Loan Due Diligence

Client Profile – Federal Government Agency

The Need

• Warbird Consulting Partners (“Warbird”) contracted with the Federal Deposit Insurance Corporation (“Client”) to provide loan Due Diligence services on portfolios of loans owned or controlled by the Client.  Pursuant to the first Task Order received and completed, our project was to compile and review loan documents and data provided by the Client to ensure that the loans being reviewed were represented in the Client’s system, that the data is consistent with the loan documents, and that the loan types and characteristics were compliant and properly categorized.
• It was important to determine that this information was accurate to ensure that the valuation of the loan assets was also accurate and appropriate to the current market conditions.

The Solution

• Warbird used an internal document imaging and indexing system to compile, catalog, retain, review and distribute loan document packages.  The system also provided individual “deal rooms” for review and consideration of the loan assets by advisers and potential buyers.  Warbird partnered with finance technology experts, Access Business Technologies (“ABT”), who provided Managed Hosting, Integration, Web Services, Reporting and Professional Services along with its flagship distribution platform PowerCore, a proprietary Forensic Data Management System utilized in the review process.
• Warbird utilized a due diligence work-flow process to guide the review of the loan and to gauge document sufficiency, underwriting consistency, compliance, servicing sufficiency, risk characteristics, and collateral sufficiency. ABT created a comprehensive centralized loan portfolio review database for the due diligence reviews.  The work performed was specifically Due Diligence on over 4,700 Loans.

The Results

• The initial project request was for Compliance Reviews only, and was completed in a three-week time frame.  All tasks and deliverables were completed on time.
• Warbird mapped the Client’s data to its own database system, and used exception reporting to identify and correct data inconsistencies and insufficiencies.  The data was then compared to electronic document images to verify the accuracy of the Client’s data.
• Various loan types and characteristics were identified and grouped for electronic review for compliance with regulations.  Reviewers then validated the findings by reviewing the document data to ensure accurate results.
• Reports were produced on both a loan- and portfolio-level basis that stratified the loan assets based on data characteristics and individual loan ratings.  Warbird was able to complete the Engagement with maximum flexibility, minimum disruption and at extremely attractive billing rates.  Warbird was commended by the Client for its efficiency and knowledge.