Managing collateral for an application

The process of adding and maintaining complex secured loan and lease collateral structures, and ensuring that the required information has been gathered for each type of collateral, is a complex task. Q2 Origination provides a simple and standardized process to create and manage complex collateral structures. From the Collateral tab in the left pane of the Loan (or Lease) Dashboard, you may view collateral pledged to a loan. You can also initiate the process of pledging new or existing collateral to a loan. 

Cross-collateralization

There may be cases where multiple loan or lease applications are being processed for the same borrower. In some of the cases, the same collateral may be pledged against more than one application for part of its value. The cross-collateralization feature helps you maintain details of the collateral appraisal, its appraised value and pledged value across applications. Cross collateralization ensures that a collateral is not pledged beyond its appraised value and an application is not under-collateralized, especially when the collateral is pledged against multiple applications. It calculates the total pledged value of a collateral and displays an error if this value exceeds the appraised value. You can view all the applications which are pledged against a collateral, and the appraised and remaining amount of the collateral in the Collateral Dashboard.

You can complete the collateral appraisal using Q2 Origination's appraisal management capability or externally. However, the appraised value must be made available in Q2 Origination's Collateral Valuation record for collateral to be pledged against an application. Collateral that is pending appraisal is pledged with a zero value. Once the appraisal completes, you can update the pledged amount.

Capture cash flow details

As part of create/update collateral in the application, you will now be able to capture the cash flow details related to a collateral . For example: you will be able to upload a rent roll against a real estate collateral .On an upload, a preview of the uploaded CSV file is shown. The preview consists of the header and the first five records of the file. You can then map the header fields or in case the correct header names are already provided, you can skip this step. 

You also can associate the rent roll document category with a rent roll document definition. On Save, the rent roll data is inserted, a new document category is created with the collateral and application in context and linked to the document definition selected. If a collateral is part of multiple applications, then this document will be visible across applications.