This has fallen to me and I needed to clarify a couple of issues for an OCC bank.
1) We are part of the Legal Lending Limit Pilot Program. We only consider balances over 15% of capital when calculating our ratios. When I read 12 CFR 34, it mentions the "aggregate amount of all loans in excess of the supervisory loan-to-value limits". Does this mean I need to consider the full balance of the loan, or only that part above our policy limits for LTV?
2) There is a section in 12 CFR 34 which discusses credit enhancement (read: Private Mortgage Insurance) on 1-4 family loans. We sometimes make loans which are 90.01-95% LTV which have PMI coverage at a higher rate in order to reduce risk. Since we have PMI coverage, do these loans need to be included in our totals as well?
Thanks in advance for everyone's assistance!
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