Internal Loan Review Audit

Periodic independent inspection template for reviewing a sample of loans for underwriting quality, documentation completeness, risk rating accuracy, policy exceptions, and credit quality trends.

Review Scope and Sample Identification

• Review period and portfolio segment documented
  Record the review period, portfolio type, and any segmenting criteria used for the sample.
• Sample selection method documented
  Identify how the sample was selected.
• Loan identifiers and file list captured
  List the loans included in the review, using internal loan IDs or masked borrower references.
• Reviewer independence confirmed
  Confirm the reviewer is independent of loan origination and ongoing credit administration for the items reviewed.

Underwriting Quality Review

• Borrower repayment capacity supported by current financial analysis
  Verify that the file contains sufficient analysis of cash flow, debt service capacity, or repayment source appropriate to the loan type.
• Collateral valuation and advance rate supported
  Confirm collateral values, appraisal or valuation support, and advance rates are reasonable and documented.
• Guarantor or secondary repayment support reviewed
  Confirm guarantor strength, support, or other secondary repayment sources were evaluated where applicable.
• Loan structure aligns with approved credit policy
  Assess whether amortization, maturity, covenants, and structure are consistent with policy and approval authority.
• Underwriting exceptions documented and approved
  Confirm any deviations from policy were clearly identified, approved by the proper authority, and retained in the file.

Documentation and File Completeness

• Executed note and core credit agreements present
  Confirm the executed promissory note and any required credit agreements are in the file.
• Collateral perfection documents present
  Verify UCC filings, mortgage documents, lien releases, or other perfection documents are present as applicable.
• Financial statements and tax returns current
  Confirm required borrower financial statements, tax returns, or other periodic reporting are current per policy.
• Insurance evidence current and adequate
  Verify required insurance certificates, coverage limits, and loss payee language are current and adequate.
• Missing or stale documents listed
  Document any missing, expired, or incomplete items identified during the file review.

Risk Rating Accuracy and Credit Quality

• Current risk rating matches observed credit profile
  Rate the alignment between the assigned risk rating and the borrower’s current financial condition, performance, and collateral support.
• Payment performance reviewed
  Confirm delinquency, past due status, nonaccrual status, or other payment trends were reviewed.
• Adverse trends or watchlist indicators identified
  Determine whether any adverse trends, covenant breaches, collateral deterioration, or watchlist indicators are present.
• Risk grade change recommended
  Select whether a risk rating change is recommended based on the review.

Policy Exceptions, Findings, and Sign-Off

• All policy exceptions captured
  Confirm all identified policy exceptions were documented with rationale, approval, and remediation status.
• Findings severity assigned
  Classify the overall finding severity for this loan review.
• Corrective action owner assigned
  Identify the person or team responsible for remediation of any findings.
• Target remediation date
  Enter the target date for completing corrective action, if applicable.
• Reviewer signature
  Independent reviewer attestation and sign-off.