La. Admin. Code tit. 10 § III-337
Current through Register Vol. 50, No. 12, December 20, 2024
Section III-337 - Pool Treated as Individual Loans for Lending Limit PurposesA.1. For treatment of the pool as individual loans for legal lending limit calculations, the bank must maintain an affidavit signed by the person or persons conducting the review and countersigned by the board of directors stating that: a. a representative portion of the individual loans contained within the pool were reviewed to determine that the individual borrowers appear creditworthy; andb. the bank is relying primarily on the individual maker's responsibility for payment of the loans.2. Without the above affidavit, the pool will be deemed a direct borrowing of the seller for purposes of determining compliance with the bank's legal lending limit.B. The bank shall maintain a listing of all loans included in the pool at the time of purchase.C. On all payments received, the bank shall procure a breakdown of such payments by borrower name and the amount of payment applicable to principal and interest.D. Delinquent Loans 1. The bank shall obtain a monthly listing of all loans in which payments are overdue and shall report those loans overdue 30 days or more in its overdue loan calculations.2. The bank shall obtain a monthly listing of all loans contractually requiring monthly payments of principal and interest which are currently paying interest only. These loans should also be reflected in the bank's overdue calculations based on their amortization schedule.3. The bank shall obtain a quarterly status report, corresponding with call report dates, on all loans in process of foreclosure along with collection efforts being made on those loans which are delinquent but not in the process of foreclosure.4. The bank shall obtain a quarterly status report, corresponding with call report dates, on any collateral seized through foreclosure.E. Loan Loss Reserve Analysis. Although the pool may have a partial recourse endorsement and/or guarantee of the seller, the bank shall assess risk and provide for such risk on an individual loan basis in its loan loss reserve analysis.F. Subsequent Reviews. At least semi-annually, the bank shall conduct subsequent reviews of a portion of the loans within the pool to ensure that all information being provided by the servicer of the pool is substantially correct. Subsequent reviews should also be conducted by someone other than the originating officer. Documentation of subsequent reviews should be maintained by the bank for review at subsequent examinations.G. Reporting of Pools. These pools shall be reported in accordance with the Federal Financial Institutions Examinations Council's Instructions for Consolidated Reports of Condition and Income (Call Report Instructions). The treatment of a pool as individual loans is only for purposes of assessing the bank's compliance with its legal lending limit.La. Admin. Code tit. 10, § III-337
Promulgated by the Department of Economic Development, Office of Financial Institutions, LR 19:38 (January 1993).AUTHORITY NOTE: Promulgated in accordance with Act 1129 of 1992.