Understanding Primary and Secondary Evaluation
Once a collateral loan application has been added, it is displayed on the Collateral workplace, and collaterals specified for that loan application can be valued. This is a Primary valuation.
Every such collateral can be assigned a “Valuation period” - i.e. time after which it has to be repeatedly evaluated.
Once the loan has been disbursed, the system starts tracking the valuation period.
If the current date is beyond the valuation period, the loan has to be re-evaluated. This is a Secondary valuation.
The filter on the left allows selecting all loans that need a valuation, loans provided for initial (primary) valuation, or waiting for a revaluation (secondary valuation)
Step-by-Step Instruction
The two operations are performed with the same set of steps:
Select the loan application in the Collateral workplace
If collateral needs to be evaluated (regardless of the valuation type), the check mark is displayed in the “Needs valuation” column
Click the valuation icon in the row of the collateral.
The window displaying properties of a selected collateralized property will be displayed:
Go to the Valuation area and define:
Estimated value of the collateral;
If your system is pre-integrated with a valuation service provider, you can also request the market value of the collateral.Valuation period of the collateral in months: this is a period from the moment of the latest valuation after which the collateral must revaluated.
If applicable, you can add files in the Valuation documents section.
All details will now be available in the Collaterals table
Once the collateral was evaluated, the Collateral Summary Value (total of all the collateral valuations for this loan) and resulting loan-to-value ratio (LTV) are displayed in the loan detail (top of the workplace)
Now, the collateral manager can approve or confirm the loan for further processing.