Frequently Asked Questions for Lenders: Servicing Responsibilities
Other Lender Questions
Eligible Businesses
Eligible Uses of Loan Proceeds
Underwriting
What are my servicing responsibilities
after closing the loan? 
You are responsible for monitoring the borrower and servicing the loan
in the same manner you would monitor and service other loans in your portfolio
and in accordance with the Lender's
Manual and Master Guarantee Agreement.
Notify us within 30-days of any adverse changes in a borrower's financial
situation or if there is an occurrence or likelihood of an occurrence
that will result in the default of the guaranteed loan.
We consider a loan to be delinquent or defaulted when a full principal
and interest payment is not received within 30-days of the due date. In
such an event, notify us immediately.
What are my reporting requirements?
In January of each year we will send you an Annual Status Report listing
any outstanding guarantees with your institution. You provide us the loan
balance, status and, if appropriate, annual servicing fee and return the
report by the end of that month.
When would I request a guarantee
payment?
After all collection and liquidation options have been exhausted.
How is the guarantee payment determined
in the event of default?
After all collection and liquidation efforts have been exhausted, we
apply our guarantee percentage to the outstanding balance of the Note
and pay that amount to you, provided you pursued all collection efforts
and complied with the terms and conditions of the guarantee.
Example:
An 80% guarantee on a $100,000 loan is approved.
The loan subsequently defaults and after collection efforts are pursued
a balance of $50,000 remains. The guarantee payment would be $40,000 ($50,000
x 80%).
Will WHEDA share in collection
expenses on defaulted loans?
Yes, if the expenses were preapproved and related to workout, litigation,
and/or liquidation. Our exposure will be limited to the lesser of 10%
of the original loan amount or the original guarantee percentage applied
against actual expenses. Up to 90 days of interest is considered a reimbursable
expense and is included when calculating the 10% limit.
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