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| Topic | Questions and Answers |
|---|---|
| Asset Sales - General | How can I buy furniture or equipment from the FDIC? The FDIC sells various items such as furniture or office equipment in two ways—as the leftover assets from a bank failure or through liquidation of old FDIC-owned property. For information about failed bank items, please visit Other Assets from Failed Banks. |
| Asset Sales - General | How can I buy loans from the FDIC?
Prospective bidders may also provide contact and investor status information and identify the types of financial assets, loans, and loan-related assets they are interested in purchasing by completing the Prospective Bidder Information form and delivering the completed form electronically to: prospectivepurchaser@fdic.gov. Prospective bidders that submit the form will have their names included on a list to receive sale announcements that match their expressed interests. |
| Asset Sales - General | Do you have historical information on FDIC property sales? Closed Real Estate Sales is a searchable database with real estate sales results from January 1, 2010 to the present. Closed Loan Sales provides data on pools of loans sold from January 1, 2010 to the present. |
| Joint Venture Transaction | Is a joint venture transaction an appropriate investment for me? Every interested party, based on its own circumstances, must determine whether participating in a joint venture transaction is a suitable investment. Prospective purchasers must have the financial sophistication and resources sufficient to evaluate and bear the economic risks of this type of investment as well as the requisite expertise to manage the venture. |
| Joint Venture Transaction | How do I receive notification of FDIC joint venture transactions? Parties interested in joint venture transactions must complete the Prospective Bidder Information form, including their investor status, in order to receive notice of upcoming transactions. |
| Joint Venture Transaction | What types of loans are included in joint venture transactions? The most common loan types in these transactions are loans secured by commercial or residential real estate, including acquisition, development, and constructions loans. |
| Joint Venture Transaction | What criteria does the FDIC consider when pooling loans to be conveyed into a joint venture transaction? Typically, a joint venture transaction contains a large volume of loans with a substantial aggregate unpaid principal balance (e.g., in excess of $100 million) with similar characteristics or that meet specific criteria. Pooling considerations may include performance status, loan type, loan size, and collateral type and location. |
| Joint Venture Transaction | Is a ‘joint venture transaction’ the same as a ‘structured transaction’? Yes, the FDIC previously used the terminology ‘structured transaction’ to describe what is now referred to as a ‘joint venture transaction.’ |
| Joint Venture Transaction | How does a joint venture transaction work?
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| Joint Venture Transaction | How does a leveraged transaction work?
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| Joint Venture Transaction | Who manages the assets? The private owner is also the manager of the LLC and is responsible for the management and servicing of the assets conveyed to the LLC. The manager enters into a servicing agreement with a qualified servicer to service the assets in a manner consistent with industry standards and to maximize their value to the joint venture. The private owner receives a monthly management fee, which is specific to each transaction and is disclosed to bidders prior to the bid date. Except for the management fee and certain reimbursable administrative expenses, the private owner, and not the LLC, bears the cost of overhead and administrative fees. |
| Joint Venture Transaction | What type of oversight does the FDIC have? The FDIC has monitoring and oversight rights pursuant to the joint venture legal agreements. The private owner is required to deliver periodic financial statements, and monthly cash and financial reports to the FDIC. In addition, the FDIC engages third party contractors to perform periodic compliance reviews to test the private owner’s adherence to legal agreement provisions governing asset, financial, and business management activities of the LLC. |
| Joint Venture Transaction | Are borrowers affected when their loan is conveyed in a joint venture transaction? The documents governing the legal rights and obligations of borrowers do not change when their loans are conveyed in a joint venture transaction. |
| Joint Venture Transaction | Does the FDIC also give bidders the option to purchase these pools on a whole-loan all cash basis? At FDIC’s discretion, pools proposed to be conveyed to a joint venture transaction may also be offered separately on a whole-loan all cash basis. In such a case, bidders may bid to acquire the whole loans and/or an interest in the joint venture. |
| Joint Venture Transaction | Are the legal documents for past joint venture transactions available? Yes, the primary legal documents for past joint venture transactions are available at the following link: Historical Joint Venture Transactions |
| Loan Sales | 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. |
| Loan Sales | How do I receive notification of FDIC loan sales? Persons with accounts on the respective advisors’ websites will receive emails notifying them of the FDIC loan sale when they are made available to the market. In addition, a general announcement of an FDIC loan sale will appear on the website of the loan sale advisor responsible for the sale. The FDIC also announces sales on its website under Loan Sale Event(s). |
| Loan Sales | What types of loans are in loan sales? The most common loan types in these sales include loans secured by commercial or residential real estate, commercial and industrial loans, and consumer loans. They can also include specialty assets like agricultural loans, credit cards, leases, government-backed loans, or lead participations. |
| Loan Sales | Does the FDIC sell only distressed or troubled loans? No. The loan portfolios of failed banks usually contain a variety of performing and non-performing loan products including mortgage, commercial, and consumer loans. The FDIC sells loans that are available for sale regardless of performance status or quality. |
| Loan Sales | What criteria does the FDIC consider when creating loan pools? Typically, pools contain loans that have similar characteristics or meet specific criteria. Pooling considerations may include performance status, loan type, loan size, collateral, and location. A loan pool may contain one or more loans. For example, a loan that is a lead participation may be placed in its own pool to provide the downstream participant(s) an opportunity to purchase its related interest. |
| Loan Sales | Are there any restrictions to purchasing loans from the FDIC? Yes. A prospective purchaser must be able to execute a Purchaser Eligibility Certification asserting their eligibility to purchase assets of failed financial institutions from the FDIC. 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 prospective purchasers as a prerequisite to bid. The Purchaser Eligibility Certification is available on the website of the loan sale advisor responsible for the sale. Prospective purchasers will supply the completed form to the loan sale advisor. In order to self-screen, prospective purchasers can review a sample copy of the Purchaser Eligibility Certification at the following link: Purchaser Eligibility Certification |
| Loan Sales | Does the FDIC guarantee the performance of loans it sells? No. The FDIC makes no representations or warranties in connection with any of the loans. The only remedies or recourse provided to the purchaser are those set forth in the Loan Sale Agreement. Generally, all risks associated with the loans are passed to the purchaser. Prospective purchasers can review the terms and conditions of sale in a sample copy of the Loan Sale Agreement at the following link: Loan Sale Agreement. Please refer to the specific Loan Sale Agreement for each respective sale as it is subject to change. |
| Loan Sales | May prospective purchasers review the loan files? The FDIC encourages prospective purchasers to complete file reviews and to perform their own investigation of the loans to the extent allowable under the Confidentiality Agreement. To conduct an online review of the loan files, interested parties must contact the loan sale advisor responsible for the sale and register on its website. |
| Loan Sales | What is required to review files or obtain specific information on the loans in a given sale?
The loan sale advisor may charge a fee for vetting a prospective purchaser’s qualifications. |
| Loan Sales | Is a deposit required in order to bid? Yes. An Initial Deposit, as defined in the Bid Instructions for a given sale, must be received on one of the two business days prior to the bid deadline. Only one Initial Deposit, typically in the amount of $100,000, is required from each bidder regardless of the number of bids submitted. Bidders must make the Initial Deposit by wire transfer. The Initial Deposit will be returned to the unsuccessful bidder within a reasonable time after selection of the winning bidder. |
| Loan Sales | What is required to bid on a sale? The Bid Instructions for a specific loan sale will define all requirements to bid on a given pool of loans. This includes submitting an Initial Deposit and executing certain documents, such as the Bid Certification and the Purchaser Eligibility Certification. These documents can be found on the loan sale advisor's website. Once all requirements are met, the bidder will be given online access to bid. |
| Loan Sales | Where can I find the terms and conditions of the sale? The Loan Sale Agreement provides the terms and conditions of the sale. The Loan Sale Agreement will be available on the website of the loan sale advisor responsible for the sale. Prospective purchasers can review the terms and conditions of sale in a sample copy of the Loan Sale Agreement at the following link: Loan Sale Agreement Please refer to the specific Loan Sale Agreement for each respective sale as it is subject to change. |
| Loan Sales | Once a winning bidder is awarded a bid, how long before the sale is closed? The period of time varies, but FDIC sales are usually consummated within 20 business days after a bid is awarded. Bid Package documents (e.g., Invitation to Bid, Loan Sale Agreement) should be reviewed to determine the specified closing date. |
| Loan Sales | Is an earnest money deposit required from 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 bidder’s Initial Deposit. The Final Deposit must be submitted via wire transfer within one business day following bid award. |
| Loan Sales | What will the successful bidder receive at closing? The successful bidder will receive the executed Bill of Sale, Closing Statement, Assignment and Assumption of Interests and Obligations, and Loan Sale Agreement at closing. All pertinent and available documentation for the loans such as the notes, collateral documents, and loan files will be delivered to the purchaser within a reasonable time after closing. |
| Loan Sales | How are sales consummated? Closing will occur on the closing date. At the FDIC’s option, closing may be done electronically or conducted in person at a place designated by the FDIC. |
| Loan Sales | How often are historical loan sale results updated? Loan sale results are updated monthly and can be found on FDIC’s website at FDIC Closed Loan Sales. |
| Mortgage Servicing Rights | What types of MSRs does the FDIC sell? The most common MSRs relate to SFR loans originated or purchased by the failed institution and sold, servicing retained, to the Government Sponsored Enterprises (GSEs) such as Fannie Mae and Freddie Mac or included in a mortgage-backed securitization guaranteed by Ginnie Mae. MSRs that relate to SFR loans held by private investors or backing private-label securitizations are not as common. |
| Mortgage Servicing Rights | How can I receive notification of MSR sales? Parties interested in participating in MSR sales may request that they be included on a list of prospective bidders to receive sale announcements. Prospective bidders may provide contact and investor status information and identify the types of financial assets, including MSRs, they are interested in purchasing by completing the Prospective Bidder Information form and delivering the completed form electronically to: prospectivepurchaser@fdic.gov. Prospective bidders that submit the form will be included on a list to receive sale announcements that match their expressed interests. |
| Mortgage Servicing Rights | Who can buy MSRs? Prospective bidders must demonstrate the ability to service loans in accordance with mortgage industry standards. Generally, only mortgage originators and servicers, financial institutions, and institutional investors with experience and access to sophisticated mortgage servicing platforms are eligible to purchase MSRs. In addition, many investors—including the GSEs and Ginnie Mae—will require the purchaser to meet investor approval requirements. Eligible bidders must be qualified prior to receiving information regarding MSRs offered for sale. |
| Mortgage Servicing Rights | How can I become a qualified bidder?
The FDIC also runs a search with the Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury on potential qualified bidders prior to bid sheet distribution. |
| Mortgage Servicing Rights | How are MSR sales advertised? MSR sales are generally advertised through direct and digital solicitation of current and previously qualified bidders through contacts maintained by the FDIC and, if contracted to assist with the sale, investor lists maintained by a financial advisor. Depending on the type of portfolio and the timing, a sale may also be advertised through media outlets and on FDIC.gov. |
| Mortgage Servicing Rights | What is the auction sale process?
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| Mortgage Servicing Rights | Is a deposit required to bid? Yes, an earnest money deposit is typically required from each qualified bidder to access due diligence materials and bid. |
| Mortgage Servicing Rights | Where can I find a listing of historical sales? Historical sales can be found on FDIC.gov through the following link: Mortgage Servicing Rights (MSR) Sales |
| Real Estate Sales | How does the FDIC obtain real estate? The FDIC retains real estate from failed financial institutions and may obtain additional real estate through foreclosure. |
| Real Estate Sales | What types of real estate does the FDIC sell? The FDIC sells various types of real estate including commercial properties, multifamily and single family residential, developed and undeveloped land, and bank branches. |
| Real Estate Sales | Where can I find more details on FDIC real estate? The online listing for each individual property owned by the FDIC will typically include the name, phone number, and e-mail address (if available) of the local real estate agent and/or broker, and the FDIC real estate contractor. Any of these parties will be able to provide more details on any property of interest. |
| Real Estate Sales | How does the FDIC market and sell real estate? Properties are generally sold individually through listings with local real estate agents and/or brokers, who are hired by FDIC real estate contractors to assist in the marketing and disposition of properties on behalf of the FDIC. Occasionally, the FDIC conducts open “outcry” and online real estate auctions. All properties are sold on an “as is, where is, with all faults” basis. The FDIC makes no guarantee, warranty, or representation, express or implied, as to the location, quality, kind, character, size, description, or fitness for any use or purpose, now or hereafter with regard to any of the properties listed. |
| Real Estate Sales | Where can I find information on FDIC real estate auctions? Auction announcements can be found on the FDIC Real Estate and Property Sales web page at Real Estate and Property Sales. Advertising may also appear in local, regional or national newspapers or other media in each event’s local and/or regional area. |
| Real Estate Sales | How are list prices established? List prices are established by a variety of factors which may include, but are not limited to, independent appraisals, broker opinions of value, property condition, time on the market, and/or current market conditions. List prices are subject to change without notice. |
| Real Estate Sales | When the FDIC receives my offer, how is it evaluated? Various criteria are considered when evaluating offers from prospective purchasers. They include, but are not limited to: appraised value; purchase offer amount; earnest money deposit amount; how the purchase will be funded (e.g., cash or financing); due diligence, inspection, and closing periods; net sales proceeds; and the submission by the prospective purchaser of all complete, fully executed documents required by the FDIC. The FDIC reserves the right to accept, reject, and/or counter any offer. While reviewing such offers, the FDIC further reserves the right to continue its sales efforts, including responding to any other inquiries or offers from other parties concerning the purchase of a property. |
| Real Estate Sales | Does the FDIC provide seller financing? The FDIC does not provide seller financing for the purchase of real estate. |
| Securities Sales | What types of securities does the FDIC sell?
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| Securities Sales | Who can participate in a FDIC securities auction? Investors meeting federal securities act qualification criteria for private placement sales, such as banks and registered broker-dealers, are eligible to purchase securities. Bidders must be qualified before receiving information about securities sales. |
| Securities Sales | What is the auction sale process?
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| Securities Sales | Are securities auctions absolute? No, reserve prices are established for each security and FDIC has discretion to accept a bid below reserve or withdraw a security if the reserve price is not met. |
| Securities Sales | Is a deposit required to bid? No. |
| Securities Sales | How are securities sales advertised? Qualified bidders are notified via e-mail of an upcoming auction. |
| Securities Sales | Where can I find a listing of securities for sale? Securities are not publicly listed for sale. Qualified bidders can review securities offered for auction when the bid sheets are distributed (generally one week prior to the auction date). |
| Securities Sales | Where can I find a listing of historical sales? Historical sales are not currently posted. |