Jan 30, 2017 · Question 15 2 out of 2 points A loan for which the collateral value exceeds the loan balance is said to be _____. Selected Answer: overcollaterali zed Correct Answer: overcollaterali zed Question 16 2 out of 2 points After a single national mortgage market had developed as a result of disintermediation, the 30-year fixed-rate mortgage rates _____.
Sep 06, 2015 · Correct Answer : the principal balance relative to the value of the collateral Question 16 A loan for which the collateral value exceeds the loan balance is said to be ______. Correct Answer: overcollateralized
Nov 20, 2017 · What is collateral? (A)money obtained from signing a loan (B)assets obtained after getting a loan (C)assets used to secure a loan (D)money used as a down payment for a loan 2 See answers Advertisement Advertisement brianluong00 brianluong00 The answer would be b assets obtained to get a loan
Oct 01, 2021 · Today, for regulatory reporting purposes, the agencies require the use of the fair value of collateral to measure estimated credit losses when an individually evaluated loan that is determined to be impaired, including a loan that is a troubled debt restructuring, is considered to be collateral dependent, regardless of whether foreclosure is ...
An institution should not automatically default to nine quarters as its reasonable and supportable forecast period for estimating credit losses under CECL solely because a nine-quarter horizon is used in the stress testing process. Although CECL does not prescribe a specific method for estimating reasonable and supportable forecast periods and it does not include bright lines for establishing a minimum or maximum length for these periods, the standard makes clear that management's allowance estimates must be based upon management's expectations. Each institution's reasonable and supportable forecast periods for financial and regulatory reporting purposes should be properly supported and documented independent of the stress testing process.
Under CECL, the allowance for credit losses is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. 7 In concept, an allowance will be created upon the origination or acquisition of a financial asset measured at amortized cost. The allowance will then be updated at subsequent reporting dates. The allowance for credit losses under CECL is a valuation account, measured as the difference between the financial assets' amortized cost basis and the amount expected to be collected on the financial assets (i.e., lifetime credit losses). 8
CECL requires institutions to measure expected credit losses on financial assets carried at amortized cost on a collective or pool basis when similar risk characteristics exist . Similar risk characteristics may include one or a combination of the following: 18
The federal bank regulatory agencies issued a final rule that modified their regulatory capital rules and provided an option to phase in over a period of three years the day-one regulatory capital effects of the new accounting standard.
Specifically with regard to data, to implement CECL, an institution should collect and maintain relevant data to support its estimates of lifetime expected credit losses in a way that aligns with the method or methods it will use to estimate its allowances for credit losses. As such, the agencies encourage institutions to discuss the availability of historical loss data internally and with their core loan service providers because system changes related to the collection and retention of data may be warranted. Depending on the estimation method or methods selected, institutions may need to capture additional data and retain data longer than they have in the past on loans that have been paid off or charged off to implement CECL.
GAAP, the new credit losses standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.
In the period leading up to the global economic crisis, institutions and financial statement users expressed concern that current U.S. GAAP restricts the ability to record credit losses that are expected, but that do not yet meet the "probable" threshold. After the crisis, various stakeholders requested that accounting standard-setters 6 work to enhance standards on loan loss provisioning to incorporate forward-looking information. Standard-setters concluded that the existing approach for determining the impairment of financial assets, based on a "probable" threshold and an "incurred" notion, delayed the recognition of credit losses on loans and resulted in loan loss allowances that were "too little, too late."
An accumulation of savings in an insurance policy that can be used as a source of loan col lateral.
Loans made for specific purposes using formally negotiated contracts that specify the borrowing terms and repayment.
A mortgage on personal property given as security for the payment of an obligation.