As previously announced, the Office of the Comptroller of the Currency (OCC) is providing support for super-high LTV loans to help revitalize distressed communities (see http://blog.docutechcorp.com/compliance-news-occ-high-ltv-loan-program). Part of the criterion for a national banks’ or federal savings associations’ program to be accepted by the OCC is the following criteria:
“[Acceptable] policies and procedures should include provisions that address the . . .
- Content, form, and timing of notice(s) the bank will provide in connection with program loans to clearly inform the borrower that
- The market value of a property securing a higher-LTV loan is less than the loan amount at origination.
- The market value of a rehabilitated property likely will be less than the original loan amount upon completion of the rehabilitation.
- The market value may continue to be less than the original loan amount thereafter and for the duration of the loan.
- There may be financial implications for the borrower if the borrower seeks to sell the property and the sale price is less than the outstanding loan balance at the time of such sale, and explain the implications.” (OCC Bulletin 2017-28; available at: https://www.occ.gov/news-issuances/bulletins/2017/bulletin-2017-28.html)
In order to support this criteria for our clients who may be supervised by the OCC and who may have higher LTV lending, revitalization programs, we have created new “Notice Concerning Market Value and High LTV” (Cx21638) which contains the points of information listed above.
Because this document would only be required on a customized, loan program basis for clients supervised by the OCC, it will be available “upon request” and will not print generically in loan packages. Once it is requested, it will print for the requesting client under the following circumstances:
- Lien Position = FirstLien
- Occupancy = PrimaryResidence and SecondHome
- Loan Purpose = Purchase, ConstructionOnly, and ConstructionToPermanent
- HELOC = No
- CLTV/LTV is greater than 100%? = Yes
- Loan Amount Less Than or Equal To 200k = Yes
This document will be available immediately. If you have any questions or concerns about this new document, please contact Client Support at 1.800.497.3584.