On January 31, four federal financial regulatory agencies, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency, issued supervisory guidance on allowance for loan and lease losses estimation practices associated with loans and lines of credit secured by junior liens on one- to four-family residential properties, including second mortgages and home equity lines of credit taken out by mortgage borrowers.

The guidance, which includes instructions to examiners on how to examine for the risks imposed by second liens, may be found here.