At Kondaur, we understand the complexities of a loan seller's liquidity needs. We also know the seller needs not only cash now, but also as much cash as possible. Our competitors frequently give inflated and unrealistic "indicative" bids, only to significantly reduce such bids after a two to four week "due diligence" period. During this "due diligence" period, the loans are essentially out of the market. Not infrequently, these reduced bids experience an even further reduction in the bid for all sorts of "creative" reasons.
At Kondaur, we don't play such games. Although Kondaur can give "indicative" bids, we do not recommend such an approach. We recommend sellers set a price or range at which to sell loans. If, based on the loan parameters provided in any normal secondary marketing tape, Kondaur believes it can bid such a price, it will perform its own extensive "due diligence" review of the loan. During Kondaur's due diligence review period, usually only a matter of several days, the seller is welcome to seek other bids.
Alternatively, if the seller insists or prefers to get a “true” indicative bid, Kondaur can give an initial indicative bid based on the data provided by the seller, with additional bids based on a “fade” in the value of the underlying collateral. We have found that it is rare that a seller’s indication of the value of collateral is current. So, at Kondaur, if our indicative bid is accepted, we’ll perform an extensive due diligence review of value and come up with a “true” indicative bid, which can even be on a loan level basis. In this way, Kondaur and the seller can agree on a sales price for a loan or loans, provided that Kondaur is successful in convincing the Seller that its valuation of collateral is fair, current and accurate. Once the seller and Kondaur settle on a sales price per loan, Kondaur will then complete its due diligence review.
Kondaur's due diligence reviews are very "high touch" and include a meticulous review of the complete loan file, including all servicing records and communications with the borrower(s). Unlike many of our competitors, we typically spend many, many hours on each loan. At the conclusion of our due diligence review, Kondaur usually gives an unconditional and final bid.