EMAIL DETAILS

Please see below and let me know if it is of potential interest as an
advisory client. At a minimum I want to be responsive to Grant who is one
the heirs to Charles Kettering's fortune--Charles invented the electric
starter that is standard in all cars.

On an unrelated note, great day for America. I hope you guys are drinking
champagne tonight--I know I will be.

Best,

John

---------- Forwarded message ----------
From: Grant Kettering <grantkettering@mac.com>
Date: Wed, Jun 27, 2012 at 5:21 PM
Subject: Grail Partners » RMBS Strategy
To: John DeLoche <jdeloche@rosemontseneca.com>


John,

I hope you are well.

Interesting opportunity coming out of a lunch with Grail Partner's today.
You will probably recall that Steve Oyer from the Columbia effort is a
partner there. They have hatched a pretty out-of-the-box strategy to use
the power of eminent domain in US localities to force the sale of
underwater mortgages (not houses!) to a public-private partnership that
they are setting up, then in turn re-mortgage the houses to the
owner/occupier with a mortgage at the value of the house. The eminent
domain is carried out at fair market value, the prices at which these
mortgages are trading, but they trade at a discount to market value of the
collateral. Thus investors can realize the spread. There are *lot*s* *of
details here for the explanation of which I would have to refer you to
Grail. Their end goal is to basically completely transform the mortgage
market in the US by getting $140 billion of underwater mortgages
effectively written down, and to make money along the way. Bottom line:
could be a big deal.

The reason I'm writing is that there is strong political component to this,
because of the unfamiliar use of eminent domain. They apparently already
have some presence in Washington, though this has been public
knowledge<http://www.ft.com/intl/cms/s/0/8017cf44-b309-11e1-83a9-00144feabdc0.html>
for
only around 2.5 weeks. I thought that RSP might be a very natural partner
in the project.

If you and RSP have any interest in this concept, I really encourage you to
get in touch with Steve about it specifically. It's very unorthodox, but
probably worth a talk. I can put you in touch if you'd like.

*Best*,

Grant


GRANT KETTERING

grantkettering@mac.com
Mobile: +1 303 907 8555


--
John DeLoche
*Managing Director*
Rosemont Seneca Technology Partners
One Market, Spear Tower, 36th Floor
San Francisco, CA 94105
office: 415 293 8147
mobile: 415 793 7070

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