SBA, Charge-Off Tabs Wrap-Up
Summary
An SBA form titled Charge-Off Tabs, designed to help a lender assemble its final wrap-up report for a Charge Off request. It defines charge-off as an SBA administrative action whereby a loan is reclassified from "liquidation" to "charge-off" status, and states that it has no impact on an Obligor's liability for the loan balance (SOP 50-57). The tabs are Lender Information, Is Charge-Off Appropriate?, Charge-Off Justification, Recovery Worksheet, Obligors/Collateral Worksheet, Collateral Disposition and Treasury Referral. Under Collateral Disposition, the form states that personal property collateral may be abandoned if its Recoverable Value is $5,000 or less, and real property collateral if its Recoverable Value is less than $10,000 per parcel.
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Charge-Off Tabs
Charge-off is an SBA administrative action whereby a loan is reclassified from "liquidation"
to "charge-off" status and the outstanding balance of the loan is removed from the Agency's
accounting records. It has no impact on an Obligor's liability for the loan balance. (SOP
50-57)
This Tab system was designed to help you assemble your final wrap-up report. In order for
SBA to process and expedite your request for Charge Off, the following Charge-Off Tabs
must be completed. Please be sure to complete all information requested and provide the
appropriate supporting documentation as noted. If any information is not provided, please
provide an explanation.
Once your Charge-Off package is received it will be assigned to a Loan Specialist for review.
All Charge Off requests are assigned for review and consideration to a Loan Specialist in
order of date received. If we are unable to process your request, you will be notified by the
Loan Specialist or our Customer Service Department.
TAB 1 Lender Information
TAB 2 Is Charge-Off Appropriate?
TAB 3 Charge-Off Justification
TAB 4 Recovery Worksheet
TAB 5 Obligors/Collateral Worksheet
TAB 6 Collateral Disposition
TAB 7 Treasury Referral
Commercial Loan Service Center - Little Rock Commercial Loan Service Center - Fresno
2120 Riverfront Drive, Suite 100 801 R Street, Suite 101
Little Rock, AR 72202 Fresno, CA 93721
Phone: 501-324-5871 Phone: 800-347-0922
Fax: 202-741-6959 Fax: 202-481-1756
* Email: LRSC.postservicing@sba.gov * Email: fsc.postservicing@sba.gov
** Send This File: https://www.sba.gov/content/send-file ** Send This File: https://www.sba.gov/content/send-file
1
Lender Information
Borrower Name:
SBA Loan Number:
Companion Loans:
Has the guaranty been honored? Yes No
If the loan was sold on the secondary market, has
the Post Purchase Review been completed? Yes No
Was this loan part of an FDIC Loss/Share Agreement? Yes No
Lender Contact Information
Lender Name:
Contact Name:
Phone: Fax:
E-mail:
Address:
City: State: Zip Code:
Global Certification:
I, , hereby certify, represent and warrant on behalf
of that all information and documentation submitted to the U.S.
Small Business Administration in connection with this final wrap-up report is accurate, genuine and
complete and contains true copies of 's records for this loan. I further
certify that I have personally reviewed and confirmed, based upon [Lender's]
's records, the copy of [Lender's] 's Transcript of Account with respect to this
loan provided herewith and that to the best of my knowledge and belief the information contained
therein is true and accurate. I also certify to the best of my knowledge and belief that
___________________________has materially complied with the SBA Loan Program Requirements (as
defined in 13 CFR 120.10) applicable to this loan.
By signing below, I represent and warrant that I have the proper authority to execute this document
on behalf of
1
Signature: Date:
2
Charge-Off Checklist
Is Charge-off Appropriate?
Charge-off is appropriate when:
g
All reasonable efforts have been exhausted to achieve recovery from (1) voluntary payments on the
Note, (2) compromise agreement with the Obligors; (3) liquidation of the collateral; and (4) enforced
collections;
g
The estimated cost of further collection efforts exceeds the anticipated recovery;
g
The only remaining avenue of recovery is from Obligors who cannot be located or who are unable to
pay the loan balance; or
g
The loan balance is uncollectible due to discharge in bankruptcy (i.e., release of the debtor from any
further personal liability for pre-bankruptcy debts), the expiration of the statute of limitations (i.e., the
passing of the deadline for suing), or the existence of another defense available to the remaining
Obligors under state or federal law.
Check Yes or No regarding the status of the subject loan.
Yes No
Pending Post Purchase Review?
Ongoing Liquidation and/or Litigation?
Open Bankruptcy?
Is there a possibility of further recovery?
Workout the Borrower is complying with?
Approved Performing Term OIC?
Billing owed to SBA?
Paid-in-Full Status?
If you answered Yes to any of the questions, this loan is NOT ready for charge-off. Do not
submit this package until the loan is fully ready for charge-off. Until then, continue to
submit Quarterly Status Reports until the loan is ready for charge-off or paid in full.
Requests for approval of Recoverable Expenses may only be submitted with the Lender's Purchase
Package or with the Lender's Wrap-Up Report (Charge-Off Tabs). Please read SBA Informational Notice
5000-1311 for guidance on when lenders may submit requests for approval of Recoverable Expenses.
Please use the Care and Preservation of Collateral (CPC) Tabs, located at https://www.sba.gov/sites/
default/files/files/LRSC_and_FSC_CPC_Tab_System.pdf when submitting a Recoverable Expense
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request with your Wrap-Up Report (Charge-Off Tabs). After the loan has been charged off, SBA will no
longer accept a request for reimbursement of recoverable expenses.
3
Charge-Off Justification
Charge-off Justification
Please attach a narrative detailing recovery and collection efforts, including reasons
and justification for charge off action.
Site Visit Report
Please provide a copy of the post-default Site Visit Report or an explanation for why a
site visit was not conducted.
Lender's Transcript
Please provide a current copy of the complete Lender's Transcript. If liquidation
proceeds are listed on the transcript, complete Tab 4.
Was this loan purchased from the Secondary Market by SBA? Yes No
If No, proceed to Tab 4
If Yes:
1. Did the loan balance on the lender's transcript submitted with the post
purchase package agree with what was reported to the FTA on the last 1502
prior to purchase from the Secondary Market? Yes No
2. Indicate the date when the balance stopped matching:
3. Please provide a revised certified transcript and a written statement
explaining the reasons for the difference along with copies of all supporting
documents to justify your revised balance (expense receipts, liquidation
verification reflecting the gross/net and any deductions, copies of form 172,
and evidence of any returned checks from the borrower.)
3
4
Recovery Worksheet
Please summarize all recoveries using the spreadsheet below. You must include all
supporting documentation (i.e. HUD1 sheet(s), auction report(s), settlement
statement(s), bill(s) of sale, and/or copies of cancelled checks). An Offer in
Compromise (OIC) is considered recovery and must be included. Provide supporting
documentation for funds held in escrow listed on the HUD-1.
Net Amount Applied to
Date Collateral Sold
Indebtedness
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
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Total Recovery
Requests for approval of Recoverable Expenses may only be submitted with the Lender's Purchase
Package or with the Lender's Wrap-Up Report (Charge-Off Tabs). Please read SBA Informational Notice
5000-1311 for guidance on when lenders may submit requests for approval of Recoverable Expenses.
Please use the Care and Preservation of Collateral (CPC) Tabs, located at https://www.sba.gov/sites/
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default/files/files/LRSC_and_FSC_CPC_Tab_System.pdf when submitting a Recoverable Expense
request with your Wrap-Up Report (Charge-Off Tabs). After the loan has been charged off, SBA will no
longer accept a request for reimbursement of recoverable expenses.
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Obligors/Collateral Worksheet
Collateral Worksheet
Lien Position
Current Lien
Description of Collateral Per Loan
Position
Liquidated Remaining Abandoned*
Authorization
1
2
3
4
5
6
7
8
9
10
11
*If you checked "Abandoned", please complete Tab 6.
Obligors Worksheet
Guarantor Per Loan Authorization Remaining Released Bankrupt Limited Deceased *
1
2
3
4
5
6
7
8
9
* If deceased, please provide a copy of the death certificate or printout of the
verification from the Social Security Administration records:
http://search.ancestry.com/search/db.aspx?dbid=3693
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6
Collateral Disposition
Abandonment of Collateral
Personal property collateral may be abandoned if the collateral has no significant
Recoverable Value, i.e. the individual or aggregate Recoverable Value is $5,000 or less.
Real property collateral may be abandoned if the collateral has no significant
Recoverable Value, i.e. a Recoverable Value of less than $10,000 per parcel. The
decision and justification for abandoning collateral, including the basis for the
Recoverable Value estimate, must be documented in the Loan File.
Abandonment of collateral requires a cost benefit analysis (post default
appraisal, estimated moving and resale expenses, associated foreclosure and
legal fees, etc.) that clearly supports and justifies that enforced collection of
pledged real and or personal property would exceed potential recovery. (See
SOP 50-57, Chapter 5 for requirements when property is contaminated).
__________________________________________________________________________________________________________________
Has any collateral been abandoned on this loan? Yes No
If No, proceed to Tab 7
If Yes, you must provide the justification used for such action along with
supporting documentation. Examples of supporting documents are:
Post Default Appraisal
g
Amounts owing to primary lien holders
g
Environmental Reports (Summary pages of Phase I and Phase II)
g
Summary detailing reasons for abandonment
g
6
7
Treasury Referral
NOTE: Business Legal Entities: If legal entity is no longer operating, dissolved, and
has not operated for more than two years, please provide SBA with documentation that
obligor's business has been legally dissolved. Eligible active entities will be referred.
After Charge-off, if further collection is not barred by a valid legal defense such as
compromise, discharge in bankruptcy, or statute of limitations, the loan and remaining
Obligors must be referred to Treasury for further collection efforts (Debt Collection
Improvement Act of 1996).
Name of Business:
Treasury
Name of each Business or Obligor SSN/TIN Current Address with Zip Code Reason Not to Refer
Referral?
Y N
1.
2.
3.
4.
5.
6.
7.
8
Reason Not to Refer: B-bankruptcy, D-deceased, L-limited, C-compromise, O-other
Upon receipt of notice of a bankruptcy filing or other litigation concerning an SBA loan referred to
Treasury, the Person receiving the notice must immediately notify the SBA Treasury Offset Division in
Birmingham, Alabama so that the loan can be recalled from Treasury and SBA legal counsel can take
appropriate action in response to the litigation. The notice, which must include the Borrower's name and
the SBA loan number, should be faxed or e-mailed to:
Supervisory Loan Specialist
Treasury Offset Division
Fax: 202-481-0592
E-mail: BirminghamTOPS@sba.gov
Note: Regardless of whether the loan was originally serviced by the Lender, after
the loan has been referred to Treasury, all subsequent litigation is handled by SBA
legal counsel(Chapter 3, Paragraph B, SOP 50-57).
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