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.” 

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.