Eye of the Storm or Tempest in a Teapot?

July 2020

Our clients are thinking more about loan sales in this economic environment. We’ve completed ~ $400MM in loan sales since the Covid-19 outbreak and the related shutdown. We continue to gather solid and actionable data to share with clients.

June was busier than we expected but slow by historical terms. Sales were ~$50MM for six clients. Note that June included a couple of non-bank secondary market credit buyers successfully selling back into the market, which gives us some interesting insights that we’ll touch on below.

June Sale Observations

PPP Loan Sales – There is a market. Pricing is a bit below par, and we’re seeing sales primarily to book origination income and eliminate the servicing and forgiveness burden. Some banks are selling non-customer loans and/or small balance only, although loans of all sizes are selling.

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