OCC Calls Rental Properties As Risky As Commercial Loans

Law360, New York (September 17, 2012, 8:39 PM EDT) -- The Office of the Comptroller of the Currency said Monday that banks should treat mortgages issued to borrowers who plan to rent out one- to four-family buildings similar to commercial loans because the risk of default on those properties is higher than for properties where borrowers live.

Borrowers who plan to repay their mortgages with income from renters pose a higher risk of falling behind on their payments than those that live on the properties themselves because they are at the mercy of tenants' rent payments....
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