Pooling and Servicing Agr. btwn Credit Suisse First Boston Mortgage Securities Corp., Wash. Mutual Bank F.A. and Bank One - National Association dated Nov. 1, 1999. 213 pages A Pooling and Servicing Agreement (PSA) is a legal contract that governs the creation, operation, and termination of a mortgage-backed securities (MBS) pool. The PSA serves as a comprehensive document outlining the rights, obligations, and responsibilities of various parties involved in the securitization process. It plays a crucial role in facilitating the issuance and trading of MBS in the secondary market. Keywords: Pooling and servicing agreement, mortgage-backed securities, securitization, MBS pool, rights, obligations, responsibilities, secondary market, issuance, trading. The primary purpose of a PSA is to establish the terms and conditions under which a pool of mortgage loans will be assembled, managed, and serviced by a trustee on behalf of the investors. The agreement outlines the specific criteria for including loans in the pool, including loan types, credit quality, geographic location, and other relevant factors. It sets forth the rules for servicing the loans, collecting payments, and distributing the cash flows generated from the underlying mortgage pool to the MBS investors. The PSA encompasses key provisions related to the creation and operation of the MBS pool, such as the composition of the pool, the process for loan transfer and substitution, allocation of cash flows, and the order of distribution for principal and interest payments. It also includes guidelines for the allocation of losses, the management of delinquent loans, default procedures, and foreclosure processes. Different types of Pooling and Servicing Agreements can vary based on the specific characteristics of the mortgage loans being securitized. Some common types include: 1. Residential Mortgage PSA: This type of PSA pertains to mortgage-backed securities backed by residential mortgage loans, typically including single-family homes, condos, or townhouses. 2. Commercial Mortgage PSA: Commercial mortgage-backed securities (CMOS) involve commercial properties, such as office buildings, retail spaces, or industrial properties. The corresponding PSA may contain provisions tailored to the unique characteristics and risks associated with commercial real estate. 3. Prime or Subprime Mortgage PSA: The prime/subprime classification refers to the credit quality of the underlying loans. Prime mortgage loans typically consist of borrowers with excellent credit profiles, while subprime loans are extended to borrowers with lower creditworthiness. SAS for each category may have different risk management measures and provisions. 4. Government-Sponsored Enterprise (GSE) PSA: In cases where the mortgage loans are originated or guaranteed by government-sponsored enterprises like Fannie Mae or Freddie Mac, specific PSA frameworks are established to align with the requirements and guidelines set by these agencies. In conclusion, a Pooling and Servicing Agreement is a legally binding document that governs the creation, management, and servicing of mortgage-backed securities. It establishes the rules and responsibilities of various parties involved and plays a critical role in facilitating the securitization process. Various types of PSA sexist to accommodate different types of mortgage loans and associated risks.
A Pooling and Servicing Agreement (PSA) is a legal contract that governs the creation, operation, and termination of a mortgage-backed securities (MBS) pool. The PSA serves as a comprehensive document outlining the rights, obligations, and responsibilities of various parties involved in the securitization process. It plays a crucial role in facilitating the issuance and trading of MBS in the secondary market. Keywords: Pooling and servicing agreement, mortgage-backed securities, securitization, MBS pool, rights, obligations, responsibilities, secondary market, issuance, trading. The primary purpose of a PSA is to establish the terms and conditions under which a pool of mortgage loans will be assembled, managed, and serviced by a trustee on behalf of the investors. The agreement outlines the specific criteria for including loans in the pool, including loan types, credit quality, geographic location, and other relevant factors. It sets forth the rules for servicing the loans, collecting payments, and distributing the cash flows generated from the underlying mortgage pool to the MBS investors. The PSA encompasses key provisions related to the creation and operation of the MBS pool, such as the composition of the pool, the process for loan transfer and substitution, allocation of cash flows, and the order of distribution for principal and interest payments. It also includes guidelines for the allocation of losses, the management of delinquent loans, default procedures, and foreclosure processes. Different types of Pooling and Servicing Agreements can vary based on the specific characteristics of the mortgage loans being securitized. Some common types include: 1. Residential Mortgage PSA: This type of PSA pertains to mortgage-backed securities backed by residential mortgage loans, typically including single-family homes, condos, or townhouses. 2. Commercial Mortgage PSA: Commercial mortgage-backed securities (CMOS) involve commercial properties, such as office buildings, retail spaces, or industrial properties. The corresponding PSA may contain provisions tailored to the unique characteristics and risks associated with commercial real estate. 3. Prime or Subprime Mortgage PSA: The prime/subprime classification refers to the credit quality of the underlying loans. Prime mortgage loans typically consist of borrowers with excellent credit profiles, while subprime loans are extended to borrowers with lower creditworthiness. SAS for each category may have different risk management measures and provisions. 4. Government-Sponsored Enterprise (GSE) PSA: In cases where the mortgage loans are originated or guaranteed by government-sponsored enterprises like Fannie Mae or Freddie Mac, specific PSA frameworks are established to align with the requirements and guidelines set by these agencies. In conclusion, a Pooling and Servicing Agreement is a legally binding document that governs the creation, management, and servicing of mortgage-backed securities. It establishes the rules and responsibilities of various parties involved and plays a critical role in facilitating the securitization process. Various types of PSA sexist to accommodate different types of mortgage loans and associated risks.
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