Due Diligence, Loan Documentation and Portfolio Management: Are Your Papers in Order?

By Golden, Chrit | ABA Banking Journal, October 2005 | Go to article overview

Due Diligence, Loan Documentation and Portfolio Management: Are Your Papers in Order?


Golden, Chrit, ABA Banking Journal


Commercial lenders are feeling more squeezed than ever to increase profit margins in today's competitive business environment. By adopting industry best practices and incorporating new technologies to increase efficiency and better manage risk, lenders can improve due diligence and loan documentation, retain flexibility according to their business needs, and reduce overall costs.

Due Diligence

Responsible risk management begins with accurate searching. Accurate searching helps lenders get the whole picture before they take the risk. Some information is good, more is better, but the due diligence process often requires a high degree of manual involvement, using a variety of different resources to obtain information.

Increasing the efficiency and integrity of a financial institution's due diligence process can be achieved by focusing on three core areas: establishing clear-cut guidelines; obtaining accurate information from trusted sources; and reducing the number of locations from which data is obtained. Some ways to protect against defaulting debtors and high-risk loans include the following:

* Establishing minimum search requirements

* Increasing the accuracy of lien searches

* Reducing the number of locations where data is obtained

* Maintaining a central database of all search activity

Loan Perfection and "Paperiess" Portfolio Management

The loan process is challenging enough without having to master and manage the myriad of UCC filing details. Lenders often wish that a "uniform" process existed, but reality says otherwise. Research shows that many lending institutions employ a manual filing process that ultimately increases transaction time, the possibility of mistakes and overall cost. The majority of filing officers agree with the statistics: UCC1s are most often rejected because of incomplete and/or incorrect information and miscalculated filing fees. And the primary reason for subsequent UCC3 filing rejections is incorrectly entered data that does not match the original filing. These rejections create a considerable increase in risk and cost. While lenders would rather focus resources on generating more loan revenue, they are forced to contend with all the requirements needed to properly perfect loans and keep them that way. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Due Diligence, Loan Documentation and Portfolio Management: Are Your Papers in Order?
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.