- Audio Conference Addresses Commercial Real Estate Loan Workouts
The FDIC has posted on its web site a transcript of a December 3 interagency audio conference on prudent commercial real estate loan workouts in which the federal banking agencies addressed some of the frequently asked questions that they have received on the interagency Policy Statement on Prudent Commercial Real Estate Loan Workouts.
Nutter Notes: Among other topics, the agencies discussed restructuring a loan by splitting it into a multiple-note structure (so-called A and B notes) in a situation where the borrower is able to meet a certain level of debt service, but cannot meet the entire debt service requirements of the original loan.
- Fed Provides Guidance for Adverse Action on Mortgage Loan Modifications
The Federal Reserve issued guidance in a December 4 consumer affairs letter on whether an adverse action notice under Regulation B (Equal Credit Opportunity) is required when an institution declines to modify a residential mortgage loan under the U.S. Treasury Department’s Making Home Affordable Modification Program.
Nutter Notes: In the letter, the Federal Reserve advises that Regulation B requires a four-part analysis to determine whether an adverse action notice is required. The analysis must consider whether there is an extension of credit, whether there is an application, whether there is an adverse action on an application, and whether the borrower is delinquent or in default on the loan.