1. What is a loan sale?
A loan sale is a commonly used term for the sale of loans or loan pools. Loans
acquired by the FDIC from failed financial institutions are generally sold in
pools through sealed bid sale or English outcry auction.
2. How are sales structured?
Typically, sales contain loans that have similar characteristics. The loans are refined
into pools according to specific criteria. Pooling considerations may include
loan size, quality, type, collateral and location.
3. What documents are available on the site?
The storeroom provides documents for the sale offering and the individual loan
pools. The documents that can be found
in the storeroom are the: Invitation to Bid, Bid Instructions, Purchaser
Eligibility Certification, Loan Sale Agreement, Loan Spreadsheets and other
relevant documents.
4. Are loans an appropriate investment for me?
Every interested party, based on their own circumstances, must determine whether
loans are a suitable investment. Prospective purchasers must have the financial
sophistication and resources sufficient to evaluate and bear the economic risks
of such loan purchases.
5. Are there any restrictions to purchasing loans from the FDIC?
Yes. The Purchaser Eligibility Certification identifies prospective purchasers who
are not eligible to purchase assets from the FDIC under the laws, regulations
and policies governing such sales. The FDIC must receive an executed Purchaser
Eligibility Certification from the winning bidder upon notification of bid
award. The Purchaser Eligibility Certification is available on the
website of the loan sale adviser responsible for a particular sale.
Purchasers will supply the completed form to the loan sale adviser.
In order to self screen, Potential Purchasers can review a sample copy
of the Purchaser Eligibility Certification at the following link:
Purchaser Eligibility Certification
(http://www.fdic.gov/buying/loan/purchaser/purchaser.pdf) (PDF file - 144 kb)
6. Does the FDIC only sell distressed or troubled loans?
No. The loan portfolios of failed financial institutions usually contain a variety
of performing and non-performing loan products including mortgage, commercial,
consumer loans, etc.
7. Does the FDIC guarantee the performance
of loans being offered for sale?
No. The FDIC makes no representations or warranties in connection with any of the
loans. The only remedies or recourse provided to the buyer are those set forth in the Loan Sale Agreement. Generally, all risk associated with the loans
are passed to the buyer.
8. May prospective purchasers review the loan files?
The FDIC encourages
file reviews. Interested parties must contact the FDIC as instructed in
the Notice of Loan Sale to schedule due diligence appointments.
9. Is there anything required to review files or obtain specific
information on the loans in a
given sale?
Prospective purchasers must execute the Confidentiality Agreement that is provided either online or in person at the due
diligence location. The FDIC must receive an executed
Confidentiality Agreement before it will allow access to files or other
specific loan information. The Confidentiality Agreement form can be obtained
at the following link:
Confidentiality Agreement
(http://www.fdic.gov/buying/loan/confidentiality/confidentiality.pdf (PDF file - 139 kb)
10. What is required to bid on a sale?
A review of the Bid Instructions for a specific loan sale will define all requirements to
bid on a given pool of loans. This document is found in the storeroom. Once all
requirements are met, the bidder will be given online access to the bid room.
11. Once a sale is awarded, how long before it is closed?
The period of time varies, but FDIC sales are usually consummated within 20
business days after a bid is awarded. Each Loan Sale Agreement should be reviewed to determine if there are
specified closing dates.
12. Is a deposit required in order to Bid?
Yes. An Initial Deposit must be received the business day prior to the bid
deadline. Only one Initial Deposit is required from each bidder regardless of the number of bids submitted. Bidders must make the Initial Deposit by wire
transfer. Initial Deposit is defined in
the Bid Instructions for a given sale.
13. Is an earnest money deposit required by the winning bidder?
Yes. The Earnest Money Deposit is comprised of the Initial Deposit and a Final
Deposit. The Final Deposit equals 10% of
the sum of all bid amounts for loan pools and loan pool combinations awarded
the winning bidder less the amount of the bidders Initial Deposit. The Final Deposit must be submitted via wire
transfer within one business day following bid award.
14. What will the successful bidder obtain at closing?
The successful bidder will receive the executed Bill of Sale, Assignment and
Assumption Agreement, and Loan Sale Agreement at closing. All pertinent, available documentation for the
loans such as the notes, collateral documents and loan files will be delivered
to buyer within a reasonable time after closing.
15. How are sales consummated?
Closing shall occur on the closing date either by mail or conducted in person at a
place designated by seller, at sellers option. The closing documents are executed upon receipt of the balance
of the purchase price due from buyer.
16. How does one get on the FDIC Asset Marketing E-mail list?
FDIC markets loans through two loan sales advisors:
Persons with accounts on these systems will receive notice of a FDIC loan
sale offering when they are made available to the market. General
Announcements of a FDIC loan sale will appear on the website of the loan
sale advisor responsible for that particular sale.
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