25-7 A bank loan sale occurs when an FI originates a loan and sells the loan without recourse to an outside buyer.

Name: 25-7 A bank loan sale occurs when an FI originates a loan and sells the loan without recourse to an outside buyer.
Brand: Quizplus
Rating: 4.8 (54 reviews)

Question

Quizplus · Accepted Answer

A bank loan sale occurs when an FI sells a loan it has originated, without any obligation to buy the loan back in case of default, to an outside buyer. This can help the FI improve liquidity, reduce credit risk exposure and generate fee income from loan origination.

25-7 a Bank Loan Sale Occurs When an FI Originates