Expert: Jason Milleisen - 7/16/2011

Question
Hi,
The point you made in your profile that there is little you haven't seen prompted me to write.  You may not have this particular knowledge, but who knows?  This does not pertain to an SBA loan issue, however.

Every merger/acquisition has its implementation and integration challenges.  I have a special interest in the Wachovia/Wells Fargo situation as my company is in their Special Assets department.  Originally with Wachovia, the officer responsible has changed at least twice since Wells took over control.  I intend to try to find as an anonymous source someone who actually was/is in the hierarchy to get some sort of feel for where we might go from here, but anything you might contribute would be appreciated.

A disclaimer--I really don't see us as a potential client for several reasons, and I'll elaborate if you want to start a dialog as part of your answer.

A few questions to start my research:
-Would the Special Assets designation be roughly equivalent to some level of FDIC classified loan?
-Does the same department within the bank handle both non-performing and other Special Asset loans?  As an aside, and a prelude to a later question, our company has never been late on a loan interest payment.  We are a Special Asset because of our financial situation.
-Does the same officer handle both non-performing and performing loans?  Does he/she handle both real estate and other business activity-type companies?  We are not a real estate developer of any kind.  We are an operating company with products.
-There are signs that we have kind of fallen between the cracks because we pay our bills and so don't raise red flags or trigger some sort of alert within the bank.  I wonder if that is even possible.  That idea occurs because of the Wachovia/Wells transition.  No one has requested certain financial reports in the longest time, and we're not even certain that the same officer we last talked to almost a year ago is even the responsible person anymore.  (Let sleeping dogs lie, you know.)
-We are only talking under a million that the bank has at risk, so is this handled by a relatively junior work-out officer?  What kind of authority would he have?  Does he have to present ideas to a committee or a VP for approval?  Is he even the responsible person or simply a cut-out with a name for a higher boss?

Well, I don't want to keep on and on if this holds no interest for you, so let me stop for now.

Ken

Answer
Hi Ken,

Thanks for your questions. I have not worked for Wells Fargo, so I will answer your questions based on my own experiences.  I'll tackle them one at a time:

-Would the Special Assets designation be roughly equivalent to some level of FDIC classified loan?

Not neccesarily. When I worked for an SBA lender, Special Assets handled any loan that needed extra attention, and some cases were more severe than others.  In other words, my loan portfolio contained loans with a number of different fed classifications.

-Does the same department within the bank handle both non-performing and other Special Asset loans?  Does the same officer handle both non-performing and performing loans? 䯥s he/she handle both real estate and other business activity-type companies?

My portfolio included both performing and non-performing loans in virtually every sector.  That said, every bank is different so its hard to know.

-We are only talking under a million that the bank has at risk, so is this handled by a relatively junior work-out officer? 𗨡t kind of authority would he have? 䯥s he have to present ideas to a committee or a VP for approval? 鳠he even the responsible person or simply a cut-out with a name for a higher boss?

Again, without having direct work experience with Wells Fargo, its hard to know the answer to these questions. Most banks to have a chain of authority for modifications and settlements, so if you ever needed to work something out it is likely that more than one decision maker would be involved.

Overall, if you are current on your loan, it is likely that you are a low priority. Given the state of the economy, there are so many delinquent loans that require the banks attention.  But don't think you are completely forgotten.  As the sign on one of my former co-workers desk read: "If you think nobody cares about you, try missing a loan payment!"

Best of luck!

Jason Milleisen
Distressed Loan Advisors
www.JasonTees.com
Jason@jasontees.com
1-877-436-4533