Sec. 204. Servicing rights; representations and warranties
278 words·~1 min read·
/bill/114/hr/1491/ih/section-204·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The servicing rights for mortgage-backed securities issued by the Issuing Platform shall be controlled by— the reinsurance company reinsuring the first 5 percent loss position on such securities; or in the case of securities that do not have a reinsurance company reinsuring the first 5 percent loss position or with respect to which the such reinsurance company is insolvent, Ginnie Mae. The party controlling the servicing rights described under subsection
(a)shall also control the advancing of payments. With respect to each pool securitized by the Issuing Platform, there shall be a collateral manager who shall— oversee representations and warranties; act for the benefit of investors; and in the case of a mortgage loan that is in breach of the representations and warranties, facilitate the repurchase or replacement of such mortgage loan with a mortgage loan that is in compliance with representations and warranties. Ginnie Mae and the Secretary of the Treasury shall, jointly, conduct a study to determine— the proper roles and responsibilities with respect to fiduciary duty for each participant in a private label security; the appropriate compensation for such a fiduciary duty; and the proper placement for such a fiduciary duty role. In carrying out the study required under subparagraph (A), Ginnie Mae and the Secretary shall take into account stakeholder efforts to conclude which party (if any) should have a fiduciary duty attached to it. Upon completion of the study required under subparagraph (A), Ginnie Mae and the Secretary shall issue a report to the Congress containing all findings and determinations made in carrying out such study. Disputes between parties to a security issued by the Issuing Platform shall be subject to mandatory arbitration.