Monitoring Collateral Risk Over Life-of-Loan

Commercial real estate lenders have traditionally given close attention to conducting property due diligence during loan origination. However, many are less vigilant post-closing, and property held as collateral often goes unmonitored over the course of the loan term. Both the FDIC (FIL-98-2006) and the OCC’s CRE Lending Handbook (August 2013) recommend that banks have effective risk management policies that address the need for monitoring collateral for potential environmental concerns and other risks for loans held in a bank’s loan portfolio.

The challenge, however, has been the effort and resources needed to efficiently track changes in properties’ risk profiles over time. Monitoring hundreds of properties is no small task. Just as challenging is understanding what degree of monitoring the regulators require. Questions such as how often, for what (on-site and off-site environmental, flood, property conditions, etc.) and, just as much a challenge, who is paying for it, bank or borrower?

EDR is excited to have assembled a panel of experts who will address the challenges of monitoring at the RMA’s Annual Risk Management Conference in Boston on November 2. Dev Strischek of SunTrust will provide some clarity on the regulations, discuss sound risk management practices, and examine sample policy. Anthony Buonicore of the Buonicore Group will share his 35 years’ experience in the environmental industry as well as a real estate investor, discussing the monitoring of on- and off-site risks, and examining some real case scenarios. Guy Tassinari will demonstrate how technology can help simplify the monitoring process, allowing risk managers to move from a “project” driven activity to a systematic process. Lenders will take away from the session valuable information that can be immediately employed in their organizations.

The RMA session is Monday, November 2nd at 12:00 (lunch served) in the Sheraton’s Republic Ballroom.

For more information on the RMA Conference, go here.