Part 11 of 15 · The Scratch & Dent Strategy
The 30-Day Trade Execution Timeline
Institutional debt trades move fast. Banks sell S&D loans to clear their balance sheets before quarter-end reporting, demanding execution certainty. A standard trade goes from initial data tape to fully boarded loan in roughly 30 days.
| Stage | Timing | Key Activities |
|---|---|---|
| 1. Sourcing & Bidding | Days 1–3 | Execute NDA, receive and scrub the data tape, identify target loans, price assets, submit indicative bid. |
| 2. Due Diligence | Days 4–14 | Bid accepted. Order BPOs, run Title O&E reports, review collateral files and origination documents. |
| 3. Closing & Funding | Days 15–20 | Finalize the MLPA, wire funds to clearing escrow, officially close the transaction. |
| 4. Servicing Transfer | Days 21–30 | “Board” the loan with a licensed third-party servicer. Servicer sends Goodbye/Hello letters to borrower. |
The Servicing Imperative: You never collect checks yourself. The loan is transferred to a licensed third-party servicer (like FCI or Madison Management) who handles borrower communication, payment collection, escrow management, and regulatory compliance for a small monthly fee ($15–$30/month).
By Day 30, the trade is fully executed, the asset is secured, and cash flow begins routing to your accounts.