A loan sale is a
sale, often by a bank, under
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
of all or part of the
cash stream from a specific
loan
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...
, thereby removing the loan from the
bank
A bank is a financial institution that accepts Deposit account, deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital m ...
's
balance sheet
In financial accounting, a balance sheet (also known as statement of financial position or statement of financial condition) is a summary of the financial balances of an individual or organization, whether it be a sole proprietorship, a business ...
.
Often subprime loans from failed banks in the United States are sold by the
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation (FDIC) is one of two agencies that supply deposit insurance to depositors in American depository institutions, the other being the National Credit Union Administration, which regulates and insures cr ...
(FDIC) in an online auction format through companies. Performing loans are also sold between financial institutions.
See also
*
Internet Data Exchange (IDX)
*
Commercial Information Exchange
A Commercial Information Exchange (CIE) is an Internet-based commercial property listing service in the United States that is operated by a local association to serve the local market.
A CIE is the commercial real estate equivalent of the resid ...
External links
Federal Deposit Insurance Corporation
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Credit
Loans