Correspondent Blog

We are often asked by lenders about pricing differentials for fixed-rate commercial loans with and without prepayment provisions.  For example, if a bank were to price a loan with a yield maintenance provision the loan would have a much longer expected life, and under most circumstances the bank would not have negative impact if rates…

In a recent article (HERE) we discussed the importance of loan prepay speeds.  We explained why loan prepayment speed is a major factor influencing a bank’s profitability, how national banks use historical analysis, quantitative modeling, and predictive analytics to structure loans to increase loan retention (decrease loan prepayments).  We introduced the crucial factors influencing commercial…