Schedule B - Raw Land - classification

[AlexS-LBLIC]

Hi, does anyone know the appropriate classification for a mortgage loan on raw land?
Is this considered a residential or commercial mortgage?
I've read the SSAPs, NAIC instructions, etc... but I can't find clear guidance.
Thanks

[Lisa]

Alex,

Based on the information provided, it is difficult to tell, but could this land be considered an investment in real estate? If so, I believe you want to refer to SSAP 41R Real Estate Investments and the annual statement instructions for Schedule A for the accounting and classification guidance.


Thanks
Lisa Mullen

[Glenn]

AlexS,
Please note I have researched SSAP 37 - Mortgage Loans and also the NAIC instructions for all parts of Schedule B. The instructions and SSAP 37 are indeed silent with respect to Mortgage Loan on raw land. There are columns to capture Land and Building appraisal values ( B part 1 , column 14 and B part 2 column 9).
I believe what you need to do is revisit the mortgage loan contractual terms to see exactly how the land is intended for future use. That is, will it be used for Commercial or Residential properties ( this should be in the terms or convenants).

This is best advice my colleague and I can provide on these facts and circumstances.

Thank you.

Regards,
Glenn S Sackett