Banks, credit unions, mortgage companies and other lenders/loan servicers need experienced financial services consultants and auditors to identify and assess the many challenges. The Hilltop team is ready! Hilltop can assist your Company with identifying risks in its lending, securitization/investor transactions and loan servicing by:
- identifying all significant risks and assessing the potential impact on the Bank,
- quantifying the operational and technology impact caused by the various risks,
- calculating the cost of such risks, and
- helping plan, prioritize and performing risk mitigation efforts.
Example engagements include the following:
- assessing the Credit Memorandum for completeness, accuracy, overall content and compliance with the Credit Policy,
- assessing the Bank’s regulatory compliance relating to Fair Lending, loan risk ratings, any other lending/loan servicing compliance requirements,
- reviewing the Bank’s credit policy and how risk ratings will be defined/utilized,
- conducting an independent risk rating using the Bank’s policy and compare to the Loan officer’s or internal audit’s risk rating to test whether policy and procedures are aligned and meet credit, risk rating policies and risk indicators,
- reviewing new loans (customer, loan type, geography, etc.) as part of the overall risk rating assessment,
- assessing what material risks and any issues may have impacted a borrower’s business and its business continuity due to the pandemic and current economy,
- recalculating loan loss calculations (ALLL) to determine if such calculations are compliant with GAAP and/or regulatory requirements,
- identifying “loans to one borrower” and concentration requirements,
- doing a “deep dive” borrower and/or guarantor review (assessing the financials and underlying records, inspecting collateral/assets, critiquing borrower’s asset or company valuations, assessing whether there is any possible fraud activity, determining whether there are no covenant violations, etc.,
- conducting a fraud assessment to identify risks of a fraud, determining whether preventive policies/procedures are actually effective and identify remediation efforts when a fraud has been identified,
- performing an investigation into “financial crimes” which are covered by the Bank Secrecy Act (assessing whether the Bank’s policies and control procedures are in place to detect, prevent and report malicious cyber activity (such as internet scams, phishing, spear fishing, malware, ransomware/extortion, “fake” business email compromised (BEC) schemes),
- performing work-out activities by evaluating borrower and guarantor credit, assessing the financial performance, calculation of cashflows available, assessing the valuation of any collateral, review of the net recovery calculations, designing/documenting a business plan to deal help the delinquent borrower and identifying any loss mitigation steps,
- assessing any appraisal or asset valuations used by the Bank,
- helping the bank with discussions with Federal and/or state examiners,
- testing the occupancy, rent rolls, delinquency reports, financial statements, payrolls and cashflow to determine ability/inability to make loan payments for CRE and multifamily loans and ensuring that the replacement and other reserves are not being used by the owner/borrower,
- performing HUD, GSEs or investor loan audits,
- assisting with the Bank’s processing of the PPP application and now helping review the Application for Forgiveness to recommend that the SBA forgive the PPP loan,
- reviewing Credit Policy content and testing compliance with such policy,
- identifying new risks should be an on-going practice to identify risks like COVID19/high touch businesses, economic sector issues, new management, etc.,
- identifying loans that cannot be securitized, sold or become a participation loan for banks that typically do not “hold” the entire loan (which will indicate quality control and compliance issues,
- assessing the Bank’s compliance with unique requirements for specific investors, types of loans (ADC and Warehouse loans) and Federal programs (SBA, FHA, VA, GSEs),
- training loan officers to gather the right borrower and guarantor data so that risk ratings are complete and accurate, etc., and
- providing Expert/support litigation services for the Bank (as plaintiff or defendant).
The above list of Hilltop engagements is only a sample of all engagements. Hilltop’s team includes professionals that have either worked at banks, credit unions, mortgage companies, other financial services clients or provided consulting, audit and accounting services with the Big 4 and other major consulting firms. Out team members average 17+ years of lending, loan securitization and servicing industry experience. If you are interested in discussing your issues/risks or how Hilltop can assist your company, please contact our CEO Jeff Oliver (gaoliver@thehilltopcompanies.com) and/or any of our other risk management team members.
