What are supervisory loan-to-value limits?

What are supervisory loan-to-value limits?

The aggregate amount of all loans in excess of the supervisory loan-to-value limits should not exceed 100 percent of total capital….Supervisory Loan-to-Value Limits.

Loan category Loan-to-value limit (percent)
Raw land 65
Land development 75
Commercial, multifamily,2 and other non residential 80

What is the supervisory limit for raw land loan-to-value?

What are the supervisory LTV limits for residential tract developments? Answer: An institution may lend up to 65 percent of the value for raw land, 75 percent for land development or finished lots, 80 percent for multifamily residential construction, and 85 percent for 1- to 4-family residential construction.

What regulation applies to commercial real estate lending?

Fair Housing Act (FHA) Yes, depending on the nature of the secured property. The FHA applies to commercial and business-purpose mortgage loans used to purchase, construct, improve, repair, or maintain a “dwelling” and loans secured by residential real estate.

What is disparate impact in lending?

Disparate Impact. A disparate impact occurs when a lender applies a racially (or otherwise) neutral policy or practice Page 3 Federal Fair Lending Regulations and Statutes: Overview equally to all credit applicants but the policy or practice disproportionately excludes or burdens certain persons on a prohibited basis.

What is firrea regulation?

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) is a set of regulatory changes to the U.S. savings and loan banking system and the real estate appraisal industry, passed in 1989 in response to the savings and loan crisis of the late 1980s.

What is part365?

Part 365 – Real Estate Lending Standards The regulation sets for standards for real estate lending and applies to insured state nonmember banks. The regulation also sets for the interagency guidelines for real estate lending standards.

What is discounted loan-to-value?

Loan-to-Value Discount LTV Discounts are applied to the eligible unpaid principal balance of loans that are not priced, the market value of priced loans, and the market value of all securities. LTV Discounts are periodically analyzed and adjusted when necessary. Members are notified in advance when changes occur.

Does Regulation Z apply to business loans?

Regulation Z does not apply, except for the rules of issuance of and unauthorized use liability for credit cards. (Exempt credit includes loans with a business or agricultural purpose, and certain student loans. Regulation Z does not apply.

What is a FIRREA violation?

Section 951 of FIRREA, codified at 12 U.S.C. § 1833a, authorizes the DOJ to bring a complaint seeking civil money penalties against persons who violate one or more of 14 enumerated criminal statutes (or predicate offenses) that involve or affect financial institutions and government agencies.

Who regulates FIRREA?

Other FIRREA Initiatives Both of these funds were to be administered by the FDIC, but the Federal Deposit Insurance Reform Act of 2005 consolidated the two funds. FIRREA also allowed bank holding companies to acquire thrifts.

When to apply supervisory loan to value limits?

The supervisory loan-to-value limits should be applied to the underlying property that collateralizes the loan.

Do you need to report a loan as a loan to value exception?

Does a bank need to report a loan as a loan to value exception based upon the following scenarios? Loan to value was originally conforming at origination of loan; however, at renewal a new appraisal or evaluation reports a lower value which causes the LTV to be in excess of the Supervisory limits.

When is real estate excluded from supervisory LTV limits?

in real property is taken as additional collateral through an abundance of caution may be excluded from the supervisory LTV and capital limits. The Guidelines specifically state that “abundance of caution” exists when an institution takes a blanket lien on all or substantially

Are there internal loan to value limits for real estate loans?

Institutions should establish their own internal loan-to-value limits for real estate loans. These internal limits should not exceed the following supervisory limits: a Appendix A to Part 365 of FDIC Rules and Regulations, http://www.fdic.gov/regulations/laws/rules/2000-8700.html#2000appendixatopart365