LENDER RELATION SPECIALIST TRAINING

Transcription

1 LENDER RELATION SPECIALIST TRAINING 504 SERVICING, LIQUIDATION AND POST SERVICING Wednesday, September 6, 2017

2 A message from the Little Rock and Fresno Commercial Loan Service Centers.. While the Loan Centers may be responsible for the processing, servicing and liquidation of SBA loans, we THANK YOU as we also understand that these loans would not be possible without the work that is done by local lenders and SBA District Office professionals like you. The work you are doing and the loans that you are helping make play a vital role in helping to build a better America one business at a time!

3 Get to know your Servicing Center Staff Visit us at: This site contains various tools/forms/templates/tabs/guides that your CDC s will use on a regular basis.

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5 Each Center has 4 main functions: Four Main Functions: Loan Servicing fsc.servicing@sba.gov lrsc.servicing@sba.gov John Gossett, FSC Supervisor, john.gossett@sba.gov Shirley Walls, LRSC Supervisor, shirley.walls@sba.gov SBA Express and Small 7a purchase: fsc.purchasing@sba.gov lrsc.expresspurchase@sba.gov Barbara Jung, FSC Supervisor, barbara.jung@sba.gov Jerry Johnson, LRSC Supervisor, gerald.johnson@sba.gov 504 Loan purchase and liquidation fsc.504liquidations@sba.gov lrsc.504liquidation@sba.gov Gary Wamhof, FSC Supervisor, gary.wamhof@sba.gov Steve Park, LRSC Supervisor, steve.park@sba.gov Post Servicing fsc.postservicing@sba.gov lrsc.postservicing@sba.gov Ray Kulina, FSC Supervisor, ray.kulina@sba.gov Izora Harris, LRSC Supervisor, izora.harris@sba.gov

6 Meet the Fresno Staff The finance, legal and support professionals serving at the Commercial Loan Service Center Fresno

7 Meet the Little Rock Staff The finance, legal and support professionals serving at the Commercial Loan Service Center Little Rock

8 Make your 504 servicing and liquidation SOP look like this one!

9 Make sure your CDC s have this tool While the 7a version is better known and more widely circulated, there is a Servicing and Liquidation Actions CDC Matrix for 504 loans. The link is on the Center website or at: icing%20and%20liquidation%20action%20matrix_.pdf The Matrix identifies which actions require prior SBA approval for both PCLP CDC s and also Non-PCLP CDC s.

10 What do the Centers want to see in a loan servicing request For assistance on what is needed to be reviewed and analyzed, see SOP beginning in Chapter 6. Written Request: Requests for approval of a proposed Loan Action should be in the form of a clearly and concisely written letter (or other document) based on an internal credit memorandum. Both the letter and credit memorandum must be independent of any document or analysis prepared by a senior lienholder or any other Person with a conflict of interest. Although SBA reserves the right to request additional information, the letter should generally include: A brief description of the proposed Loan Action. The amount funded, dated of funding, current balance and status of the loan. The current financial condition of the borrower. Justification for the proposed Loan Action. If the proposed Loan Action will increase the risk of loss, any mitigating factor (eg., value of collateral will be increased) If the proposed Loan Action will impact the collateral, a summary of prior Loan Actions impacting the collateral and a before and after Loan Action collateral analysis. A summary of prior servicing experience with the borrower. Indication of whether obligor consent has been obtained for the proposed Loan Action. Generally, it is not necessary to include a copy of the Borrower s financial statement or Supporting Documents provided they are adequately analyzed in the credit memo.

11 What do the Centers want to see in a loan servicing request continued Please have your CDC include the closing document (eg., on a subordination request include the Subordination Agreement) with the request. Templates are available on the Center websites. Including the document better ensures one touch by SBA improving the overall turn around time to the CDC/borrower. It would be helpful to have the documents submitted in Word format and not locked. If a document needs minor revision, this would enable the Center to make necessary revision(s).

12 Review the CLCS Both Centers make regular and extensive entries into the CLCS (or CHRON) system. Should a lender call the District Office for status of servicing or liquidation request, review the CHRON it will hopefully indicate who is working on the loan and the current status of the request.

13 What happens when a 504 loan goes into Liquidation status? Per Chapter 14 of SOP A good faith effort should be made to help delinquent Borrowers bring their loans current. But, when a payment default cannot be cured, the Note should be accelerated, demand made on the Obligors, the loan classified in liquidation, the Debenture purchased, and a Liquidation Plan prepared and implemented without delay.

14 504 Liquidation The debenture purchase list is compiled and submitted on the 11 th business day of the month. 400 action taken. CDC s notified to submit liquidation plan (if not already provided).

15 Goals! 1. Get the greatest recovery in the shortest amount of time. 2. Bring the loan to resolution Return to Regular Servicing Paid in Full Charge Off

16 What happens if a 504 loan is charged off? Based on 2017 numbers, 44% of our loans going into liquidation had a balance that was charged off. Once a loan is charged off, the treasury referral process begins for all liable parties.

17 Treasury Referrals When a loan is charged off, all liable parties will be sent a due process letter notifying them that the loan will be referred to Treasury at/about 60 days from the date of notice. The due process letter also provides for payment options to stop the referral.

18 Bankruptcy Filing Upon receipt of notice of a bankruptcy filing or other litigation concerning an SBA loan that is in regular servicing or liquidation status, please the appropriate Commercial Loan Service Center.

19 Bankruptcy Filing Upon receipt of notice of a bankruptcy filing or other litigation concerning an SBA loan referred to Treasury, the Person receiving the notice must immediately notify the SBA Treasury Offset Division in Birmingham, Alabama so that the loan can be recalled from Treasury and SBA legal counsel can take appropriate action in response to the litigation. The notice, which must include the Borrower s name and the SBA loan number, should be faxed or ed to: Supervisory Loan Specialist Treasury Offset Division Fax: BirminghamTOPS@sba.gov Phone: Ext. 7705

20 CAIVRS If you receive a call or written request from a debtor stating they are seeking assistance to remove CAIVRS (for whatever the reason may be), you can refer the parties to the Little Rock Commercial Loan Service Center at LRSC.CAIVRS@sba.gov The direct number for the CAIVRS department in Little Rock is x 341.

21 ELIPS coding to watch for as far as who borrower should contact for resolution. Loan is still Lender/SBA serviced. Borrowers can still discuss workouts and OIC with Lender/SBA. Birmingham also has the ability to place borrowers on payment plans if lender s collection efforts are complete. Once a payment plan is set, Birmingham codes the loan appropriately to prevent TOP offsets. Lender/SBA can no longer service the debt. Borrowers must contact Treasury directly to discuss repayment/settlement options. Borrowers must contact Treasury for payoff figures. The payoff balance in ELIPS does NOT include Treasury s fees! If lien remained in place at charge off, the Treasury services the debt for collections, however, settlements must be approved by SBA.

22 ETRAN post servicing module You can use the ETRAN post servicing module to help determine who has been referred to treasury on defaulted 504 loans. In the ETRAN post servicing module, on the leftside tree, scroll to the bottom treasury referral info line and click. From here, you can see parties that have been referred to TOP, to Treasury for Cross Servicing and when that referral took place.

23 CDC loan file retention requirements SOP 50-55, Chapter 3 The CDC must retain its Loan File on a 504 Loan for nine years after the loan is paid in full or for ten years after the loan is charged off, whichever is applicable.