Board of Governors of the Federal Reserve System

Data Dictionary

Item Number 5373

Call confidentiality applies to FFIEC 031/041.

Data Description:

Includes the net book value of all other real estate owned. Included as all other real estate owned are: (1)   Real estate acquired in any manner for debts previously contracted (including, but not limited to, real estate acquired through foreclosure and real estate acquired by deed in lieu of foreclosure), even if the bank has not yet received title to the property (hereafter referred to as "foreclosed real estate"). (2)   Real estate collateral which the bank controls "in substance" even though formal foreclosure proceedings have not been instituted against the borrower. Such an "in-substance foreclosure" should be accounted for in accordance with paragraph 34 of FASB Statement No. 15, "Accounting by Debtors and Creditors for Troubled Debt Restructuring." (3)   Property formerly but no longer used for banking. (4)   Property originally acquired for future expansion but no longer intended to be used for that purpose. (5)   Foreclosed real estate sold under contract and accounted for under the deposit method of accounting in accordance with FASB Statement No. 66, "Accounting for Sales of Real Estate." Under this method, the seller does not record notes receivable, but continues to report the real estate and any related existing debt on its balance sheet. The deposit method is used when a sale has not been consummated and is commonly used when the initial investment in the property was inadequate and recovery of the carrying value of the property is not reasonably assured. Once the criteria for sale treatment under FASB Statement No. 66 have been met, the receivable resulting from the sale of the foreclosed real estate should continue to be reported in this item or should be reported as a loan in Schedule RC-C in accordance with the following paragraph and any gain on the sale should be recognized in accordance with FASB Statement No. 66. (6)   Receivables resulting from sales of other real estate owned accounted for under the installment, cost recovery, reduced profit, or percentage-of- completion method of accounting in accordance with FASB Statement No. 66, "Accounting for Sales of Real Estate," when the buyer's initial investment (as defined in FASB Statement No. 66) is less than 10 percent of the sales value of the real estate sold. Once this 10 percent initial investment condition has been met, the receivable should be reported as a loan in Schedule RC-C. (7)   For national banks only, real estate sold in a "covered transaction" for the period the transaction remains "covered." A "covered transaction" is defined as a sale of foreclosed real estate when: (a)   less than 10 percent of the total sales price is in cash, (b)   there is financing by the bank of all or a portion of the sales price on terms more favorable than those customarily required by the bank when it is involved only as lender, or (c)   the transaction does not transfer from the bank to the purchaser the usual risks and all or most of the rewards of ownership. A transaction ceases to be "covered" when these conditions no longer exist. NOTE: A financing at less than prevailing interest rates is not considered to have an interest rate more favorable than that customarily required by the bank provided that the note received is discounted to a market rate of interest in accordance with APB Opinion No. 21, "Interest on Receivables and Payables," and is carried on the bank's balance sheet (Schedule RC) at this discounted amount. When the bank acquires property through foreclosure as a second lien holder and does not assume the first lien, the property should be recorded at the loan amount (not to exceed the fair value of the bank's interest in the property). If the bank assumes the first lien, the property should be recorded at the loan amount plus the unpaid balance of the first lien (not to exceed the fair value of the property). NOTE: Beginning 3/31/01, for series RCFD and RCON, derived for FDIC. These items will not be available until Interagency Call Central Data Repository is active in 2005. INTL - The total dollar amount of other real estate owned (OREO) that was classified at the foreign nonbank at this examination. Dollar value, in thousands, as of the Asset Quality Review Date.