SBA Program to Jumpstart Secondary Market Begins The U.S. Small Business Administration (SBA) recently
announced that it had authorized nine loan pool originators to assemble and
sell pools of 504 program first mortgage loans, through a new program, aimed at
jump-starting the secondary market, authorized under the American Recovery and Reinvestment Act. Through the program, the SBA will provide a government
guarantee on the pools of portions of eligible 504 first mortgage loans
assembled by authorized pool originators. The pools then will be sold to
third-party investors. To be eligible, a first mortgage must be associated with
a 504 loan disbursed on or after Feb. 17, 2009. While the SBA will provide an 80 percent guarantee on
the pools, lenders and the pool originators also are required to retain a
stake. Lenders are required to retain at least 15 percent of each individual
loan and pool originators must assume 5 percent of the risk. The program is authorized to be in place until Feb.
16, 2011 or until $3 billion in new pools are created. The first nine pool originators authorized are: • Bank
of America, N. A. of New York, New York • Cantor
Fitzgerald & Co. of New York, New York • Citizens
Bank of Elizabethton, Tennessee • Coastal
Securities, Inc. of Houston, Texas • Community
South Bank of Knoxville, Tennessee • Fidelity
Bank of Covington, Georgia • Meadows
Bank of Las Vegas, Nevada • Morgan
Stanley Bank, N.A. of Salt Lake City, Utah • Voyager
Bank of Eden Prairie, Minnesota For additional information on the pool originators,
please click here. |