1) Are loan commitments that constitute (accepted or unaccepted) loan offers to clients to be considered off balance sheet items, which fall under the definition of 'undrawn credit facilities' of Annex 1?
2) The 'original maturity' that is used for the allocation of 'undrawn credit facilities' to either medium risk, or medium/low risk is determined on the basis of the maturity of the commitment or on the basis of the underlying loan of the offer?
A credit institution has loan commitments for the provision of mortgage loans. The loan commitments relate to mortgage loan offers granted by the institution to clients, and can be either already accepted by the client, or pending acceptance (or refusal) by the client.
The loan offer not yet accepted by the client has a contractual expiry date (typically 45 days) in which the client must either accept or refuse the loan offer, after which the loan offer is cancelled. The by the client accepted loan offer has a contractual expiry date (typically 4 months) in which the client must take the necessary steps to pass the mortgage act with the notary, after which the accepted loan offer is suspended or terminated (unless an extension is granted by the institution to the client). The mortgage loan that is the subject of the loan offer has a maturity of (typically) > 20 years.
The maturity of the commitment in the example is 45 days for unaccepted loan offers and 4 months for accepted loan offers, while the underlying loan of the offer in the example is >20 years).