Minn. R. agency 120, ch. 2675, BANKING PROCEDURES, pt. 2675.2170 - OTHER REAL ESTATE
Other real estate:
A. Any real estate acquired or owned by a
bank:
(1) pursuant to Minnesota Statutes,
section
48.21,
subdivision 1, clauses (2) to (5);
(2) not used in the business resulting from
relocation of the principal office, or closing of a detached facility;
or
(3) abandonment of plans to use
real estate acquired for future expansion, shall be designated as "other real
estate."
The property acquired pursuant to subitem (1) shall be so designated from the date upon which the bank actually acquires title and upon expiration of any redemption period. Property owned pursuant to subitems (2) and (3) shall be so designated from the date the determination is made to divert or abandon as actual operating bank premises.
B. "Other real estate" shall not
be entered upon the books of a bank at an amount greater than the balance of
the principal amount of the indebtedness at the time of acquisition or the
remaining book value if owned. In any case, the book value of other real estate
shall never exceed the estimated fair market value of the property. The fair
market value shall be determined by an appraisal prepared by an independent
qualified appraiser within 60 days of acquisition. The appraisal shall be made
part of the other real estate file.
C. Reasonable attempts shall be made to
dispose of other real estate by sale. The other real estate file shall be
documented with disposal attempts. The maximum period for holding other real
estate as an asset shall be five years.
D. "Other real estate" sold on contract for
deed may be carried as a loan at the lesser of the principal balance due on the
contract, or at its present book value. Loss on sale of "other real estate"
shall be recognized in the period the sale occurs. Gains on sale of other real
estate shall be either accreted ratably on the same basis as repayment, or may
be deferred until title is transferred to the buyer.
E. "Other real estate" shall be documented
with an attorney's opinion or equivalent evidence to reflect title and all
encumbrances. Insurance must be maintained where necessary and taxes must be
kept current if the "other real estate" is carried as an asset.
F. [Repealed,
L
2011 c 61
s
8 ]
Notes
Statutory Authority: MS s 45.023; 46.01
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