DebtMarket FAQ
- As a buyer, why would I use DebtMarket?
- As a seller, why would I use DebtMarket?
- What makes DebtMarket a transparent marketplace?
- What are your portfolio size requirements?
- What loan performance requirements are there for listing a portfolio for sale?
- What is the credit quality of portfolios listed for sale?
- What asset classes does DebtMarket allow to be listed?
- What type of portfolio information does a buyer see on DebtMarket?
- What information must a seller provide to list a portfolio for sale?
- Who is eligible to become a member of DebtMarket?
- Who are seller members of DebtMarket?
- Who are buyer members of DebtMarket?
- How much does it cost to use DebtMarket?
- How can I contact buyer and seller members directly?
- How is DebtMarket different from a broker?
- How does DebtMarket work with brokers?
- How do I perform due diligence on DebtMarket?
- How do you keep consumer information private?
Q: As a buyer, why would I use DebtMarket?
A: During these turbulent times, it is critical that loan portfolio buyers carefully analyze the risk and return for every opportunity and better understand market pricing. With DebtMarket, loan portfolio buyers can eliminate the cost and time associated with picking through hundreds of deals to obtain a clearer picture of market opportunities and seller pricing expectations.
- Debt buyers can make apples-to-apples comparisons on unique deals with a standardized set of loan data
- Buyers and sellers negotiate directly with each other
- DebtMarket streamlines the transaction process, making it easy for new and experienced buyers
Q: As a seller, why would I use DebtMarket?
A: In uncertain times like these, sellers can no longer guarantee long-term relationships with lenders and debt buyers. That’s why it is crucial for debt sellers to continually improve their access to capital and to receive fair market value for their notes. DebtMarket’s transparent marketplace ensures members obtain competitive pricing for their portfolios while remaining anonymous until they accept an offer.
- Sellers have instant and direct access to hundreds of debt buyers
- Sellers control the terms of both the sale and the negotiation process
- DebtMarket streamlines the transaction process, making it easy for new and experienced sellers
Q: What makes DebtMarket a transparent marketplace?
A: Here is how we define transparency and how we deliver it on DebtMarket:
- Published fee structure
- Standardized transaction process
- Access to loan-level data
- Direct buyer and seller communication
- Seller profile information
- Standardized portfolio data
- Aggregated marketplace data (coming soon)
Q: What are your portfolio size requirements
A: There are no minimum or maximum size requirements.
Q: What loan performance requirements are there for listing a portfolio for sale?
A: Sellers may list loan portfolios of all performances, for example:
- Performing
- Non performing
- Access to loan-level data
- Bankruptcy
Q: What is the credit quality of portfolios listed for sale?
A: Sellers may list portfolios of all credit quality:
- Super prime
- Prime
- Near prime
- Subprime
- Deep subprime
Q: What asset classes does DebtMarket allow to be listed?
A: Sellers may list portfolios of all major asset classes
- Auto
- Mortgage (commercial and residential)
- RV
- Marine
- Powersport
- Student loans
- Credit cards (coming soon)
Q: What type of portfolio information does a buyer see on DebtMarket?
A: Buyers see four types of information on DebtMarket:
- Summary/aggregate information
- Portfolio reports
- Loan level detail
- Information about the seller
Q: What information must a seller provide to list a portfolio for sale?
A: The amount/type of information that a seller provides depends on the portfolio size and the asset class. For portfolios above $5MM, sellers need to provide the following minimum info: (we encourage detailed loan level information in an effort to provide transparency however, DebtMarket is flexible enough to handle basic information.
- The number of loans in the portfolio
- Current remaining balance ($)
- Current principal balance ($)
- Weighted average coupon
- Weighted average remaining term
- Weighted average initial term
- Average amount financed
- Original balance
- Seller survey
For portfolios of under $5 million, sellers need to provide following minimum info:
- Populated loan level template for the specific asset class. Sellers download the standard DebtMarket loan level detail templates from the platform
- Seller survey. Sellers complete a seller survey online during the listing process which automatically creates a seller survey in pdf format for buyers to view and download
- Auction information (pricing terms etc.)
Q: Who is eligible to become a member of DebtMarket?
A: DebtMarket membership is open to institutions in the business of buying and selling consumer debt, such as:
- Financial institutions:
- Banks
- Credit Unions
- Hedge Funds
- Private Equity Firms
- Consumer Finance Companies
- Retail dealers (e.g. auto, RV, boat, motorcycle and other powersport dealers)
- Related Finance Companies
- Educational institutions
- Licensed Loan Portfolio Brokers
DebtMarket does not grant membership to individuals or accredited investors.
Q: Who are seller members of DebtMarket?
A: Seller members include:
- Financial institutions:
- Banks
- Credit Unions
- Hedge Funds
- Private Equity Firms
- Consumer Finance Companies
- Educational institutions
- Retail dealers
- Licensed loan brokers
Q: Who are buyer members of DebtMarket?
A: Buyer members include:
- Financial institutions:
- Banks
- Credit Unions
- Hedge Funds
- Private Equity Firms
- Consumer Finance Companies
- Licensed loan brokers
Q: How much does it cost to use DebtMarket?
A: There is no cost to join DebtMarket or list and browse portfolios for sale. We charge a small fee on the close of a transaction based on the transaction size and portfolio credit quality. For example, a sub-prime portfolio transacts at $10 million:
- Seller fee = 0.4% ($40,000)
- Buyer fee = 1% ($100,000)
For a full pricing schedule please call us at 866-559-4339 or email info [Email address: info #AT# debtmarket.com - replace #AT# with @ ]
Q: How can I contact buyer and seller members directly?
A: Buyers and sellers can communicate directly through DebtMarket’s online messaging system. Coming soon: members will be able to communicate with each other in real time using the DebtMarket instant messaging system.
Q: How is DebtMarket different from a broker?
A: DebtMarket operates as an unbiased marketplace that brings buyers and sellers together. We do not provide any loan advisory, marketing or negotiation services. Buyers and sellers have direct access to each other on the DebtMarket platform.
Q: How does DebtMarket work with brokers?
A: DebtMarket welcomes licensed brokers to become members of the platform. Brokers may open either buyer or seller accounts based on their clients’ needs. DebtMarket transaction fees remain the same for brokers as for regular buyers and sellers.
Q: How do I perform due diligence on DebtMarket?
A: Buyers perform due diligence at two stages of the transaction process:
- Preliminary due diligence (before the offer is placed): A buyer uses pre-set filters to prospect portfolios of interest and reviews supporting documents (loan level detail, stratification reports etc.) to make a pricing suggestion to the seller.
- Standard due diligence (after conditional bid is placed and accepted): A buyer reviews electronic copies of all the original loan documents they require to submit a final offer to the seller. A buyer may also perform on site due diligence but must coordinate this with the seller.
Q: How do you keep consumer information private?
A: DebtMarket employs a rigorous security and privacy policy to protect all sensitive consumer information. In cooperation with RackSpace, our internal technology team is responsible for information security operations including; daily reviews, access control requests, incident handling engineering, consultation, design, and implementation of security mechanisms.
For more detailed information please refer to our privacy policy, You may also contact us at 866-559-4339 or info [Email address: info #AT# debtmarket.com - replace #AT# with @ ]
