PHILADELPHIA - Three East Coast credit unions have launched a new CUSO called UnityXchange that is creating a trading platform where credit unions and banks can solicit and buy into loan participations based on member business loans.
The CUSO will use technology developed by Debt Exchange, Inc., known as DebtX, to create a uniform platform for exchanging information and pricing data on loans, according to Guy Messick, the Philadelphia lawyer who specializes in developing CUSOs.
DebtX, which sells distressed loans, has been used by, among others, NCUA to sell its portfolio of hundreds of Florida properties obtained in the failure of three credit unions.
MBLs will be posted on the DebtX platform and both credit unions and banks will be able to buy participation interests - known among banks as syndications, said Messick.
Buyers will be able to just click through the postings to find the right loan to buy, according to Messick, who said other types of loans will be considered for trading over the exchange in the future.
The CUSO has been set up by North Carolina's Coastal FCU, New York's Corning FCU and Pennsylvania's Tri County Area FCU.
"The technology permits sellers to upload loan documents and market them in a secure website that only qualified buyers can access," the CUSO said in a statement. "There is no need to canvass multiple prospects, obtain non-disclosure agreements and exchange loan documents one buyer at a time...The time between shopping and completion of the sale will be significantly reduced."
According to the company, Unity Xchange will perform due diligence to ensure that the lenders listing loans are certified as having the expertise and track record to underwrite high quality loans. Non-certified lenders may list loans provided certified lenders re-underwrite the loans to confirm the loans meet the minimum underwriting standards. Dave Dunn has been named president of Unity Xchange.
"We expect to be buyers in this new marketplace," said Andy Pistoria, CEO of Tri County Area FCU. "Like many credit unions we need net income and the ability to buy loan yield from certified lenders is a great asset to us."
The new market can be found at
