According to Secondary Market Access (SMA), a leading SBA 504 First Mortgage Lien Pool (FMLP) settlement firm, December 2011 saw record activity for FMLP settlement with a total of 24 loans settled into 10 separate pools.
SMA’s Bob Judge said FMLP volume is growing significantly as lenders realize this secondary market option is available to them. “The FMLP program is an incredibly valuable tool for those lenders who are looking to maximize income while diversifying risk.”
The gross loan amount of all loans was almost $60 million. Judge coordinated the settlement on 8 of 10 pools in December 2011 and he anticipates additional pool originators entering the market as the FMLP program becomes more widely recognized by 504 lenders. The program allows for the pooling and sale of a portion of first mortgage loans that were closed in conjunction with SBA 504 second mortgage loans.
“Country Bank and ValueXpress are actively assembling a first FMLP for settlement in the spring or summer of 2012,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “We anticipate 4-5 first mortgage loans that will be closed in conjunction with SBA 504 second mortgage loans; an approximate balance of $20 million will be pooled and partially sold under the FMLP program.” Country Bank has set a goal of $50 million of SBA 504 first mortgage loans for 2012 and it is actively providing loans to qualified borrowers.