Two Bayview homeowners faced eviction orders scheduled for Wednesday. So, as has been the case for several months now, housing advocates from groups such as Occupy Bernal and ACCE took on their cause.
On Sunday, a contingent of protesters trekked over to Atherton, to picket before the house of Peter Briger, the co-chairman of the board of directors of Fortress Investment Group, a hedge fund. Fortress is the majority shareholder for Nationstar, a mortgage service provider based in Texas. And earlier this year, Nationstar purchased mortgage-servicing rights from Aurora Bank, a package that included the two Bayview homeowners' housing loans.
The demonstrators hoped that, somehow, marching along Briger's driveway could help change those homeowners' fate.
It worked. Again.
Readers of Bloomberg News and the Business Times are likely very familiar with Nationstar. The company stepped into the mortage-service vacuum created by the stricter banking regulations put in place following the financial crisis.
One key cause of the economic collapse was that many banks were carrying way more debt than they had capital to cover. Regulators have since required that banks carry a higher proportion of capital against risky debts, such as sub-prime mortgages.
Consequently, banks have been selling off much of that risky debt, in order to meet the capital requirements. In June, for instance, Bank of America sold Nationstar mortgages worth $10.4 billion in unpaid principal.
Fortress, which took Nationstar public in March, recently began targeting this market, raising funds for the investment. As Bloomberg reported in May:
"In the U.S., the regulatory drumbeat continues," Wes Edens, head of private equity at Fortress, said during an earnings call this month. "There is going to be a flight of businesses and assets out of regulated financial institutions into nonregulated. We see that certainly in the mortgage-servicing rights."
Fortress and its affiliates since December have used a co-investment structure to buy servicing rights for more than $70 billion of unpaid principal balance, according to the presentation, which doesn't set a fundraising target. The more than $700 billion of unpaid balance in the available pipeline may surge to $4 trillion over the next five years, Fortress estimated.
According to Inside Mortgage Finance, over the past year Nationstar's mortgage servicing portfolio has grown by $36.3 billion, $3 billion more than that of Well's Fargo, the San Francisco-based bank that is easily the country's largest mortgage service provider.
Local housing advocates are familiar with Nationstar's rise. In August, two dozen protested outside Fortress' downtown office, the San Francisco Business Times reported.
Just as the advocates have visited Wells Fargo board members' homes throughout the year, they set up shop outside Briger's home on Sunday. Unlike the Wells Fargo demonstrations, though, this one appeared to catch the resident off-guard. There was no security detail standing in the driveway, and a patrol car didn't show up until after the group began protesting.
Instead, according to Occupy Bernal spokesman Julian Ball, a half-hour or so into the picketing, Briger walked outside to talk to the marchers. Ball says that Briger was polite, half-joking to them, "This is a lot of criticism to be hearing on a Sunday afternoon."
After a 10-minute discussion, Briger went back inside. He didn't give indication that the conversation had spurred any sort of serious decision.
But apparently, something happened.
Yesterday morning, says Ball, the homeowners called the Sheriff's Department and learned that their eviction dates had been removed from the calendar.
Fortress and Nationstar might be trying to make some friends in the city. Just three weeks ago Nationstar called off another Bayview eviction, after advocates rallied around the homeowner's cause.