Thank you Randy and Dan. I am doing it right now.

Thank you all for your responses. I truly appreciate it. It is my first time dealing with auditors directly without my boss who is out on sick leave and it is pretty stressful.

Thank you,

Pick and choose? The auditor is prime to learn a lesson == that your bank can pick and choose -- its auditors.

These auditors are all wet, pun intended. As everyone has agreed, unless the titles are retired on the homes your borrower owns, thus becoming your security by virtue of retired titles and you don't hold title, if titled, then you have zero interest in those or any other MH in that park!

The only OTHER possibility, and I think you already cleared it as non-issue, would be any other common buildings...utilities house, common rec room, etc.

As the owner of a consulting company that performs audits, this is shocking to hear. First, we all make mistakes and don't know everything, but when you go back with information, it really surprises me that they are sticking to their guns - especially when they are wrong. I know what it's like to try to convince a bank that something they are doing is wrong, but when those situations arise, the first thing we do is ensure we're right by going to the regulations and proving it. Sounds like these auditors are just being arrogant and naive (intentionally).

An audit can be stressful on bank personnel, but the auditors should be doing everything they can to reduce that stress - not increase it. As John pointed out, you can pick and choose. There are LOTS of outside companies to choose from and after 25 years of consulting, I can attest that not all companies are created equally. When this is over and you're looking for your next engagement, be sure to compare apples to apples. Stress on you and your Team is a major factor to consider.

We also use external auditors to strength the compliance program and they are wonderful to work with and feel a part of our team. We can have discussions with them if we don't agree and everything else that David stated above. You might want to talk to management about looking at alternatives.

Hang in there!!!

AZ, let us know how this all falls out please.

After calling my boss multiple times, he showed up at the Bank. I felt really bad as he recently finished his chemo, but I was really glad he came. I showed this thread and he agreed with where I stood. Thank you all.

The most stressful part was that I would do research and ask around and would go back with citations and they would bring up other scenarios. Some of the questions/comments were:
"Your appraisal used income approach for the value. If there is no MH, the value will be only land value, therefore you need flood insurance"
"You have to find out who is going to be beneficiaries on those flood policies, as they are individually owned"
"Even if you didn't take security interest on the MH, it doesn't matter, they are located on the park you took as collateral"
"How do you determine, MH is affixed, is it when they are plugged in to the utilities? It is hard to determine"
"It is part of the property if customers leave their MH when they move. Do they leave their MH or take them with them?"

Oh lord - what rock did you find this auditing firm under Not only do they not understand flood, they know nothing about basic lending and collateral requirements. You guys need to move on to a different firm next year. After hearing this, I am embarrassed to even to admit that I was in the same profession.

Me too. We offer a "delight guarantee". Do they? I would explain to them how much time they have wasted. I hope they aren't billing by the hour. Even if they aren't, how much time and money of yours have they wasted? I would definitely go to their managers/owners and demand a discount/refund.

Again, we all make mistakes and I often learn things too, but the comments you posted tells me they don't even understand basic title/real estate rules yet they continued to burden you.

Again, I wouldn't just accept this or simply not use them next year. I would ask for financial restitution now.

They definitely wasted my energy, sanity, and time for sure. I can't remember the last time when I was this stressed. I have been in banking for 2.5 years. Not very long. But I take my job serious and like to do everything correctly. When they started questioning and telling me that I was wrong, I started second guessing myself and I hate that. I keep thinking maybe these guys are right because they have been in the banking for their whole entire careers.I shouldn't have doubted myself.

Did they apologize or anything?

"I keep thinking maybe these guys are right because they have been in the banking for their whole entire careers."

Well plainly that is not possible, regardless of what they may have told you. Either that or they got run out of banking and decided on a new career path with about the same success.

AZ, you've learned an important lesson--be sure your boss mentions it in your next performance evaluation.

The span of one's banking career commands the respect of others, but it doesn't guarantee his/her opinion is right. When it comes to regulatory questions, the final authority is the regulation (and the issuing agency.) Until there is a CFR cite or reference to official material issued by the rulewriters, you don't have an answer. "Because we've always done it this way" or "trust me, I'm from the government" is never enough.

You came up with the cite to support your position. Your auditors did not. You win.

AZ, you've learned an important lesson--be sure your boss mentions it in your next performance evaluation.

The span of one's banking career commands the respect of others, but it doesn't guarantee his/her opinion is right. When it comes to regulatory questions, the final authority is the regulation (and the issuing agency.) Until there is a CFR cite or reference to official material issued by the rulewriters, you don't have an answer. "Because we've always done it this way" or "trust me, I'm from the government" is never enough.

You came up with the cite to support your position. Your auditors did not. You win. The same rule applies to confrontations with bank examiners--they aren't right until there's a cite!

Thank you all. The draft report came back from the auditing company and the flood issue was not there. They removed it as an exception. I think that they went to their compliance team or something and learned that I was correct. Well, you guys were correct and I reached out to the right people.

I think I can say that I am little more prepared for next audits and will be standing up to my position with little more confidence.

Congrats AZ, that is great news.

Yes congrats AZ.....

Way to go! Stand up, don't stand down....ever...:/