Description
Understand what buyers and sellers should be looking for when considering loan participation transactions.Buying and selling loan participation can be a very valuable investment asset in any credit union loan portfolio. However, loan participation transactions do attract regulatory attention since they can get complex. It’s important for all parties involved to have good and effective due diligence practices and procedures to be ready for regulatory inquiries, but also to better ensure a robust lending program. This presentation will focus on what buyers and sellers should be looking for when considering loan participation transactions to better understand these types of transactions from knowing the parties involved to contract negotiations to monitoring loan performance and other general best practices.
Date: 2024-12-19 Start Time: End Time:
Learning Objectives
General Due Diligence Considerations
• Clear Communications With Internal Stakeholders
• Practicing What You Preach
• Role of the Board
General Loan Participation Due Diligence Considerations for Sellers
• How Will the Seller Make Loans Available for Participation to Buyers?
Loan Participation Due Diligence Requirements for Buyers
• Loan Is One That the Buyer Is Authorized to Make
• Borrower Is a Member of a Participating Credit Union in the Deal
• Purchase Complies With the Buyers Policy on Loan Participation Purchases
Knowing the Parties Involved
• Party Lending Experience
• Legal Issues?
• Financial Stability of Parties Involved
• Role of Third Parties
Contract Negotiations
• 701.22(D)(4) Requirements
• Reporting Obligations
• Remittances
• Loan Modifications/Exit Strategy
• True Sale
Monitoring Loan Performance
• Internal Transition From Due Diligence to Monitoring
• Communications Between the Parties
• Evaluating Loan/Seller/Servicer Performance
• Internal Assessment of Loan Participation Due Diligence
CLE (Please check the Detailed Credit Information page for states that have already been approved) ,Additional credit may be available upon request. Contact Lorman at 866-352-9540 for further information.
Michael Heller-Messick Lauer & Smith P.C.
