MBA releases model whole loan sale and servicing agreement
The Mortgage Bankers Association (MBA) has adopted a model sale and servicing agreement it anticipates will become the standard form for industry participants to use voluntarily for whole loan purchases and sales made with an eye toward potential securitization. The agreement was adopted by MBA's Residential Board of Governors (RESBOG) as an MBA supported best practice.
The model agreement is part of an MBA initiative to help increase liquidity and efficiency in the non-conforming residential mortgage market. The Agreement provides standard formatting and text for standard practices, reducing the time, effort and cost of legal and due diligence reviews. The agreement also includes standard formats for transaction-specific terms.
"At the current time, there is virtually no private label MBS market to speak of," said John A. Courson, MBA's president and CEO. "When the market begins to return, we expect it will start with whole loan transactions. This model agreement will provide consistency and transparency to help investors get a better understanding of the whole loans they are purchasing."
A working group of MBA's Secondary and Capital Markets Committee developed the model agreement by consolidating elements of existing whole loan servicing agreements. MBA released a draft in July for public comment in order to solicit feedback from all interested stakeholders. The current model agreement incorporates that input and is designed to increase transparency and efficiency in the private label mortgage backed security market. MBA anticipates further refinements to the agreement this year and a process of regular periodic review going forward.
"The model agreement was drafted by members, for members and with significant input from a wide variety of stakeholders," said Courson. "Plus, we've developed protocols so that the agreement reflects standard practices and legal requirements both now and in the future."
A copy of the model agreement can be found by clicking here.
For more information, visit MortgageBankers.org.
FMJ Job Listings
- Mortgage Loan Processor - First Commerce Credit Union - , GA
- Sales & Service Rep - Undisclosed - Prospect, KY
- Loan Processing Assistant - Guild Mortgage Company - Columbia,
- Loan Processing Supervisor - Guild Mortgage Company - Roseville,
- Analyst, Capital Markets - JLL - Phoenix, AZ
- Loan Processor III - Guild Mortgage Company - Hudson Oaks,