Learn what a whole loan is, how it differs from securitized exposure, and
A whole loan is a single loan held or transferred as one undivided asset rather than split into securities or participation slices. The buyer takes exposure to the individual loan itself, subject to its credit quality, documentation, and servicing terms.
An originating lender may keep a whole loan on its balance sheet or sell it to another institution. Selling whole loans can free capital, reduce concentration risk, and create liquidity for new lending. Unlike securitization, the asset being sold is still the original loan contract, not a tranched security backed by a large pool.
This matters because the distinction between holding whole loans and holding securitized exposure affects risk analysis, valuation, due diligence, and servicing arrangements. Buyers of whole loans often care deeply about borrower quality, underwriting standards, and documentation accuracy.