There is no doubt that banks are facing increasing nonperforming assets due to economic conditions. However, a percentage of these losses could be averted or at least mitigated with effective collection strategy designed to indentify and deal with problems early. Although most loan officers are ill equipped to resolve these issues, it is imperative that they be trained in early detection.
The chances of resolution or mitigation are drastically increased at early detection when the relationship with the borrower has not deteriorated. Liquid assets and inventories are normally at more acceptable levels making resolution more feasible. The longer the delinquency persists the greater the drain on cash and inventory.
As Community Bankers, it is our job to offer solutions. If we detect a problem early, there may be a lending or workout solution. If we do nothing, hoping the credit will work its self out the unresolved problem increases our chances of loss. Ultimately, waiting reduces resolution efforts to work out and worse, liquidation where all parties lose.
Crossroads Credit and Portfolio Management, LLC offers collection training designed to teach your loan officers, customer service representatives’ and tellers how to identify problems in a probing manner which is not confrontational or threatening.
Loan Training
As Community Bankers we need our loan officers to be versatile understanding the whole credit process. Historically, we have invested little capital in collections departments expecting our Loan Officers to fulfill the collector’s role. However, loan officers today lack the skills of their predecessors. They were trained in a sales driven market focused on volume rather than lending fundamentals. They focus on making the deal while never considering whether the loan is good for their borrower or maybe even the Bank. Many loan officers that began their careers in the last 10 to fifteen years have never experienced loss. After all, in a booming market even poor risks with little liquidity find a way to get by.
The big bank’s answer is to centralize underwriting taking credit authority away from the field relegating their staff to order takers. This method is not only expensive but, is also converse to the community bank philosophy where the customer can talk to his loan officer who can make decisions and offer sound advice. This is the way we maintain our niche in the Banking world.
Crossroads Credit and Portfolio Management, LLC offers both collection and lending training to help shore up the skills of new and not so new loan officers. This is “back to basics” training of fundamentals which has been missing in our industry and has lead to the problems community bank’s are facing today.
