Loan to Value Calculation for Collective Land Charge 

Data constellation comprising the collective land charge scenario

                             

 

Normally, the absolute loan-to-value ratio with respect to collateral right is the sum of assessment value and prior charges. In the scenario for collective land charges, the calculations component excludes the prior collateral right if the prior charges have already been assigned to a collateral agreement in the constellation.

 

Loan to value calculation:

Assignment of collateral agreement – real estate	Loan-to-value ratio
Collateral agreement 582 – real estate 624	200 + 500 = 700
Collateral agreement 604 – real estate 624	350 + 200 + 500 = 1050

 

Collateral agreement 582

500 + 0 (no prior charges) = 500

 

Collateral agreement 604

200 + 500 (assignment of collateral agreement 582 – real estate 624) = 700

 

Collateral agreement 605

350 (collateral agreement 605) + 200 (assignment of collateral agreement 604 – real estate 624) + 500 (assignment of collateral agreement 582 – real estate 624) = 1050

In this case, the collateral agreement 582 – real estate 626 is not considered as the prior charges are already considered in the assignment of collateral agreement 582 – real estate 624.

 

Collateral agreement 705

      750 (Cag 701) + 500 (Cag 582 – RE 624 assignment) + 200 (Cag 604 – RE 624 assignment) + 350 (Cag 605 – RE 624 assignment) = 1800

In this case, the prior charges from the following assignments are not considered:

§         500 (Cag 582 – RE 626) – prior collateral right is already considered with Cag 582 – RE 624 assignment

§         350 (CAG 605 – RE 626) – prior collateral right is already considered with Cag 605 – RE 624 assignment

§         350 (Cag 605 – RE 643) – prior collateral right is already considered with Cag 605 – RE 624 assignment.