First Financial's Morris

GlobeSt.com: Are buyers getting discounts on these property sales?

Morris: That is impossible to generalize. It depends on the style of the loans and collateral securing the loans as well as the geographic location of the assets. I couldn't tell you, for instance, that buyers are getting a 20% discount. It is very individual.

GlobeSt.com: Can you give me an example of a recent sale and how the winning bidder did?

Morris: One recent portfolio had several types of assets and the prices varied from 30 cents on the dollar to par.

GlobeSt.com: Which group is the more dominant in these sales: institutions putting up portfolios up for sale or buyers looking for a deal?

Morris: It is hard to say as both groups are more active now. We are definitely seeing more financial institutions taking their portfolios to market. Also investors have been sitting on the sidelines. Now they are coming out more but still looking for that 'unique' opportunity.

GlobeSt.com: Are sellers' expectations more realistic than a few months ago?

Morris: I think some are. Some are still trying to figure out where the market is headed. Our strategy is to do actual valuations on each loan before taking them to the secondary markets so the financial institution has a reasonable expectation of what it might receive.

GlobeSt.com: Do you think the market is finally bottoming out?

Morris: I couldn't say. I have been through a few downturns and this one appears to be pretty significant. I can tell you that we recently were engaged by the Federal Deposit Insurance Corp. (FDIC) for a five-year contract to sell any assets that result from a failed banking institution – that fact that this is five-year contract shows they are anticipating a long downturn.

GlobeSt.com: Have you completed any sales for them yet?

Morris: Yes, we've already closed a $40 million portfolio that consists of primarily sub-prime residential assets about 30 days ago. And we are currently marketing an agriculture bank's assets.