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#883208 - 01/07/08 08:25 PM Purchase of OREO Property by Loan Officer
one auditor Offline
100 Club
Joined: Apr 2004
Posts: 104
Midwest
We have a situation where the bank has an OREO property and a loan officer wants to buy the property with an outside partner. What are the regualtions, if any, in a loan officer purchasing an OREO property and what other steps must the bank perform to ensure an arms length transaction?

Thank you.

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#883243 - 01/07/08 09:20 PM Re: Purchase of OREO Property by Loan Officer one auditor
Mint Julep Offline
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Mint Julep
Joined: Oct 2007
Posts: 1,152
Tennessee
Um, I know a guy that got fired for doing this at a bank we both worked at several year's ago.

I think the issue was that he bought it before it was made available to the public. I recall him telling me that he was told that it would have been okay if he had bought it at public auction or after it was on the market for a certain number of days.

Of course, this was about 1987, so .... grain of salt and all that.
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#883351 - 01/08/08 12:25 AM Re: Purchase of OREO Property by Loan Officer Mint Julep
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,605
Galveston, TX
Unless it is purchased at public auction just be ready for the regulators to but a microscope to this transaction. IMHO - it would hardly be worth the risk. Check your State laws also.
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#883528 - 01/08/08 02:48 PM Re: Purchase of OREO Property by Loan Officer Mint Julep
one auditor Offline
100 Club
Joined: Apr 2004
Posts: 104
Midwest
Thank you.

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#885209 - 01/10/08 03:34 PM Re: Purchase of OREO Property by Loan Officer one auditor
A_G Online
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Joined: Jul 2004
Posts: 18,957
Check your Bank ethics/code of conduct policy too. It might prohibit this.
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#910648 - 02/26/08 07:22 PM Re: Purchase of OREO Property by Loan Officer A_G
KYWoman Offline
Member
Joined: Feb 2008
Posts: 63
Kentucky
I believe our OREO property is sold at public auction. Even with repo'd cars, I think we prefer that someone other than the employee bids.

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