This program introduces the consumer lending process from the initial application to closing and documentation. It will follow the "TION" Method of Consumer Lending including the following topics:
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Regulation
- Solicitation (Business Development)
- Application
- Investigation
- Evaluation
- Decision
- Documentation
- Administration
These steps will explore methodologies to thoroughly accomplish successful consumer underwriting and will utilize lectures and case studies to reinforce the concepts presented.
After completing day one the participants will have a better understanding of underwriting consumer loans from the application to the closing and will be able to place this knowledge into practice immediately upon return to their respective banks. Specifically, the participant will be able to:
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Understand individual strengths and weaknesses during the business development process plus proven tips to enhance success on the sales call.
- Analyze Loan Applications and Personal Financial Statements
- Ask relevant questions during the interview process
- Investigate the validity of the information on the application and credit report
- Evaluate the consumer utilizing proven credit principles and proper debt to income calculations
- Review the decision-making process utilizing an effective consumer loan policy
- Recognize the important Regulations covering consumer lending
- Analyze the tax returns to determine true Cash Flow
The order of sessions below is subject to change.
DAY 1 SESSION 1: INTRODUCTION, CONSUMER LENDING ENVIRONMENT, CONSUMER LENDING REGULATIONS & THE CONSUMER CREDIT POLICY
- Regulation B (Equal Credit Opportunity Act)
- Regulation X (RESPA)
- Regulation Z (Truth-In-Lending Act)
- Understanding the Contents of the Consumer Lending Policy
- Purpose of the Consumer Loan Policy
- Identifying Desirable and Undesirable Types of Consumer Loans
- How to Underwrite Consumer Loans
SESSION 2: THE APPLICATION PROCESS
- Purpose of the Consumer Loan Application
- Best Practices During the Application Phase
- Analyzing the Application for Consistency
- Effective Questions During the Loan Interview
- Regulatory Requirements Governing the Application Process
CASE STUDY: Review of Loan Applications to Detect Inconsistencies, Errors and Common Flaws
DAY 2 SESSION 3: CREDIT INVESTIGATION, EVALUATION AND DECISION-MAKING PROCESS<
- Review and Understanding of the Credit Report and Credit Score and How It Should Be Used in Making Credit Decisions
- Verification of Employment, Income, Assets and Liabilities
- Review the Six "C's" of Credit
- Analyzing Personal Financial Statements
- Calculating the Debt to Income Ratios
CASE STUDY: Analyzing the Personal Financial Statement and Calculating Adjusted Net Worth
CASE STUDY: Consumer Loan Request Case Study
CASE STUDY: Review Loan Officers' Consumer Credit Memoranda to Detect Common Flaws and Identifiable Misapplication of Judgment
DAY 3 SESSION 4: CREDIT INVESTIGATION, EVALUATION AND DECISION-MAKING PROCESS (CONTINUED)
- Understanding How Self-Employed Borrowers are Different from Salaried Borrowers
- How to Transpose Income into Cash Flow Income by Making Required Adjustments to Income
CASE STUDY: Analyzing the Self-Employed Borrower to Determine True Cash Flow
DAY 4 SESSION 5: UNDERWRITING THE SMALL BUSINESS BORROWER
- Determining the Creditworthiness of Small Businesses Often Owned by the Consumer Borrower
- Credit and Ratio Analysis
- Basic Cash Flow Analysis
SESSION 6: CONSUMER LOAN DOCUMENTATION
- Documenting Actions During and After the Consumer Loan Decision Has Been Made
- Review Loan Documents to:
- Identify the Borrower
- Identify, Value and Protect the Collateral
- Evidence the Debt
- Attach the Collateral
- Perfect the Collateral
CASE STUDY: Documenting a Consumer Loan to Protect the Bank's Security Interest
SESSION 7: LENDING TO THE SPECIAL CONSUMER
- Unsecured Consumer Lending
- Lending to Consumers and Small Business on Limited Financial Information
- Lending to High Net Worth Individuals
KEY BENEFITS FROM ATTENDING
- Enhanced Understanding of the Consumer Borrower
- Established and Proven Consumer Lending Process to Achieve Consistency in Consumer Lending
- Understand the Importance of the Consumer Lending Policy and How It Provides Guidance for the Consumer Lender
- Develop Loan Interviewing Techniques to Determine Creditworthiness
- Know How to Verify Income, Assets and Liabilities
- Understand the Decision-Making Process Utilizing the Judgmental and Credit Scoring System
- Understand the Unique Traits of the Self-Employed Borrower
- Know How to Underwrite Unsecured Consumer Loans to Reduce Risk
- Early Recognition of the Un-Creditworthy Consumer Borrower and a Potential Problem Consumer Loan
Event Brochure
Online registrations are followed up with an email confirmation. Once an online registration is started you must click proceed to check-out and then click submit to finalize the registration. Registrants can view events they are registered using the MyKBA link on https://www.kybanks.com.
If you are not a KBA member, please contact Paula Cross at pcross@kybanks.com or 502-736-1276 for the possibility of attending at a non-member rate.
Program is 9 a.m. - 4 p.m. local time and includes lunch each day. Registration (on the first day only) begins after 8:30 a.m.
Should you need overnight accommodations we suggest: Holiday Inn Express, 1520 Alliant Avenue, Louisville (502) 240-0035; be sure to mention you are attending a KBA program to receive our rate. The special rate for KBA will expire 4/28/25.