This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

FASB issues proposals concerning collateralized mortgage loans

  • FASB (US Financial Accounting Standards Board) Image

Jul 19, 2013

The FASB has issued a proposed Accounting Standards Update (ASU), which seeks to clarify the determination of the time at which a creditor is considered to have received physical possession of the collateralized real estate property in an in substance repossession or foreclosure of a consumer mortgage loan and when the creditor should recognize the real estate property and derecognize the loan.

The main provisions in this proposed ASU are as follows:

  • To clarify when a creditor is considered to have received physical possession of residential real estate property.
  • To require “an entity that receives physical possession of residential real estate property collateralizing a consumer mortgage loan disclose a roll-forward schedule reconciling the change from the beginning to the ending balance of such foreclosed properties at every reporting period.”
  • To require the disclosure of “the recorded investment in consumer mortgage loans secured by residential real estate properties that are in the process of foreclosure according to local requirements of the applicable jurisdiction.”

Currently, IFRSs do not contain any guidance on the reclassification of collateralized mortgage loans to foreclosed residential real estate property.

The proposed ASU had a comment deadline of September 17, 2013.

Click for:

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.