First, let me start by thanking the NADCO staff for putting on another excellent conference. As always, Spring Summit provided important updates, a chance to speak to SBA representatives, network with industry peers, and advocate for the industry to Congressional representatives.

No matter how long you’ve been in the industry and how many NADCO conferences you have attended, you can always learn something new and get new ideas during the sessions and networking events. JRB Principal Alex Liberchuk and I enjoyed meeting many of you and attending several key sessions. Some highlights:

SBA did a breakout session on the new Redwood Loan Scoring System. This new system was created by SBA and Deloitte & Touche LLP (Deloitte) under the new contract. The information is available in the LLMS Portal in the CAFS System, so now multiple members of a CDC can be granted access to the data. SBA and Deloitte are still working on improving the system and asked that any ideas/suggestions be submitted thru NADCO.

Definitions of the terms are now available on the system as you look at the report(s). The information is updated quarterly so you should put a reminder on your calendar to download the information before it is refreshed.

Since SBA had a direct impact on the new system, they will now be able to provide more information and explanations of the information provided. This wasn’t available under the prior system.

The Servicing Centers provided guidelines on the best way to submit a servicing request and what documentation should be submitted with the request. The timeline for a loan liquidation was also provided. Very useful information.

SLPC representatives provided a detailed explanation of the Deficiency Report and best practice tips on submission of applications. The industry was also reminded that Marijuana hasn’t been legalized on a federal level so projects aren’t eligible.

OCRM provided a list of the “emerging issues” as compared to FY22 reviews. Items of note are:

  • Maintain an ability to sustain operations continuously with reliable sources of funds.
  • Document in the Credit Memorandum or on SBA Form 1244 an itemization of eligible business expenses (EBE) or certify the eligibility of such EBE for debt refinancing.
  • Consistently document borrower contributions at closing.
  • Adequately document the number of jobs created and/or retained.

Watch for additional comments from NADCO’s Spring Summit in upcoming JRB eBulletins.

Please let us know if you have any questions or want our J.R. Bruno Team to provide additional information. As always, we look forward to hearing from you on topics you would like discussed in future eBulletins.

Sanford (Sandy) Mortan. Senior Associate,
Loan Servicing, Closing Reviews and Training