Advice 1: What are the risks of misuse of credit

The need to report to the Bank about how it has spent funds occurs only upon the receipt of targeted loans. Liability that threatens the borrower for misuse of money prescribed in the loan agreement.
What are the risks of misuse of credit

The responsibility of individuals for misuse of funds

Responsibility for the misuse of money can arise only in the case of registration of the target credit. They have recently become increasingly popular, as have lower interest rates. In this case the Bank attaches great importance to the control of target use of money, as the Bank is also the collateral.

As for non-earmarked loans, which are often issued in the form of cash loans that banks are often interested in obtaining a loan, but checks do where the money went they are not engaged. For banks the main thing here is to let the user make regular payments on the loan.

It is worth noting that spending money inappropriately to the borrower-a physical person it would be extremely problematic. The fact that most banks additionally insure yourself and transfer the money immediately to the seller and not issue them to the hands of buyers. For example, when issuing a mortgage, the money is immediately transferred to the account of the developer, and when loans are transferred in favor of the dealer. Previously banks check outlets for evidence of suspected fraud. If the outlet does not pass the scoring of the Bank, then the loan will be denied even the most reliable and conscientious borrower.

Liability for misuse of credit funds should be spelled out in the loan agreement. It may be penalties, or demand from the Bank immediate return of the full amount of the loan. Such a borrower with high probability in the future there are problems with obtaining loans.

The worst thing that could face for misuse of money criminal prosecution, because such actions may be subject to
article 159 of the criminal code "Fraud".

Liability of legal persons for misuse of funds

Loans, which attract entrepreneurs and legal entities, in most cases are the target. They are provided for a certain purpose. This can be the implementation of the investment project or working capital financing.

The performance of the contract is supervised by the Bank employee by gathering supporting documents for trade (invoice, bill of lading, etc.), as well as regular analysis of account movements to the company.

The reasons of steadfast attention of the Bank to the directions of an expenditure of money is that lending forecast of the refund is built on the basis of the purpose of the loan. If you misuse the company, for example, may not be enough working capital and will have to refinance with another Bank, which creates a risk of bankruptcy.

In identifying the facts of misuse of money, the Bank will give a proper assessment of the reliability of the borrower. This will create some problems in obtaining a new loan, granting a new tranche under the credit facility. The Bank also has the right to demand early repayment of the loan.

Advice 2: As checks the Bank issuing the mortgage

A mortgage is a complicated matter. The banking organization will definitely require a lot of documents. But it's not just paperwork, but a necessary step for a financial institution. All documents are subject to scrutiny, after which a decision on granting a loan to a specific borrower.
As checks the Bank issuing the mortgage
The procedure of obtaining mortgage loan is quite complicated and includes many stages. One of them is to check the documents of the potential borrower. Usually this check is conducted by several services of banking institutions, the head of each of which results provides a report. These documents are stored in the personal file of the borrower and is protected by the Bank secrecy act.

Examination of major documents

First of all, the Bank's security service checks the client to determine the accuracy of the data provided in the application. Sure it turns out the question of the authenticity of all documents submitted to the Bank by the borrower and in the presence of the guarantors. In addition, credit history and current credit obligations is the subject of the audit in the first place. If it turns out that there are existing loans which was not specified in the questionnaire – this may be cause for rejection of credit.

Another aspect is authentication of documents confirming the income of a potential borrower. Analyze them carefully and meticulously, if necessary, sent relevant inquiries to the place of work and the tax office. The additional income that the borrower can not be documented, are usually not considered in the scoring program. However, if such income is specified in the questionnaire, they may also be verifiable.

Check the register of mortgages and movable property

In addition to the authentication of documents of the borrower and conformity to its income, Bank officials sent requests to the state electronic registries of movable assets and mortgages. Thus it appears whether on the borrower any obligation. Simply put, the Bank verifies the existence of the outstanding mortgage loans or car loans.

Property that the borrower intends to borrow also check in the appropriate register. With it, it is done twice. For the first time – when you receive a full package of documents from borrower (prior to a decision by the credit Committee), the second time on the day of the transaction. Such precautions are necessary banking organization to reduce the risks of loss of the collateral. For example, there are cases on the secondary market when a few buyers, not knowing about each other, apply for a loan on the same mortgaged in different banks.
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