An interesting article was recently published by the American Banking Association (ABA), discusses the transparency of the BORROWER, providing ten tips to help a LENDER spot trouble.
(1) Failure to confront changed circumstances.
(2) Just listen.
(3) Observe "local business indicators."
(4) Mind the deposits.
(5) Look for any change in overdraft behaviors.
(6) Watch for late financial statements.
(7) Spend more time out of the bank and in the customers' places of business.
(8) Try to see the world as the customer sees it.
(9) Get your ducks in a row.
(10) Be mentally prepared for the worst.
See the entire article at:
http://www.ababj.com/blog/311.html
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So what does the lender do if this behavior is spotted?
ReplyDeleteThat would depend on the situation. Have you already made the customer a loan? Is it a commercial or a consumer customer? If it is a commercial customer, mabye you need to call the note. Maybe you just need to investigate the situation further. If it is a commercial customer, ask for additional financials, i.e. tax returns, personal fianancial statements, financial spreads, etc. If it is a consumer customer, run a crdit bereau, look at the debt to income ratio, FICO score, etc.
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