OCC to Release LTV Risk Management Guidance

February 9, 2016

In his remarks at the National Interagency Community Reinvestment Conference on Tuesday, February 9, 2016, Comptroller of the Currency Thomas Curry indicated the OCC will release in the coming months a “Risk Management Guidance for Higher Loan-to-Value Lending in Communities Targeted for Revitalization.”  This guidance is in response to concerns about barriers to financing homes and stabilizing neighborhoods in certain cities.  Comptroller Curry explained certain cities, specifically referencing Detroit, have trouble valuing a property because there is a scarcity of home sales in the area.  Another issue prompting the guidance, according to Comptroller Curry, is after necessary home repairs, the value of the house often exceeds the market value.  The release is expected to “provide guidance for OCC-regulated institutions wanting to set up mortgage programs so that potential homeowners may be able to secure purchase or purchase/rehabilitation loans in excess of the supervisory loan to value, or LTV, limits.”