Mr. Tony M. Ettinger This is Me

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1. 1. www.creditbasedcapital.com

   www.creditbasedcapital.com/ind - [Cached]

   Published on: 3/22/2008   Last Visited: 3/22/2008

   Tony M. Ettinger, a founder of two of the most successful specialty finance companies in history, C-BASS and Sherman Financial, has founded Credit Based Capital, a merchant banking entity focusing on credit based businesses. Credit Based Capital has competencies in Board representation, Management, capital formation, valuation analytics, value added servicing and creating learning organizations through integrated feedback loops. The credit based businesses that Mr. Ettinger has started have generated $1billion of income and an average 35% ROE since inception. Mr. Ettinger will serve as President and CEO of Credit Based Capital.
   
   Credit Based Capital In The News
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   CEO Tony Ettinger

2. 2. www.creditbasedcapital.com

   www.creditbasedcapital.com/Pod - [Cached]

   Published on: 3/22/2008   Last Visited: 3/22/2008

   Newsmaker Pod-cast Interview | CEO Tony Ettinger | (May16, 2006) 
   ...
   Tony Ettinger is founder, president and chief executive officer of Credit Based Capital, a merchant bank that specializes in credit-based businesses.
   
   Recently, Mr. Ettinger was the focus of an American Banker story in which he "described his vision of a mortgage and nonmortgage loan servicer that would specialize in identifying borrowers in trouble and work out a modification or repayment plan before they default."
   
   In this podcast interview, Tony Ettinger elaborates on the opportunity he sees today and his plans to build such a company.
   
   Listen to this Podcast using the controls on the left.
   
   Tony Ettinger

3. 3. www.creditbasedcapital.com

   www.creditbasedcapital.com/ame - [Cached]

   Published on: 6/22/2006   Last Visited: 3/22/2008

   Tony Ettinger, who in the 1990s helped start two specialists in distressed consumer loans, has joined the New York private equity firm Fortress Investment Group LLC as a managing director in charge of forming joint ventures.
   
   As American Banker reported in April, Mr. Ettinger had been hunting private equity capital to build a servicer that would specialize in identifying borrowers in trouble and working out a modification or repayment plan forthem before they default.
   
   In an interview Wednesday, he said he had received "a flurry of interest" in the idea, and the project may yet come to fruition. He is "trying to sort it through right now," he said, and to figure out what makes sense for Fortress and how to deal fairly with the handful of employees at Credit-Based Capital, the Chappaqua, N.Y., firm he started in August of last year.
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   In 1996, Mr. Ettinger founded C-Bass LLC with veterans of Citicorp Securities'mortgage trading desk. The bond insurer Enhance Financial Services Group Inc., where Mr. Ettinger was an executive vice president, put up half the capital; the
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   Radian Group Inc. of Philadelphia bought Enhance in 2001, and Mr. Ettinger retired.
   
   In 2003 he joined Maple Financial Group Inc., an $18 billion-asset company based in Toronto, where he ran thecommercial finance business.
   
   He said the investments he works on for Fortress will involve "a full array of assets that are attractive from a risk return perspective" - both consumer and commercial.
   
   In Mr. Ettinger's view, services of mortgages and other consumer loans are ill prepared for the coming deterioration in credit quality; though lenders have invested heavily in analytical tools for originating loans and collecting on bad debt, they have not brought the same sophistication to servicing performing loans. "They haven't brought the rocket scientists on to the servicing side."
   
   Technology could help firms predict which borrowers are headed for default, he said.
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   Mr. Ettinger said his servicer would "need to be careful" about approaching borrowers who have not defaulted but have given it reason to believe they will do so. It would make a "courtesy call" in which it would say it noticed some changes in payment patterns and ask, "Is everything OK? ...
   
   The idea is that "the more contact you have with an at-risk borrower, the more chances they have to talk to you," he said.
   
   He also made a more controversial assertion about servicers: Even when a troubled borrower takes the initiative of calling, as long as the loan is current, "they treat it like a prime loan and try to minimize contact with the borrower."
   
   In his observation, the standard operating procedure is to simply tell these borrowers to do their best to pay. Only when the customer becomes delinquent a few months later is the typical servicer willing to counsel them or negotiate a modification or repayment plan, and by then there are fewer options for working out the loan, he said.
   
   "The key ... is to try to work with that borrower as soon as they have a problem, when they've got more flexibility and they still have money," Mr. Ettinger said.
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   Mr. Ettinger said the new servicer would also be built with small acquisitions. Servicing is "not a business line that lends itself" to starting from scratch.
   
   Ratings are important, and the rating agencies look for a track record, he said.
   
   Unlike in 1996, Mr. Ettinger does not have an insurance company with nearly $1 billion of assets behind him this time. Credit-Based Capital, the Chappaqua, N.Y., firm he started in August, is close to securing private equity capital for its first purchase, he said.
   
   He is banking on the track record of his creations. Last year C-Bass and Sherman produced $147 million of profits for MGIC, 23% more than they did in 2004, and $136 million for Radian, or 20% more than they did in 2004, according to the insurers' annual reports.
   
   Also, unlike C-Bass' Litton Loan Servicing LP and Sherman's Allegis Servicing, which service primarily loans owned by their respective parents, the new company would work for third parties.
   
   However, Mr. Ettinger said it would share some of the credit risk by investing in the residual pieces, to show "we're putting our money where our mouth is."