The demise or severe wounding of C-Bass may have significant repercussions for the mortgage market and residential real estate prices beyond the loss of a mere 1 Billion of corporate equity.

C-Bass was in a small niche called the “scratch and dent market”. Saul Sanders, who I originally met when he worked at Citicorp, started the business around 1995. A year or two after they started the company, I was running a mortgage warehouse (repo) operation. We had about 300 million of “Badly Dented Product” that was hard to get rid of at any price. C-Bass was virtually the only bidder-- they knew it but they offered a fair price (which of course included a healthy profit for them). They knew they could have ripped our face off but they didn’t. The reason was, I believe that first, Saul was a man of deliberation and integrity; and second he knew his business well enough that he could make a handsome, honest profit without the extra oomph.

I haven’t spoken to him in a loooong time, but My impression is he survived, grew and enjoyed a sterling reputation on Wall Street over the years. He was the one who provided liquidity for problem loans. Litton Servicing out of Texas added to operation. He made money because he knew how to resolve problems. So the industry in general, always knew they had a fair bidder to handle the problem loans and the real estate. With that player gone or severely cut back, a Significant amount of liquidity and expertise is withdrawn from the Marketplace in Exactly the area it is needed today. This is not a Hedge fund gone under, in my perception the Company added value and stability to the mortgage industry.