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    OCC Bulletin on Risk Management Guidance for Home Mortgage Lending

    June 19, 2019

    OCC published Bulletin 2019-28 on risk management guidance for higher-loan-to-value (LTV) lending activities in communities targeted for revitalization. OCC is highlighting the core lending principles in this bulletin to encourage responsible bank loan products that meet the credit needs of individual borrowers, support community revitalization efforts, operate in a safe and sound manner, and comply with applicable laws. This guidance applies to all OCC-supervised banks.

    OCC encourages banks to continue to develop responsible, innovative lending strategies intended to meet the credit needs of individual borrowers and support revitalization efforts. These efforts could include residential mortgage lending products for the purchase, refinancing, or rehabilitation of owner-occupied one- to four-family properties, where the LTV ratio at the time of origination exceeds 90%, and the loan is without mortgage insurance, readily marketable collateral, or other acceptable collateral (higher-LTV loans). This OCC Bulletin (2019-28) rescinds the OCC Bulletin 2017-28, titled: “Mortgage Lending: Risk Management Guidance for Higher-Loan-to-Value Lending Programs in Communities Targeted for Revitalization,” which was issued on August 21, 2017.

    OCC encourages banks interested in making higher-LTV loans in communities targeted for revitalization by a federal, state, or municipal governmental entity or agency to:

    • Refer to the core lending principles in this bulletin when considering making higher-LTV loans.
    • Discuss plans to offer higher LTV loans with their OCC supervisory office before implementation, particularly if the offerings constitute substantial deviations from the bank’s existing strategic or business plans.


    Related Link: OCC Bulletin 2019-28


    Keywords: Americas, US, Banking, LTV, Core Lending Principles, Bulletin 2019-28, Credit Risk, Loan Origination, Residential Mortgage Lending, OCC

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