Level 1 Loans offers residential loan portfolio securitization services.
We have found that dealing with seasoned loan portfolios is dramatically different than new production. You will find very limited information on how to sell, pool or deliver seasoned loans from the GSEs. Level 1 Loans will perform all the necessary tasks needed to execute your transaction including: submitting data in the required Agencies format, assisting in the negotiation process with variances, due diligence, pooling, electronic and physical loan file delivery. We work directly with the Agencies to ensure that all of their requirements are met.
POTENTIAL BENEFITS INCLUDE
- An improvement in liquidity.
- Higher capital ratios … mortgage loans are 50% risk weighted (i.e. 4% capital required), while MBS’s are 20% risk weighted (1.6% capital required)
- In return for a small give up on yield due to the guaranty fee, return on risk-based equity increases significantly.
- Lock in current credit profile. As economic conditions change the market value of loan portfolios continue to decline as credit scores and housing prices continue to deteriorate.
- Capital that is freed up from your loan portfolio can be used to support investments in additional earning assets, for acquisitions, expansion of your branch network, share repurchases – almost any asset or activity that can generate more revenue, income and growth. Take advantage of distressed sales in this volatile market environment.
- If you hold the servicing, its value as a Fannie Mae or Freddie Mac MBS increases.
HOW ARE WE DIFFERENT FROM OUR COMPETITORS
We have shown great success at swapping seasoned mortgage loans for Fannie Mae securities, even where previous efforts have failed. We will take the time to underwrite every loan that passes the following edits; pay histories, current credit score, current market LTV and conforming balance. In addition we will research the loan files for any possible compensating factors and aggressively assist in the negotiation process with the Agencies on variances. We can still help even if you are not approved with Fannie Mae or Freddie Mac.
Our team has extensive and complementary experience in the analysis, valuation, structuring and securitization of residential mortgage assets. We have successfully executed billions of dollars in seasoned mortgage loan securitizations for clients of various asset sizes. Our experience with seasoned portfolios is what enables us to be creative in these very difficult times, while delivering unique and compelling strategies to our clients.