Credit Evaluation School Instructor eBook - Oct 2023

MATCH THE RED FLAGS TO THE EXAMPLES PROVIDED

• The person who was supposed to be filing the UCCs was not aware they needed to be submitted for recordation. Going forward, this will be corrected.

Loan Pricing May Not Reflect Risk

Incomplete Loan Documentation

• Borrower signed the note, but there was no security agreement, guaranty agreement, or borrowing resolution.

Numerous Instances of Lien Imperfections

• “Great news! Felicia just closed a $9 million loan to construct a new cruise ship! Although the borrowers have limited experience, the projections are amazing. She was even able to offer them a rate 200 basis points lower than their best offer!!”

18

MATCH THE RED FLAGS TO THE EXAMPLES PROVIDED

• The person who was supposed to be filing the UCCs was not aware they needed to be submitted for recordation. Going forward, this will be corrected.

Loan Pricing May Not Reflect Risk

Incomplete Loan Documentation

• Borrower signed the note, but there was no security agreement, guaranty agreement, or borrowing resolution.

Numerous Instances of Lien Imperfections

• “Great news! Felicia just closed a $9 million loan to construct a new cruise ship! Although the borrowers have limited experience, the projections are amazing. She was even able to offer them a rate 200 basis points lower than their best offer!!”

19