Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from Aaron Deer – Sandler O’Neill.
Aaron Deer – Sandler O’Neill & Partners
I guess to begin I’d like to talk about the RAL program. First, given your current capital levels and funding, if you didn’t have any other access in terms of securitization or syndication, how much RAL business in terms of transactions could you handle with your balance sheet as it is now?
Stephen Masterson
In past years, Aaron, that’s a good question, this is Stephen Masterson, in past years we’ve had a securitization facility of $1.6 billion, and we’ve sold a total of $2.2 billion into that facility, mostly during February. If we were to cut that back last year we had about $6.8 billion in RAL loans, the funding we could carry on balance sheet would be about $4.5 billion to $5 billion.
Aaron Deer – Sandler O’Neill & Partners
And with the – if you were to go toward a syndication for the RALs, how might that impact the profitability of the business versus the securitization that you had in the past?
George Leis
Well I understand why you want to ask that question, but I can’t – it would be a little premature for me to provide that information right now, Aaron. It’s sort of a fluid situation and we’re looking at a whole bunch of possible scenarios so, I really don’t want to make any commitments or speculative comments on that until I’ve had the chance to finalize all the discussions we’re having. And we’ve committed to communicate that to you guys as soon as we know that, so that’s kind of the way we’re thinking about it right now.
Aaron Deer – Sandler O’Neill & Partners
That’s fair, and kind of along the same lines if I may, what have your folks in Washington said about the incoming administration and how it might affect the RAL, RT business?
George Leis
As we said in the past, Aaron, we have great intelligence and great relationships with the folks in Washington and you know what? I have nothing really to update you on. Nothing’s changed from our prior discussions about –
Stephen Masterson
Yes and, this is Stephen, we’ve talked in the past about the work we’ve done in Washington and we have met with Obama’s campaign, and talked with various constituents around Washington about the program. They understand the importance of the program. They understand the program much better today than they did yesterday through the education that we’ve done, and we feel like we’re in tune with what’s happening and we’ll continue to work with Washington as things progress.
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