Increased Risk Weight for High Volatility Commercial Real Estate

Lorman Education Services
Training overview
1.5 hours

Increased Risk Weight for High Volatility Commercial Real Estate

Increased Risk Weight for High Volatility Commercial Real Estate

Increased Risk Weight for High Volatility Commercial Real Estate

Gain valuable insights on risk weighted assets and learn how the increased risk weight for High Volatility Commercial Real Estate (HVCRE) will affect lenders and borrowers. This topic will provide an in depth discussion of risk weighted assets in general, and the risk weight for High Volatility Real Estate (HVCRE) in particular. The content will address how the increased risk weight for HVCRE affects lenders and borrowers, the extent to which the HVCRE risk weight has altered the appetite of lenders for commercial acquisition, development or construction loans or the pricing of loans which are HVCRE exposures. The topic will also discuss the exclusions from HVCRE and how HVCRE exposure is avoided as well as answers to “frequently asked questions” posed by a community bank.

Learning Objectives

  • You will be able to discuss the HVCRE background and rationale.
  • You will be able to define risk weighting and understand its effect on capital retention and loan pricing.
  • You will be able to review and structure commercial real estate ADC loans to avoid HVCRE exposure.
  • You will be able to explain what qualifies as borrower contributed capital.

  • Who should attend?

    This live webinar is designed for presidents, vice presidents, attorneys, branch managers, directors, loan officers, loan department personnel, credit and collection managers, controllers, auditors, business executives, estate and financial planners, accountants, tax managers and enrolled agents.

    Training Content

    • HVCRE Background and Rationale
    • HVCRE Loans Are a Subset of Acquisition, Development or Construction Loans (ADC)
    • Regulatory Rationale for HVCRE Classification
    • Market Effect of HVCRERisk Weighting
    • Risk-Weighted Assets
    • Higher Risk Assets Assigned Higher Risk Weights
    • What the 150% HVCRE Risk Weight Means for Lenders and BorrowersAvoiding the 150% Risk Weight
    • ADC Loans That Are Not HVCRE Exposures–One-To-Four Family Residential Real Estate–Certain Community Development and Small Business Loans–Certain Agricultural Loans–Commercial Real Estate ADC Loans
    • Supervisory LTV
    • Borrower Contributed Capital–Purpose of Borrower's Equity–Hard Equity–What Does and Does Not Qualify as Borrower Contributed Equity
    • 15% of the "as Completed" Appraised Value and the Law of Unintended Consequences
    • Ensuring That Borrower's Equity Is Invested Before Loan Proceeds Are Disbursed
    • What Payments or Distributions May Be Made During the Life of the Loan?Lender FAQs

    Costs

    The cost of this Increased Risk Weight for High Volatility Commercial Real Estate live webinar is $0 per participant.

    Provider: Lorman Education Services

    Lorman Education Services

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