Perform Annual Review

For many loans – especially commercial loans – credit risk is monitored via a process of an annual review. The annual review process typically consists of credit evaluation (similar to the underwriting process but abbreviated in scope) to determine the borrower's ongoing ability to repay the debt. Q2 Origination enables users to more quickly and efficiently manage the annual review process. Using Q2 Origination's existing Covenants functionality, users can configure annual review covenants, which automatically assign tasks and trigger email notifications to applicable users when the annual review must be performed.

Annual reviews are performed on existing loans in servicing and, as a result, are performed on the Interface Contracts. The annual review process leverages the loan dashboard and loan origination functionality in Q2 Origination. In an annual review, many of the tasks and processes are the same as origination; however, the stages are shortened. For example, during the annual review, the analyst/processor must gather specific documents such as financial statements, pull credit, and perform credit/financial analysis.

The annual review process is nearly identical to the renewal process, where a user selects a button and an application record with associated records is created, and configurable data is mapped from the Interface Contract to the new Application record. The distinction lies in the ability to choose the Annual Review product the user wants to use. The Annual Review Product is specified in the definition of the CL Product and is applied as the new CL product on the application during the annual review. In addition, all of the associated stages, tasks, document requirements are automatically applied to the Application.

To expedite the annual review process, you can define specific credit evaluation processes, policy rules, and approval processes for annual reviews of specific products. To do this, you can configure an annual review product and add applicable tasks, scorecards, stipulations, and workflow processes to enforce and accelerate the annual review process.

Prerequisites

Before you proceed to review a loan, ensure that the following prerequisites are met:

• The loan contract numbering model is defined.

• The existing loan record is imported into Q2 Origination.

• The fields to be copied over to the new application are mapped between the loan management system and Q2 Origination.

• The Use for Renewal checkbox is selected in the conversion mapping setup.

• An Annual Review Product is specified in the CL Product of the contract.

Steps

To renew a loan through annual review:

1. Log in to your Salesforce account.
   

2. Select Interface Contract in the list of tabs.
   

3. Select the contract to be renewed.
   

4. Confirm the contract details, such as the loan amount (displayed in the Original Amount field) and the interest rate, and select Annual Renew.
   

   An application is created with the annual review product specified in the CL Product definition.