What's New

SBA loan purchases increased for the third straight year and were at the highest level since 2006 as seen in the chart below:

figure 1. SBA Loans Purchased

USDA loan purchases were strong in 2011, despite the expiration of programs relating to the Federal stimulus package that drove USDA loan purchases to nearly $600 million in 2010.

figure 2. USDA Loan Purchases

Looking at the breakdown of USDA loan types purchased in 2011, the majority of loans purchased continue to be quarterly adjustable. However the fixed proportion experienced an 8% increase year over year. This growth can be attributed to the increased amount of fixed rate loan originations in 2011. With the overall rate environment continuing to be at relatively low levels, borrowers have more demand for fixed rate loans, and originators view fixed rate lending as less favorable than adjustable rate, and therefore are more likely to sell these loans into the secondary market.

figure 3. Structure of USDA Loans Purchased in 2010
figure 4. Structure of USDA Loans Purchased in 2011

This information is for informational purposes only and is not intended as an offer to sell or a solicitation of an offer to buy any security. It merely provides information and/or alternatives CS, Inc. believes is appropriate for your consideration. Although this information has been obtained from sources CS, Inc. believes to be reliable (some of which are third party services), CS, Inc. does not guarantee that it is accurate or complete, and it should not be relied upon as such. All assumptions, opinions and estimates constitute CS, Inc.’s judgment as of this date and, along with prices and yields, are subject to change without notice. Due to the dynamic nature of the market, users of this information (especially when related to market indications or valuations) are cautioned that, while every reasonable effort has been made to provide accurate information, such accuracy is not guaranteed by CS, Inc. and users should make whatever additional determinations of market value they deem appropriate. The yield and/or average life shown on loans, SBA pools, CMOs or mortgage-backed securities consider prepayment assumptions that may or may not be met. Changes in prepayments may significantly affect yield and/or average life.


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