Anyone dealt with First National Acceptance Corp ? - Posted by Tim (Atlanta)

Posted by David Butler on January 11, 2001 at 12:26:57:

Hello Tim,

Hey… your a day late! FNAC’s Brokerline program was the one real source of equivalent mortgage banking capital in the private note industry, and for the past four years, they really contributed to a booming marketplace. Unfortunately, they pulled the plug in mid-August (seems like too much BAD paper floated through the pipeline :-((( )

For what it was, and what it offered, I personally think on a competitive basis that is was as good a program as one would find… in direct comparison to traditional mortgage banking operations, particularly with regard to the LTV parameters they were willing to accept - and the relative risk factors involved.

As it turns out, they probably weren’t charging enough, in view of loss mitigation considerations.

There was some talk that they may restart the program in January, but last word I got two days ago is that probably won’t happen. They were a very successful corporate note buyer before the program, and most likely will stay that safer route.

By the way,they had contacted us last May about creating a program for “freestanding” MH notes, but they were having a difficult time accepting the risk management imperatives… based on what has gone down, it is easy to see where they were coming from.

I am keeping my fingers crossed however… they were a great outfit to work with, and they helped the private cash flow industry a great deal (including some real CREI success stories!).

Sorry I can’t give you better news at this point, but let’s hope!

David P. Butler

Anyone dealt with First National Acceptance Corp ? - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on January 11, 2001 at 10:01:49:

I have just came across a company that offers a broker line of credit. It is used to purchase notes. The company is First National Acceptance Company of North America. Has anyone here had dealings with them? The cost of the line is pretty steep. 2 points to start, and 1 point each year thereafter of the maximum credit line. Rate varies with the quality of the note in question up to 14.5%.

Any advice is appreciated.

Re: Anyone dealt with FNAC? - Posted by Ron Ohara

Posted by Ron Ohara on January 13, 2001 at 13:37:07:

The program that FNAC offered to a lot of Brokers, seemed like it was “heaven sent”. In reality, one has to be very cognizant of what it is that he/she is buying, and what FNAC is charging per file. At the rate you are being charged by FNAC and the interest rate you are receiving on the Security Instrument, as you will notice, most of the time the rate you are receiving on the Security Instrument is lower than the rate you are being charged by FNAC.

The credit line funds are not cheap and has to be used carefully and sparingly. To a lot of brokers, this line was used like a credit card. Having knowledge in this industry and how to price and buy Security Instruments, plays a big factor on how to use this type of line of credit.

To a lot of brokers, I would not recommend using this type of credit. Remember, it is a line of credit in which you are responsible and liable for those funds.