The Office of Thrift Supervision's warning last week that high-loan-to- value lending is a risky business has quashed one buyout deal, but leaders in the business say it should not affect them significantly.

On Aug. 27, the OTS issued a stern warning and strict guidelines to thrifts that make loans for 90% or more of a home's value. The next day Bay View Capital Corp., a San Mateo-based thrift holding company, said it had scrapped its $153 million deal to buy the high-LTV lender PSB Lending Corp., in part because of the OTS' new guidelines.

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