Best Practices: Complying with Section 2202 of the Taxpayer First Act
On July 1, 2019 the Taxpayer First Act was signed into law. According to the IRS website, “the legislation aims to expand and strengthen taxpayer rights and to reform the IRS into a more friendly agency…” One of the reforms that will directly impact SBA Lenders imposes a requirement on Lenders regarding the re-disclosure of ... Read More
Best Practices: Impact of the OIG’s Audit Report on SBA’s Oversight of High-Risk Lenders
On November 12, 2019, the SBA’s Office of the Inspector General (OIG) published a report on its Audit of SBA’s Oversight of High-Risk Lenders (Report). While the Report is directed principally at reviewing the actions of the Office of Credit Risk Management (OCRM) in meeting its mission of maximizing the efficiency of SBA’s lending programs, ... Read More
Best Practices: Nuances of the Eligible Passive Company Rule
One of the basic tenets of SBA lending is that an applicant must be an active operating business. SBA prohibits financing assets that are held for their passive income, with one exception – the Eligible Passive Company (EPC) Rule. Because the EPC Rule is an exception to SBA’s general policies, the SBA interprets it strictly. ... Read More
Best Practices: Nothing Reasonable About “Reasonable Attorney Fees” In Confession Of Judgment Provisions
When it comes to SBA lending, all participating lenders are no strangers to loan documents that include confession of judgment provisions (“COJ Provisions”). By way of background, COJ Provisions are written statements typically found in mortgages, deeds of trust, promissory notes and guarantees (“Loan Documents”). COJ Provisions are conspicuous and are typically accompanied by a ... Read More
Best Practices: Impending Mandatory Changes to Florida Notarial Certificates for Acknowledgments and Jurats
Effective January 1, 2020, Florida law requires new language to be used in ALL notarial certificates for acknowledgments and jurats pursuant to House Bill 409 (“HB 409”)/Session Law Chapter 2019-71, which was signed into law in June 2019. Failure to include this additional language may: (i) cause the clerk of the court to reject the ... Read More
Best Practices: Closing Instruction Letters #2
The last few days before a closing can be a hectic time. Each party has its own responsibilities and everyone must make sure that there is an agreement as to when and how a closing will occur. No matter how chaotic this time can be, lenders should consider preparation of written closing instructions to be ... Read More