If you make loans, you will encounter problem loans. No lender intends to make a problem loan, lending institutions must anticipate having some level of problem loans and loan losses. Problem Loans are simply a by-product of the business of lending. While there are different strategies for managing and resolving problem loans, the underlying problem is the same – a lack of cash flow to pay creditors and operating costs.

Resolving problems can be expensive and difficult, and managing problem loans properly is a complex, time-consuming task, frequently requiring specialized knowledge and expertise in, credit analysis, bankruptcy and security laws, as well as negotiating. The overriding objective in managing problem loans is to improve the lender’s position enough to get repaid in full.

This session provides an overview for those wanting to know the basics of sound problem asset management.

Learning Objectives:-

• How to identify prospective problem loans and relationships
• How to underwrite, monitor and manage problem loan portfolios
• How to resolve problem loans

Areas Covered:-

• Preventive maintenance—red flags of problem loans, portfolio signals, e.g., declining communication from the borrower, the slowdown in financial information, deterioration in risk ratings, covenant breaches, overdrafts, delinquency
• Problem asset policy—when to transfer problem loans to problem asset management, e.g., criticized and classified assets, non-accrual, charge-off, OREO asset management
• Problem asset management—the process of default, judgment, foreclosure, possession, OREO; reporting, disposal; negotiation issues and tips

Background:-

Problem loans rise as the economy falls, and the past several years have resulted in considerable economic volatility, e.g., Covid’s push of workers out of offices into homes and rising vacancy rates in office buildings, the Fed’s increase in interest rates that has boosted mortgage rates and reduced demand for construction of homes and apartments.  Lenders need to manage problem loans as soon as possible. 

Why Should You Attend:-

This webinar will show bankers and lenders how to get ahead of problem loans before they become unmanageable by instituting timely identification processes and implementing mitigating measures.

Who Will Benefit:-

• Commercial bankers and business lenders
• Credit analysts and credit managers
• Credit approvers
• Loan reviewers
• Workout officers