The commercial loan officers at my bank have a general understanding of FIRREA however one among us believes that FIRREA may dictate LTVs on commercial real estate - in particular a vacant commercial lot. Is this true, If so, where can we find an explanation?
Under Regulation Y Sec 225.63(a)(2) there is an exception if a lien is taken in an abundance of caution. Would this include a lien taken on an existing home as additional collateral for a construction loan that will have a FIRREA appraisal on new construction, but is not adequate collateral so we are taking the existing home? Can we forgo the FIRREA appraisal on that collateral taken in an abundance of caution?
If a review appraisal is completed by the same appraiser who did the original, is this a violation of FIRREA? Does the review appraisal have to be from a different apprasier?
FIRREA allows an exemption from a state licensed or state certified appraisal for business loans of $1M or less that are not dependent upon the sale of, or rental income generated from the collateral real estate as the primary source of repayment. A "business loan" is defined as an extension of credit to "any" corporation or other business entity. Would this exemption be applicable to a non-profit corporation (e.g., an incorporated church)?
Separating the Appraisal and Evaluation Functions
Answer by Mary Beth Guard, BOL Guru
HUD has published a proposal to make significant changes to the Good Faith Estimate that lenders issue within three days of taking an application. HUD calls this a "simplification" of the GFE.