COVID-19 has created unprecedented volatility in all markets, which in turn has stressed many participants. The whole loan market is no different. Liquidity remains in the space; however, PHOENIX believes that sellers should adjust their sales strategy and expectations to the present landscape:


  • Since COVID-19’s effects became increasingly widespread in mid-March, the whole loan market has experienced a substantial disruption in liquidity, driven in part by a material reduction in buy-side demand. A large number of S&D and non-QM buyers have temporarily, and in some cases, permanently exited the market.
  • The remaining whole loan buyers are seeking higher yields, shrinking their credit boxes, as well as bidding deals very selectively. It can be difficult to place 100% of a pool with a single buyer, which only increases the importance of knowing the right buyers for the right asset classes.
  • A seller’s price and timing expectations will likely need some adjusting to the current market conditions. We are seeing pricing anywhere from a few points to 20 points back from where the market was 45 days ago. Additionally, bid and due diligence timelines have increased due to the current levels of volume trading.
  • We are in discussions with a number of investors looking to enter the whole loan market as buyers. While we can’t predict the timing of new buyers, we do anticipate additional liquidity on the near horizon.
  • Trading in the current market demands greater scrutiny of legal documents. Knowing what R&W are ‘industry standard’ as well as which reps can be better aligned with price is imperative in the overall execution of any trade.
  • Sellers of whole loans who need to get loans off their balance sheet or warehouse line(s) quickly, should utilize a trusted and experienced adviser in order to direct and oversee the process and choice in investors to ensure the loans settle quickly, with little to no fallout. Counterparty selection is imperative when a trade must close and close on time.


Only an experienced and active trade & contract finance desk can incorporate all of these to ensure a successful transaction. The PHOENIX whole loan desk has a tremendous history of success, exclusively representing clients where we consider and defend their best interests throughout.