Speaker: Jeffery Johnson, Bankers Insight
This recording is from a 2-day instructor led program held on September 20-21, 2022 via Zoom. Recordings are 9 MP4 links. Electronic materials will be sent as well.
Loan Documentation is a critical component in lending. After the decision to make a loan has been made, the next step is the documentation and closing process. This part of the lending process is essential in order to avoid loan losses due to poor documentation. Many community banks assign this important responsibility to Loan Administrators with input from the sponsoring Loan Officer. If not performed properly, poor documentation can cause loans to be adversely classified even if the underlying credit is sound or if the loan is performing as agreed.
The purpose of this program is to provide participants with a good understanding of the loan documentation process for Consumer and Commercial Loans. Participants will be exposed to the five steps in the loan documentation process and the documents required to accomplish each step in the process. The Loan Documentation Process includes identifying documents to:
- Identify the Legal Status of Consumers and the Various Forms of Commercial Borrowers
- Identify and Properly Place Assets Taken as Collateral into the Proper Collateral Category and Obtaining a Proper Valuation of the Collateral
- Evidence the Debt to Detail the Mutual Understanding of the Loan Arrangement Between the Bank and the Borrower
- Attach the Collateral Which Allows a Lending Institution to Seize, Foreclose Upon and Sell the Collateral for Repayment of the Loan
- Perfect the Security Interest to Insure the Bank’s Collateral Position is Superior to Other Creditors
Each of the five steps requires certain documents to accomplish their respective purpose. The participant will develop an understanding of each of these documents and know when to use them.
After completing this course the participant will:
- Recognize the documents required to complete the five steps in the documentation process
- Have a good working knowledge of the purpose of each document
- Be able to provide a broad overview of the documents’ provisions to borrowers
- Know the rules of perfecting the security interest under the rules of Article 9 of the Uniform Commercial Code and Non-Article 9 rules
- Know why other non-legal documents are just as important as receiving the legal documents
- Review of the Required Compliance Documents for Consumer and Commercial Loan Transaction Under Banking Rules and Regulations