Which statement is true regarding the requirement for a lender's review of their guaranteed loan portfolio?

The requirement for a lender’s review of their guaranteed loan portfolio is established to ensure that the lender is actively managing and monitoring the health of the loans they have provided. Annual reviews are critical because they allow lenders to assess performance, identify potential issues, and maintain compliance with program guidelines. Regular evaluations help in maintaining accountability and ensuring that borrowers are meeting their obligations.

Conducting these reviews annually provides a framework for ongoing assessment and supports proactive risk management. This helps both the lender and the borrowers by identifying any issues early, ensuring that terms are adhered to, and ultimately enhancing the likelihood of successful loan repayment.

Biannual reviews, skipping reviews if loans are current, or focusing only on defaulted loans do not align with the standards set for monitoring guaranteed loan portfolios. Relying on the current status of loans (if they are current) or only reviewing defaulted loans would not provide a comprehensive picture of the portfolio's overall health. Regular annual evaluations ensure consistent oversight and help mitigate potential risks across the entire loan portfolio.