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Camilla N. Andrews, Esq.

Camilla N. Andrews is the Managing Partner of Starfield & Smith's California office. She has been practicing law for over twenty years, specializing in representing SBA lenders and financial institutions. Her areas of expertise range from transactional to litigation matters and she is an expert on issues unique to SBA lending, creditors' rights, receiverships, judicial and non-judicial foreclosures, personal and real property collateral, real estate issues, prejudgment remedies, guarantor issues, contract disputes, general business law and loan workouts. Camilla has been recognized by her peers for her outstanding legal skills and the highest legal ethics, attaining Martindale-Hubbell's highest "AV - Preeminent" rating. Camilla recently finished her tenure as Counsel for the FDIC at its West Coast Temporary Satellite Office where her responsibilities included overseeing SBA loans for the Western states.

Over the years Camilla has represented numerous SBA and commercial lenders, including large national banks and non-bank lenders, as well as small and regional community banks. Through her extensive work in SBA guaranteed lending, Camilla has developed a reputation for responding promptly to her clients' needs in a manner which is cost-effective without compromising quality. This reputation arises from her focus on building relationships with her clients to achieve the mutual goal of prompt, responsive service. By specializing in issues unique to the SBA lending community and using state-of-the-art technology which maximizes productivity, Camilla is able to respond quickly and efficiently to her clients' legal needs. 
 

 By Christopher M. Evans, Esq.

Christopher M. Evans, Esq.

The new 10 Tab System incorporates several clarifications to the information required on a lender's transcript of account ("Form 1149") provided in Tab 6. SBA's Form 1149 is critical to the NGPC's review of a lender's 10 Tab Package: the transcript should reflect an accurate record of the borrower's payment history, all recoveries, any liquidation expenses, and the lender's application of each payment and/or all recoveries.  The new 10 Tab System clarifies, among other things, that the Form 1149 must accurately reflect:            

In addition, Tab 6 in the new 10 Tab System also includes the following note: "For loans sold into the secondary market after January 31, 2011, SBA will only pay 120 days of interest. Any interest above 120 days paid to the investor will be billed to the lender."

These changes are consistent with the SOP 50 51 3 which provides: "In the event SBA is required to pay a secondary market holder more than 120 days of accrued interest because of Lender delay, the Lender must reimburse SBA for the difference between the amount paid by SBA and 120 days of accrued interest." Furthermore, if expenses have been deducted from recoveries, lenders are now required to include care and preservation of collateral reimbursement request packages ("CPC Tabs") for those expenses with the submission of the 10 Tab Package. Lenders should note that, pursuant to SOP 50 51 3, only recoverable expenses may be deducted from liquidation proceeds. In order to avoid potential liability for non-recoverable expenses, SBA encourages lenders to seek prior SBA approval of any expenses through an early submission of CPC Tabs. Furthermore, prior to the commencement of any non-routine litigation, including litigation which can reasonably be expected to result in legal fees exceeding $10,000.00, a litigation plan must be submitted to and approved by SBA. In addition, in almost all cases, liquidation proceeds must be applied first to recoverable expenses, then to the principal balance of the loan, and then to accrued interest. See SOP 50 51 3 at page 131. Misapplication of liquidation proceeds may lead to a repair or, in extreme cases, a denial of the guaranty. Pursuant to the instructions at Tab 6 of the new 10 Tab System, lenders must adequately document liquidation activities and be prepared to provide SBA with such documentation upon submission of any 10 Tab Package.

All SBA lenders should be careful to comply with SBA's guidelines on liquidation as set forth in the SOP 50 51 3, SBA's Servicing and Liquidation Actions 7(a) Lender Matrix, the code of federal regulations, and prudent lending practices. Failure to comply with such guidelines may lead to a repair or denial of the guaranty.  

For more information regarding these and other issues involving the liquidation of SBA loans, contact the author at cevans@starfieldsmith.com or 215-542-7070.

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