Bulk Loan Sales - Bulk Loans by MBS
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Bulk Loan Sales

1.   What is a bulk loan sale?

A bulk loan sale is a commonly used term for the sale of bulk loans or loan pools.  Bulk loan sales acquired by the FDIC from failed financial institutions are generally sold in pools through sealed bid sale or English outcry auction.

2.   How are bulk loan sales structured?

Typically, bulk loan sales contain loans that have similar characteristics.  The loans are refined into pools according to specific criteria.  Pooling considerations may include loan size, quality, type, collateral and location.
3.   What documents are available on the site?
The storeroom provides documents for the sale offering and the individual loan pools.  The documents that can be found in the storeroom are the:  Invitation to Bid, Bid Instructions, Purchaser Eligibility Certification, Loan Sale Agreement, Loan Spreadsheets and other relevant documents.

4.   Are loans an appropriate investment for me?

Every interested party, based on their own circumstances on how to get bulk loan sales, must determine whether loans are a suitable investment.  Prospective purchasers must have the financial sophistication and resources sufficient to evaluate and bear the economic risks of such loan purchases.
5.   Are there any restrictions to purchasing loans from the FDIC?
Yes.  The Purchaser Eligibility Certification identifies prospective purchasers who are not eligible to purchase assets from the FDIC under the laws, regulations and policies governing such sales.  The FDIC must receive an executed Purchaser Eligibility Certification from the winning bidder upon notification of bid award.  The certification form can be viewed at the following link:
Purchaser Eligibility Certification

6.   Does the FDIC only sell distressed or troubled loans?

No.  The loan portfolios of failed financial institutions usually contain a variety of performing and non-performing loan products including mortgage, commercial, consumer loans, etc.

7.   Does the FDIC guarantee the performance of loans being offered for sale?

No.  The FDIC makes no representations or warranties in connection with any of the loans.  The only remedies or recourse provided to the buyer are those set forth in the Loan Sale Agreement.  Generally, all risk associated with the loans are passed to the buyer.
8.   May prospective purchasers review the loan files?
The FDIC encourages file reviews.  Interested parties must contact the FDIC as instructed in the Notice of Loan Sale to schedule due diligence appointments.
9.   Is there anything required to review files or obtain specific information on the bulk loans in a
      given sale?
Prospective purchasers must execute the Confidentiality Agreement that is provided either online or in person at the due diligence location.  The FDIC must receive an executed Confidentiality Agreement before it will allow access to files or other specific loan information.  The Confidentiality Agreement form can be obtained at the following link:
Confidentiality Agreement

10.   What is required to bid on a sale?

A review of the Bid Instructions for a specific loan sale will define all requirements to bid on a given pool of loans.  This document is found in the storeroom.  Once all requirements are met, the bidder will be given online access to the bid room.
11.   Once a bulk loan sale is awarded, how long before it is closed?
The period of time varies, but FDIC sales are usually consummated within 20 business days after a bid is awarded.  Each Loan Sale Agreement should be reviewed to determine if there are specified closing dates.
12.   Is a deposit required in order to Bid?
Yes.  An Initial Deposit must be received the business day prior to the bid deadline.  Only one Initial Deposit is required from each bidder regardless of the number of bids submitted.  Bidders must make the Initial Deposit by wire transfer.  Initial Deposit is defined in the Bid Instructions for a given sale.
13.   Is an earnest money deposit required by the winning bidder?
Yes.  The Earnest Money Deposit is comprised of the Initial Deposit and a Final Deposit.  The Final Deposit equals 10% of the sum of all bid amounts for loan pools and loan pool combinations awarded the winning bidder less the amount of the bidders Initial Deposit.  The Final Deposit must be submitted via wire transfer within one business day following bid award.

14.   What will the successful bidder obtain at closing for a bulk loan?

The successful bidder will receive the executed Bill of Sale, Assignment and Assumption Agreement, and Loan Sale Agreement at closing.  All pertinent, available documentation for the loans such as the notes, collateral documents and loan files will be delivered to buyer within a reasonable time after closing.
15.   How are bulk loan sales consummated?
Closing of a bulk loan sale shall occur on the closing date either by mail or conducted in person at a place designated by seller, at sellers option.  The closing documents are executed upon receipt of the balance of the purchase price due from buyer.
Basic questions about Bulk Loan Sales answered by Mortgage Banking Solutions

Still looking for more resources on bulk loan sales? Well then look no further:
Bulk loan resources

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