BoeFly Logo

BoeFly Transactions

Previous Issues
Issue 30: Loan Sale Premiums Hold Steady in November

Issue 29: Proper Risk Management Protection and Credit Worthiness

Issue 28: BoeFly Helps Veterans With Disabilities Connect With Lenders to Obtain Small Business Loans

Issue 27: Loan Sale Premiums Level off in October

Issue 26: SBA Secondary Market changes - Warranty Period and Premiums on New Larger Loans

Issue 25: BoeFly Surpasses the $1 Billion Transaction Mark

Issue 24: Loan Sale Premiums Continue Climb in September

Issue 23: Robert Tannenhauser, CEO of BoeFly, Interviewed by Michael McKee on Bloomberg Radio

Issue 22: Lender Optimism is up While Anxiously Awaiting the Small Business Jobs Bill

Issue 21: Loan Sale Premiums Blast to Record Highs in August

Issue 20: Title Insurance- the Lender's Perspective

Issue 19: Condemnation and Mortgage Lender's Rights

Issue 18: Long-Term Deals Continue Record Climb; Short-Term Deals Fade

Issue 17: Congressman Walt Minnick (D-Idaho) Gets It

Issue 16: Deeds and Forms of Ownership

Issue 15: SBA Loan Sale Premiums Hit Record High in June

Issue 14: What You Need to Know About Property Insurance

Issue 13: SBA Fixed Interest Rate Loans are an Important Product to have at the Ready

Issue 12: 504 Guaranteed Pool Program Summary and Survey Results

Issue 11: Loan Sale Premiums Surge to Record Highs in May

Issue 10: Environmental Risk for Lending Opportunities

Issue 9: How To Take Advantage of the First Lien Position 504 Loan Pool Guarantee Program

Issue 8: Investors Remain for SBA Loans

Issue 7: Retirement Funds for an Equity Injection - Selecting the Right Plan Provider

Issue 6: Why Outsourcing Environmental Risk Management makes Cents for Lenders

Issue 5: Loan Monitoring: Comfort in a Crisis

Issue 4: BoeFly Case Study: The economics of selling SBA guaranteed loans

Issue 3: BoeFly Lender Survey Results Q1 2010

Issue 2: Loan Sale Premiums Rally in Q1

Issue 1: The Importance of Efficiency in Secondary Markets

504 Guaranteed Pool Program Summary and Survey Results

Lenders Expect to Increase Lending – Want Program Extension


Share this article:
Bookmark and Share

On June 2nd, a group of 300 bankers, SBA pool assemblers, professional loan brokers, and SBA representatives joined BoeFly for a live webinar to hear experts discuss the SBA’s new 504 First Lien Mortgage Guarantee Pool Program. The program, initiated under the American Recovery and Reinvestment Act of 2009, is intended to bring liquidity back to 504 1st Mortgage Lenders.

504 Webinar Survey Results:


Key points discussed during the webinar:
Lenders can achieve liquidity in 3 distinct ways – all available on BoeFly:

  1. Sell 85% of a 504 1st mortgage
    Bank of America (BoA) is planning to actively buy 85% portions of 504 Loans. Acting as a pool originator, Bank of America is required to maintain 5% of an unguaranteed loan on their books, placing the remaining 80% in a pool which is guaranteed. CDC Direct Capital executive, Jordan Blanchard, discussed that his firm has signed an agreement with Bank of America in which his consortium will package and underwrite deals for BoA. Loans presented for sale will be underwritten - but not as detailed as a new origination - as a "double-check to make sure everything was done right, and make sure the underwriting was done in a consistent manner." Blanchard described, "anything goes…anything that a bank is willing to sell, that is eligible…will have a price associated with it." He did point out that BoA will stay away from properties with environmental risk (i.e. gas stations). On the topic of rates, Jordan, indicated that on a "5-year fixed rate for example…with a par rate of 5.65%, with a floor of 6.25%...using a .25 to 1 mark-up, the lender could expect in the neighborhood of 2% with .50% of annual servicing." Bank of America will be reviewing loans for sale on BoeFly.

  2. Sell Pools of 80% portions of 504 1st liens
    Banks can be designated as a pool originator by SBA through a free application process. Once a lender is designated as a pool originator, they can offer loans for sale on a 'as-if-pooled' basis. As a pool originator, the market of buyers grows as the buyer is acquiring a 100% guaranteed full-faith-and-credit pool. Coastal Securities executive, Chris LaPorte, reviewed a set of loans with a 25-year amortization and a 10-year balloon, fixed for 5-years at 7.25 then switching to variable at Prime + 3% and he indicated that a bid could be in the ballpark of a 6% premium. David Barnes, of Morgan Keegan & Co stressed the importance for lenders to originate homogenous loans - with similar rate structure, prepayment penalty, term, etc. Morgan Keegan and Coastal Securities will be reviewing loans for sale on BoeFly, as they do with 7(a) loans.

  3. Sell 100% of a 504 1st mortgage
    Zion’s executive, Matt Hunt, discussed that his bank is actively seeking to acquire whole loans. They are currently paying a 3% premium on loans purchased. Zions underwrites each loan prior to purchase and is selective based upon geography and industry. Zions is a buyer on BoeFly and is notified on every 504 loan sale on BoeFly. Other national and regional lenders expect to buy 100% of 504 1st loans on BoeFly.