We have a property that is posted for foreclosure that we have not classified as OREO yet. We now have a buyer who wants to purchase the loan for the full balance. If we foreclose on the property would we be required to move it to OREO if we then come to the bank and make a note to the new owner? I have the feeling I need to call an accountant.

Are you meaning purchase the LOAN or purchase the COLLATERAL and PAY OFF the loan?

He will purchase the property with a loan that we are making him.

What we have done in the past (and my understanding - check your own policies) (we are a national bank) is go ahead and make the new loan and the disbursement of funds pays off the existing (foreclosed) loan and the property never goes into ORE.

Our policy allows us 30 days following courthouse sale where we were successful bidder before the property should be in ORE to allow for appraisal, etc.

It's rare (for us) to have one work out this way, but we like it (obviously) when it does. Congratulations

I'm not 100% sure on the Call Report / Accounting requirements, but if you've already sold it, there's no point in adding the expense to move it onto your balance sheet as ORE, in my opinion.

We do not have that provision and we would not be able to close within 30 days. Thanks for the info.