Credit Evaluation School Instructor eBook - Oct 2023

SCENARIO 7

 Bank advanced $350,000 for the purchase of a home appraised at $437,500.  The town’s largest employer closed, and the borrower lost his job.  Future job prospects are weak.  Many homes are now listed for sale, including the borrower’s which is estimated to now be worth $250,000.  The current loan balance is $340,000 and payments are over 90 days past due.  For this loan, would you recommend:  Pass  Special Mention  Substandard  Doubtful  Loss