No Holiday for Distressed Asset Sales

It seems like banks are selling off mortgages and commercial loans like hot cakes lately.
By Maria Woehr ,

NEW YORK (

TheStreet

) -- Firms did not take a breather from shedding distressed assets during the holiday weekend.

General Electric

(GE) - Get Report

sold off its Mexican consumer mortgage division to

Santander

(STD)

for $162 million and

Credit Suisse Group

(CS) - Get Report

sold off a $2.8 billion commercial-property loan portfolio to private equity group,

Apollo Management

for $1.2 billion.

The sales follow reports that

Bank of America

(BAC) - Get Report

is shopping

$1 billion

in home loans. Other banks such as

Citigroup

(C) - Get Report

and

Wells Fargo

(WFC) - Get Report

are

also reportedly shopping mortgage assets.

There are a several reasons the market is seeing sales of mortgage assets and commercial loans now, including the opportunity to take non-core assets off their balance sheets as a result of an improving market.

"The last two years the markets were frozen. Recently the markets have opened up so you are seeing some sales, but not a lot of bulk sales of debt," National Penn's CEO Scott Fainor told

TheStreet

. "There are more buyers in the market and a lot of loans are starting to be sold."

In addition valuations are also becoming more realistic, Jim Lockhart, vice chairman of

WL Ross & Co.

told

TheStreet

.

"Last year there were some real distressed sales that will probably turn out good for PE firms that made them, but there were a lot of sales that did not happen because price expectations were too high by the sellers," Lockhart said. "Now the sellers are being a little more realistic and maybe the buyers are being more realistic so they can price the assets better."

--Written by Maria Woehr in New York.

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Maria Woehr

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