Pledging collateral for an application
You may pledge a collateral for its full or partial appraised value, to a loan. For example, the value of a house may be 2,00,000 but you may pledge it for only 30,000 to the loan application. In case the loan becomes delinquent, the pledged collateral may be sold or auctioned, and proceeds from it up to the pledged value would be retained by the lender and the remaining amount would be returned to the borrowing entity that has pledged it. If the collateral is not yet appraised, the system informs you of the already pending appraisal status and pledges it with zero amount. Once the appraisal is complete, the collateral valuation amount is recorded in the system. If the appraisal is done outside of Q2 Origination, the collateral valuation information must be updated in order to pledge it. Subsequently, you can update the pledged amount in the application collateral.
The same collateral may be pledged against multiple loan opportunities, up to its appraised value. Similarly, multiple collateral may be associated with a single application.
You can also use the Application Collateral tab in the main navigation bar to associate existing collateral to applications and vice versa, and specify the pledged amount. However, this page does not display all the details of the collateral.
Prerequisites
Collateral categories and collateral types are set up.
Collateral valuation is active. (The Active checkbox in the collateral valuation details page is selected.) For a collateral appraised multiple times, the Active valuation is used.
Collateral appraisal is complete
Steps
Perform the following steps to pledge collateral for an application:
Log in to your Salesforce account.
Go to Applications and select the application to which you want to pledge collateral.
Select the Collateral tab on the Loan Dashboard.
Select + to pledge collateral to the application. The Manage Pledged Collateral page is displayed where the Collateral Wizard guides you in pledging new or existing collateral.
Select New Collateral or Existing Collateral to indicate whether you are pledging a new collateral or a collateral that is already recorded in your Q2 Origination application, maybe as part of another loan application.
Select Next.
To add a new collateral:
Search for and select the Collateral Type by selecting the Select Collateral Type
on the left of the collateral. For example, Land, Home or Aircraft, and select Next. Based on the selected Collateral Type, fields are provided to capture collateral details. For example, if collateral type is Home, you may specify any Lien or Leasehold details. For a collateral type of Aircraft, you may specify the manufacturer and vehicle details.
Select Next.
In the Collateral Information section, provide the Collateral Name and Collateral Code.
Specify collateral details in the fields and checkboxes that are displayed based on the selected collateral type.
Select Next.
In the Collateral Owner section, select the Account checkbox and select the Add New Collateral Owner
on the left of the Account field.
You can add one or more account as owners to the collateral.
Search and select the Account Name by selecting the Add New Account
Specify the Ownership.
The Ownership must not be greater than 100%.
Select Save.
Select Next.
Select Yes or No for Do you want to request a new appraisal for this collateral? This page is displayed if your organization is using the Q2 Origination Appraisal Management feature. If you are using an external appraisal system, proceed to the next step.
If you select Yes, provide the Due Date for the appraisal. This is the date by which appraisal must be complete.
Select Save. The collateral is pledged with zero amount. Once appraisal is complete, you can update this value.
To add an existing collateral:
Search for and select the Collateral. For example, any collateral that you have earlier set up in Q2 Origination. Such collateral must have a collateral type defined for it.
Select Next. The Collateral Information page is displayed.
Review or modify any information, if required and select Next. All mandatory information about the collateral must be available in order to pledge it. For example, if a collateral type is not associated to a collateral, an error message is displayed asking you to add the collateral type. You can edit the collateral details and try to pledge the collateral again.
In the Collateral Information section, provide the Collateral Name and Collateral Code.
Specify collateral details. Different fields and checkboxes are displayed based on the collateral type, for example, registration details for a vehicle vs number of dwellers for a property.
Select Next.
Add one or more accounts as owners to this collateral.
Assign the ownership percentage for each account. The total percentage must be 100%.
Select Next.
Do one of the following:
For unappraised collateral - The system displays the pending appraisal request, if any for the collateral. Select Save. The collateral is pledged with zero amount. Once appraisal is complete, you can update this value.
For an appraised collateral - Specify the Pledge Amount. This value can be less than or equal to the Remaining Value of the appraisal valuation. Select Save to pledge the collateral. The Pledged Collateral page is displayed with details of the pledged collateral.
Use the icons available in the right panel to manage the collateral. You can submit an appraisal request, view pledge details of the application, and update the pledge amount. Select the Loan tab once you have added all the collateral, to navigate to the Loan Dashboard.