CUSTODIAN, ACCOUNTING, AUCTION MANAGEMENT
AND OTHER INFRASTRUCTURE SERVICES
FOR A PORTFOLIO OF
TROUBLED MORTGAGE-RELATED ASSETS
Proposed Services to Assist with Trouble Mortgage-Related Assets or Portions thereof:
Accounting and Reporting
• Provide accounting and footnote disclosure for the portfolio in accordance with GAAP and FAS 157.
• Produce management and operational reports on transactions, positions, valuations, cash flows, portfolio characteristics, and counterparties.
• Reconcile activities daily with the Treasury and with asset managers.
• Provide a SAS No. 70 Service Organization Type II report, on an annual basis, for the
services required in this notice.
Pricing, Valuation, and Market Information
• Provide asset pricing and valuation services for all types of mortgage-related securitized
assets, including all necessary analytics, models, and reports.
• Provide valuations of whole mortgage loans, and portfolios of whole mortgage loans,
according to different product and performance characteristics, including residential first
liens (non-agency Prime, Alt-A, Subprime), residential second liens, commercial mortgages, and other loans.
• Provide detailed information on the number, values, and characteristics of mortgage backed securities in the market, as necessary to develop auction and acquisition strategies.
Operations
• Maintain records of (i) trades executed, including all pertinent financial and settlement
information, (ii) principal and interest (P&I) payments, and (iii) cash flow projections of new trades and principal and interest payments.
• Enforce internal controls
• Permit the Treasury’s internal and external auditors, or other governmental oversight entities to audit books and records related to the services in this notice.
Whole Mortgage Loan Custodian and Trustee
• Warehouse title and legal documents and provide other similar central administrative custody services.
• Monitor third party servicer compliance with the Treasury’s servicing and loss mitigation Guidelines
WHOLE LOAN ASSET MANAGEMENT SERVICES
FOR A PORTFOLIO OF
TROUBLED MORTGAGE-RELATED ASSETS
Pre- and Post-Transactional Diligence
• Conduct preliminary pre-transaction diligence on loans and portfolios of loans, and report on actual and represented loan characteristics and exceptions to transaction guidelines.
• Conduct deeper post-transaction reviews of purchased loans and portfolios of loans.
Whole Loan Transactional Infrastructure
• Receive and process data files with descriptions of loans and portfolios of loans from
potentially hundreds or thousands of Financial Institutions offering loans.
• Analyze, standardize, and convey the data into systems and reports as necessary.
Whole Loan Valuation
• Value loans and portfolios of loans offered for sale according to product and performance characteristics.
Whole Loan Asset Management
• Provide integrated asset management services for loans and portfolios of loans including acquisition, management, reporting, risk management, and asset disposition capabilities.
Cooperation with Whole Loan Trustee and Custodian
• Work in good faith with the Treasury’s central loan custodian and trustee for loan and
portfolio cash management, reporting, warehousing of title and legal documents, and other central administrative services.
• Work in good faith to help the central monitoring of servicer compliance with the Treasury’s servicing and loss mitigation guidelines across the entire portfolio.
Whole Loan Servicing and Loss Mitigation
• Service loans and portfolios of loans in accordance with the Treasury’s servicing and loss mitigation guidelines.
Surveillance
• Monitor the ongoing performance of purchased loans and portfolios of loans, and provide detailed reporting to Treasury
Physical Asset Management
• Manage liquidation of physical assets and underlying property, as necessary.
Cross-Cutting Operations and Reporting
• Interface with the custodian’s and the Treasury’s management and accounting systems and provide data feeds as necessary.
• Reconcile books and records with the custodian and the Treasury.
• Maintain records of all loans acquired and cash flow projections of principal and interest.
• Identify, document, and enforce internal controls on an on-going basis.
• Permit the Treasury’s internal and external auditors, or other governmental oversight entities, to audit books and records related to the services in this notice.
• Report on loan and portfolio holdings, valuations, and characteristics
• Report on loan and portfolio performance against the Treasury’s benchmarks or success
metrics.
End