CRE Collateral Valuation Process: Conducting a Risk Assessment
Duration: 90 Minutes
Is your institution in compliance with “Interagency Guidelines for Establishing Standards for Safety and Soundness” that requires institutions to establish and maintain loan documentation practices that ensure that the bank can make an informed lending decision and assess risk on an ongoing basis? If you haven't checked lately, now would be a good time to assess whether your institution's CRE collateral valuation process complies with “assess risk on an ongoing basis” requirements. Most importantly, institutions need to determine if they have appropriate procedures for ongoing monitoring of the value of their collateral interests and security protection.
Objectives of the Presentation
During this important webinar, our speaker will discuss conducting a risk assessment of CRE collateral valuations including:
Why should you Attend
- Assessing the adequacy of collateral documentation to meet regulatory requirements
- Evaluating collateral valuation monitoring efforts to determine if valuation updates reflect changing market and economic conditions to preserve safety and soundness
- Reviewing the adequacy of collateral valuation monitoring policies and procedures
- Assessing management's decision-making process for the timing of collateral valuation updates
- Evaluating the adequacy of management's assessment of early warning signs that would lead to collateral valuation updates
- Developing an assessment report for the board's review to ensure the board can carry out their responsibilities to comply with safety and soundness guidance
What happens in practice is many institutions conduct the required real estate collateral appraisals or evaluations as part of the underwriting process. Then the collateral values may or may not be updated unless a subsequent transaction extends new money to the borrower or market conditions change. CRE loans with no subsequent transactions may be exposed to safety and soundness regulatory concerns, especially when economic conditions deteriorate. Consider what happened during the great recession. Many institutions were unprepared for the significant declines in collateral values that resulted from the real estate bubble. Although the Great Recession was an extreme case, changing market and economic conditions can have a significant adverse effect on CRE collateral values while borrowers are faced with decreasing cash flows from their real estate projects. That's why institutions need to have policies and procedures for periodically monitoring CRE collateral valuations and managing borrower risks.
Please join our expert, Gary Deutsch, as he guides you through conducting a risk assessment of your institution's CRE collateral valuation monitoring process.
Who will Benefit
- Internal and External Auditors
- Chief Lending Officers
- Chief Credit Officersv
- Loan Officers
- Funding Control Personnel and other lending personnel whose duties and responsibilities include ordering, preparing and reviewing appraisals and evaluations
This is a 90 minutes Recorded Video Program wherein the speaker will join at the end for the Q&A session to answer your queries.