I am trying to review HMDA data integrity on a commercial rental property and came across a note where there is cross-collateralization language in the note and mentions in addition to the mortgage executed for the purchase, "all mortgages not specifically listed herein are made part of this note". The loan officer in their underwriting approval did not break out the value of ALL collateral, but only the property that was purchased. Since the loan officer did not break out the LTV of ALL collateral would one report NA or use the LTV of the property purchased.

Thank you for any guidance!

but only the property that was purchased

If that's the value used then that is what is reported.

Similar situation. Property A valued at $200,000 is securing Loan A ($100,000), but is also cross-collateralized to Loan B ($500,000). Loan B is secured by Property A and 5 other properties (valued at $700,000).

Underwriting approved Loan A with a maximum LTV of 80%, but there is no evidence of a final LTV calculation. So I think a literal reading of the reg. would say our CLTV is 300%, $600,000 (Loan A + Loan B) divided by $200,000 (Value of Property A).

I don't think that's the true intention of the regulation and common sense would say that our decision was made with the knowledge only a portion of Loan B's debt is attributed to Property A, but unfortunately there is nothing in the file to show that. Is anyone else making their underwriters go back and re-document the CLTV or just reporting 600%?

Since the CLTV reported is the 'CLTV' "relied on" in making the credit decision, it's not cut and dried. If they relied on a value and a LTV/CLTV, it likely needs to be documented so you know what to look for on the LAR.

Joker is right. The CLTV is ALL collateral RELIED ON. If there’s nothing else in the file about the extra collateral, they probably didn’t really upon it.

However, this is exactly why loan officers should complete a HMDA report to tell you what they relied on. You shouldn’t be guessing. Without that exact info, the examiners can second guess and no one really knows the answer.