Question: We regularly make loans to executive officers for their homes, in line with the Regulation O guidelines. Many of these loans are sold to FHLMC after origination. After these loans are sold and we are simply accepting payments (they are still on our system, but we pass the payments on and they are shown as fully sold on our financial records), would this loan be considered an extension of credit that would count against the $500,000 limit for prior board approval and as the only home loan available for the Section 215.5(c)(2) treatment in regards to additional restrictions on loans to executive officers?
Answer: No, once these loans are sold (assumming there is no recourse), they no longer fall under any of the Regulation O requirements.
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