{"id":37163,"date":"2008-03-26T16:35:41","date_gmt":"2008-03-26T21:35:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/uncategorized\/loan-sales.html"},"modified":"2008-03-26T16:35:41","modified_gmt":"2008-03-26T21:35:41","slug":"loan-sales","status":"publish","type":"corporate","link":"https:\/\/corporate.findlaw.com\/litigation-disputes\/loan-sales.html","title":{"rendered":"Loan Sales"},"content":{"rendered":"
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n\n

1. What is a bulk sale?<\/b><\/font><\/p>

It is a commonly used term for sales of groups of loans. Loans acquired by the FDIC from closed banks and savings & loan associations generally are sold in bulk through a sealed bid process.<\/blockquote>

2. How are the sales structured?<\/b><\/font><\/p>

The sales contain loans that ordinarily have similar characteristics. The loans are refined into pools or packages, according to specific criteria. Packaging considerations include loan size, quality, type, collateral and location.<\/blockquote>

3. How will the sales be conducted?<\/b><\/font><\/p>

Each FDIC office (see Question 17<\/a> for a list of Service Centers) normally has, at any given time, a number of sales in process. Announcements are sent to parties that have expressed interest in purchasing the type of loans being sold. Detailed Bid Packages are forwarded to interested parties on request.<\/blockquote>

4. What is a Bid Package?<\/b><\/font><\/p>

The Bid Package is an offering of a specific portfolio(s) of loans that includes loan information spreadsheets, an invitation and instructions to bid, the loan sales agreement and other important sales documents.<\/blockquote>

5. Are loans an appropriate investment for me?<\/b><\/font><\/p>

Every interested party, based on their own circumstances, must determine whether loans are a suitable investment of funds. Potential purchasers must have the financial sophistication and resources sufficient to evaluate and bear the risks of an investment in loans.<\/blockquote>

6. Are all loans sold by the FDIC distressed or troubled?<\/b><\/font><\/p>

No. The loan portfolios of failed financial institutions usually contain a variety of performing and nonperforming mortgage, commercial and consumer loans.<\/blockquote>

7. Is the performance of loans being offered for sale guaranteed by the FDIC?<\/b><\/font><\/p>

No. The FDIC does not guarantee the performance of loans being sold. All loans are sold with limited, if any, representations and warranties, all of which are contained in the loan sales agreement. Generally, all risk associated with the loans are passed to the purchaser.<\/blockquote>

8. May potential purchasers review the loan files?<\/b><\/font><\/p>

The FDIC encourages file reviews. Interested parties should contact the FDIC office announcing the sale to arrange appointments. Refer to the Bid Package for important dates, such as for bidder due diligence and the bid deadline.<\/blockquote>

9. Is there anything required to review files or obtain specific information on the loans in a given sale?<\/b><\/font><\/p>

Each interested party must sign a Purchaser Eligibility Certification and a Confidentiality Agreement, whereby they certify that they are eligible to purchase FDIC assets and they agree not to disclose or divulge to a third party any privileged information. The executed documents must be received by the FDIC before access is allowed to files, notes or other specific information.<\/blockquote>

10. What do I do after reviewing the offering and deciding to participate in the sale?<\/b><\/font><\/p>

A written bid must be submitted on the standard Bid Form prior to the Bid Deadline. The form and complete instructions are provided in the Bid Package.<\/blockquote>

11. What is the asking price?<\/b><\/font><\/p>

An asking price in a loan sale is the equivalent of a listing price in the sale of real estate property. Bidders should not rely on the asking price to establish their bid, but should formulate bids on their own analysis.<\/blockquote>

12. What happens to my bid once I submit it to the FDIC?<\/b><\/font><\/p>

It is reviewed and evaluated at the bid opening against all other bids. The bid selected is recommended for approval. In many FDIC sales, prior approval of a minimum acceptable bid is obtained, minimizing the time to bid acceptance and closing.<\/blockquote>

13. Once a sale is awarded, how long before it is closed?<\/b><\/font><\/p>

The period of time varies, but FDIC sales are usually consummated within 30 days after a bid is accepted.<\/blockquote>

14. Is an earnest money deposit required?<\/b><\/font><\/p>

A deposit, normally 10% of the purchase price, must be submitted by the winning bidder in immediately available funds within 24 hours of bid acceptance by the FDIC.<\/blockquote>

15. What will the successful bidder obtain at closing?<\/b><\/font><\/p>

The successful bidder will receive all available documentation, such as the note, credit files, mortgage deed of trust, car registration, appraisals, history cards, guarantees, insurance policies, etc. In summary, all pertinent, available documentation of the loan will be assigned from the FDIC to the purchaser.<\/blockquote>

16. How are sales consummated?<\/b><\/font><\/p>

Sale consummations are generally held at the office conducting the sale and consist of simultaneous exchanges of immediately available funds for the notes and files. In some instances, sale closing can be transacted by mail. In such cases, upon receipt of funds, the available notes and files are shipped to the purchaser at their expense.<\/blockquote>

17. How does one get on the FDIC Asset Marketing Mailing List?<\/a><\/b><\/font><\/p>

The FDIC maintains a national mailing list to inform potential investors of upcoming Loan Sales. All offices use this single mailing list. Simply write or e-mail (click on the name of the individual) or call the Asset Marketing Department at one of the offices listed below and request a LOAN SALES SURVEY which will be mailed or faxed to you. The LOAN SALES SURVEY can not be sent by e-mail (as of today) so please be certain to include your US Postal Service address (or your fax number) with your SURVEY request.<\/blockquote>
Northeast Service Center 101 East River Drive East Hartford, CT 06108
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Field Operations Branch – Dallas 1910 Pacific Avenue Dallas, TX 75201<\/blockquote><\/blockquote><\/div>","protected":false},"excerpt":{"rendered":"

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