Exam 25: Loan Sales

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Good Bank: Good Bank:   Bad Bank:   Bad Bank buys the bad loans for $232. The proceeds of the loan sale are used by Good Bank to pay off purchased funds. What will be the amount of equity on the balance sheet of Good Bank after the sale of the loans? Bad Bank: Good Bank:   Bad Bank:   Bad Bank buys the bad loans for $232. The proceeds of the loan sale are used by Good Bank to pay off purchased funds. What will be the amount of equity on the balance sheet of Good Bank after the sale of the loans? Bad Bank buys the bad loans for $232. The proceeds of the loan sale are used by Good Bank to pay off purchased funds. What will be the amount of equity on the balance sheet of Good Bank after the sale of the loans?

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In the sale of a loan to an investor/buyer, there are fewer agency costs associated with loan participation contracts than with loan assignment contracts.

(True/False)
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Assignments of fixed-rate loans typically do not have difficulties in the calculation and transfer of accrued interest.

(True/False)
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