Expert Analysis of Proposed Trust Settlement Agreement
Expert Analysis of Proposed Trust Settlement Agreement
Situation
- BPA was engaged to provide Trustees with an expert analysis of certain mortgage loan servicing related terms of a proposed Settlement Agreement for over 275 securitization Trusts, including:
- Investigating potential claims that might be asserted for failure to adequately service loans held by the Trusts
- Investigating potential benefit which could reasonably be expected from implementation of subservicing and associated provisions of subservicing protocol
Our Role
- BPA compared the performance of loans in existing trusts to comparable trusts by vintage, loan type and grade & other factors
- Developed a methodology to estimate servicing loss differentials by severity and applied to all relevant Trusts
- Established a methodology to estimate dollar benefit of avoided losses using historical migration rates and historical loan severity percentages and applied to the trusts
- Performed benefit analysis of fees
- Performed a review of the subservicer handling the loans
- Performed document exception analysis
Outcome
- Through a series of complex analyses, BPA provided parties with a comparison of large bank servicing performance to other servicers and estimated losses associated with the large bank servicing
- BPA demonstrated the benefit of moving servicing to other servicers, especially at a certain point in time in delinquency
- BPA support enabled the Trustees to enter into a favorable RMBS Trust Settlement Agreement