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Loan to Buy Structured Settlements

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  • 02-07-2010, 02:23 PM
    beekrock
    Loan to Buy Structured Settlements
    Pennsylvania

    Is it possible (or likely) to get a large loan from a bank to buy structured settlements? I would think that, being a very secure asset, a bank wouldn't mind lending money for this cause.
  • 02-07-2010, 02:30 PM
    LawResearcherMissy
    Re: Loan to Buy Structured Settlements
    Theoretically, you can get a loan to buy just about anything.

    In practice, it depends on the bank's policies. This is probably not the place for a definitive answer to your question, it's one best addressed to the bank(s) you might wish to borrow from.
  • 02-07-2010, 02:32 PM
    jk
    Re: Loan to Buy Structured Settlements
    and how do you propose placing a lien on those assets?


    the lender is loaning the money to the person, not the holder of the assets so the person is what determines the security of the loan, not the structured settlement.

    Unless the borrower has some assets that can be attached and secured by the lender, the lender has no guarantee of getting paid back.

    as such, it is a very high risk loan and will be based upon the borrowers credit worthiness.
  • 02-07-2010, 11:22 PM
    Betty3
    Re: Loan to Buy Structured Settlements
    Here's some info you might want to read on structured settlements & structured settlement loans.

    http://www.expertlaw.com/library/per...ettlement.html

    http://en.wikipedia.org:80/wiki/Structured_settlement

    http://ezinearticles.com:80/?How-to-...oan&id=3234303
  • 03-31-2010, 07:50 PM
    beekrock
    Re: Loan to Buy Structured Settlements
    I originally started this thread a few months back and then got busy with some other projects, but I just wanted to follow up on JK's post.

    I believe that a structured annuity purchased from the original holder is granted an assignment by the court to the new owner as a part of the purchase process. If this is the case, then would a bank then be willing to place a lien on the annuity itself as collateral (much like a mortgage for a house)?

    I'm just kicking around some ideas, so I thought I'd run it past the ExpertLaw crowd.
  • 03-31-2010, 09:41 PM
    jk
    Re: Loan to Buy Structured Settlements
    obviously to act on it in the manner you suggest, it would have to be assignable. So, you might want to find out what types of structured settlements are assignable.
    you also need to realize the value of any possible lien is only worth as much as how dependable the payor is. If the stuctured payments depend on the liquidity of the payor, then their credit worthiness would definitely play a large part in the interest rate you would be charged by the bank.

    the ezine article betty3 linked, while short, speaks about just such elements.

    why would a person with a structured settlement sell it to you if a bank is willing to loan money to you based on that same structured settlement? If you can allow a lien on it so the bank has a security interest in the money, why would the recipient of the settlement just go to the same bank and get a loan against the settlement?

    I'm not big into finances but I think you are missing a big part of the puzzle that makes this profitable for the companies that buy structured settlements.
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