Suretyship and guaranty.

CFR · 2024-01-01 · US · Title 12

Pursuant to section 5(b)(2) of the HOLA, a Federal savings association may enter into a repayable suretyship or guaranty agreement, subject to the conditions in this section. (a) (b) (1) The Federal savings association must limit its obligations under the agreement to a fixed dollar amount and a specified duration. (2) The Federal savings association's performance under the agreement must create an authorized loan or other investment. (3) The Federal savings association must treat its obligation under the agreement as a loan to the principal for purposes of 12 CFR 31.2 and part 32 of this chapter. (4) The Federal savings association must take and maintain a perfected security interest in collateral sufficient to cover its total obligation under the agreement. (c) (i) If the collateral is real estate, the Federal savings association must establish the value by a signed appraisal or evaluation in accordance with part 34, subpart C of this chapter. In determining the value of the collateral, the Federal savings association must factor in the value of any existing senior mortgages, liens or other encumbrances on the property, except those held by the principal to the suretyship or guaranty agreement. (ii) If the collateral is marketable securities, the Federal savings association must be authorized to invest in (2) The Federal savings association may take and maintain a perfected security interest in collateral which is at all times equal to at least 100 percent of its obligation

official document · source cfr-2024 · id 12:§ 160.60