Basel

Satisfactory Essays
Assignment on
Loan Administration Department
Submitted to:
Md. Ariful Islam
Lecturer,
Lending Risk & Credit Analysis
Department of Banking
University of Dhaka Submitted by: Shakila Parvin ID# 002, Batch #15 Department of Banking University of Dhaka

Course: Lending Risk & Credit Analysis Code: B- 407
-------------------------------------------------
Date of submission: July 09, 2012

Loan administration is a critical issue for a banker. It consists of various aspects which can affect the business if there is any fault in case of loan administration. Losses related to poor loan administration are by definition avoidable and therefore all the more painful.
Loan administration:
Loan administration encompasses the activities by which a bank ensures--from origination to final payoff--proper loan documentation, accurate loan accounting systems, and disbursement and collection of principal and interest. The administration aspect of a loan from the time the proceeds are dispersed until the loan is paid off. This includes sending monthly payment statements and collecting monthly payments, maintaining records of payments and balances, collecting and paying taxes and insurance (and managing escrow and impound funds), remitting funds to the note holder, and following up on delinquencies.
Loan administration Department:
It is a department within the same company through which people takes out the loan or a different company contracted by the lender to perform all servicing functions. Typically, if the lender outsources loan administration, once the loan closes, borrowers receive a letter that explains which company will

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