Bank Connects with National Mortgage Lender to Sell Pool of Seasoned Mortgages

Case Study FHAOverview

Brought to you by Promontory Interfinancial Network, Residential Mortgage Network helps financial institutions expand their residential mortgage opportunities by developing new relationships between buyers and sellers. The service’s network of potential buyers and
sellers of mortgage loans, coupled with its team of experienced mortgage professionals, helps banks to locate assets they otherwise might have difficulty finding. A recent connection between a community bank in the Midwest and a mortgage company in the South
demonstrates how institutions have experienced success using Residential Mortgage Network (or “the Network”).

The Opportunity

A community bank in the Midwest was seeking “full eagle” approval for originating FHA loans. This time-consuming and rigorous process involves sending information about the loans the bank originated to FHA for a trial period to verify that the bank precisely follows FHA guidelines. By the time the process was complete and the bank became an FHA-approved lender, its pool of mortgages was classified as “seasoned.” Without success, the bank reached out to various institutions in an attempt to sell this pool of loans. As a result, this pool of loans remained on the bank’s balance sheet for several years. The bank then turned to the Residential Mortgage Network and its team of experts for assistance.

Customized Solution

The Residential Mortgage Network team utilized its industry expertise to identify several potential buyers to the seller, and presented the potential buyers with detailed information about the loan pool. Within a 24-hour period, 3 bids were received. A mortgage company in the South was the winning bidder. With due diligence, the deal was closed in about 6 weeks.

The Power of Connection

The Residential Mortgage Network team was successful in helping the community bank sell the seasoned pool of mortgage loans, which enabled the bank to focus on originating more FHA and other loans. The team also helped the mortgage lender to source loans that fit into its portfolio criteria.

Benefits to Participants

Buyers

  • Access newly originated inventory from top national originators and aggregators of residential mortgages
  • Customize your experience and receive updates when the Network receives mortgage pools that meet your buying criteria
  • Discover more opportunities to purchase pools of seasoned mortgages from investment funds, banks, and mortgage originators
  • Choose mortgage pools consistent with your bank’s asset goals, including its CRA requirements

Sellers
  • Tap into an active buyer community that includes mortgage companies, nonbank lenders, mortgage investors, funds, and banks
  • Save time and resources with the ability to learn about predetermined buyer criteria and originate loan pools accordingly
  • Choose to receive buy-side inquiries from motivated buyers, or send your loan tape to the Residential Mortgage Desk so that it can perform prospecting on your behalf


Correspondent

  • Connect with national mortgage firms and banks that buy residential mortgage loans in the secondary market, on a delegated or non-delegated correspondent basis, to expand your product offerings or decrease back-office costs

View more Residential Mortgage Network case studies or contact us.