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.
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.
WHAT YOU’LL LEARN
During this important webinar, our speaker will discuss conducting a risk assessment of CRE collateral valuations including:
- 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
- AND MUCH MORE!
YOUR CONFERENCE LEADER
our conference leader for "CRE Collateral Valuation Process: Conducting a Risk Assessment” is Gary Deutsch, president, BRT Publications LLC. Mr. Deutsch is a licensed CPA in Maryland and has a B.A. in accounting and an MBA in finance from Loyola University Maryland. He has also achieved the Certified Management Accountant, Certified Internal Auditor and Certified Bank Auditor designations. Mr. Deutsch is the founder and president of BRT Publications LLC. Mr. Deutsch has trained thousands of financial institution professionals in all aspects of risk management and has written numerous books in the U.S. and Europe on topics such as credit risk, internal audit and compliance with Generally Accepted Accounting Principles. Mr. Deutsch has extensive risk management and internal audit experience through his association with financial institutions of all sizes as well as through his role leading the KPMG financial institution consulting practice in the Mid-Atlantic region.