Published in: CUNA Council
High performing credit unions understand the importance of evaluating all asset classes, including whole loans, when constructing their balance sheets. Just like a securities investment or loan origination, incorporating the secondary whole loan market into balance sheet strategy can often improve your credit union’s performance.
- Establish characteristics.
The most direct driver of a loan pool’s price is the characteristics of the collateral itself. These include:
- Coupon (WAC)
- Credit quality
- Weighted average maturity (WAM)
- Servicing type