Loan Sale Pricing

Our take on the latest trending events:

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BankUnited of Florida recently received FDIC approval to sell a covered loan portfolio. The sale is expected to take place by the end of this year. Selling covered loans is a complicated process requiring the writing of a case for the FDIC, and FDIC approval. Garnet Capital is experienced in writing these cases and can help interested institutions both write the cases and sell the covered loans on the market.
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Banks Selling Nonperformers Lead to Cleaner Mergers
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Monitoring Loan Portfolios Can Help Banks Avoid Future Headaches
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Valuing a Loan Portfolio: Looking Deeper Than a Spreadsheet
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Loan Growth Opportunities in 2017
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Monitoring the Balance Sheet: Key to Banking Profitability
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Stagnant Loan Portfolio Growth Results in Shrinking Profit Margins
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Banks Struggle to Increase Profits: Higher Interest Rates Are Not the Solution
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Today's Economic Forecast? Partly Cloudy
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From Loan Sales to Higher Profits: Santander Takes an Aggressive Approach
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Competition in the Secondary Mortgage Market: Is Price Competition Possible?
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Loan Portfolios Offer Growth Opportunities for Banks
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Banks Seek Portfolio Optimization in Low-Rate, High-Compliance Environment
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The mortgage industry has faced substantial criticism following the financial crisis, and many critics and government officials have pounced on the opportunity to disparage this particular sector. While these views have been growing less harsh, those looking to spearhead meaningful reform have encountered numerous challenges, according to American Banker.  
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The banking sector has been benefiting from strong mergers and acquisitions activity, as economic conditions continue to improve and financial institutions look toward consolidation as a means of cutting costs, meeting capital requirements and even diversifying their businesses. 
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While they are frequently identified as being competitors of banks, marketplace lenders have asserted repeatedly that they want to work with these more traditional financial institutions. 
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Home Bancshares recently took an innovative approach to bolstering loan growth, buying nearly $300 million worth of national commercial real estate loans. The Conway, Arkansas-based bank was able to snap up this loan portfolio after Doral Bank's failure, purchasing it from private equity firm J.C. Flowers & Co. 
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Online lending marketplace Lendio recently raised more than $20 million through a funding round led by Napier Park Financial Partners. South Jordan, Utah-based Lendio, which uses innovative technology to connect small businesses with lenders, plans to use the money to enhance its relationships with lenders, invest in improving its online resources and expand its partnership program. 
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The valuations of technology startups have been surging as hedge funds and mutual funds pour money into this space in an effort to profit from the next big thing. Many institutional investors have taken an interest in technology startups, hoping to select the right ones and then profit when they hold an initial public offering.
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Puerto Rico's banking industry has undergone some seismic shifts in the aftermath of Doral Bank's failure earlier this year. While this troubled bank entered receivership, several competitors benefited from the situation, bolstering their market share by snapping up its branch locations, loans, deposits and mortgage servicing rights.
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Sterling Bancorp, one of the largest lenders doing business in the payroll lending market, recently acquired Damian Services Corporation, which provides payroll-related services to staffing firms. By making this purchase, Sterling will grow its client base, expand its lending capacity and open up new possibilities to earn fees in specialty finance, according to American Banker.
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The peer-to-peer lending market recently benefited from a move by the U.S. Securities and Exchange Commission to revise existing regulations, as this decision gave smaller companies greater ability to raise money and investors more flexibility to participate in this particular industry. 
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While small business lending fell sharply after the financial crisis, there are signs this crucial activity is gaining steam. This development presents banks with new opportunity, but they should know the market has changed significantly, and many non-bank lenders have sprung up to fill the higher demand for small business loans, according to American Banker. 
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While lending activity has grown more conservative since the financial crisis, there is reason to believe this sector is once again running into trouble. More specifically, both auto and student loan debt saw their delinquencies track higher in the fourth quarter, and during the same time, household debt increased.
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America's millennials could potentially represent a huge market for alternative banking, according to the results of the most recent FICO survey. Financial institutions looking to stay abreast of the latest shifts in the rapidly changing banking industry might benefit substantially from gathering further detail on these customer preferences. 
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Consumer Financial Protection Bureau Director Richard Cordray took a minute to delve into some of the agency's current concerns, as well as the disagreements its staff are having. 
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Community banks need to either innovate or face extinction in the current environment, according to several industry participants who spoke at the American Bankers Association's National Conference for Community Bankers. 
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Regulators shut down Doral Bank on Friday, Feb. 27, after the financial institution faced a string of challenges including a dispute surrounding a tax refund, government investigations and sharp declines in stock prices. The Office of the Commissioner of Financial Institutions of Puerto Rico announced in a statement Friday that it had appointed the Federal Deposit Insurance Corporation receiver. 
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Federal Reserve Chair Janet Yellen testified before lawmakers on Tuesday, Feb. 24, providing greater clarity on the central bank's timeline for boosting benchmark interest rates. 
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Many banks have been focusing on deposits in the current environment, building up these resources instead of taking on additional credit risk. This approach reflects a more conservative stance, as financial institutions are unsure when the Federal Reserve will opt to push its benchmark interest rates higher. 
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Major banks, already facing a tough environment, have been encountering an additional headwind stemming from the dollar's sharp rally. The currency's recent appreciation, along with proposed capital guidelines, could make US banks seem bigger relative to their European counterparts. 
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Doral Financial's problems only seem to be getting worse. While the Puerto Rico-based holding company was able to improve its financial position late last year by attaining a legal victory, it has been encountering rising pressure from regulators, according to American Banker. 
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Mergers and acquisitions activity involving banks has been increasing, and this momentum has grown to include not only smaller banks in the U.S., but also midsize and international financial institutions. 
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Banks could run into challenges generating revenue growth as their ability to tap into loan-loss reserves deteriorates. 
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Subprime lender Santander Consumer USA Holdings (SCUSA) recently announced a smaller provision for credit losses amid otherwise general concerns that deteriorating lending standards could impact credit quality. The company cut this reserve to $560 million in the fourth quarter of 2014 from $770 million during the prior period.
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Lending Club recently announced a partnership with Alibaba Group whereby the peer-to-peer lender will provide small businesses with lines of credit for purchasing Chinese goods through the e-commerce giant's online marketplace. 
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Bank of America recently moved a $2.7 billion student loan portfolio to hold-for-sale status, chief financial officer Bruce Thompson told analysts during a conference call in January. 
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While many bemoan the challenges less-experienced borrowers face, San Francisco-based startup Earnest has been using an innovative new approach to assess their creditworthiness.
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BlackRock is planning to securitize loans purchased via internet origination channels. 
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New York Community Bancorp, Inc. has been generating many benefits by selling assets, keeping its balance sheet below the $50 billion mark and improving its financial results in the process. 
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The recent announcement that Los Angeles-based City National has agreed to be acquired by Royal Bank of Canada could be a game changer for other banks in the region, providing them with stronger opportunities to find clients or buyers.
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Two groups of peer-to-peer consumer loans collectively worth more than $300 million recently obtained ratings from Moody's Investors Service, which represents a first because major credit ratings agencies have never before evaluated P2P securitizations.
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A handful of innovative banking startups have been working on creating lending algorithms that consider more than the traditional variables such as one's credit score. Amid this push, companies are developing risk evaluation methods that account for how much time an applicant spends reading terms and conditions or whether they only use capital letters when filling out forms, The New York Times reported.
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Banks are striving to generate loan growth amid stiff competition and low interest rates. At the same time, analysts and shareholders are pressuring these financial institutions to reign in their expenses where possible, according to American Banker.
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Many banks have been reporting falling interest income in the current environment of low rates and tight competition.
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Banks have had a hard time generating satisfactory earnings growth lately, and this difficulty could easily continue in 2015. Banks both large and small have suffered these challenges, as the major financial institutions and the regional ones have been reporting lackluster earnings so far this year. Legal costs and compressed loan margins are the major drags for the larger banks.  Community banks are also feeling the pinch in generating good quality assets.
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U.S. economic conditions continue to improve at a time when the nation is benefiting from increased growth, falling energy costs and sustained job creation.
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U.S. economic conditions have been steadily improving, and this development has helped bolster the performance of major banks such as Wells Fargo, whose executives have been rather vocal about how much faith they have in the nation's recovery. 
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The Swiss National Bank eliminated its cap on the euro-franc exchange rate Jan. 15, at a time when the global currency markets are experiencing sharp volatility and central banks across the world are using increasingly divergent monetary policy.
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While many U.S. consumers have been benefiting significantly from sharply dropping oil prices, they may find they have even more money in their pockets after the Federal Housing Administration's recent decision to reduce its annual premiums. 
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Fintech startup Larky has been taking an innovative approach with its mobile applications, marketing them directly to banks so they can be used to provide consumers with discounts and offers from local stores.
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The Consumer Financial Protection Bureau has been quite active in recent years, and there is no sign that this trend will stop in 2015.
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Non-bank lender Progreso Financiero recently announced plans to change its name to Oportun - based on the Spanish word for opportunity - to reflect the value it provides to underserved Hispanic borrowers.
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The banking industry is encountering various disruptive forces - including stiff regulations, the proliferation of online lending and innovative new lending activities - that bankers should monitor if they want to capitalize on existing opportunities.
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American Banker recently named marketplace lending its Innovation of the Year.
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While headlines have been filled with subjects about the rising cost of college education, the financial challenges of students are becoming less severe, a handful of reports stated recently.
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Distressed loan sale programs can help out homeowners, taxpayers and government organizations, but to generate these benefits, they must be set up in the right way, Sarah Edelman and Julia Gordon, who work for the Center for American Progress, wrote in a recent American Banker opinion piece.
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While some banks may feel challenged by their constantly-changing environment, the situation grants them an opportunity to better their reputation and stand out from the competition, two experts wrote recently in an American Banker opinion piece.
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As auto lending activity strengthens across the country, banks have been viewing it with fresh eyes, looking to this particular activity as an opportunity where they can potentially benefit from low default rates, attractive rates, short duration and significant demand.
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U.S. Bancorp CEO Richard Davis has been offering some fairly rosy views of the economy, predicting that growth will accelerate sharply next year.
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The revenue banks are generating from customer-account fees has dropped sharply, stemming from changes in consumer behavior and new regulations created to protect account holder interests.
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The Office of the Comptroller of the Currency recently published final risk management and governance guidelines for major financial institutions, giving them different expected timelines for compliance based on their size.
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The value of many assets around the world - including real estate, stocks and bonds - has been rising, and several market participants have warned they have grown inflated and approach bubble status.
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Commercial lending has improved steadily over the last several years, but this recovery has certainly encountered some obstacles along the way.
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Credit union lending ramped up in May and June, according to recent reports from the Credit Union National Association.
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Fledgling startup companies could one day dominate the banking industry, financial expert Richard Magrann-Wells wrote in a recent American Banker piece.
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JPMorgan Chase recently caused a stir by announcing that utilization rates for its commercial credit lines moved higher in the first half of this year.
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As a result of hitting a critical point in its development, the market for Federal Family Education Loan Program loan sales may soon enjoy a sharp rise in activity.
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Bank mergers and acquisitions have surged lately, as the industry struggles to overcome numerous headwinds including a challenging compliance environment, higher capital requirements and the proliferation of alternative lending.
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U.S. auto lending warmed up in the first quarter, as the total loans of banks and thrifts climbed higher and delinquencies declined.
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Loan sales have been picking up steam in the U.S., as the rising interest in home equity loans and non-performing loan securitizations helps increase the value of such transactions.
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In a recent report, the Office of the Comptroller of the Currency warned banks about the credit risk that is steadily accumulating because of their willingness to provide loans easily.
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Certain mortgage lenders have been following more stringent requirements than those created by the Consumer Financial Protection Bureau in an effort to ensure compliance.
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LendingClub Corp., the largest peer-to-peer lender in the U.S., has started preparing for an initial public offering, selecting major investment banks Morgan Stanley and Goldman Sachs Group Inc. to lead the sale, individuals familiar with the situation told The Financial Times.
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Nigel Morris, who co-founded financial services firm Capital One, recently joined the board of Prosper Marketplace, the parent company of peer-to-peer online loan marketplace Prosper.
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Many consumers have lackluster feelings about the economy or their household income, according to the results of a recent Fannie Mae poll.
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Younger people are more likely to consider alternative banking, according to the results of a recent Accenture survey.
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The federal government recently announced plans to make mortgage lending standards less stringent, hoping that doing so will help jump-start the housing market.
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The Bank Director's 2014 Risk Practices Survey recently provided some insight into the risk management challenges that lending institutions are facing.
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The Consumer Financial Protection Bureau recently released a report on its supervision of non-bank activities.
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The auto loan portfolios held by credit unions grew at the fastest pace in 13 years durin?g March, according to data provided in a CUNA Mutual Group report.
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Lenders identified Consumer Financial Protection Bureau mandates as their single greatest compliance challenge in a recent QuestSoft survey.
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Younger Americans have been paying down their debts, gradually lifting the burden off their shoulders in the aftermath of the recession.
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Jobless claims recently fell to their lowest level in seven years, and this development could show the latest progress made by the labor market.
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Commercial and multifamily mortgage loan originations fell during the first quarter, according to figures contained in a recent Mortgage Bankers Association report.
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Household debt rose during the first quarter, according to figures provided in a report from the Federal Reserve Bank of New York.
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Mortgage applications surged during the week ending May 2, according to Mortgage Bankers Association figures.
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Larger lenders have been approving a higher fraction of applications for small business loans, taking market share away from banks with a more modest scope.
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Home prices experienced a sharp year-over-year surge in March, according to data contained in a CoreLogic report.
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Many U.S. banks recently reduced their standards for mortgage lending, and this development could boost loan sales by increasing the availability of this type of debt.
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Commercial and industrial loan origination moved higher during the first quarter, according to Federal Reserve data.
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A growing percentage of Americans are paying their credit card balances in full every month, according to a recent Gallup poll.
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Homes values have been rising in several different metropolitan areas, and now many properties have prices that exceed the conforming loan values set forth by government programs.
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The Consumer Financial Protection Bureau recently released a report containing information on how consumers can use electronic methods to complete the paperwork involved in a mortgage closing.
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Lending standards could potentially weaken as housing prices continue to increase, Lindsey Piegza, chief economist for privately-owned brokerage Sterne Agee, stated recently.
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The total value of automobile loans outstanding rose in March, and the increased supply of this type of debt could bolster loan sales.
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U.S. economic growth seems to be picking up, and this development could affect both loan origination and loan sales by bolstering the sentiment of consumers and the demand for credit.
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Various measures of consumer confidence have shown strength lately, and the continued improvement in this sentiment could fuel more robust loan origination by increasing the demand for credit.
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Strong durable goods order data for March showed the robust nature of the economy, and this continued improvement could help bolster loan origination by making consumers more confident.
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New home sales dropped sharply in March, and this development could combine with more stringent lending standards to affect loan sales by reducing the supply of debt.
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Retail sales surged in March, and the sharp gain could potentially drive up loan origination by supporting demand for credit.
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Economic conditions in Texas are strong and improving, and this situation could help support loan sales by increasing both the supply and demand for credit.
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U.S. consumer defaults plunged in March, and this development could affect loan sales and pricing by lowering the supply of low-quality credit.
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U.S. mortgage lending plunged during the first quarter of 2014, and this development could easily affect the price and volume of loan sales by reducing supply.
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Condominium developments have been springing up all over in U.S. metropolitan areas, and this trend could easily impact loan sales by increasing the amount of available debt.
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U.S. consumer borrowing surged more than economists had expected in February, and this development could bolster loan sales if banks seek to unload any excess credit they have extended.
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U.S. banks have been facing many challenges recently that could hamper their fiscal results, and lenders in this situation might turn to buying loan portfolios in order to bolster their financial performance.
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Several measures of consumer delinquency fell during the fourth quarter of last year, according to a survey conducted by the American Bankers Association.
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Many participants in a recent industry survey expressed optimistic views of the housing market, and this strong sentiment could foreshadow more robust loan origination.
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More than 80 percent of lenders taking part in a recent American Bankers Association survey predicted that consumers will have reduced access to mortgages as a result of new industry regulations.
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Banks across the U.S. have been focusing on the leverage ratio, and complying with this particular requirement could motivate them to make loans that they consider safer or have lower capital requirements.
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Temporary positions in the U.S. have surged lately, and this situation could potentially have a significant impact on credit markets if it is a precursor to the creation of more full-time jobs.
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The U.S. economy has been creating jobs consistently for many months, most recently boosting payrolls in March, and sustained labor market improvement could bolster loan origination by putting more money in the pockets of consumers and making them more optimistic about the future and willing to borrow.
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Investors are flocking to debt, and their strong desire could push whole loans higher in price.
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Millennials are facing myriad challenges, and these difficulties could constrict their demand for credit and undermine loan origination.
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A recent surge in consumer spending could indicate that these individuals are becoming more confident, which could result in them seeking more credit.
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Jobless claims fell to a four-month low during the week that ended on March 22, according to figures from the U.S. Department of Labor.
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CBA Live 2014, the highly anticipated annual event hosted by the Consumer Bankers Association, is set to begin on March 31 in Washington, D.C., and will run until April 2.
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Banks have been purchasing loans that have been originated through the internet as credit markets undergo significant structural changes.
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If current economic conditions send lenders' portfolio values higher, these banks could see an uptick in loan sale activity.
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Consumer Financial Protection Bureau Deputy Director Steven Antonakes recently spoke about how important accurate information is for completing various activities involved in debt collection, including debt sales.
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Key members of the Senate Banking Committee recently released the text of a proposal that could impact U.S. debt sales by reforming current housing finance regulations.
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