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#1990684 - 01/23/15 05:22 PM LTV Exception
Mike Baker Offline
100 Club
Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
This has likely been asked before, probably many times, and I apologize for the repeat. I attempted to do a search of the threads first, but was not successful. In any case, as an example, Loan # 1 was closed without an LTV exception. Later Loan # 2 using the same property was closed as a 2nd deed of trust. When calculating the LTV exception, can you use just the balance of Loan # 2 or must the balance of Loan # 1 be included as well?
Assuming that only Loan # 2 must be included, then would it have been logical and permissible [if need for additional funds was known at the time] to have closed 2 loans on the same day, the larger one for which there would not have been the LTV exception, and the second one for which there would be...so that the amount reported as exception would not be one larger balance, but only the part that "tipped the scales," so to speak?
Thank you for your assistance and input.
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"When you believe He's all you need,that will be your defining moment." [from "Defining Moment" Newsong, Sheltering Tree CD]

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#1990769 - 01/23/15 08:01 PM Re: LTV Exception Mike Baker
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,625
Galveston, TX
You only get one LTV and it is applied to both loans:

In determining the aggregate amount of such loans, institutions should: (a) Include all loans secured by the same property if any one of those loans exceeds the supervisory loan-to-value limits; and (b) include the recourse obligation of any such loan sold with recourse. Conversely, a loan should no longer be reported to the directors as part of aggregate totals when reduction in principal or senior liens, or additional contribution of collateral or equity (e.g., improvements to the real property securing the loan), bring the loan-to-value ratio into compliance with supervisory limits.
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#1990789 - 01/23/15 08:29 PM Re: LTV Exception Mike Baker
Mike Baker Offline
100 Club
Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
Thank you very much. I would not have thought that the regs would have allowed such a "loophole," and as it turns out, they do not. I appreciate the clarification.
_________________________
"When you believe He's all you need,that will be your defining moment." [from "Defining Moment" Newsong, Sheltering Tree CD]

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