Report 9-08 – Audit of the Liquidation Process at the National Guaranty Purchase Center

This report presents the results of our audit of the liquidation process for 7(a) loans at the National Guaranty Purchase Center. The Small Business Administration (SBA) guarantees loans that are made by participating lenders. Upon loan default, SBA authorizes participating lenders to continue servicing the account and, should liquidation and/or litigation become necessary, to completely liquidate or sue upon the loan instrument. During the liquidation process, the Center reviews and approves lender actions, as necessary. When no further recovery is expected on a loan, the Center also performs a comprehensive review of the lender’s wrap-up report, liquidation plan, and relevant  documentation to determine if the lender materially complied with SBA’s liquidation requirements.