Williams & Williams Starts New REO Hedge Fund.

Tulsa, OK -- The best course of action in todays mortgage market remains a matter of perspective. Many are selling, private investors are buying and expanded REO management operations are hoping for long-term profit. Instead, auctioneer Williams & Williams here turned hedger in June.

The reason, Williams & Williams president and CEO Dean C. Williams told MSN, is his belief it ultimately compliments the auctioning practice. So far from creating a conflict of interest, it serves it well. The logic behind the newly founded REO hedge fund is based on a wider view of the core services it offers.

At the core of what our company is all about is trying to make real estate more liquid, Mr. Williams said. Were sort of trying to decrease the waste involved in transferring a home from one owner to another.

That is and has always been the core of our business, he said. In addition to the auction-based services it offers, there also are other sellers in the market including individuals and institutions that for whatever reason are not able to avail themselves that option and/or prefer the lower risk of a done deal at a preset price.

The Williams Merchant Group was created to do just that, provide what a secondary market for REO offers.

Basically it is an investment fund to buy vacant real estate, he said. Obviously in mortgage banking it means foreclosed homes.

It also buys the nonperforming loans subject to foreclosure, he explained, meaning it also does transactions involving properties before they turn into REO, which results in mortgage lenders getting title either a foreclosure of a deed-in-lieu, or pre-foreclosure contracts, in addition to acquiring the REO post-foreclosure.