## CHAPTER 6. SYSTEMATIC ANALYSIS OF OPERATIONS

#### Contents

  ----------- --------------------------------------------------- -------
  Paragraph   Title                                               Page

  6.01        Purpose                                             6-1

  6.02        Responsibility                                      6-1

  6.03        Scope                                               6-2

  6.04        Reporting and Filing                                6-3

  6.05        Improvement Action Priorities                       6-3

  6.06        Management Alternatives Under Critical Conditions   6-3

  6.07        Areas For Review                                    6-5
  ----------- --------------------------------------------------- -------

+------------+---------------------------------------------------------+
| ##### 6.   | Systematic analysis is intended to apprise management   |
| 01 Purpose | of significant trends and developments in program       |
|            | operations. It should identify conditions requiring     |
|            | improvement and recommend courses of action to achieve  |
|            | such improvement.                                       |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | Station management will ensure that a systematic        |
|  6.02 Resp | analysis is made annually of each of the following Loan |
| onsibility | Guaranty functional areas:                              |
|            |                                                         |
|            | > • Management                                          |
|            | >                                                       |
|            | > • Construction and Valuation (including SAH).         |
|            | >                                                       |
|            | > • Loan Production (including COE/ROL/SOE).            |
|            | >                                                       |
|            | > • Loan Administration.                                |
|            |                                                         |
|            | -   \[ \]                                               |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | Because each functional area includes a wide variety of |
|  [NOTE]{.u | activities, stations may find it convenient to segment  |
| nderline}: | functional areas into two or three systematic analyses. |
|            | In such cases stations must ensure that all elements of |
|            | each functional area are analyzed at least annually.    |
|            | Whenever conditions warrant an immediate analysis of a  |
|            | component of operations, it should not be deferred.     |
+------------+---------------------------------------------------------+

+----------+-----------------------------------------------------------+
| ##### 6. | Systematic analysis should cover major end products and   |
| 03 Scope | work processes in each functional area. All components of |
|          | a functional area should be examined together as part of  |
|          | a single working system. Accuracy, compliance, management |
|          | and significant program indicators should be examined     |
|          | together as they apply to the functional area under       |
|          | review. Stations will design a format for each systematic |
|          | analysis that contains at least the following elements:   |
+----------+-----------------------------------------------------------+
|          | a\. [Statistical quality control.]{.underline} Chapter 5  |
|          | discusses evaluating the results of SQC reviews. The      |
|          | systematic analysis of a functional area should include   |
|          | an examination of SQC reviews pertinent to the functional |
|          | area conducted since the previous SAO. At RLCs the        |
|          | sampling procedures in chapter 2 should identify cases    |
|          | from each State served by the RLC. If examination of SQC  |
|          | reviews indicates that a sampling of cases from each      |
|          | State has not been reviewed, additional cases should be   |
|          | selected for review during the SAO.                       |
+----------+-----------------------------------------------------------+
| #####    | b\. [Other quality.]{.underline} Each functional area     |
|          | consists of a wide variety of end products and work       |
|          | processes that should be reviewed. Although not all       |
|          | inclusive, the listings in paragraph 6.07 provides an     |
|          | outline of work processes to be included, as applicable,  |
|          | in an SAO.                                                |
|          |                                                           |
|          | c\. [Efficiency of operations.]{.underline} Every SAO     |
|          | should consider the efficiency of processes, work flows   |
|          | and use of space and equipment. Analysis should determine |
|          | that: workflow and processing steps are arranged for      |
|          | efficient use of space, equipment and personnel; delays   |
|          | are minimized and overlaps are eliminated; unnecessary    |
|          | processing steps and controls are avoided; registers,     |
|          | lists, records, follow-up devices, etc., associated with  |
|          | the process are designed efficiently and used             |
|          | effectively; disposition of record file series is made    |
|          | according to the disposition standards in Records Control |
|          | Schedule VB-1; equipment is adequate, operational and     |
|          | appropriately supported; there is maximum efficiency      |
|          | between Loan Guaranty and support services that           |
|          | contribute to work processes or end products;             |
|          | inefficiencies have not grown into the work process as    |
|          | additions and modifications to procedures have been       |
|          | implemented; and mandatory requirements and locally       |
|          | imposed requirements do not impede the attainment of      |
|          | program goals. Recommended changes in mandatory           |
|          | requirements should be pursued through regular channels   |
|          | and documented in the systematic analysis file.           |
+----------+-----------------------------------------------------------+
| #####    | > d\. [Public relations and outreach.]{.underline}        |
|          |                                                           |
|          | e.  [Significant trends]{.underline}.                     |
|          |                                                           |
|          | f.  [Program oversight.]{.underline}                      |
+----------+-----------------------------------------------------------+

## 

+------------+---------------------------------------------------------+
| #          | A copy of each systematic analysis report and copies of |
| #### 6.04  | any working papers, including periodic follow-ups made  |
| Reporting  | to ensure that actions taken to bring about             |
| and Filing | improvements were implemented, will be maintained in a  |
|            | systematic analysis file maintained in the Loan         |
|            | Guaranty Division. This file of reports and working     |
|            | papers will be subject to review by Central Office      |
|            | staff.                                                  |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### 6.05 | Deficiencies which constitute failure to comply with    |
|  Improveme | requirements of law, regulation or mandatory procedures |
| nt Action  | should claim first call on improvement efforts and      |
| Priorities | employee capabilities. If all such requirements are     |
|            | met, next priority should be given to timely            |
|            | performance and manpower utilization. Then, efforts     |
|            | should be devoted to opportunities for improvement      |
|            | which would result in performance that exceeds          |
|            | standards and requirements. Resources to be expended to |
|            | improve an operation should be balanced against the     |
|            | size of the activity and the potential for savings.     |
|            | Improvement efforts should be concentrated in those     |
|            | areas which offer the greatest opportunity for          |
|            | substantial savings.                                    |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### 6.06 | a\. There may be reasons or conditions beyond station   |
|  Managemen | control which preclude attainment of all standards of   |
| t Alternat | accuracy, compliance and timeliness, despite the best   |
| ives Under | efforts of all personnel concerned. Under such          |
|  Critical  | conditions, standards and requirements will not be      |
| Conditions | relaxed nor will shortcomings be overlooked. Quality    |
|            | and timeliness are based on factual evidence;           |
|            | conditions at a station, even though beyond station     |
|            | control, do not change the fact that work is of poor    |
|            | quality or not timely.                                  |
+------------+---------------------------------------------------------+
| #####      | b\. When conditions arise under which a station is      |
|            | unable to meet all prescribed standards of accuracy,    |
|            | compliance and timeliness, management must decide which |
|            | operations merit a priority call on available resources |
|            | and which operations are to be allowed to fall below    |
|            | acceptable levels of performance. The impact on program |
|            | effectiveness and the attainment of program goals is    |
|            | the most important determining factor in such           |
|            | decisions. Each decision must be made in the light of   |
|            | local laws, customs and economic conditions.            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### 6.0  | c\. Shortcomings which arise under critical conditions  |
| 6 Manageme | should be the result of conscious choices of priorities |
| nt Alterna | by management and not due to oversight or loss of       |
| tives Unde | control. Management should be aware of the probable     |
| r Critical | consequences of decisions and their impact on program   |
|  Condition | effectiveness. Management should have determined the    |
| s (Cont.)  | reasons for the unavoidable shortcoming and what is     |
|            | needed to correct the condition. These conditions, when |
|            | they arise, must be recognized and reported despite the |
|            | fact that they could not be avoided. They will be       |
|            | reported to the appropriate levels of management as     |
|            | they are detected.                                      |
+------------+---------------------------------------------------------+
| #####      | d\. A Loan Guaranty activity may show evidence of       |
|            | superior management even through all standards and      |
|            | requirements are not met. Failure to meet standards of  |
|            | quality and timeliness due to conditions over which the |
|            | station has no control does not necessarily mean that   |
|            | management action has been deficient, particularly      |
|            | where management has fulfilled the following            |
|            | responsibilities:                                       |
|            |                                                         |
|            | -   Exercised a choice of priorities to minimize the    |
|            |     unfavorable impact on program effectiveness.        |
|            |                                                         |
|            | -   Anticipated the unfavorable consequences of the     |
|            |     choice and taken all feasible steps to minimize     |
|            |     them.                                               |
|            |                                                         |
|            | -   Made all reasonable efforts to correct the          |
|            |     condition within the limits of local authority and  |
|            |     resources.                                          |
|            |                                                         |
|            | -   Reported the condition and the cause to higher      |
|            |     authority, with requests or recommendations for     |
|            |     assistance or corrective action as appropriate.     |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > If management performance under uncontrollable        |
|  [NOTE]{.u | > adverse conditions is successful in minimizing the    |
| nderline}: | > unfavorable impact on program effectiveness to the    |
|            | > extent possible, then such management performance     |
|            | > would be considered superior.                         |
+------------+---------------------------------------------------------+

#### 6.07 Areas For Review

+------+-------------------------------+-------------------------------+
| #### | The areas to be reviewed for  |                               |
| # 6. | the                           |                               |
| 07a  | **[Management]{.underline}**  |                               |
| - Ma | portion of Loan Guaranty      |                               |
| nage | operations include, but are   |                               |
| ment | not necessarily limited to:   |                               |
|      |                               |                               |
|      | -   **[Planning and           |                               |
|      |     Organizing]{.underline}** |                               |
|      |                               |                               |
|      | ```{=html}                    |                               |
|      | <!-- -->                      |                               |
|      | ```                           |                               |
|      | -   Division organizational   |                               |
|      |     chart                     |                               |
|      |                               |                               |
|      | -   Staffing patterns and     |                               |
|      |     functional charts         |                               |
|      |                               |                               |
|      |     **[Implementing and       |                               |
|      |                               |                               |
|      |    Controlling]{.underline}** |                               |
|      |                               |                               |
|      | -   Backlogs                  |                               |
|      |                               |                               |
|      | -   Contract personnel        |                               |
|      |     payment                   |                               |
|      |                               |                               |
|      | -   Credit report charges     |                               |
|      |                               |                               |
|      | -   Date stamps               |                               |
|      |                               |                               |
|      | -   Delegations of Authority  |                               |
|      |                               |                               |
|      | -   Division library (current |                               |
|      |     and up-to-date)           |                               |
|      |                               |                               |
|      | -   Equal Opportunity Logo    |                               |
|      |                               |                               |
|      | -   Equipment needs           |                               |
|      |                               |                               |
|      | -   External releases         |                               |
|      |     (information bulletins)   |                               |
|      |                               |                               |
|      | -   Fireproof storage         |                               |
|      |     equipment                 |                               |
|      |                               |                               |
|      | -   Fiscal management         |                               |
|      |                               |                               |
|      | -   Incumbent updating (LGO,  |                               |
|      |     ALGO, Dir.)               |                               |
|      |                               |                               |
|      | -   Interview area            |                               |
|      |                               |                               |
|      | -   Loan Guaranty Files       |                               |
|      |     Activity                  |                               |
|      |                               |                               |
|      | -   Local forms and form      |                               |
|      |     letters                   |                               |
|      |                               |                               |
|      | -   Mailing list of program   |                               |
|      |     participants              |                               |
|      |                               |                               |
|      | -   Management review of SQC  |                               |
|      |     findings                  |                               |
|      |                               |                               |
|      | -   Monday Morning Report     |                               |
|      |                               |                               |
|      | -   National Control Listing  |                               |
|      |     Internet access           |                               |
|      |                               |                               |
|      | -   Pamphlets and posters     |                               |
|      |                               |                               |
|      | -   Program surveillance      |                               |
|      |                               |                               |
|      | -   Records control per RCS   |                               |
|      |     VB-1, Part I              |                               |
|      |                               |                               |
|      | -   Registers for quality     |                               |
|      |     reviews                   |                               |
|      |                               |                               |
|      | -   Systematic Analyses of    |                               |
|      |     Operation                 |                               |
|      |                               |                               |
|      | -   Staff meetings            |                               |
|      |                               |                               |
|      | -   ADP equipment security    |                               |
+------+-------------------------------+-------------------------------+

+------------+---------------------------------------------------------+
| #####      | -   **[Personnel Management and                         |
|            |     Utilization]{.underline}**                          |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Borrowed and loaned time                            |
|            |                                                         |
|            | -   Contract personnel training                         |
|            |                                                         |
|            | -   Employee leadership                                 |
|            |                                                         |
|            | -   Employee suggestions                                |
|            |                                                         |
|            | -   Employee training                                   |
|            |                                                         |
|            | -   Incentive awards program                            |
|            |                                                         |
|            | -   Individual Development Plan (IDP)                   |
|            |                                                         |
|            | -   Position descriptions                               |
|            |                                                         |
|            | -   Administrative sanction procedures for fee          |
|            |     personnel                                           |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### 6.   | The areas to be reviewed for the **[Construction and    |
| 07b - Cons | Valuation]{.underline}** portion of Loan Guaranty       |
| truction & | operations include, but are not necessarily limited to: |
|  Valuation |                                                         |
|            | -   **[Promotion and maintenance of the Appraisal       |
|            |     Assignment Processing System]{.underline}**         |
|            |                                                         |
|            | -   **[Fee Personnel Files]{.underline}**               |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Personnel files (to ensure they include the         |
|            |     application, evidence of State license or           |
|            |     certification, sample appraisal, annual statement,  |
|            |     tests or evidence of proper credentials accepted in |
|            |     lieu of any tests, etc.)                            |
|            |                                                         |
|            | -   Performance files (to ensure that negative work     |
|            |     quality findings per the C&V System and RCS 20-0697 |
|            |     are properly documented and resolved)               |
+------------+---------------------------------------------------------+
| #####      | -   **[Field Reviews]{.underline}**                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Review of each individual appraiser's work, per VA  |
|            |     requirements                                        |
|            |                                                         |
|            | -   \[ \]                                               |
|            |                                                         |
|            | -   \[ \]                                               |
|            |                                                         |
|            | -   Review of 20% loss liquidation cases                |
|            |                                                         |
|            | -   Reconsideration of value cases                      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -                                                       |
|            |                                                         |
| #####      | -                                                       |
|            |                                                         |
| #####      | -   **[LAPP (Lender Appraisal Processing                |
| 6.07b - Co |     Program)]{.underline}**                             |
| nstruction |                                                         |
|  & Valuati | ```{=html}                                              |
| on (Cont.) | <!-- -->                                                |
|            | ```                                                     |
|            | -   Application (ensure that proper documentation was   |
|            |     submitted and processed timely)/Performance file    |
|            |     (ensure that negative work quality findings are     |
|            |     properly documented and resolved)                   |
|            |                                                         |
|            | -   Post Audit of each LAPP lender's guaranteed loans   |
|            |     are properly quality reviewed                       |
|            |                                                         |
|            | -   LAPP cases are included in field reviews            |
|            |                                                         |
|            | -   Cases where SAR made value change are desk and/or   |
|            |     field reviewed                                      |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -   **[Specially Adapted Housing]{.underline}**         |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Verify procedures for inputting SAH data into the   |
|            |     BDN system and notification of grant approval to    |
|            |     Central Office                                      |
|            |                                                         |
|            | -   Program Management                                  |
|            |                                                         |
|            | -   Automation initiatives                              |
|            |                                                         |
|            | -   Workload (pending in-process and pending inactive)  |
|            |                                                         |
|            | -   Timely and appropriate conduct of the initial       |
|            |     interview                                           |
|            |                                                         |
|            | -   Escrow procedures and use of interest bearing       |
|            |     accounts                                            |
|            |                                                         |
|            | -   Coordination with VAMC Prosthetics & Sensory Aids   |
|            |     Service regarding use of HISA grant program         |
|            |                                                         |
|            | -   File Maintenance                                    |
|            |                                                         |
|            | -   Grant approval checklist                            |
|            |                                                         |
|            | -   VA Form 26-1836                                     |
|            |                                                         |
|            | -   Grant calculation                                   |
|            |                                                         |
|            | -   Plans and specifications                            |
|            |                                                         |
|            | -   Inspection reports                                  |
|            |                                                         |
|            | -   Final accounting documentation                      |
|            |                                                         |
|            | -   Quality Reviews                                     |
|            |                                                         |
|            | -   SAH Training                                        |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -                                                       |
|            |                                                         |
| #####      | -                                                       |
|            |                                                         |
| #####      | -                                                       |
|            |                                                         |
| #####      | -                                                       |
| 6.07b - Co |                                                         |
| nstruction | -   **[Training]{.underline}**                          |
|  & Valuati |                                                         |
| on (Cont.) | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Staff training opportunities                        |
|            |                                                         |
|            | -   Annual fee personnel meeting                        |
|            |                                                         |
|            | -   Fee personnel training kits current and complete    |
|            |                                                         |
|            | -   LAPP lender SAR training                            |
|            |                                                         |
|            |     **[Builder Files]{.underline}**                     |
|            |                                                         |
|            | -   Builder organizational data cross referenced for    |
|            |     each party of interest                              |
|            |                                                         |
|            | -   Complaint correspondence                            |
|            |                                                         |
|            | -   VA Forms/Form Letters 26-312, 26-421, 26-8791       |
|            |                                                         |
|            |     **[Construction Complaints]{.underline}**           |
|            |                                                         |
|            | -   Complaint log                                       |
|            |                                                         |
|            | -   Timely and appropriate resolution of complaint      |
|            |     cases                                               |
+------------+---------------------------------------------------------+
| #####      | -   **[Overall Timeliness]{.underline}**                |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   NOV/MCRV                                            |
|            |                                                         |
|            | -   Reconsideration of Value                            |
|            |                                                         |
|            | -   Liquidation appraisal processing                    |
|            |                                                         |
|            | -   PUD/Condo                                           |
|            |                                                         |
|            | -   Fee Personnel application processing/notifications, |
|            |     etc.                                                |
|            |                                                         |
|            |     **[Miscellaneous]{.underline}**                     |
|            |                                                         |
|            | -   Building codes (ICC, BOCA, local)                   |
|            |                                                         |
|            | -   Airport files                                       |
|            |                                                         |
|            | -   Flood maps                                          |
|            |                                                         |
|            | -   Geological instability file                         |
|            |                                                         |
|            | -   Approved Plan certifier list and files              |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| ##### 6.0  | The areas to be reviewed for the **[Loan                |
| 7c - Loan  | Production]{.underline}** portion of Loan Guaranty      |
| Production | operations include, but are not necessarily limited to: |
|            |                                                         |
|            | -   **[Loan Closing]{.underline}**                      |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Funding fee and entitlement spot checks             |
|            |                                                         |
|            | -   Performing full review on 10% sampling              |
|            |                                                         |
|            | -   Allowable fees and charges                          |
|            |                                                         |
|            | -   CRV (NOV) requirements satisfied                    |
|            |                                                         |
|            | -   Lender notified of underwriting deficiencies        |
|            |                                                         |
|            | -   Post audit reviews completed                        |
|            |                                                         |
|            | -   Proper follow up                                    |
|            |                                                         |
|            | -   Appropriate level person signing off on post audit  |
|            |     findings                                            |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -   **[Underwriting]{.underline}**                      |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   \[ \]                                               |
|            |                                                         |
|            | -   Reject letter signature                             |
|            |                                                         |
|            | -   M26-l and *Lender's Handbook* for each loan         |
|            |     examiner                                            |
|            |                                                         |
|            | -   Piecemeal processing                                |
|            |                                                         |
|            | -   Federal and State tax, and FICA tables in LP system |
|            |                                                         |
|            | -   Proper authorization being accomplished (high debt  |
|            |     rations, etc.)                                      |
|            |                                                         |
|            |     **[Eligibility]{.underline}**                       |
|            |                                                         |
|            | -   Spot checks for quality of eligibility              |
|            |     determinations being made at the RLC/RO. Use the    |
|            |     following questions as a guide when conducting spot |
|            |     checks:                                             |
|            |                                                         |
|            | -   Was the determination of basic eligibility correct? |
|            |                                                         |
|            | -   If restoration of entitlement involved, was         |
|            |     > restoration decision or denial of restoration     |
|            |     > decision proper?                                  |
|            |                                                         |
|            | -   If eligibility denied based on character of         |
|            |     service, which was not expressly dishonorable, was  |
|            |     determination based on advice of Adjudication?      |
|            |                                                         |
|            | -   Was proper action taken with respect to automatic   |
|            |     issuance of Certificate of Veteran Status (i.e., VA |
|            |     eligibility denied but vet status for FHA program   |
|            |     established)?                                       |
|            |                                                         |
|            | -   [\[ \]]{.underline}                                 |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -                                                       |
|            | -                                                       |
| #####      | -                                                       |
|            | -                                                       |
| #####      |                                                         |
|            | ```{=html}                                              |
| ##### 6    | <!-- -->                                                |
| .07c - Loa | ```                                                     |
| n Producti | -   Register (paper or computer). Use of a register for |
| on (Cont.) |     non eligibility sites is optional                   |
|            |                                                         |
|            | -   Forms (safe storage and adequate accountability)    |
|            |                                                         |
|            | -   VSD procedures                                      |
|            |                                                         |
|            | -   \[ \]                                               |
|            |                                                         |
|            | -   M26-1, or eligibility chapter for each staff member |
|            |     issuing COEs                                        |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   **[NOTE]{.underline}: Those stations designated as  |
|            |     Eligibility Sites should maintain a register        |
|            |     (manual or electronic) and do formal, regular       |
|            |     quality reviews using the questions noted above.**  |
|            |                                                         |
|            | -   **[Lenders]{.underline}**                           |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Conduct ongoing lender training                     |
|            |                                                         |
|            | -   Files                                               |
|            |                                                         |
|            | -   Surveillance                                        |
+------------+---------------------------------------------------------+
| -          | -   **[Reports]{.underline}**                           |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   COIN GIL 09-01, being maintained in conjunction     |
|            |     with the 04-01W, G/I Loan Reject Register           |
|            |                                                         |
|            | -   \[ \]                                               |
+------------+---------------------------------------------------------+
| #####      | -   **[Miscellaneous]{.underline}**                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Annual Paid-in-Full and canceled commitments        |
|            |     station releases                                    |
|            |                                                         |
|            | -   Release of liability/substitution of entitlement    |
|            |     registers maintained                                |
|            |                                                         |
|            | -   Procedure for identifying pre-1988 cases and        |
|            |     Section 3714 cases                                  |
|            |                                                         |
|            | -   Adequate follow-up and withdrawing cases when       |
|            |     appropriate                                         |
+------------+---------------------------------------------------------+
| #####      | -   Spot checks on station processed release of         |
|            |     liability/substitution of entitlement cases. Use    |
| #####      |     the following questions when doing spot checks:     |
|            |                                                         |
| #####      | -   Was decision to approve or disapprove request for   |
|            |     ROL/SOE proper (i.e., was transferee a satisfactory |
| #####      |     credit risk)?                                       |
|            |                                                         |
| #####      | -   Did the purchaser or proposed purchaser assume the  |
|            |     original veteran borrower's indemnity liability tot |
| ##### 6    |     he Government and liability to repay the loan in    |
| .07c - Loa |     the transfer deed and/or assumption agreement?      |
| n Producti |                                                         |
| on (Cont.) | -   Was the loan folder documented to show that loan    |
|            |     was current at the time the release was executed?   |
|            |                                                         |
|            | -   Was ROL/SOE properly coded into GIL system?         |
+------------+---------------------------------------------------------+
| #####      |                                                         |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -   Pamphlet distribution                               |
|            |                                                         |
|            | -   Pamphlets with COE                                  |
|            |                                                         |
|            | -   Pamphlet and letter when guaranty issued            |
|            |                                                         |
|            | -   Customer Access                                     |
|            |                                                         |
|            | -   Adequate telephone access                           |
|            |                                                         |
|            | -   Adequate coverage                                   |
|            |                                                         |
|            | -   Adequate meeting area for personal interviews       |
|            |                                                         |
|            | -   Appropriate response to results of veteran's        |
|            |     surveys                                             |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | > The areas to be reviewed for the **[Loan              |
|            | > Administration]{.underline}** portion of Loan         |
| #####      | > Guaranty operations may include, but are not          |
|            | > necessarily limited to:                               |
| #####      |                                                         |
|            | -   **[Loan Servicing]{.underline}**                    |
| ###        |                                                         |
| ## 6.07d - | ```{=html}                                              |
|  Loan Admi | <!-- -->                                                |
| nistration | ```                                                     |
|            | -   Timely coding of notices                            |
|            |                                                         |
|            | -   Intervention Action Coding                          |
|            |                                                         |
|            | -   RPO 23                                              |
|            |                                                         |
|            | -   Refunded and 4600 loan establishments with contract |
|            |     servicer                                            |
|            |                                                         |
|            | -   Accurate coding of reason for foreclosure           |
|            |                                                         |
|            | -   Foreclosure follow-up. (Reason code 27 on Diary     |
|            |     Action List)                                        |
|            |                                                         |
|            | -   Serious Default Action List (LSR and Supervisory    |
|            |     reviews)                                            |
|            |                                                         |
|            |     **[Claims]{.underline}**                            |
|            |                                                         |
|            | -   Timely payment of GI claims (COIN LCS 30-05) (Std:  |
|            |     85% within 30 days)                                 |
|            |                                                         |
|            | -   Accuracy and timeliness of 38 CFR 36.4600 cases.    |
|            |     (Std: 90% within 10 days)                           |
|            |                                                         |
|            | -   Application of "BUYDOWN" funds                      |
|            |                                                         |
|            | -   Pending Distribution Report/Claims pending over a   |
|            |     year                                                |
|            |                                                         |
|            | -   LCS Accruals List                                   |
+------------+---------------------------------------------------------+

+------------+---------------------------------------------------------+
| #####      | -   **[Miscellaneous]{.underline}**                     |
|            |                                                         |
|            | ```{=html}                                              |
|            | <!-- -->                                                |
|            | ```                                                     |
|            | -   Equity skimming                                     |
|            |                                                         |
|            | -   Partial release of security                         |
|            |                                                         |
|            | -   Servicer files                                      |
|            |                                                         |
|            | -   Safeguarding of Legal Documents                     |
|            |                                                         |
|            | -   Significant trends                                  |
+------------+---------------------------------------------------------+

\[ \]