Lori N. McCausland
Loan Review Exceptions: it's (too) easy to make mistakes
The Office of Credit Risk Management (OCRM) has started paying more attention to mis-matches between E-Tran entries and the final loan parameters. When their loan review turns up discrepancies – they’re issuing exceptions.
But let’s go back to the beginning.
As you know, regardless of whether you’re a Non-Delegated or Delegated Lender, you need to submit your SBA loans through the E-Tran portal. Non-Delegated Lenders, also known as General Program Lenders, must submit supporting documents and must undergo a review; Delegated Lenders have the privilege of skipping the supporting documents and usually receive immediate approval.
As you undoubtedly know, updates to the loan after SBA has approved it are common. Then you have two paths, depending upon whether you’re a Delegated or Non-Delegated Lender – and depending upon the update in question.
For updates permitted under Delegated authority, it’s a quick Memo to File.
For Non-Delegated Lenders, and for any change not allowed, you must request SBA approval of the action.
But that’s not the end of the story.
You must also update the E-Tran information with the changes, or you risk being flagged with exceptions by the OCRM.
And exceptions impact your PARRiS score, which in turn might mean you can’t get your Preferred Lender Program designation renewed – or you might lose it altogether.
Does every single change require E-Tran updates? No, and that, of course, is where it gets easy to let things slip through the cracks. We recommend taking SBA’s Servicing and Liquidation 7(a) Lender Matrix (linked here) to guide you in creating processes for updates.
Now, all of that said – please remember that OCRM deals with much more than just this issue. We’re focusing on the question of exceptions in this article because it’s an important thing for you to remember. In future articles, we’ll be looking at other areas of OCRM oversight and what it means for you. So if you want to stay informed, sign up here to get these articles in your email in-box!
We’re SBA 7(a) Loan Process specialists, and would be glad to have a brief conversation with you to see where we can lend (no pun intended) a hand. Schedule your free consultation here. We look forward to talking with you!