So you’ve made a bank an amazing offer to purchase a non-performing loan…an offer that they can’t refuse. For reasons passing understanding, they refuse it anyway and respond by countering you with a ridiculous amount in return. Why on God’s green earth to banks make the decisions they do. There is a simple reason for that. Banks don’t make decisions.
Non-Performing Loan buyers often forget that a bank is not a living, breathing entity. It is a corporation that is run by humans. These humans have their own agendas, needs, and bias. Most of the bankers that man Special Assets departments have been around the block a few times. They have been through merger after merger and they know a thing or two about how corporate banks work. Banks preach “loyalty, loyalty, loyalty”, but at the first moment that they no longer need you, they will lay you off. Bank loyalty is not a two-way street. The Special Assets officers know this fact. So riddle me this…a Special Assets officer is given a portfolio of, let’s say, one hundred loans to work through. The bank says “do a great job and get these loans off the balance sheet!” What happens, however, when the Special Assets officer goes does exactly what the bank asks them to do and there is no need for them any more? You guessed it, they are now expendable.
Special Assets officers aren’t stupid and they, not the non-human bank make the decision. Bank and banker agendas often don’t align. Keep that in mind the next time you are trying to negotiate with a bank.