“Due to new underwriting regulations we can’t just end [lines of credit] without verifying ability to repay,” noted Scott Stein, president and chief executive office at Xetus, a Santa Clara, Calif.-based loan management technology provider.
Because “it’s really a hassle…to have a bank shut down a line and open up a new one,” Stein said his company provides automation that allows them to “be forward thinking in terms of what’s going to happen at the end of the life cycle of that loan.”
He told this publication that banks’ approaches to this “underwriting moment” vary. But they could, for example, use the system notify borrowers who have LOCs maturing in 120 days that the maturity date for their line is approaching. It also helps them process the maturity of borrowers’ LOCs in such a way that they can possibly address the issue without account number changes and delays that could otherwise cause them to lose customers to competitors.