[April]

We just had an Audit with Clifton Larsen Allen in which one of their findings was how we define value. Our policy has always been that on the purchase of real property we us the appraisal for our basis. We are FDIC and on their website they list the definition of value as “Value means an opinion or estimate, set forth in an appraisal or evaluation, whichever may be appropriate, of the market value of real property, prepared in accordance with the agency’s appraisal regulations and guidance. For loans to purchase an existing property, the term “value” means the lesser of the actual acquisition cost or the estimate of value.”

How does everyone else calculate Loan To Value and is this information current?

[bonniebaker]

We use the lower of the appraised value or purchase price except in the state of New York, we use the higher of the appraised value or purchase price. We are an FDIC Bank and have also had several audits from varying firms. (This reply is only intended to give my opinion on how we are currently handling this within our institution.)

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