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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