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#257649 - 10/15/04 05:57 PM Second Review Loan Denial Committee

I would like to know what are some of the norms for this type committee.
1. How often does the commitee meet
2. What position of management comprises the commitee
3. For credit scoring banks what is the purpose of the committee? Is it to review that there is sufficent data to support the denial reason, to see flaws in the system, or is it to review overides?
4. What constitutes an override?

We have five separate committees reviewing denials for our community banks. My job is to make sure they are all looking at the process in a similiar fashion. I would appreciate some discussion on this matter.

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Lending Compliance
#257650 - 10/15/04 06:20 PM Re: Second Review Loan Denial Committee
someone else Offline
Power Poster
someone else
Joined: Aug 2004
Posts: 3,300
back to my roots
For what it's worth, and believe me it isn't much, our second review committee was comprised of another, usually senior, underwriter looking at the file to look for any possibility of counter offer. Then the file would be sent on to operations management for signature. This was done on an on-going basis with no formal meeting time or location.

May not help much...but that's how we do it...
Somewhere, something incredible is waiting to be known. - Carl Sagan

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#257651 - 10/15/04 08:15 PM Re: Second Review Loan Denial Committee
Rocky P Online
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Joined: Jun 2003
Posts: 7,565
Our underwriters have approval authority and decline recommend authority. All applications recommended for decline have to get the sign-off of the senior underwriter.

This process ensures that a senior lender, familiar with the underwriting requirements of different products, gets to see if accommodations can be made to approve the loan and secondly (as underwriters have different skill levels) to ensure a consistancy of decline decisions.

Approvals are reviewed by QC and investors.
Integrity. With it, nothing else matters. Without it, nothing else matters.

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