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Strategies for selling smaller pools of loans


  • McCarthy, John


Proceedings of the Conference on the Secondary Market for Community Development Loans In September 2006, the Federal Reserve hosted a conference on secondary markets for community development loans. A theme that emerged was that techniques, programs, and structures that work for large loans do not necessarily work for small ones. In this article, I briefly outline why smaller deals can be more difficult to finance, and describe two ways in which the Community Preservation Corporation (CPC) has used unrated transactions to overcome these obstacles. Finally, I suggest that a broad secondary market for small loans is more likely to grow organically from numerous small transactions, rather than by a herculean effort to create a copy of the commercial mortgage-backed securities market. I also suggest how the Federal Reserve could help speed this growth.

Suggested Citation

  • McCarthy, John, 2006. "Strategies for selling smaller pools of loans," Community Development Investment Review, Federal Reserve Bank of San Francisco, issue 2, pages 40-43.
  • Handle: RePEc:fip:fedfcr:y:2006:p:40-43:n:v.2no.2

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    References listed on IDEAS

    1. Mitchel Y. Abolafia (ed.), 2005. "Markets," Books, Edward Elgar Publishing, number 2788.
    2. Bostic Raphael & Paulson Anna L & Mehran Hamid & Saidenberg Marc, 2005. "Regulatory Incentives and Consolidation: The Case of Commercial Bank Mergers and the Community Reinvestment Act," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 5(1), pages 1-27, April.
    3. Timothy Bates & William Bradford & Julia Sass Rubin, 2006. "The Viability of the Minority-Oriented Venture-Capital Industry Under Alternative Financing Arrangements," Economic Development Quarterly, , vol. 20(2), pages 178-191, May.
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    Community development; Loans; Secondary markets;


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