| Southeast Corporate has
partnered with Charlie Mac, a wholly owned subsidiary
of U.S. Central Credit Union, to provide increased
liquidity options to its members.
The Charlie Mac program operates as a warehouse
facility that purchases and holds members'
loans until pooled into future securitization
structures or sold off in individual loan
sales. Charlie Mac will currently purchase high
quality loans for new and used automobiles
and non-conforming, high quality first mortgage
loans. Other types of loans, such as student
loans, home-equity loans, credit card loans
and other types of personal loans, will
be considered on a loan-by-loan basis.
This program provides liquidity through
two distinct phases - a purchasing phase
and a servicing phase. A loan portfolio
purchase and sale characterizes the purchasing
phase on the day of the closing. The purchase
and sale transaction enables members to
sell their loans to Charlie Mac, receiving off-balance
sheet accounting treatment, in exchange
for cash. The pricing on the sale is based
on the characteristics of the portfolio
being sold and on current market conditions.
The servicing phase involves all of the
transactions that occur on the underlying
loans after the closing. The servicing phase
is comprised of the cash flows of the principal
and interest payments made by borrowers
that are then directed to investors, servicers
and credit enhancers.
The entire transaction is transparent to
the member's borrower.
- Efficient pricing, including premium
pricing (depending on the portfolio weighted
average coupon (WAC)
- Off-balance sheet accounting treatment
(please consult with your local accountant)
- Transforms on-balance sheet spread business
into a fee-based servicing operation
- Provides low-cost funding when loan
demand outstrips core share deposit growth
- Provides an earnings management tool
that can either 1) monetize or mark-to-market
the unrealized value of a loan portfolio,
or 2) remove low yielding assets from
books
- Can be used as an efficient balance
sheet management tool to reduce or add
exposure to certain asset types
- Demonstrates to regulators the ability
to efficiently obtain liquidity for on-balance
sheet assets.
Each member portfolio is priced based on
its own individual characteristics. The
portfolio is modeled based on industry standard
prepayment speeds and is priced accordingly.
The member receives a .75% (annualized)
fee for servicing loans. The servicing fee
is calculated on the outstanding principal
balance at the beginning of the month and
is paid on the 15th of the following month.
For
current pricing click here |
