Skip to content
GeoDataVision
Thread Options
#2198461 - 11/16/18 04:07 PM Loan Particiapation
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
We are in a participation loan where we are not the lead bank. We were not provided with a borrower resolution or board minutes authorizing the loan request. It seems like that would have been taken care of by the lead bank. We were written up in a Large Loan Audit for not having this authorization. Would the loan agreement suffice for us as the secondary bank in this case?
Last edited by mdog76; 11/16/18 04:07 PM.
Return to Top
Lending Compliance
#2198500 - 11/16/18 06:21 PM Re: Loan Particiapation mdog76
HRH Okie Banker Offline
Power Poster
Joined: Jan 2003
Posts: 3,070
Oklahoma
The participation agreement will normally say that you have reviewed the loan documents and are going into this transaction with eyes wide open (to paraphrase). Your participation agreement should protect you from gross negligence but a general documentation error? That could be a court fight.

I've gone into too many participation relationships whereby something wasn't right in the file - documentation, flood, .... A preliminary review is the way to go, in my opinion.
_________________________
Just working here until I get my letter from Hogwarts.

Return to Top

Moderator:  Andy_Z