1 - Quia
Introduction to the Credit Lifecycle & Credit Documents
“The life and times of credit”
Facilitator Guide
Training Department
10/2010
1.0
Introduction to the Credit Lifecycle & Credit Documents
“The life and times of credit”
Participant Guide
Version: 1.0
Version Date: 10/2010
About This Document
Document History
|Version Number |Version Date |Owner |Comments or Description of Changes |
|1.0 |10/2010 |Sandy Ballard |Initial draft for pilot |
Document File Name and Location
|File Name |File Retention Location |
|Credit Lifecycle & Credit Documents |Shared Drive |
Table of Contents
About This Document i
Document History i
Document File Name and Location i
Table of Contents ii
Getting Started iii
Course Overview iii
Course Preparation and Completion iv
Facilitator Guide Icons v
Introduction to the Credit Lifecycle and Credit Documents 1
“The life and times of credit” 1
Module Overview 1
Introduction to the Credit Lifecycle and Credit Documents 2
“The life and times of credit” 2
Module Overview 2
Introduction 2
Pre-Requisite 2
Learning Objectives 2
The Credit Lifecycle 3
The Credit Lifecycle 4
Phases of the Credit Lifecycle 4
Customer and Lender needs 4
Credit Lifecycle Activity 4
Credit Documents 11
Credit Documents 12
Customer and Lender wants/needs and credit documents 12
Electronic Filing and Credit Documents 12
Credit Documents Inbox Activity 12
Appendix 13
Appendix 14
Instructions 14
Getting Started
|Course Overview |
|Introduction |This blended learning course describes the phases of the credit lifecycle and introduces participants to |
| |common credit documents used throughout the lifecycle of a credit product such as a loan or a line of |
| |credit. This is a two-part course: |
| |Part one is an online tutorial |
| |Part two is an instructor-led session |
|Purpose |The purpose of this course is to familiarize learners with the credit lifecycle at $ome Financial Company |
| |and commonly used documents throughout the lifecycle. |
|Requirements |This course should only be delivered to participants who have successfully completed new hire orientation |
| |as well as credit product training. |
|Learning Objectives |After completing this course, participants will be able to: |
| |Identify the phases of the credit lifecycle (Sales, Underwriting, Servicing) for a typical credit product |
| |such as a loan or a line of credit. |
| |Determine in which phase of the credit lifecycle a document falls. |
|Estimated Time to Complete |The estimated length of time for this course is: |
| |15 - 30 minutes pre-class online tutorial |
| |2 - 3 hours instructor-led session |
| |Total 2 ¼ - 3 ½ hours over 2 sessions |
|Course Preparation and Completion |
|Facilitator Pre-Work |Two weeks before facilitating the course: |
| |Send the URL below for the pre-work tutorial via email to all participants |
| |Send the participant materials for printing |
| | |
| |One day before facilitating the course: |
| |Send a course reminder |
| |Verify online completion for all participants in learning management system |
| |Set up the training room (see below) and distribute materials |
|Classroom Set-Up |For the most effective delivery and participant experience, set-up the training room as follows: |
| |For average class size of 10-15 |
| |Small table groups of 3-5 people for group activities |
| |3 Flip chart easels or flip chart papers posted on the wall |
|Required Materials |The following materials are required to facilitate this course: |
| |Material |Module |
| |Online course access |Pre-class tutorial |
| |Facilitator & Participant Guides, accompanying PPT |Instructor-led session |
| |file | |
| |3 Flip Charts easels or self sticking flip chart |Instructor-led session |
| |paper (pre-labeled) Sales, Underwriting, Servicing | |
| |(optional) Three kinds of candy for dividing small |Instructor-led session |
| |groups | |
| | |
Facilitator Guide Icons
The following icons are used in this guide as visual cues to direct you in what to do, say, or use throughout the training.
|Icon |Description | |Icon |Description | |Icon |Description |
|[pic] |Refer to the Participant| |[pic] |Display a corresponding | |[pic] |Display a corresponding |
| |Guide. | | |overhead transparency or| | |PowerPoint presentation |
| | | | |use a digital projector | | |slide. |
| | | | |to display your | | | |
| | | | |computer. | | | |
|[pic] |Use a wall chart. | |[pic] |Use computers for | |[pic] |Tie a current topic back|
| | | | |demonstration or | | |to previous information.|
| | | | |follow-along. | | | |
|[pic] |Distribute a hand out. | |[pic] |Take note of a reminder.| |[pic] |Transition from one |
| | | | | | | |topic to the next topic.|
|[pic] |Facilitate an activity. |
Introduction to the Credit Lifecycle and Credit Documents
“The life and times of credit”
|Module Overview |
|[pic] |Direct participants to page 1 in the PG. |
| |Review the information on page 1 in the PG with participants. |
|Introduction |Facilitator: Display PPT S1. Display PPT S2. Say: |
|[pic] |This course describes the phases of the credit lifecycle and introduces you to common credit documents used |
| |throughout the lifecycle of a credit product such as a loan or a line of credit. This is a two-part course: |
| |Part one was the online tutorial (that hopefully everyone had a chance to complete) |
| |Part two is this instructor-led session |
|Pre-Requisite |Facilitator: Ensure all participants have completed the online tutorial. [Depending on business arrangement, class|
|[pic] |time may be allotted for online tutorial. If pre-arranged, have participants complete the online tutorial at this |
| |time.] Engage group in discussion. Say: |
| |Did everyone have an opportunity to complete the online tutorial? |
| |Facilitator: Display PPT S3. Debrief the tutorial by asking participants: |
| |What questions do you have from the tutorial? |
| |Who here has applied for credit in the past? Was your experience similar? |
|Learning Objectives |Facilitator say: |
| |Our discussion ties in nicely with the learning objectives for this course. Let’s take a look at the learning |
| |objectives now. |
| |After completing this course, you will be able to: |
| |Identify the phases of the credit lifecycle (Sales, Underwriting, or Servicing) for a typical credit product such |
| |as a loan or a line of credit. |
| |Determine in which phase or phases of the credit lifecycle common documents are used. |
Introduction to the Credit Lifecycle and Credit Documents
“The life and times of credit”
|Module Overview |
|Introduction |This course describes the phases of the credit lifecycle and introduces you to common credit documents used |
| |throughout the lifecycle of a credit product such as a loan or a line of credit. This is a two-part course: |
| |Part one - online tutorial |
| |Part two - classroom session |
|Pre-Requisite |You should have already completed the online tutorial prior to attending the classroom session. |
|Learning Objectives |After completing this course, you will be able to: |
| |Identify the phases of the credit lifecycle (Sales, Underwriting, Servicing) for a typical credit product such as a|
| |loan or line of credit. |
| |Determine in which phase(s) of the credit lifecycle common documents are used. |
| The Credit Lifecycle |
|[pic] |Direct participants to page 2 in the Participant Guide. |
| |Review the information on page 2 with the participants. |
|[pic] |Facilitator: Say: |
| |During the Credit Lifecycle online tutorial, you learned about the three phases of the Credit Lifecycle: Sales, |
| |Underwriting and Servicing. As you read the customer story of the Balentines, you reviewed the events that occurred|
| |during each of the three phases. |
| |You were also asked to think about what the customer and lender wants/needs might be at each phase in the cycle. Now|
| |you will have an opportunity to capture your thoughts about the customer and lender needs. |
|[pic] |Display Previously Prepared Flip Charts and PPT S4. |
|[pic] |Facilitator Say: |
| |In the room we have three flip charts labeled with the three phases of the Credit Lifecycle. In a few moments we |
| |will divide into three groups. |
| |As a small group, discuss what you think the customer and the lender ($ome Financial Company) might want/need at that|
| |phase in the Credit Lifecycle for your assigned flip chart and capture your thoughts. (Detailed instructions are |
| |found on page 2 in your guide) |
|[pic] |Facilitate the Activity (allow 5- 8 minutes for each round) |
| |Divide the participants into three groups using one of the following methods (or a method of your own choosing): |
| |Ask participants to count-off by threes |
| |Ask participants to choose one of three types of candy. ( Bring candy) |
| |Make rounds to each flip chart as the groups discuss to answer any questions. At the end of each round, rotate each|
| |group to the next flip chart to add their thoughts to the previous group’s ideas. Continue rotating until each group|
| |has visited each flip chart, and then return groups to their original chart for overall debrief. |
|The Credit Lifecycle |
|Phases of the Credit |During the Credit Lifecycle online tutorial, you learned about the three phases of the Credit Lifecycle. As you |
|Lifecycle |read the customer story of the Balentines, you reviewed the events that occurred during each of the three phases: |
| |Sales |
| |Underwriting |
| |Servicing |
|Customer and Lender needs |While you reviewed the tutorial you were asked to think about what the customer and lender needs might be at each |
| |phase in the cycle; now you will have an opportunity to capture your thoughts about the customer and lender needs. |
|Credit Lifecycle Activity |In the room you will find three flip charts labeled with the three phases of the Credit Lifecycle. Your |
|[pic] |facilitator will divide your class into three groups, one group for each flip chart. |
| |As a small group, discuss what you think the customer and the lender ($ome Financial Company) might need at that |
| |phase in the Credit Lifecycle for your assigned flip chart. For example, during the Sales process, the customer |
| |might want to know what credit products are available; the lender might need to know what assets the customer has |
| |to secure a loan. |
| |Capture your thoughts from your small group discussion on each half of your assigned flip chart. |
| |Use the example flip charts on the following pages to copy the ideas from each flip chart at the end of this |
| |activity. |
| |Be prepared to share your thoughts with the large group. |
|The Credit Lifecycle, continued |
|[pic] |Direct participants to page 3 in the Participant Guide. |
| |Advise participants to capture the results of each flip chart on the corresponding page. |
|[pic] |Display Previously Prepared Flip Charts |
| |Possible group answers are provided below |
|Sales |
|Customer wants/needs |Lender wants/needs |
| Money | Find out how much money the customer needs and why the customer needs|
|Information about credit |the money |
|Understanding |Information about customer assets, income and collateral |
|To know what the process is to get money | |
| | |
| | |
|The Credit Lifecycle, continued |
| | |
|Sales |
|Customer wants/needs |Lender wants/needs |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|The Credit Lifecycle, continued |
|[pic] |Direct participants to page 4 in the Participant Guide. |
| |Advise participants to capture the results of each flip chart on the corresponding page. |
|[pic] |Display Previously Prepared Flip Charts |
| |Possible group answers are provided below |
|Underwriting |
|Customer wants/needs |Lender wants/needs |
| Money, when will he/she get the money | Customer credit report/history |
|To know how much payment will be |Customer income documents |
|To know what fees he has to pay |Property appraisal |
| |List of customer assets |
|The Credit Lifecycle, continued |
| | |
|Underwriting |
|Customer wants/needs |Lender wants/needs |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|The Credit Lifecycle, continued |
|[pic] |Direct participants to page 5 in the Participant Guide. |
| |Advise participants to capture the results of each flip chart on the corresponding page. |
|[pic] |Display Previously Prepared Flip Charts |
| |Possible group answers are provided below |
|Servicing |
|Customer wants/needs |Lender wants/needs |
|To know how much payment is |(money) Customer to make payments |
|To know when payment is due |Retain customer business |
|To ask, “What if I can’t make my payment?” |Offer new business products to restart cycle |
|To ask, “Why did my payment change?” | |
|The Credit Lifecycle, continued |
| | |
|Servicing |
|Customer wants/needs |Lender wants/needs |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Credit Documents |
|[pic] |Debrief the Credit Lifecycle Activity |
| |Facilitator: Say: |
| |Let’s look at the results of our flip chart activity and how this leads us to the next part of our session focusing |
| |on credit documents. As you probably know if you’ve ever borrowed money, the financial services industry is well |
| |known for its many documents! The standing joke at any loan closing is that you will get writer’s cramp just from |
| |signing all the paper work. |
| |Although there seems to be an abundance of paper work, each of those documents you sign has a purpose. The primary |
| |purpose for most of the documents is to fulfill a customer or lender want or need. |
|[pic] |Transition to the Credit Document Activity |
| |Facilitator: Say: |
| |Let’s look at one of our flip charts: Sales for example. [Usually ‘money’ is one of the answers but if not say: |
| |“one of the want/needs here might have been money.”] Everyone wants money! The customer would like to borrow |
| |money; the agent would like a commission. One of the common documents you see in the Sales phase is the product |
| |brochure. Product brochures tell the customer about the various money products we offer and help the banker or sales|
| |agent make the sale. |
|[pic] |Direct participants to page 6 in the Participant Guide. |
| |As a $ome Financial Services company team member, you will be responsible for correctly identifying in which phase(s)|
| |a particular credit document occurs so that you can electronically file the document. All documentation sent from |
| |and received at $ome Financial company is electronically filed in our Electronic Paper Management (EPM) system. |
|[pic] |Facilitate the Credit Document Inbox Activity (allow 3- 5 minutes for each document in the Appendix) |
|[pic] |Display PPT S5. |
| |Ask a participant to volunteer to read the Credit Documents Inbox Activity instructions to the class. |
| |Have participants complete the activity in small groups. Make rounds to group during the activity to answer any |
| |questions. |
|Credit Documents |
|Customer and Lender |Review the customer and lender wants and needs you identified in your flip chart activity. As you may already be |
|wants/needs and credit |aware, the financial services industry is well known for its many documents! A significant amount of time is spent|
|documents |working with credit documents during most customer interactions. Although there may seem to be an abundance of |
| |paper work, each of the documents we work with has a purpose. The primary purpose of most of these documents is to|
| |fulfill a customer or lender want or needs you have captured in your flip charts. |
|Electronic Filing and |As a $ome Financial Services company team member, you will be responsible for correctly identifying the phase(s) |
|Credit Documents |that a particular credit document occurs in so that you can electronically file the document. All documentation |
| |sent from and received at $ome Financial company is electronically filed in our Electronic Paper Management (EPM) |
| |system. |
|Credit Documents Inbox |In the Appendix you will find various credit documents that are used throughout the three phases of the Credit |
|Activity |Lifecycle. |
|[pic] |As a small group, discuss which phase or phases you believe each of the credit documents might be used. As you |
| |read each description, compare the details to the wants and needs you identified in the flip chart activity to help|
| |you determine the phase. |
| |Capture your answers from your small group discussion in the third column of the summary table. |
| |Be prepared to share your decisions with the large group. |
| Appendix |
|[pic] |Direct participants to page 7 in the Participant Guide. |
|[pic] |Explain / Discuss |
| |Ask participants if there are any questions about the instructions for the activity |
|[pic] |Refer to Appendix |
| |Answers to the exercise are provided below |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |Good Faith Estimate |Underwriting |
| |The Good Faith Estimate is estimate of settlement charges and loan terms provided to | |
| |customers if they are approved for a credit product. | |
| |Form 1003 – Universal Residential Loan Application |Sales |
| |The Universal Residential Loan Application is designed to be completed by the | |
| |applicant(s) with the lender’s assistance and provides details about the applicant’s | |
| |financial request. | |
| |Form 1004 – Universal Residential Appraisal Report |Underwriting |
| |The Universal Residential Appraisal Report provides lenders with an accurate, and | |
| |adequately supported, opinion of the value of a property. | |
| |Form 65A – Statement of Assets and Liabilities |Sales |
| |The Statement of Assets and Liabilities is completed by an applicant and provides | |
| |lenders with details of the applicant’s assets such as checking, savings, IRA and | |
| |401k accounts, as well as liabilities such as credit cards, loan and line payments, | |
| |etc. | |
|Appendix |
|Instructions |Review the descriptions below and the details on each form that follows in the Appendix. |
|[pic] |Complete the third column of the table by indicating in which phase(s) of the Credit Lifecycle the document should |
| |be electronically filed. |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |Good Faith Estimate | |
| |The Good Faith Estimate is estimate of settlement charges and loan terms provided to | |
| |customers if they are approved for a credit product. | |
| |Form 1003 – Universal Residential Loan Application | |
| |The Universal Residential Loan Application is designed to be completed by the | |
| |applicant(s) with the lender’s assistance and provides details about the applicant’s | |
| |financial request. | |
| |Form 1004 – Universal Residential Appraisal Report | |
| |The Universal Residential Appraisal Report provides lenders with an accurate, and | |
| |adequately supported, opinion of the value of a property. | |
| |Form 65A – Statement of Assets and Liabilities | |
| |The Statement of Assets and Liabilities is completed by an applicant and provides | |
| |lenders with details of the applicant’s assets such as checking, savings, IRA and | |
| |401k accounts, as well as liabilities such as credit cards, loan and line payments, | |
| |etc. | |
|Appendix, continued |
|[pic] |Direct participants to page 8 in the Participant Guide. |
|[pic] |Refer to Appendix |
| |Answers to the exercise are provided below |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |Form 1020 – Borrower’s Financial Statement |Servicing |
| |The Borrowers Financial Statement is completed by customers who are experiencing a | |
| |financial hardship and are struggling to make payments on their credit products. | |
| |Standard Mortgage Note |Underwriting |
| |The Standard Mortgage Note is created by the lender upon approval of the credit | |
| |product and provides the customer with details regarding payments, interest, due | |
| |dates and fees. | |
| |W2 Wage and Tax form |Underwriting |
| |The W2 is a government income form provided to wage earners that indicates total | |
| |annual income from an employer. | |
| |Form 1021 –HAMP Hardship Affidavit |Servicing |
| |The HAMP Hardship Affidavit is completed by customers who are experiencing financial | |
| |difficulties due to one or more changes in their financial situation and who are | |
| |requesting a review of their payment plan under the government Making Home Affordable| |
| |Program. | |
|Appendix, continued |
| | |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |Form 1020 – Borrower’s Financial Statement | |
| |The Borrowers Financial Statement is completed by customers who are experiencing a | |
| |financial hardship and are struggling to make payments on their credit products. | |
| |Standard Mortgage Note | |
| |The Standard Mortgage Note is created by the lender upon approval of the credit | |
| |product and provides the customer with details regarding payments, interest, due | |
| |dates and fees. | |
| |W2 Wage and Tax form | |
| |The W2 is a government income form provided to wage earners that indicates total | |
| |annual income from an employer. | |
| |Form 1021 –HAMP Hardship Affidavit | |
| |The HAMP Hardship Affidavit is completed by customers who are experiencing financial | |
| |difficulties due to one or more changes in their financial situation and who are | |
| |requesting a review of their payment plan under the government Making Home Affordable| |
| |Program. | |
|Appendix, continued |
|[pic] |Direct participants to page 9 in the Participant Guide. |
|[pic] |Refer to Appendix |
| |Answers to the exercise are provided below |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |HUD-1 |Underwriting |
| |The HUD-1 is a government form lenders are required to provide to borrowers detailing| |
| |all aspects of a credit product including settlement details, fees and adjustments | |
| |Mortgage Statement |Underwriting, Servicing |
| |The Mortgage Statement is completed by the lender and provides the borrower with | |
| |details and risks associated with a real estate secured product. | |
| |Credit Report |Underwriting. Servicing |
| |A Credit Report is requested by lenders and provides borrower history of payment on | |
| |various types of accounts, or tradelines, as well as account history information, | |
| |public records of any bankruptcies and an accumulative FICO (Fair Isaacs Company) | |
| |score. | |
| | Request for Verification of Employment form |Sales, Underwriting |
| |The Request for Verification of Employment form is sent by lenders to validate a | |
| |borrower’s stated employment and income information from a credit product | |
| |application. | |
|Appendix, continued |
| | |
|# |Name and Description/Purpose of the document |Phase(s) of the Credit Lifecycle in which |
| | |this document should be electronically |
| | |filed |
| |HUD-1 | |
| |The HUD-1 is a government form lenders are required to provide to borrowers detailing| |
| |all aspects of a credit product including settlement details, fees and adjustments | |
| |Mortgage Statement | |
| |The Mortgage Statement is completed by the lender and provides the borrower with | |
| |details and risks associated with a real estate secured product. | |
| |Credit Report | |
| |A Credit Report is requested by lenders and provides borrower history of payment on | |
| |various types of accounts, or tradelines, as well as account history information, | |
| |public records of any bankruptcies and an accumulative FICO (Fair Isaacs Company) | |
| |score. | |
| | Request for Verification of Employment form | |
| |The Request for Verification of Employment form is sent by lenders to validate a | |
| |borrower’s stated employment and income information from a credit product | |
| |application. | |
-----------------------
Servicing
Underwriting
Sales
$OME
Financial
Company
$OME
Financial
Company
Servicing
Underwriting
Sales
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