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By selling loans they have issued, banks raise money to issue more loans.
"Can you imagine giving incentives to staff for selling loans?" he said.
Banks are selling loans made to LBOs at big discounts, reflecting wider fears of default.
But the real question is whether this is a good way of selling loans.
Firms like Merrill and UBS PaineWebber began aggressively selling loans and mortgages to their brokerage customers.
So, for many commercial banks, selling loans now, at distressed prices, would almost certainly lead to large losses.
Similar(32)
Instead of selling loan modification services, they are advertising so-called loan workouts and forensic loan audits.
MERS appears to sell loans to MERS ad infinitum.
The lenders' inability to sell loans hinders their ability to make new loans.
Lenders who sell loans to hedge funds and other investors also need not follow suit.
Mr. Walsh bought and sold loans on properties that were often in foreclosure.
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