Crescent Bay Financial, LLC formed the Loan Buyers Group, LLC in response to needs of the small and medium size debt buyers. The Loan Buyers Group allows smaller Debt Buyers (Group Members) to join forces and compete with larger players in the acquisition of charged-off consumer debt, and buy national portfolios at a discount. Like a membership department store, Loan Buyer Group Members benefit from buying direct and in bulk quantities. By buying National files in larger volumes, often directly from the Issuer, Group Members enjoy better quality inventory, avoiding different levels of markup, as well as some adverse selection that often occurs when buying files on the retail market.

Utilizing a set of proprietary tools, Crescent Bay Financial, LLC analyzes national portfolios, and determines the projected recovery rates for 6, 12 and 18 month time frames. The analysis is worked backwards, from the recovery viewpoint, to determine a present value of the portfolio. Based on how the portfolio is expected to perform at different future time intervals, a determination is made of how much can be paid for the portfolio. The Loan Buyers Group examines profitability, cash flow and portfolio strategy as well as the resale value of the portfolios, during the pre-purchase analysis. The portfolios that are selected for evaluation and purchase by the Loan Buyers Group follow one common theme: Whatever Performs the Best.

A broad range of consumer assets are evaluated, including charged-off credit cards, consumer loans, DDA’s student loans and other specialty products which are presented to the Group Members. Loan Buyer Group Members individually decide which portfolios they want to participate in. The vast majority of consumer debt purchased continues to be charged-off credit card accounts, which accounts for roughly 80% of all debt sales and purchases.

Benefits of Joint Purchase:

There are several benefits to buying larger portfolios of loans. As larger buyers, we have access to national portfolios from multiple vendors and Issuers for review. We then evaluate each of the current opportunities with a proprietary system that allows us to determine with a high level of accuracy, how a charged off portfolio should perform in the future. We also conduct an independent review with our outside Professional Portfolio Manager who provides pricing guidance and peer review of the projected performance results. This process allows us to benchmark a particular file’s projected performance and compare the recovery estimates between similar files. We bid or negotiate for the purchase the portfolios that are projected to perform the best for the Loan Buyers Group.

The collective purchase of goods is not a new concept. There are countless examples of enterprises where people come together and buy products in volume to take advantage of pricing discounts. The joint purchase concept allows the participants in the Loan Buyers Group to benefit in several different ways:

• There is greater buying power as a group and collectively the Loan Buyers Group can purchase a portfolio of a larger size, at a national level, which most individuals would not be able to acquire alone.

• The debt can be purchased much less expensively by buying closer to the source with fewer hands touching the file. By buying directly, we can also avoid much of the adverse selection and markup of the portfolio by Brokers and Resellers.

• The Loan Buyers Group is able to buy from vendors who are just not available to small individual buyers.

Collection of Accounts:

When the assets are purchased collectively by the Loan Buyers Group the title to the portfolio is vested in the name of the Loan Buyers Group, LLC. The Regular Loan Buyers Group Members have elected to keep the portfolios together for collections and share in the monthly collections disbursements based on their individual ownership interest. This alternative has provided several advantages for the Group Members including the protection of the integrity of the original portfolio to maintain the resale value, sharing returns on a greater number of accounts, and, avoiding managing a handful of accounts across multiple states which will occur with a random split of a national file. Also, when a portfolio is initially split up, for example; a $100,000 file split between 10 people, each $10,000 portion of the file will not perform exactly like another $10,000 portion. A few will be very good, a very will be poor and the rest will be somewhere between. By keeping the file intact, each Regular Loan Buyer Group Member will share equally in the file results, based on that Group Members share of the file.

This method of collective placement allows the Loan Buyers Group to have a much bigger footprint during the collection process. Since the Loan Buyers Group brings thousands of accounts to the collectors, the Group captures far more attention from the Collection Agencies than most individual debt buyers. In addition, the Loan Buyers Group typically pays a slightly higher rate for collections to get even more attention on our accounts, and more attention in this business translates directly into higher liquidation rates. The placement of the files are actively managed by a Professional Portfolio Manager, who provides day to day oversight, review, and provides settlement authorizations and manages the media requests and put-backs for the Loan Buyers Group.

If a member is interested working their portion of the files independently, they are directed to the LBG Commercial Division. The Commercial Division Group Members can buy portfolios on a State basis, or as part of a National Purchase, where the portfolio is split proportionally based on the dollar amount invested by each member, using a total random split sequence, performed utilizing an algorithm that has been developed entirely for this purpose. This process balances each member’s individual portfolio, taking into account (average balances, last pays, states etc.), where the file is evenly divided among the Group Members on this completely random basis.

Membership:
 

Membership in the Loan Buyers Group is open to Individuals and small groups of Debt Buyers, as well as Collection Agencies, Collection Attorneys and National Debt Buyers. Every aspect of the application process is confidential. The Loan Buyers Group values the Members privacy and never shares the Member names even with the active Group Members.

If you chose to participate in this process, you will be managing your own investments and making your own decisions. This is not a joint venture. There are no membership fees to join and there are no monthly fees. A Member can participate in any of the portfolios offered and there is no term commitment of any kind. The Loan Buyers Group charges a 6% acquisition fee based on the purchase price of the portfolio for the Regular Members and an 8% acquisition fee for the Commercial Members.

If you are interested in this concept, please contact us for the complete Application Package and let us know if you are interested in the Regular Membership or the Commercial Membership of the Loan Buyers Group. Please e-mail Gary Baker at: gary@crescentbayfinancial.com. Or call for more information at (949) 499-8010, we are in Laguna Beach, California.

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