Caso Practico

Real Estate Loans

Effective date July 1997 Section 3100.1 Real estate lending is a major function of some branches. However, the composition of real estate loan portfolios will vary from branch to branch because of differences in strategic direction, asset size, lending experience, market conditions, and location. This section of the manual deals with the permanent financing of residential andcommercial real estate. Also included in this section are discussions on real estate appraisals and environmental liability. Real estate construction lending is discussed separately in the following section of this manual.

Due to the differences in individual state banking laws, this section of the manual provides a general overview of the supervisory and regulatory requirements for a safeand sound real estate lending program. For information on lending limitations and restrictions, refer to the applicable banking laws and regulations that govern federally-insured and state-licensed
branches.

REAL ESTATE LENDING POLICY
The branch’s real estate lending policy is a broad statement of the standards, guidelines, and limitations that senior branch management and lending officers areexpected to adhere to in the process of making a real estate loan. The maintenance of prudent written lending policies, effective internal systems and controls, and thorough loan documentation is essential to the branch’s management of the real estate lending function.

The policies governing a branch’s real estate lending activities must include prudent underwriting standards that areperiodically reviewed by head office management and clearly communicated to the branch’s management and lending staff. The branch should also have credit risk control procedures that include, for example, prudent internal limits on exposure and an
effective credit review and problem loan identification process. The complexity and scope of these policies and procedures should be appropriate to the size ofthe branch and the nature of
the branch’s activities, and should be consistent with prudent banking practices and relevant regulatory requirements. As part of the analysis of a branch’s real estate loan portfolio, examiners
should review lending policies, loan administration procedures, and credit risk control procedures as well as the branch’s compliance with its policy.

On March 19, 1993, auniform rule on real estate lending by insured depository institutions promulgated by the federal banking agencies became effective. Although the rule does not directly apply to uninsured branches, it should be used as a general supervisory guide when reviewing loan portfolios, procedures, and practices at all branches. The rule requires each
insured depository institution to adopt and maintaincomprehensive written real estate lending policies that are consistent with safe and sound banking practices, are appropriate to the size of the institution, and the nature and scope of its operations. The policies must establish loan-to value
limits; loan administration procedures; portfolio diversification standards; and documentation, approval, and reporting requirements.
The policiesadopted by the branch should reflect consideration of the Interagency Guidelines for Real Estate Lending Policies established by the federal banking agencies. In addition to the requirements of the uniform rule, a branch’s real estate lending policy should include principal amortization terms acceptable for each type of real estate loan that the branch underwrites.
Branch management should also ensurethat loans are granted with the reasonable expectation that the borrowers will be able and willing to meet the repayment terms. Any loan that does not follow this principle should be regarded as an unsound banking practice, regardless of the collateral value and favorable ratio of
collateral value to the outstanding loan. While there is no single lending policy appropriate for all branches,...