Mortgage Lending Value

Mortgage Lending Value

Sustainable Value Concept

The Sustainable Value Concept (SVC) stems from mainland European countries, such as Germany. It addresses Euro Directive 98/32/EC concerning banking regulation and minimum solvency ratios. This directive is also used in the Basel Accords. For more references on SVC you can refer to the Journal of Property Investment and Finance, 18(1), 66-83. 2000; (25(6), 542-78, 2007; and 23(2), 141-47, 2005 and Journal of European Real Estate Research, Vol 4 (3) 225-42, 2011. You can also look into EU paper(s) on Treatment of Impaired Assets in Euro Community Banking Sector and NAMA Ireland, as well as, the IPF paper on Vision for real estate finance in the UK.

Mortgage Lending Value

The Mortgage Lending Value (MLV) means the value of the property making a prudent assessment of the future marketability of the property by taking into account long-term sustainable aspects of the property, the normal and local market conditions, the current use and alternative appropriate uses of the property. Speculative elements shall not be taken into account, but shall be documented in a transparent and clear manner.

IPF’s Vision For Real Estate Finance

Can MLV ever exceed Market Value (MV)? According to Ruchardt (2003), a manual on undertaking MLV valuations, the MLV cannot exceed MV.

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