Federal regulators said Thursday that thrifts engaging in high-loan-to-value lending should implement risk management programs.

Institutions that fail to control risks could be forced to reduce their high-LTV portfolios or even be cited for unsafe banking practices, according to the Office of Thrift Supervision.

"These loans entail risks that are different from more traditional home mortgage and consumer loans," said Richard Riccobono, OTS deputy director.

The OTS defines high-LTV credits as mortgages in excess of 90% of equity that are not covered by mortgage insurance or government guarantees. Mr. Riccobono noted that real estate lending guidelines limit high-LTV credits to 100% of capital and require that they be reported to a thrift's board of directors.

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