Keep tabs on distressed borrowers
Abstract: Some borrowers continue to limp along — wounded and headed for failure — despite reports of a gradual economic recovery. Lenders who let their guard down are likely to get burned. This article offers the hypothetical case of Jane, a lender who was almost undone by blind trust in a long-time borrower. When the borrower became ill and his son took over, she didn’t immediately realize that he was in over his head. Fortunately, she took corrective actions in the nick of time. In a sidebar, Jane is more diligent in recognizing another borrower’s fraudulent activity.