When loans are sold on the secondary market, and you as the Lender have requested SBA to repurchase the loan from the investor, next comes that pesky Post-Purchase Package.
It’s easy to let this slip off your to-do list, and to let the file slide to the bottom of the pile.
Easy, but not a great idea. Because SBA requires that you complete the Post-Purchase Package within 45 days after they’ve purchased the loan from the secondary-market investor.
Yes, you can request an extension, but you can’t count on it being granted. A second extension? Only if you have significant – and we do mean significant – extenuating circumstances.
There’s a lot riding on the accuracy and timeliness of the Post-Purchase Package, and your staff is probably inexperienced in the process. (Because, of course, you’re an excellent Lender with excellent Borrowers who never default, right?)
In all seriousness, just as with any SBA process, the SOPs and package requirements change all the time. If you’re not up to date with their requirements, you risk using the wrong templates, struggling to respond to subsequent screen outs, and – as mentioned – letting this slip off your to-do list when other urgencies arise.
The penalty can be significant: SBA will invoice you for the amount they paid to purchase the loan. Ouch.
This is one of those situations where do-it-yourself is likely not the best approach. If you don’t have solid in-house experience, the risks involved are, as the saying goes, non-trivial. There’s no value gained in training your staff, since these simply don’t happen all that often. The real benefit is reaching out early in the process to get help – expert help – and using your staff’s valuable time and energy in more productive and profitable ways.
We at LRM Lender Consultants have significant experience and expertise in helping clients with putting together Post-Purchase Packages. If this sounds helpful – whether with a current situation or a looming possibility – please reach out and let us assist! We can be reached at 877.576.0819, or by filling out the contact form on our website here. The initial conversation is always at no charge, and our clients all say we’re easy to talk with!