Credit Evaluation School Instructor eBook - Oct 2023

Internal Use Only

LOAN CLASSIFICATION DEFINITIONS Listed for Special Mention A asset listed for Special Mention has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution's credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

• Special Mention assets are usually described as Management Correctable, possibly for something such as not knowing/documenting a lien position. • If bank is in a junior position, the loan is undersecured and may be classified; if bank is in first position, loan is Pass. • Until bank obtains the title insurance or title opinion, it may be listed for special mention. Like Doubtful, Special Mention is generally a more temporary listing.