Arch Bay Capital, an active buyer and seller of non-performing, or defaulted, mortgages, is on the verge of jumping into the origination market and is busily gathering lending licenses in several states, according to officials briefed on its plans.

A non-bank based in Southern California, Arch Bay made news last year when it bought $600 million in nonperforming loans from Wells Fargo. It also recently issued a bond backed by NPLs.

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