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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Financial Institution Letters

Other Real Estate
Guidance on Other Real Estate
July 1, 2008

Summary: Continued weakness in the housing market and the rapid rise in foreclosures have increased the potential for higher levels of other real estate (ORE) held by FDIC-supervised institutions. This FIL reminds bank management of the importance of developing and implementing policies and procedures for acquiring, holding, and disposing of other real estate (ORE). "Guidance on Other Real Estate" is attached.

The attached "Guidance on Other Real Estate":

  • Emphasizes the need to properly maintain ORE.
  • Reinforces the importance of and details the expenses associated with maintaining and protecting ORE from further deterioration.
  • Addresses the need to comply with requirements for obtaining initial and updated values for ORE.
  • Summarizes the accounting and reporting standards for ORE in each phase of ownership: acquisition, holding period, and disposition.

FDIC-Supervised Banks (Commercial and Savings)

Suggested Routing:
Chief Executive Officer
Chief Loan Officer
Chief Financial Officer

Related Topics:
Real Estate Lending
Accounting for Other Real Estate

Guidance on Other Real Estate

Beverlea (Suzy) Gardner, Senior Examination
Specialist, at or (202) 898-
3640 and Leonard J. Bixby, Policy Analyst (Bank
Accounting), at or (202) 898-

Printable Format:
FIL-62-2008 - PDF (PDF Help)

FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site at

To receive FILs electronically, please visit

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).

Last Updated 7/1/2008

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