Credit Evaluation School Instructor eBook - Oct 2023

MATCH THE RED FLAGS TO THE EXAMPLES PROVIDED

Collection Difficulties Reduces Quality Time in Servicing Remaining Loan Portfolio

• Substandard loan has been identified to have an impairment, but the impairment amount has not been charged off.

• Large problem loan client has been granted four short ‐ term renewals in order to provide a current rent roll and personal financial statement. • Annual review dated November 2019 provided an analysis of 2017 financial performance.

Failure of Early Recognition of Losses

Borrower Delays in Providing Financial Information

• Lenders spend most of their time with problem loan clients and there is little time to service other existing clients or solicit new business. • We do not have a collections or past due department. Lenders are responsible for their own collections.

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MATCH THE RED FLAGS TO THE EXAMPLES PROVIDED

Collection Difficulties Reduces Quality Time in Servicing Remaining Loan Portfolio

• Substandard loan has been identified to have an impairment, but the impairment amount has not been charged off.

• Large problem loan client has been granted four short ‐ term renewals in order to provide a current rent roll and personal financial statement. • Annual review dated November 2019 provided an analysis of 2017 financial performance.

Failure of Early Recognition of Losses

Borrower Delays in Providing Financial Information

• Lenders spend most of their time with problem loan clients and there is little time to service other existing clients or solicit new business. • We do not have a collections or past due department. Lenders are responsible for their own collections.

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