Secondary Market Purchase

SBA strongly encourages lenders to purchase directly from the secondary market holder those defaulted loans that lenders had sold in the secondary market after loan closing. Should the primary lender refuse to purchase SBA will purchase from the secondary holder upon receipt of the documentation described below. If the primary lender purchases from the secondary market, and subsequently requests an SBA purchase, pre-purchase review submission instructions should be followed.

Documentation for secondary market purchase by SBA:

• Written notice and request for transcripts: The lender must advise SBA in writing that it will not purchase from the secondary market. SBA will then notify both Colson Services Corp. and the lender that SBA will purchase the guaranteed portion. The lender must send any future loan collections to SBA’s Denver Finance Center using SBA Form 172.

• Transcript of Account: It is strongly suggested the primary lender use SBA Transcript Form 1149. Failure to provide all of the required transcript information may result in a delay of the purchase and an invoice to the primary lender for the interest expense associated with that delay.

• Executed Copy of the Loan Authorization

• Executed Copies of all Payment Modifications:  Enclose copies of all deferment and other payment/terms modifications.

• Investor Approval of all Payment/Term Modifications: As required, (refer to the 1086 and applicable SOP).

• Email address to which a copy of the purchase transaction summary should be sent

The above should be sent to the Herndon Center (via regular or over-night mail only) and be clearly marked as a secondary market purchase request.

Post Purchase Review:

• Within 15 days of purchase the primary lender will submit a Post Purchase Review (PPR) documents package.  Instructions for preparation of the PPR package are the same as those for submitting a guaranty purchase request for a loan not sold into the secondary market (Pre-Purchase Review). Please use the new 10 Tab System to organize your Purchase Package.