Skip to content
BOL Conferences
Thread Options Tools
#146581 - 01/07/04 10:21 PM Loan worksheets
Jayda's Mom Offline
100 Club
Joined: Jul 2002
Posts: 220
North
I have a question regarding loan worksheets (a one page description of borrower that list the collateral, Debt to income ratio, loan to value, etc.)

Our previous compliance officer stated that this is a requirement and that examiners would want this to be filled out so they could look at the worksheet instead of having to go through the entire loan file.

Do you know where this stipulation stems from? Do you have the same requirements?

Any info you can give me would be great.

Return to Top
General Discussion
#146582 - 01/07/04 11:12 PM Re: Loan worksheets
Risk Officer Offline
100 Club
Joined: Apr 2001
Posts: 205
Dallas
I know of no "requirement" for this. I would, however, consider it a best practice. Such a worksheet helps to document financial analysis (i.e. cash flow, debt to income, etc.); policy compliance (i.e. collatral values, loan to value, amortization, etc.); the intent of the officer (for example, the loan might be a six month single pay, with an expected 10% reduction at maturity...this would not generally be noted on the note itself and must be documented somewhere); the borrower's total relationship; etc. If a loan officer leaves or the loan is otherwise reassigned to another officer, such worksheets provide a good starting point for the new officer to get to know the customer relationship. Worksheets are also nice for loan review, auditors, and examiners.
_________________________
My opinions are just that...my opinions.

Return to Top
#146583 - 01/08/04 12:14 PM Re: Loan worksheets
Cowboys Fan Offline
Power Poster
Joined: Dec 2002
Posts: 4,615
SC
From a KRM phone seminar titled "Loan Review":

"Regulatory guidelines state that loan files should contain sufficient info so that the credit reviewer can evaluate the credit, based solely on the data in the files. The essence of the credit addresses the following:
1. Purpose of the loan
2. Source of repayment (primary and secondary)
3. Terms of repayment
4. Collateral description and value
5. Info on each of the C's of credit
6. Analysis/calculation of each C of the credit
7. Identification of strenghts and weaknesses
8. Justification for exceptions to underwriting standards
9. Making recommendations and stating terms and conditions"

The KRM documentation does not include a reference as to where you can find the regulatory guidelines - sorry.
_________________________

Return to Top
#146584 - 01/08/04 03:12 PM Re: Loan worksheets
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
I agree that it is a best practice and a nice recap saves time. It also saves the reviewer/examiner from digging through each and every page in the file. Some of those pages may not be ones you'd want each of these folks scrutinizing.

So it may be advantageous, but I am aware of no regulatory requirement that there be a recap.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#146585 - 01/08/04 04:16 PM Re: Loan worksheets
MackenzieS Offline
Diamond Poster
MackenzieS
Joined: Jul 2002
Posts: 1,722
Oklahoma
I know that back in 1996 we were filling out these very lengthy re-cap sheets prior to an FDIC exam. I spent my weekends and nights up here filling those darned things out. However, over the past couple of exams we have not performed this re-cap function, yeah! I guess either loan opps changed the way they were completing their summary reports or the FDIC did not expect us to do this anymore...either way, we have not had to do this in many years and I am thankful because it was not something that was done as each loan originated, it was done right before the examiners came in. Bad organizational skills I guess.

Return to Top
#146586 - 01/08/04 06:51 PM Re: Loan worksheets
chuck Offline
Member
chuck
Joined: Oct 2003
Posts: 64
northwest missouri
I do not believe there is any requirements mandating loan worksheets. I is a great practice to get into. If nothing else, it will make the officer aware of any problems that might be coming. FDIC likes to see the sheets, they then know that some analysis has been done.

Return to Top
#146587 - 01/08/04 07:42 PM Re: Loan worksheets
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
While lenders may see these as a pain, if you can get additional use from them (sending to business development, CRA and HMDA) as examples, they may be more useful and therefore cost effective.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#146588 - 01/08/04 07:48 PM Re: Loan worksheets
GreatBlue Offline
Diamond Poster
GreatBlue
Joined: Feb 2003
Posts: 2,362
Colorado
Quote:

It also saves the reviewer/examiner from digging through each and every page in the file.




Although, when I'm auditing a file, I don't rely on information on a recap. I always want to see the source document.
_________________________
Opinions are mine and not necessarily my employer's.

Return to Top
#146589 - 01/08/04 10:03 PM Re: Loan worksheets
E.E.G.B Offline
Power Poster
E.E.G.B
Joined: Jul 2002
Posts: 6,726
the sandy shore
Quote:

I agree that it is a best practice and a nice recap saves time. It also saves the reviewer/examiner from digging through each and every page in the file. Some of those pages may not be ones you'd want each of these folks scrutinizing.

So it may be advantageous, but I am aware of no regulatory requirement that there be a recap.




Correct, to the best of my knowledge there is no regulatory requirement for such a document. Besides, the examiners generally fill out their own loan tabs on each file if they need such a beast.

And to give you an example (true story) of a piece of paper you DON'T want the examiners to look at, how about a note in the file from the branch manager that the "builder wants us to deny the loan because this couple is gay." OK, although sexual preference is not a federally protected class, this is not a statement that is going to sit well with an examiner.
_________________________
I disbelieved what he was saying so hard, I probably created an alternate universe where it wasn't true.

Return to Top