Last week the American Securitization Forum released the model contractual provisions for MBS issuers to use with their existing loan purchase and servicing agreements. The new provisions, known as "Model Provisions for Residential Mortgage Loan Purchase and Servicing Agreements," are aimed at facilitating compliance with Regulation AB, which becomes effective Jan. 1.
Tom Deutsch, associate director at the ASF, said that this would be of help specifically to smaller originators who do not have as many resources as the bigger players in the market. These provisions are written in model language that should be applicable to most transactions and that market participants could easily duplicate and include as their current terms and conditions. Deutsch adds that market acceptance has been widespread. "The provisions are being used right now by a significant number of buyers and sellers as their base document," Deutsch said. "Although there might be some modifications, market participants are using the model provisions as a base point to start negotiations on terms and conditions."