Loan Interviewing Skills and Techniques

Topics
Primary Purpose of an Interview Obvious Indicators Hidden/Complex Indicators Interviewing Questions-techniques and restrictions Documentation in Loan Notes

Purpose of a Loan Interview

Gain enough information to paint a complete picture for loan officer to make the most educated decision Provide the member with an opportunity to communicate their lending needs in the loan application Discovery of underlying issues that are not apparent

Interviewer is crucial link to Loan Officer

Skills/Techniques
Every loan application is an interview Consistent active listening In-depth detailed questions

Thorough loan notes

Obvious Indicators
Short residency/job time Past credit history Delinquent trade-lines Collection items Charge-offs Credit card limits maxed Multiple recent inquiries Multiple new trade-lines High debt ratios Not wanting to close credit cards if required

Subtle Indicators
New members Living Situation Lives with Others or Other Request to remove a joint off an existing loan Changes in life situation (death, divorce, etc) Request a loan to Help Family Request a loan to Pay Bills Purpose codes:
Legal Fees Bill Payment Debt Consolidation Taxes

Subtle Indicators
Repeated debt consolidation loans Pyramiding debt Gambling warning signs Sporadic credit history Members explanation of credit issue doesnt line up with actual credit history Multiple Names Multiple Loans

Interviewing Topics
Employment
What are all your income sources that you would like to use for a decision? Short Job time reasons

Living Costs
What is the living situation? (lives with family or others find out more) What other financial obligations do you have besides child support, unreported debts note toting)

Interviewing Topics Tough Questions

Medical collections why is it a collection item? Civil Judgments what is the status/obligation? Are Income Tax Returns Current? Cards Maxed out why have you used all the available credit on your cards? Number of credit cards why? We have the right to ask about financial behaviors

Key Concept

Ask WHY! Face value answers are not always sufficient

Reg B: Asking Questions

Cannot Ask Family Planning Marital status/income on individual app Income not listed on application Nationality Religion Receipt of welfare Health issues Rephrase Are you expecting your income to change over the term of the loan? What other sources of income would you like to use to qualify for this loan? Are you a Jamaican citizen?

Note Documentation
Only exclude collection items when an explanation is given AND they total less than $200 each Clearly explain:
Purpose of all proceeds (every dollar) Specific details of loan request

Explain what caused credit issues Provide description of plans member has to fix credit issues

Note Documentation
No need to state obvious facts that are found in the application
Good/high ratios Job time/Residency time

Explain all borrowers situations, not just primary

System Changes
Notes Functionality
Applicant Info Screen (Primary, Joint, Cosigner) Liabilities Screen Projections Screen Decision Options Screen Funding Options Screen Loan Creation Screen

Questions?

Your turn to make the decisions!