The ECHMB lends money to Primary Lenders domiciled in the Eastern Caribbean Currency Union such as Commercial Banks, Development Banks, Insurance Companies and Credit Unions secured by a pool of residential mortgage.
The basics are:
- ECHMB purchase the pool of mortgage loans from Commercial Banks, Development Banks, Insurance Companies, or Credit Unions (“Primary Lenders”) at the weighted average interest rate of the pool of mortgages.
- The Primary Lenders are subsequent contracted to collect and remit to the ECHMB (via a Transfer and Paying Agent Agreement), the principal and interest payments from home owners.
- The Transaction is mutually exclusive to the ECHMB and the Primary Lender.
- As compensation for performing the service of transfer and paying agent, Primary lenders are paid a commission.
Benefits to Primary Lender of selling your mortgages to the ECHMB
Long-term loans are immediately converted to cash. This would provide the funds for Primary Lender to originate more mortgages.