Thread Options
#1810709 - 05/03/13 03:12 PM Regulation U
Comp Guy No More Offline
Diamond Poster
Comp Guy No More
Joined: Apr 2007
Posts: 2,488
North East
Customer borrows funds to refi commercial building. A portion of the proceeds are put into an account to pay loan collar fees. Customer would like to take the funds in this account and invest, pledging the investments. All funds were disbursed under a single note. It sounds like this portion of the funds would result in a purpose loan. Is the max 50% LTV for the entire note or just the portion of funds used to buy stock? For example, (and these are not the real numbers)...Building refi $2,000,000 (1.5MM building, $500M to fund loan collar fees). Current total LTV 66% ($500M account also pledged to the loan). Would like to invest the $500M. Is the total LTV on the $2MM required to be at 50%? Or just on the $500M? So the borrower could invest $250M of it?

Return to Top
Lending Compliance
#1811132 - 05/06/13 12:37 AM Re: Regulation U Comp Guy No More
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 79,293
Galveston, TX
You need to review 221.120
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

Return to Top

Moderator:  Andy_Z