The lending function of any credit union or financial institution is its main income-generating engine. Without a sound lending function, most financial institutions would quickly see the demise of their organization. For this reason, lending reviews are crucial for financial institutions.
When completed by a third party, loan reviews provide management with an independent assessment of what is arguably one of the most important functions of the organization. The reviews present a critical control and give management a certain level of comfort in better understanding the quality of the institution’s loan portfolio.
TWHC has over 30 years of experience auditing the lending and collections functions of financial institutions.
In addition to monitoring the quality of underwriting, TWHC also provides audits of other lending areas such as collections and services to assist with monitoring the effectiveness of these post-funding functions. With regulations becoming more stringent and pressures from a weak economic recovery, the collections function is an area that should be critically monitored.
Lending Servicing Reviews
TWHC’s team of auditors completes loan servicing reviews for institutions that are seller-servicers for secondary market makers such as Fannie Mae and Freddie Mac. TWHC also has experience in providing more customized reviews for financial institutions that are lead lenders and provide participation opportunities for other financial institutions.
Consumer Loan Reviews
TWHC reviews many consumer loan departments annually. TWHC provides comprehensive reports that outline its understanding of your institution’s:
- Mortgage banking activity;
- Indirect lending program;
- Direct lending program;
- Real estate lending program; and
- Various unsecured loans, including Visa portfolios.
Commercial Lending Reviews
TWHC’s team of internal auditors has an average of more than 10 years of experience reviewing commercial loans. TWHC has reviewed real estate and equipment secured loans as well as unsecured loans. In addition to standard commercial loans, TWHC has also completed reviews for SBA loans.
TWHC has performed hundreds of collections reviews over the years. TWHC tests for internal controls issues, as well as regulatory issues. TWHC also tests for the effectiveness and adequacy of collection efforts and post-charge-off activity.
TWHC reviews the handling of repossessions and foreclosures of collateral to ensure that there is a protocol in place to minimize losses to financial institutions.
TWHC’s professional staff understands the importance of these areas and knows the common pitfalls of lending that financial institutions should be aware of.