But or Sell Commercial real estate, mortgage, or credit card loans program logo

A solution for credit unions that would like to buy or sell commercial real estate, mortgage, credit card, and other types of loans through njBIZloan Connection’s participation services.

PCU Benefits

  • Participations are a win-win for all parties
  • Referring credit union adds loans on their books
  • Lead Lender earns points and servicing revenue
  • njBIZloan Connection partnership strengthens

Let one of our specialists provide a free portfolio review and generate a proposal for adding loans, redistributing loan exposure, or lightening up the credit union’s loan portfolio.

Participations

We provide credit unions the tools and expertise necessary to buy or sell commercial and consumer participations in a safe, sound and compliant manner.

Today’s participatory environment requires higher levels of due diligence regarding regulatory compliance, vendor management, cost containment, and overall portfolio risk than in the past. As such, njBIZloan stands ready to provide consultative services in these areas to ensure that our clients’  expectations are met.

What buyers and sellers need to know

Buying or selling loan participations offers credit unions the ability to safely increase or decrease their outstandings at will which has proven to be a highly effective means of balance sheet management.

Buyers principally utilize this strategy to acquire assets that out-perform other investments, correct imbalances in liquidity and effectively manage interest rate risk and concentration limits.

Reducing outstandings can resolve inadequate liquidity and concentration concerns.  Selling loans also enables credit unions to; redeploy the proceeds into capital enhancements, higher yielding loans and investments or funding to meet loan demand.

Beginning the Process

Once the Board of Directors has given its approval, njBIZloan will provide guidance on several fundamentals such as loan policy revisions, accurate calculations of value, interpretation of the Master Participation Agreement, board reporting, accounting tips and more.

Buyer’s Readiness to Buy

The credit union will need to decide which loan type and amount would be suitable for purchase with consideration given to cost, yield, prepayment speed (life of pool), credit quality, etc.

Next is choosing a partner.  For more than a decade, members of the njBIZloan staff have participated in a national network of experienced buyers and sellers who have transacted billions of dollars of auto, real estate and other asset classes – none of which have ever been criticized by regulators or outside auditors.

Because of the relational nature of a transaction, we pair our clients with originators best suited to meet their needs.  After being introduced, we encourage the buyer to perform its due diligence to confirm a match.  Assuming the buyer wishes to move forward, njBIZloan will begin the bid process and assist the buyer in all phases of the transaction.

 Seller’s Readiness to Sell

njBIZloan also supports credit unions who wish to sell loans.  We begin by assisting with policy updates and the creation of a Master Sales Agreement.  Further guidance is rendered on the formation of the pool, calculation of the pool specifications and pricing, the contents of a due diligence package and other loan and servicing information that needs to be furnished to the buyer.

When selling a pool, interest income is replaced to an extent by trading loans above par and collecting a monthly fee for performing loan servicing duties.  Servicing also enables sellers to retain and maintain relationships with borrowers whose loans have dual ownership.

Contact us

Our clients benefit greatly due to the fact that we’ve been able to simplify the buying and selling process so credit unions of many sizes and appetites can participate with confidence.

Our product line includes but is not limited to Direct/Indirect Auto, Balloon Notes, Mortgages, Home Improvement/Solar, Unsecured and SBA 504 loans and Commercial Real Estate Loans.

To learn more, please consider having a conversation with us so we can learn about your lending goals and objectives, and then talk about how we can assist you in achieving them.

 

Jim Janota
Consumer Participations Manager
Direct Dial  609.212.0322
NMLS  312832
JimJ@njBIZloan.com

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