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Reselling Loans for Profit

TAUNTON, MA-SilverLeaf Financial is buying $3 million worth of loans from United Commercial Bank and renegotiating with borrowers.

By Ryan Clark | Updated on September 01, 2009

TAUNTON, MA-SilverLeaf Financial is purchasing two loans, which total $3 million, and will renegotiate the payment with the borrowers. The loans come from United Commerical Bank and are based off two properties, one here and one in Wooster, MA. The company is looking to turn a positive out of a negative.

The $2.3-million loan is for 437 Whittenton, here, a 452,000-square-foot office/industrial building. Sitting on 40 acres of property, the loan was purchased at a discounted rate, along with the other loan which came in at $700,000 for the 40,000-square-foot 115 Dewey St.

CEO of SilverLeaf, Shane Baldwin, explained that the company had purchased the loans at a discount, somewhere over $1 million for both loans. Baldwin tells GlobeSt.com that, for example, the $2.3 million loan can be brought to the borrower and renegotiated to between $1.26 million and $1.9 million and SilverLeaf still makes a profit. The banks, meanwhile consider these loans “subperforming,” according to Baldwin. The combination, essentially, is win-win-win, where the banks gain much-needed liquidity, SilverLeaf turns a profit and the borrowers can pay off a lower principal.

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