By Robert Judge
CEO, Government Loan Solutions
Editor, CPR Report
Needed Changes to Ensure SBA 7(a) Secondary Market Pool Vitality
The key to sustainable pooling that utilizes a Social Security Fund type of architecture is for the SBA is to do whatever they can to encourage pooling and, to a lesser extent, lowering the WAC for pools.
To accomplish this task, I recommend the following changes:
1. Move back to a 70% maturity range for pooling and watch pool originations skyrocket.
2. Allow stripped loans inside WAC pools, in order to lower the overall WAC for new pools.
3. If possible, encourage par pools via some type of incentive mechanism.
4. Get rid of the interest rate range rule and allow investors to decide what they want.
Read the entire analysis here.