Contract terms, drafting leverage, MLPA / MSR PSA / Acknowledgment Agreement / Seller Guide provisions. Repurchase and rep-and-warranty disputes also live here because they hinge on contract terms.
Both agencies will resolve a defect without making you buy the loan back, both decide which remedy to offer by assessing your financial capacity, and only one of them lets you say no. Fannie Mae’s Selling Guide provides that “[i]f Fannie Mae offers a repurchase alternative after a demand has been issued, the lender has…
Set off against your money. That is the short answer, and it is the one provision sellers most often discover after it has already happened. A correspondent purchase agreement in current use gives the purchaser discretion to recover losses “offset against Correspondent’s/Brokers funds on deposit at BancMac/UCB or any affiliate of BancMac/UCB and/or from and…
Which representations and warranties provisions determine the duration of a mortgage seller’s buyback exposure? A mortgage seller’s long-term buyback exposure is primarily determined by six critical contractual provisions: the compliance-with-law representation, the defined survival period, the sole-remedy clause, the materiality and adverse-effect qualifiers, knowledge constructs, and structural notice and cure timelines. Negotiating these interlocking levers…
How does an indemnification cap protect sellers in residential whole-loan and MSR transactions, and why should buyers negotiate it? An indemnification cap limits a seller’s aggregate financial liability for representation and warranty breaches to a fixed dollar amount or a set percentage of the total purchase price. While sellers rely on these structural ceilings to…
What specific steps should be included in a pre-bid diligence checklist to prevent post-close mortgage pool disputes? Conducting a rigorous pre-bid diligence review requires a multi-layered checklist that audits loan eligibility and ownership, regulatory compliance, loan file completeness, operational servicing tracks, and counterparty financial strength. By surfacing hidden title gaps, licensing defects, or incomplete note…
How can a properly drafted MLPA compliance representation reduce a mortgage seller’s buyback tail? A strategically structured Master Loan and Purchase Agreement (MLPA) compliance rep reduces long-term buyback exposure by establishing sharp legal boundaries around qualifiers, statutory definitions, and claim deadlines. By carefully anchoring compliance to specific origination dates, narrowing the scope of “applicable law,”…
