ESG Bank is an established bank in the Southwest region of CYC country. The bank is the region's 2nd largest and looking to expand. The Southwest region is a major source of automobile assembly/manufacturing and like business. The bank notably caters to local businesses and the community and enjoys long standing relationships with its business partners.

You were recently hired as head of ESG Bank commercial loan division. As you read the bank's reconciliation statements, you noticed two of ESG's business clients are consistently late with monthly payments on loans since Dec. '21. Due to ESG's financial structure and the clients local presence, their loans were securitized and sold in Jan.'22. (note: you decide on the loan amount and the duration of the loan. Hint: try not to make it complicated).

(b) Since the loan was securitized and sold (the client is not necessarily aware of this), you feel some need to address this with the client. Provide a detailed explanation on loan securitization and how this affects the bank's lending structure (i.e. fees, settlement costs, etc.). Include two reasons why ESG securitized the client's loan and sold it to a different entity. Include a viable reason to address this issue given the Bank's expansion opportunities.

Notes: The bank's name is not affiliated with any business of a similar name. The next meeting with the client is scheduled for 12-07-22 (the approx. date this assignment w/b graded).