Texas Administrative Code › Title 7 - BANKING AND SECURITIES › Part 2 - TEXAS DEPARTMENT OF BANKING › Chapter 12 - LOANS AND INVESTMENTS › Subchapter D - INVESTMENTS › Section 12.91 - Other Real Estate Owned

Current through Reg. 49, No. 28; July 12, 2024
(a)
				  Definitions. Words and terms used in this subchapter that are defined in the
				  Finance Code, §
										RSA 31.002, have the
				  same meanings as defined in the Finance Code. The following words and terms
				  when used in this subchapter shall have the following meanings unless the
				  context clearly indicates the contrary.
(1)
				  Appraisal--A written report by a state certified or licensed appraiser
				  containing sufficient information to support the state bank's evaluation of
				  OREO taking into consideration market value, analyzing appropriate deductions
				  or discounts, and conforming to generally accepted appraisal standards unless
				  principles of safe and sound banking require stricter standards.
(2) Appraiser--A state certified or licensed
				  staff appraiser or a state certified or licensed third party fee appraiser with
				  relevant and competent experience and background as related to a particular
				  appraisal assignment.
(3) Bank
				  facility--Real property, including improvements, owned or leased to the extent
				  of the lease by a state bank if the real estate is held for the purposes set
				  forth in the Finance Code, §
											RSA 34.001, and is not
				  disqualified under the Finance Code, §
											RSA
				  34.002(b). The term also
				  includes capitalized leasehold improvements if held for the same
				  purposes.
(4) Coterminous
				  sublease--A lease with the same duration as the remainder of the master
				  lease.
(5) Evaluation--A written
				  report prepared by an evaluator describing the OREO and its condition, the
				  source of information used in the analysis, the actual analysis and supporting
				  information and the estimate of the OREO's market value, with any limiting
				  conditions.
(6) Evaluator--An
				  individual who has related real estate training or experience and knowledge of
				  the market relevant to the OREO but who has no direct or indirect interest in
				  the OREO. An appraiser may be an evaluator.
(7) Generally accepted appraisal
				  standards--The Uniform Standards of Professional Appraisal Practice (USPAP)
				  promulgated by the Appraisal Standards Board, Appraisal Foundation, Washington,
				  D.C.
(8) Market value--The most
				  probable price which a property should bring in a competitive and open market
				  under all conditions requisite to a fair sale, the buyer and seller each acting
				  prudently and knowledgeably, and assuming the price is not affected by undue
				  stimulus. Implicit in this definition is the consummation of a sale as of a
				  specified date and the passing of title from seller to buyer under conditions
				  whereby:
(A) buyer and seller are typically
				  motivated;
(B) both parties are
				  well informed or well advised, and acting in what they consider their own best
				  interests;
(C) a reasonable time is
				  allowed for exposure in the open market;
(D) payment is made in terms of cash in U.S.
				  dollars or in terms of financial arrangements comparable thereto; and
(E) 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.
(9) Non-coterminous sublease--A
				  lease with a duration shorter than the remainder of the master lease.
(10) Other Real Estate Owned (OREO)--Real
				  estate, including improvements, mineral interests, surface, and subsurface
				  rights, owned in whole or in part or leased by a state bank, no matter how
				  acquired, which is not a bank facility as defined by paragraph (3) of this
				  subsection or leasehold property as permitted under the Finance Code, §
											RSA
				  34.204(a), but excluding
				  nonparticipating royalty interests classified as personal property pursuant to
				  Finance Code, §
											RSA 34.004.
(11) Staff appraiser--An appraiser on the
				  staff of a state bank who has no direct or indirect interest in the
				  OREO.
(12) Third party fee
				  appraiser--An appraiser who has an independent contractor relationship with a
				  state bank and has no direct or indirect interest in the OREO.
(13) Year--For the purposes of this section,
				  a calendar year.