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Property Value and LTV – Abundance of Caution

Question: 
What do we report for property value and loan to value if two properties secure the loan, but one was taken in an abundance of caution (AOC) and treated as AOC for the appraisal requirements?
Answer: 

When a dwelling is taken as collateral in an abundance of caution, and not relied upon for the loan to value calculation, the value is not included for property value. Property value should report the value that was used to reach the loan to value relied upon for the credit decision.
If the only residential collateral is a property taken as AOC, that dwelling will still trigger HMDA reporting but the rule above about property value and LTV will be considered for LAR completion. Report what was relied upon, which might be not applicable if LTV was not a consideration.
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Learn more about Kathleen Blanchard’s webinar HMDA Tips and Year End Prep

First published on 11/03/2019

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