TOPIC: Credit

Underwriting Guidelines for Unsecured Loans

VP at a bank ($648MUSA)
We are tightening down our unsecured lending guidelines. I am curious what others are doing? Are you only allowing existing customers to obtain unsecured credit? How are you determining the amount of unsecured credit that will be extended (% of net worth or % Gross Income)? Are all unsecured credits made as installment loans or are you allowing single pays? Do you have different term limits depending on installment vs. term? Any feedback related to underwriting an unsecured loan would be appreciated.

    Whitepaper: CECL Survey - Where are financial institutions?

    Abrigo CECL Survey - Results show progress, some laggards

    For the third year in a row, Abrigo (formerly Farin, MST, Sageworks, and Bankers Toolbox) surveyed 125 individuals at a wide range of financial institutions to gauge CECL preparedness. The 2019 survey shows that as the Q1 2020 compliance date looms for SEC registrants, institutions of all types are making progress – but not enough, according to CECL experts. Nearly half of survey participants (and a majority of SEC filers) have already collected and validated data. This is important, because collecting and validating data for the loan loss calculation is typically one of the more significant bottlenecks and challenges in CECL implementation.

    “The clock is ticking,” said Regan Camp, Senior Director of Advisory Services at Abrigo, (formerly Farin, MST, Sageworks, and Banker’s Toolbox). “While many financial institutions are taking the necessary steps to make sure they are prepared for this important change in accounting for credit losses, it’s clear that others are falling behind their peers.”

    Download and read the full whitepaper.

      Moving from LIBOR to SOFR: Smoothing the Transition for Your Financial Institution

      LIBOR has been used for over three decades as the global standard benchmark. This will soon be changing and financial institutions will need to adjust their loans to the new benchmark, the Secured Overnight Financing Rate (SOFR). To help you prepare, check out our white paper for a background and comparison of each rate, solutions to the challenges ahead and more. Read White Paper: http://go.pcbb.com/2019-SOFR-and-LIBOR-WP-Request.html

        Loan Fees

        Person at a bank ($163MUSA)

        Would anyone be willing to share what you charge for doc prep & underwriting on CML & Consumer ILA's? Also do you have separate GL accounts for each fee. Example, flood, credit report, appraisal, etc. How do you balance those GL accounts?

        Thank you, Kim

          Educational Seminar in Nashville, 2019

          See why more than 925 of your peers have purchased loans from Bankers Healthcare Group, at the upcoming Nashville Info Seminar.

          • Engaging seminar - Hear from the Founder/CEO and the c-suite leadership team in finance, credit, regulatory, marketing, sales and analytics.
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          Email us at bhgbanks@bhg-inc.com or call 866-461-5069 to find out the details!

          "The BHG Info Seminar was an excellent experience. We are new to BHG, having just purchased our first loan last month. It’s was a valuable experience to have the company’s staff answer your questions and talk to other banks who have experience with BHG. I was able to learn how they manage their portfolio and loan terms. The event was first-class, all the way. I came away very impressed with BHG." – Minnesota Bank President

          About BHG: Bankers Healthcare Group (BHG) is a well-established, direct lender that has a commercial loan program specifically tailored to the business needs of licensed healthcare and other professionals. BHG has provided over $4 billion of these originated, underwritten and funded loans to 925+ community banks throughout the US since 2001.

            Small Business Streamlined Underwriting Template

            SVP at a bank ($270MUSA)

            This is a version of a simplified underwriting template utilized for small business credits typically less than $250,000 originated by our retail branch managers and small business loan officers. This form was used by our small business underwriters to expedite the underwriting process for smaller and less complicated business loan requests.

              Managing growth safely & soundly

              As your institution looks to the year ahead, a key consideration is how to do so in a safe and sound manner. Regulators don't expect FIs to be totally risk-free, but they do expect institutions to manage risks with sound banking practices.

              This free whitepaper sets outa triangulated approach to growing portfolios safely and soundly by managing credit concentrations. Learn more here: http://bit.ly/2NHp4xz

                Workout loans- how do you disclose?

                VP at a bank ($1.5BUSA)

                How do you disclose workout loans involving a primary residence?

                For example, if a home equity loan has reached a maturity and the borrower does not qualify and/or the property value has decreased; how do you all handle a workout rewrite of the balance? Assuming the borrower cannot obtain financing elsewhere and we are left to do some sort of term out of the current balance.

                Our compliance department wants to fully disclose as a new loan. Our credit side wants to structure the repayment outside of any current product offerings therefore we are unable to provide disclosures that match our laserpro documents.

                Our current consumer home products are all fully amortizing with relatively low interest rates. We want the workout to be a higher rate (for the risk) and have a balloon (if possible). Compliance is worried about HPML disclosures.

                Thank you.

                  Definitive Guide to Global Cash Flow Analysis

                  It can be difficult to spread borrower financial statements in a consistent manner, and oftentimes, income or debt is over- or understated. Loan decisions could rely on inaccurate debt and cash flow information

                  This whitepaper helps to explain the biggest obstacles credit analysts face with global cashflow when they have to combine business, real estate, and guarantor income debt. It'll help you avoid double-counting, incomplete information and errors when combining personal and business incomes.

                    Lending & Risk Summit

                    There's one month left to register for the 2018 Lending & Risk Summit before late registration kicks in. This year's Summit will be held in Chicago, IL on September 24-26, and covers topics ranging from lending and digital growth strategies for banks and credit unions through concentration management and CECL prep. See the full agenda of speakers and sessions, as well as more information on registration here → https://buff.ly/2GMpUlW

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                      New Whitepaper: Why effective challenge is important to your FI

                      Loan review gets a bad rap — it's often assumed to try to and find something wrong with everything. An FI needs to grow their assets, but in a safe way. With that goal in mind, challenge functions play a critical role: not to say "no," but to create a partnership between the lines of defense protecting a financial institution's overall goals.

                      Download to learn:

                      • Why effective challenge matters
                      • How different lines of defense support growth
                      • How to improve the efficiency of challenge functions with software solutions