Loan Reviews. With all the tumult of the past year, regular SBA business goes on. Annual Reviews, PARRiS Reviews, we’ll always have them. They can’t be swept under the rug. Like an unexpected house guest, issues can pop up at the most inconvenient time. If you haven’t done so already, it’s time to dust off your files and keep things in order so your portfolio won’t get ahead of you at year end.

It all boils down to good housekeeping. At JRB, it’s something we continually stress to our clients, whatever the situation. Here are some good housekeeping thoughts that should help your preparation for reviews, for a potential “special asset” designation, and even when requesting that SBA honor the Guaranty: 

  • Policies and Procedures. Make sure they’re current and available if requested.
  • Make sure your closing procedures include a final departmental review of your files before putting them “on the shelf.”
  • Create a file stacking order and use it consistently. Best Practice suggestion: Organize your SBA loan files as if you were going to submit to SBA for purchase, much like “Trust but Verify.”
  • Your files should be available with all components, from origination, to closing to servicing. If you maintain electronic files, make sure your IT department has eliminated any “bugs” in your system. Check procedures and passwords 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 – aka: “a search to reflect your lien position” – you know who they are!
  • Is your filing caught up? You don’t want a reviewer noting that you haven’t got an item and you find it in your “To Be Filed” pile.
  • Have a plan for responding to reviewer requests to ensure that questions and requests are addressed in a timely manner by the appropriate staff.
  • Rehearse with your staff. Sit down and spot-check 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 that:
    • 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)
  • Make sure your annual for SBA employees/brokers/LSPs has been completed.

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.

Lisa Lerner
Senior Associate