The Professional's Playbook
Definitive answers to the strategic questions that define the secondary debt market. This is our doctrine.
The Seller's Mandate (For Divesting Assets)
What is the best way to sell delinquent debt?
You have two paths: the public square or the fortress. The public square (online marketplaces) promises exposure but delivers value erosion, data leaks, and reputational risk. The fortress (a confidential protocol run by a specialist advisor) delivers discretion, competitive tension among vetted principals, and maximum value. Amateurs choose the square. Professionals choose the fortress.
How do you value a non-performing loan portfolio?
Valuation is never based on the Unpaid Principal Balance (UPB). A true institutional valuation is a forensic analysis of the discounted future cash flow. This model factors in the asset class, collateral quality (if any), borrower data, legal chain-of-title, and state-specific regulations. We do not offer "spot prices"; we build a data-driven liquidation forecast to determine what the asset is truly worth to institutional capital.
What are the primary risks when selling, and how are they avoided?
The primary risks are reputational and legal. Selling to an unsophisticated or unethical buyer can expose your brand to association with improper collection practices. We mitigate this through a compliance-first framework. Every buyer in our network is contractually obligated to adhere to the highest ethical and regulatory standards (FDCPA, TCPA, etc.), ensuring your brand equity is protected.
How do I sell specialized assets like a BHPH portfolio, RTO debt, or Fintech defaults?
Specialized assets cannot be sold through generalist channels. They require a curated market of buyers who understand their unique risk and recovery models. The key is to partner with an advisor who has a proven network and a specific valuation protocol for that exact asset class. This ensures you reach the right capital, not just any capital.
The Buyer's Mandate (For Acquiring Assets)
What is the Professional Protocol for Acquiring Debt Portfolios?
Acquisition is the execution of a five-phase investment protocol: 1. Thesis Definition: Defining the specific asset class, delinquency range, geography, and target IRR. 2. Sourcing: Accessing confidential, off-market deal flow through a proprietary network. 3. Forensic Due Diligence: Auditing the asset to find disqualifying flaws, not just to confirm value. 4. Disciplined Bidding: Basing offers on data-driven valuation, not emotion. 5. Closing & Onboarding: Executing a sound Purchase & Sale Agreement (PSA) and placing the portfolio with a vetted servicer.
What are the primary risks an investor faces when buying debt?
The two primary risks are overpayment and compliance. Overpayment occurs from inadequate due diligence or emotional bidding in a competitive auction. Compliance risk stems from not understanding the complex web of federal and state laws. Both are mitigated by adhering to a disciplined, data-driven acquisition protocol and relying on expert legal counsel.
Where do I find high-quality, off-market loan portfolios?
Institutional-grade assets are rarely sold on public marketplaces. They are transacted through a network of direct relationships between sellers (banks, credit unions, funds) and specialist advisors who act as gatekeepers. Engaging a firm with this proprietary deal flow is the only professional method for accessing these opportunities.
The Professional's Role (Understanding Intermediaries)
What is the strategic role of a Loan Sale Advisor?
The role is to architect a confidential, competitive market for a specific asset. An advisor does not merely "connect" a buyer and seller. They execute a disciplined protocol to manufacture this environment, forcing multiple, vetted buyers to compete. This is the only professional method for achieving true price discovery and maximizing the seller’s return on the asset.
What is the real difference between a debt broker and a debt marketplace?
A marketplace is a passive technology platform that values volume over quality; it is a public square. A broker or advisor is an active market strategist; they are the architect of the fortress. The marketplace exposes your asset to the masses and erodes value. The advisor presents your asset only to the right capital, creating value.
Advanced Protocols & Specialized Assets
What is a Whole Loan and How is it Traded?
A whole loan is the entirety of a loan agreement, sold as a single, unsecuritized asset. The buyer acquires the complete bundle of rights: the promissory note, the security instrument (e.g., mortgage), and the servicing rights. Whole loans are not traded on a public exchange; they are traded in the institutional secondary market through confidential, bilateral transactions between sophisticated parties like banks and investment funds.
What is the difference between a Performing and a Non-Performing Note?
A performing note is one where the borrower is making timely payments according to the terms of the original agreement. A non-performing note (NPL) is one where the borrower has fallen significantly behind on payments (typically 90+ days). Performing notes are valued based on their yield, while NPLs are valued based on the likely recovery value of the underlying collateral or borrower.
What is a Distressed Asset in this context?
A distressed asset is any credit instrument that is trading at a significant discount to its face value due to underlying problems. This can include non-performing loans, judgments against defaulted debtors, or even performing loans from an originator whose reputation is in jeopardy. The opportunity lies in acquiring these assets at a discount and implementing a strategy to recover a value higher than the purchase price.