Board of Governors of the Federal Reserve System

Data Dictionary

Item Number 3802

Call confidentiality applies to FFIEC 031/041.

Data Description:

Includes loans that are fully secured by first liens on 1-4 family residential properties (including certain presold residential construction loans) that were made in accordance with prudent underwriting standards, that are performing in accordance with their original terms, and that are not 90 days or more past due or in nonaccrual status. If a bank holds the first and junior lien(s) on a residential property and no other party holds an intervening lien, the loans will be viewed as a sinle extension of credit secured by a first lien on the underlying property for purposes of determining the loan-to-value ratio and assigned a risk weight. The combined loan amount will be assigned to either the 50 percent or 100 percent risk category, depending on whether the credit satisfies the criteria for a 50 percent risk weighting. To qualify for the 50 percent risk category, the combined loan must be made in accordance with prudent underwriting standards (including an appropriate loan-to-value ratio) and none of the combined loans may be 90 days or more past due or in nonaccrual status. If the combined loan does not meet all of these criteria, the combined loans must be assigned in their entirety to the 100 percent risk category and reported in item 3804 (Schedule RC-R, item 7.a).

Also includes loans fully secured by first liens on multifamily residential properties that have been prudently underwritten and meet the requirements specified in the risk-based capital standards for loan-to-value ratios, level of annual net operating income to required debt service, maximum amortization period, minimum original maturity, and demonstrated timely repayment performance.

Also includes certain privately-issued mortgage-backed securities representing direct and indirect ownership of the aforementioned mortgage loans if the criteria for privately-issued mortgage-backed securities outlined in the risk-based capital guidelines (and listed below) are met. For example, a home builder issues a pass-through security that is backed by a pool of first mortgages on 1-4 family residential mortgages that are prudently underwritten and are not restructured, past due, or in nonaccrual status. The criteria outlined in the risk-based capital guidelines allowing these securities to be risk-weighted on the basis of the pool of mortgage collateral rather than on the issuer requires that:

(1)   the underlying assets are held by an independent trustee and the trustee has a first priority, perfected security interest in the underlying assets on behalf of the holders of the security;

(2)   either (a) the holder of the security has an undivided pro rata ownership interest in the underlying mortgage assets or (b) the trust or single purpose entity that issues the security has no liabilities unrelated to the issued securities;

(3)   the security is structured such that the cash flow from the underlying assets in all cases fully meets the cash flow requirements of the security without undue reliance on any reinvestment income; and

(4)   there is no material reinvestment risk associated with any funds awaiting distribution to the holders of the security.

In addition, includes revenue bonds or similar claims that are obligations of U.S. state or local governments, or other OECD local governments, for which the government is committed to repay the debt only out of revenues from the facilities financed.

Excludes loans collateralized by mortgage notes that the reporting bank has indirectly financed, e.g., mortgage warehousing lines.

NOTE:

Beginning 3/31/1999, the first paragraph was revised.

Reported on Schedule RC-R for the FFIEC 031, 032, 033, and 034 reports.

Confidential for March, June, and September of the 1990 reporting period.

Also completed by banks that reported a zero in item 6056 and by banks with total assets of $1 billion or more.