A "pooling and servicing agreement" PSA is the legal document that lays out the rights and obligations of specific parties over a pool group of securitized mortgage loans. To understand PSAs, you first need to understand basic mortgage transactions and the securitization process.
Most people who take out a home loan sign a promissory note and a mortgage or deed of trust. The PSA is the contract that governs the relationship between the various parties in the securitization process and controls what can and can't be done with the trust.
The PSA will say, among other things:. For instance, the PSA might describe the servicer's compensation. Often, a servicer is entitled to retain the late charges, nonsufficient funds NSF fees, reconveyance fees, assumption fees, and other fees that it collects.
The PSA will likely also carefully describe the loan servicer's responsibilities about collecting payments, handling loss mitigation including the authority to modify loans , and foreclosure. In many instances, a foreclosure will be filed in the name of the securitized trust. For example, say you're facing a judicial foreclosure , and the plaintiff in the lawsuit is "Ameriquest Mortgage Securities Inc.
Then, enter "Ameriquest" in the "Company Name" box and hit "Search. Look through the list to find the name of the trust that is listed in the foreclosure documents.
This brings up a list of the documents filed with the SEC that are associated with this trust. The PSA might be a stand-alone document, or it might be included as part of another document, like the "Prospectus. However, not all trusts are listed with the SEC, so you might not be able to find the PSA related to your loan using this method.
PSAs are very complicated and can be hundreds of pages long. If you're facing a foreclosure and your loan has been securitized, consider talking to an attorney to help you understand the intricacies and the issues surrounding securitization as it pertains to your individual situation. A foreclosure attorney can also explain different options that might be available to prevent a foreclosure and can tell you if you have any defenses to the foreclosure.
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Meet the Editors. A pooling and servicing agreement PSA lays out the rules governing a bundle of securitized mortgage loans. Please visit some of our family of sites at: Multifamily. Property Types. Loan Basics. Loan Terms. About Us. Contact Us. We're Hiring. Loan Docs. CMBS Alternatives. Get a Quote. Form is loading Get A Free Quote.
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