Mortgages from hedge funds

[Dan McGrew]

Through a friend, I got an offer for a 30 year fixed rate mortgage from a hedge fund.  The rate is better than any banks I've seen by about 0.25%.  They do all the servicing of the loan and use standard terms.  I'm not familiar with this option, so was curious if there are risks with using hedge funds for mortgages that I'm unaware of.  Is that a legitimate concern?  Are there specific questions I should be asking or certifications I need to get in writing to avoid risk?

[Account Closed]

That seems really odd, hedge funds have a much higher cost of capital than banks, and a 30 year fixed rate priced cheaper than banks seems very difficult for them to sell-off. I've never seen a hedge fund or PE fund do something like this. Has your friend or anyone you know used them before? First question I would have is where they are getting the capital to make the loan, since they don't have any deposits and no way they have investor capital for this.