SN Servicing Corp., a specialist in distressed assets, has begun offering special pricing and services to members of America's Community Bankers.
The Eureka, Calif., company guarantees to make a tentative bid for a troubled loan or repossessed property within 24 hours of receiving a description over the trade group's Web site. It does not make that promise to nonmembers.
That speed and willingness to bid for individual assets will help community banks to get a handle on the market for nonperformers, said Tim C. Campbell, SN Servicing's senior vice president of sales.
"One of the problems … for these institutions is getting consistent and accurate pricing, day in and day out," Mr. Campbell said. More information would help them not only "understand what their options are and allow them to make solid business decisions," but explain situations to regulators.
The Washington trade group's members use their pooled negotiating power to get preferred treatment through six other relationships managed by ACB Business Partners Inc., a for-profit subsidiary. The alliance with SN Servicing was announced Monday.
Debbie Whiteside, the group's senior vice president for mortgage alliances, said SN Servicing's willingness to deal directly with banks on small packages "was very important to us."
A sale can completed in 30 days. Neither side would detail the pricing advantages for members. SN Servicing also allows ACB members to make fewer representations and warranties than its other clients.
Kelly Wayne Garland, a senior vice president at SN Servicing and the head of its trading desk, said that because it is a private company, sales can be handled "discreetly."
The unit of Security National Holding Corp. was founded in 1987 with the acquisition of the mortgage portfolio of a failed Anchorage bank. This year SN Servicing has paid $300 million for distressed assets.
Ms. Whiteside said ACB members have used the perks negotiated through "collective bargaining" more than expected. In the past two and a half years, lending volumes related to the alliances have exceeded $60 billion , she said. In May, ACB announced an alliance with General Electric Mortgage Insurance Co. (later spun off as part of Genworth Financial Inc.).
The Independent Community Bankers of America has similar partnerships but does not have one to deal with problem real estate assets. Veda Dehmlow, the partnership management officer for the group's mortgage arm, said there has been no demand for such an arrangement. Members' loans "have a 40% better credit profile than the general population of loans," she said.
Mr. Campbell said that though there are few nonperforming assets today, his company's alliance with ACB is "forward-looking."
