The Uniform Retail Credit Classification and Account Management Policy recognizes that a borrower's payment performance is the principal factor in determining the classification treatment of a residential real estate loan.
Historically, creditworthy borrowers typically refinance mortgages to prevailing market rates when interest rates fall.
Many performing residential borrowers have been unable to take advantage of the recent decline in interest rates due to insufficient equity in their properties, although the borrowers meet all other underwriting criteria.
Reducing the interest rate for performing borrowers generally strengthens the borrowers' repayment ability.
In the case of performing borrowers, examiners generally should not adversely classify residential refinance loans that lower the rate to a market interest rate and otherwise follow sound underwriting guidelines, except for a high LTV ratio.
FDIC-Supervised Banks (Commercial and Savings)
Chief Executive Officer
Chief Loan Officer
Chief Compliance Officer
Uniform Retail Credit Classification and Account Management Policy
Part 365, Real Estate Lending Standards
Interagency Guidelines on High Loan-to-Value (LTV) Residential Real Estate Lending
Examination Specialist Beverlea (Suzy) Gardner at BGardner@FDIC.gov or (202) 898-3640
FIL-19-2009 - PDF (PDF Help)
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at www.fdic.gov/news/news/financial/2009/index.html.
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Paper copies of FDIC financial institution letters may be obtained via the FDIC's Public Information Center (1-877-275-3342 or 703-562-2200).