Highlights:
-
Mortgage loans risk weighted at 50 percent before modification would continue to
be risk weighted at 50 percent after modification provided they continue to meet
other applicable prudential criteria. Mortgage loans risk weighted at 100
percent would continue to be risk weighted at 100 percent after modification.
-
The final rule clarifies that mortgage loans whose HAMP modifications are in the
trial period, and not yet permanent, qualify for the risk-based capital
treatment contained in the rule.
-
Under the FDIC's general risk-based capital rules, a state nonmember bank may
assign a 50 percent risk weight to any modified mortgage loan, provided the
loan, as modified, is not 90 days or more past due or in nonaccrual status and
meets other applicable criteria for a 50 percent risk weight. Thus, the
revisions provided under this final rule relative to the FDIC's risk-based
capital rules are clarifying in nature.
-
Consistent with current practice, the agencies will continue to allow past due
and nonaccrual loans that receive a 100 percent risk weight to return to a 50
percent risk weight under certain circumstances, including after demonstration
of a sustained period of repayment performance.
Distribution:
FDIC-Supervised Banks (Commercial and Savings)
Suggested
Routing:
Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
Related
Topics:
Risk-Based Capital Rules
12 CFR Part 325
Attachment:
Final Rule for
Mortgages Modified Under the Making Home Affordable Program - PDF (PDF Help)
Contact:
Ryan Sheller, Senior Capital Markets Specialist, at rsheller@fdic.gov or (202) 898-6614
Mark Handzlik, Senior Attorney, at mhandzlik@fdic.gov or (202) 898-3990
Note:
FDIC financial institution letters (FILs) may be accessed from the FDIC's Web site
at www.fdic.gov/news/news/financial/2009/index.html.
To receive FILs electronically, please visit http://www.fdic.gov/about/subscriptions/fil.html.
Paper copies of FDIC financial institution letters may be obtained through the
FDIC's Public Information Center, 3501 Fairfax Drive, E-1002, Arlington, VA 22226
(1-877-275-3342 or 703-562-2200).
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