Exception to LTV Ratio

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Question:

Is there a compliance issue if you make an exception to your fixedrate home equity policy in order to extend the loan to value ratio from 80% 95% for one customer?

Answer:

Not for one customer there is not. The total of all the loans where you exceed the supervisory limits for the various categories of real estate loans cannot exceed 100% of your unimpaired capital and surplus. However, the interagency guidelines on real estate lending do not establish any specific supervisory limit for home equity and for owneroccupied 14 family dwelling secured loans. They do suggest for those loans that any in excess of 90% LTV be further supported by either PMI or readily marketable collateral.

First published on BankersOnline.com 2/2/04