Residential real estate will be treated even more favorably in the final version of the loan-to-value regulations than they were in the proposed rules, according to a source on the staff at the Office of Thrift Supervision.

"We agree that residential real estate is less risky and should receive appropriate treatment," he said. The proposed regs gave the most favorable treatment to residential mortgage loans. The final version will extend that treatment to residential construction and development loans, the source added.

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