Collateral definitions.

CFR · 2024-01-01 · US · Title 12

For the purposes of this part, the following definitions shall apply: (a) (1) It is not required by statute, regulation, or the institution's policies; and (2) A prudent lender would extend credit based on a borrower's income and/or other collateral, absent the real estate, and the decision to extend credit was, in fact, based on other sources of revenue or collateral. (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (1) Capitalizing a single year's income expectancy or an annual average of several years' income expectancies at a market-derived capitalization rate that reflects a specific income pattern, return on investment, and change in the value of the investment; or (2) Discounting the annual cashflows for the holding period and the reversion at a specified yield rate or specified yield rates which reflect market behavior. (l) (1) Buyer and seller are typically motivated; (2) Both parties are well informed or well advised, and acting in what they consider their best interests; (3) A reasonable time is allowed for exposure in the open market; (4) Payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and (5) The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. (m) (n) (o) (p) (1) The sale, lease, purchase, investment in, or exchange of real property, including interests in property or the financing

official document · source cfr-2024 · id 12:§ 614.4240