S.O.P. CONTINUATION SHEET
When controlled accounts are used, careful consideration will be given to the length of time funds may remain in such an account. The loan specialist processing the loan will consider each case on its own merits, and insert a paragraph in the loan authorization stating the length of time the account will be permitted.
In some cases, it may be necessary or more practical to close loans and disburse checks by mail. In these cases the same procedures apply. However, the check is not mailed to the borrower until such time as the signed note and other necessary documents have been received in the office. When mailing the note to the borrower, be sure to inform him that it should be dated; all copies should be signed; and no interest will begin accruing until the date the check is mailed to the borrower. In addition, borrower should be advised to retain his copy of the note.
When mailing a check to a borrower, be sure to send it "CERTIFIED RETURN RECEIPT REQUESTED." This will establish a record of the cate the check was actually received, and help to keep control over the checks. Also, when mailing a check, enclose a SBA Form 740 to be signed by the borrower, and a franked, self-addressed envelope for its return. Borrowers should be advised to retain one copy of the SBA Form 740.
POSTDISBURSEMENT PROCEDURES
As soon as the disbursement of a loan has been made, the file should be given to the clerk who maintains the check register so that she can close out the register as far as the particular loan is concerned. After completing the check register, SBA Form 192, "Notification of Loan Closing," must be completed.
The very nature of disaster operations makes it necessary to modify our normal servicing procedures to serve the needs of disaster victims. Ultimately, the normal procedures will also be applied to these loans. SOP 50 50 1 cites the basic servicing guidelines that apply to disaster operations, and the files, controls, and other records required by this SOP will be maintained.
110. SERVICING RESPONSIBILITY
Unlike regular Section 7(a) SBA loans, the processing section is responsible for all actions on a disaster loan until after final disbursement or until legal releases the case for transfer to the ultimate servicing office, whichever comes later.
Servicing functions which are not assumed by a disaster office include the making of initial field visits and other involve- ment of management assistance (MA) personnel. The majority of all DL's are home loans and MA involvement is usually unnecessary.
TEMPORARY SERVICING OFFICE
This office, a section within the processing section may be large or small depending on the nature of the disaster. Normally it is physically located within the processing section. The supervisor of this group MUST be experienced in portfolio management (PM) and should have an experienced loan servicing assistant to help, in large disasters. The remaining staff may be temporary employees trained on the job. In small disaster operations being handled in regular SBA offices this "section" may be a person in the PM section assigned to this function and performing these duties together with his regular assignments.
112. ACTIONS UNDER DELEGATED AUTHORITY
All actions taken under delegated authority must reflect the recommendation of the person who initiated the action and the concurrence and approval of a supervisor who has the delegated
S.O.P. CONTINUATION SHEET
authority to take final action. If the supervisor does not concur in the recommendations of the initiator, the final action must be taken at the next higher level in the chain of command in the disaster area.
All servicing actions, whether in a permanent office or a temporary disaster servicing office, will be documented by SBA Form 327, "Modification or Administrative Action" for modifications, cancellations, etc., and SBA Form 476 "Change of Address and/or Name" for changing the name and/or address of disaster borrowers. (See SOP 50 50 1 for examples of forms and instructions for using them).
AMENDMENTS AND MODIFICATIONS
With the exception of correcting typographical errors, and similar minor modifications, only an official at the same or a higher level as the official who took final action on the original loan application has the authority to approve or decline requests for amendments or modifications.
Cancellation of Undisbursed Loan Balances
Upon the written request of the borrower or participating institution the undisbursed balance of an approved loan or participation may be canceled by the official having delegated authority. Also, if a disaster loan is undisbursed for an unduly long period SBA may initiate action to cancel the balance using the same procedures as for regular business loans. (Refer to SOP's 50 10, 50 50, and 50 51, as appropriate for procedures).
Reinstatement of Canceled Loan Authorization
The regional director or others under the delegation of authority, may reinstate all or any portion of a canceled loan authorization at any time within 6 months of the date of cancellation PROVIDED no adverse change has occurred since the loan was approved.
Extension of Disbursement Period
On fully or partially undisbursed loans, the regional director or his delegate may make any reasonable number of extensions in the disbursement period beyond the original period, provided he is in receipt of a request from the borrower supported by satisfactory evidence showing the need and justification for such an extension.
S.O.P. CONTINUATION SHEET
Reconsiderations of declined requests for modification or amendment cannot be approved or declined at a level below that of the official taking the original decline action. If there is a second reconsideration, that final action will be taken at the same or next higher level than the prior decline action, but in no case will a request go beyond the regional director when the requested action is within his delegated authority.
Participation and guaranteed loans closed by a participating financial institution will be serviced by the participant in accordance with the participation or guaranty agreement. Direct and SBA-serviced immediate participation loans will be serviced by SBA.
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