PREPARING FOR AN SBA LOAN REVIEW:
IT ALL COMES DOWN TO GOOD HOUSEKEEPING!
Loan Reviews. Let’s talk. Are you facing a PARRiS Targeted Review? An Annual Review? Or working to stay on top of things to keep your portfolio from getting ahead of you at year end? Whatever the case may be, the same considerations apply.
It all boils down to keeping your house in order. At JRB, we continually stress how important that is. In working with clients across the country, we’ve come up with some thoughts that should help your Loan Review preparations:
- Have a file stacking order and use it consistently.
- Make sure your closing procedures include a final departmental review of your files before placing them “on the shelf.”
- Be sure your files are available with all components, from origination, to closing to servicing. If you maintain electronic files, be sure your IT department has eliminated any “bugs” in your system and that procedures and passwords are checked before reviewers arrive.
- Check that Tickler Report! Make sure all follow up items have been received, reviewed and filed. The usual suspects: Insurance, Title Policies, and Post-UCC Searches – you know who they are.
- Is your filing caught up? It’s not good when a reviewer notes that you don’t have something and you find it in your “To Be Filed” pile.
- Have a Walk-Thru with your staff. Sit down and spot-check those problem files, discuss issues and be ready to address any questions and concerns from the reviewer.
- When your staff reviews Insurance, be sure to check for:
- name of the insured is correct
- insured’s address is correct
- coverage is adequate
- policies have proper endorsements (Mortgagee and/or Lender’s Loss Payee)
- gov searches. If these are kept in a central file make sure it contains the search results on employees involved in your SBA program along with third parties, including brokers and LSPs.
- Policies & Procedures. Make sure they’re current and available if requested.
- Have a plan for responding to reviewer requests and go over it with your team to ensure that questions and requests are addressed in a timely manner and by the appropriate staff member.
Good housekeeping. It will help you avoid the unexpected and go a long way toward a successful Loan Review. At JRB, we specialize in Loan Reviews. We can review your portfolio to help make sure your “house” is neat, tidy – and compliant!
Your JRB Team