View
230
Download
0
Embed Size (px)
Citation preview
8/14/2019 White Paper from the American Securitization Forum
1/31
I[N ]FAXL ZIZL_ [L_AL[
Xriesnlr ieh Issameblet
dn _lsahletaic Bdrtmiml
Cdies ae tfl [lkdehiry
Bdrtmiml Birglt
ED^LBOL_ 9>, ?:9:
8/14/2019 White Paper from the American Securitization Forum
2/31
I[N Flihquirtlrs ADel ]drch Naeiekaic Kletlr, ;:tf Ncddr AElw Qdrg, EQ 9:?69 A?9?.89?.=9::
www.iblrakieslkuratazitade.kdb
XFA[ ]FAXL ZIZL_ IEH AX[ LVLK\XA^L [\BBI_Q I_L AEXLEHLH ND_
AEND_BIXADEIC Z\_ZD[L[ DECQ IEH HD EDX KDEXIAE D_ KDE^LQ CLMIC
IH^AKL, I CLMIC DZAEADE D_ I _LZ_L[LEXIXADE I[ XD XFL NIKX[ DN IEQ
ZI_XAK\CI_ X_IE[IKXADE Z_D^AHLH OQ XFL IBL_AKIE [LK\_AXAPIXADE
ND_\B D_ OQ IEQ DN XFL CI] NA_B[ _LNL_LEKLH OLCD]. XFL AEND_BIXADE
AE XFL LVLK\XA^L [\BBI_Q IEH ]FAXL ZIZL_ [FD\CH EDX OL \[LH D_
_LCALH \ZDE AE _LMI_H XD IEQ ZI_XAK\CI_ NIKX[ D_ KA_K\B[XIEKL[.
XFL CI] NA_B G&C MIXL[ CCZ [L_^LH I[ D\X[AHL KD\E[LC XD XFL IBL_AKIE
[LK\_AXAPIXADE ND_\B AE KDEELKXADE ]AXF XFL Z_LZI_IXADE DN
XFL ]FAXL ZIZL_ IEH LVLK\XA^L [\BBI_Q. XFL DXFL_ CI] NA_B[
CA[XLH DE LVFAOAX I FI^L _L^AL]LH XFL ]FAXL ZIZL_ IEH OLCAL^L XFIX
XFL LVLK\XA^L [\BBI_Q _LZ_L[LEX[ I NIA_ [\BBI_Q DN XFL CLMIC
Z_AEKAZCL[ Z_L[LEXLH.
Iblrakie [lkuratazitade Ndrub, Aek. Edvlbolr ?:9:. Icc ramfts rlslrvlh.
8/14/2019 White Paper from the American Securitization Forum
3/31
Aetrdhuktade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Lxlkutavl [ubbiry. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
9. Oisak Zraekapcls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
?. Xriesnlr dn Zrdbassdry Edtls [lkurlh oy Bdrtmimls . . . . . . . . . . . . . . . . . . . ;
;. Issameblet ieh Xriesnlr dn Dwelrsfap dn Bdrtmimls. . . . . . . . . . . . . . . . . . . ;
8. Kdekcusade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Xriesnlr ieh Issameblet dn _lsahletaic Bdrtmiml Cdies
ae tfl [lkdehiry Bdrtmiml Birglt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . =
9. Oisak Zraekapcls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . =
?. Xriesnlr dn Zrdbassdry Edtls [lkurlh oy Bdrtmimls . . . . . . . . . . . . . . . . . . . 1
]fit Kdestatutls i Elmdtaiocl Aestrublet4 . . . . . . . . . . . . . . . . . . . . . . .9:
Fdw as i Elmdtaiocl Bdrtmiml Edtl Xriesnlrrlh4 . . . . . . . . . . . . . . . . . . . . .99
]fd Biy Lendrkl I Elmdtaiocl Bdrtmiml Edtl4 . . . . . . . . . . . . . . . . . . . . .9?
]fit _amfts Imiaest Odrrdwlr Hlnlesls irl Iviaciocl td tfl Fdchlr
dn i Elmdtaiocl Bdrtmiml Edtl4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9;
Fdw As i Bdrtmiml Edtl Xriesnlrrlh \ehlr Irtakcl 1 dn tfl \KK4 . . . . . . . . . .98
Xriesnlr dn Bdrtmiml Edtls0 Kdekcusade . . . . . . . . . . . . . . . . . . . . . . . . . . 9
]fit as tfl _lcitadesfap Oltwlle tfl Xriesnlr dn i Bdrtmiml Edtlieh tfl Xriesnlr dn Dwelrsfap dn tfl Bdrtmiml4 . . . . . . . . . . . . . . . . . . . . .9>
]fit as tfl _lcitadesfap Oltwlle tfl \KK ieh [titl _lic Zrdplrty Ciws4 . . . . . .?;
Fdw Hdls tfl \sl dn BL_[ Ilkt lsl Assuls4 . . . . . . . . . . . . . . . . . . . . .?8
8. Kdekcusade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .?=
Xiocl dn Kdetlets
8/14/2019 White Paper from the American Securitization Forum
4/31
9
Aetrdhuktade
_lkletcy, i nlw kdbbletitdrs fivl riaslh i eubolr dn clmic tfldrals qulstadeaem wfltflr slkuratazitade
trusts, latflr tfdsl krlitlh oy pravitl eiekaic aestatutades dr tfdsl krlitlh oy mdvlreblet spdesdrlh
letlrprasls, sukf is Maeeal Bil, Nieeal Bil dr Nrlhhal Bik, fivl vicah clmic tatcl td tfl slvle traccade hdccirsdn bdrtmiml edtls ae tfdsl trusts. Ae ie ldrt td kdetraoutl tfdrdumf ieh wlcc-rlslirkflh clmic ieicysas td
tfl haskussade dn tflsl tfldrals, tfl Iblrakie [lkuratazitade Ndrub (I[N) assuls tfl lekcdslh wfatl piplr
letatclh Xriesnlr ieh Issameblet dn _lsahletaic Bdrtmiml Cdies ae tfl [lkdehiry Bdrtmiml Birglt (tfl
]fatl Ziplr). l ]fatl Ziplr prdvahls i hltiaclh dvlrvalw dn tfl clmic praekapcls ieh prdklssls oy wfakf
bdrtmiml cdies irl typakiccy flch, issamelh, triesnlrrlh ieh lendrklh ae tfl slkdehiry bdrtmiml birglt ieh ae
tfl krlitade dn bdrtmiml-oikglh slkuratals (BO[). lsl praekapcls ieh prdklssls fivl kleturals-dch dramaes,
ieh tfly fivl kdetaeulh td ol sdueh ieh vicahitlh saekl tfl ihvlet dn BO[ dvlr ndrty ylirs imd.
]facl tfl rlic prdplrty ciws dn likf dn tfl
8/14/2019 White Paper from the American Securitization Forum
5/31
?
Lxlkutavl [ubbiry
9. Oisak Zraekapcls
l twd kdrl clmic hdkublets ae bdst rlsahletaic bdrtmiml cdie triesiktades irl tfl prdbassdry edtl
ieh tfl bdrtmiml dr hllh dn trust tfit slkurls tfl odrrdwlrs piyblet dn tfl prdbassdry edtl. Ae i typakic
pravitl-ciolc bdrtmiml cdie slkuratazitade, likf bdrtmiml cdie as sdch td i trust tfrdumf i slrals dn stlps.
I bdrtmiml edtl ieh i bdrtmiml biy ol sdch, issamelh ieh triesnlrrlh slvlric tabls oltwlle tfl tabl tfl
bdrtmiml cdie as dramaeitlh ieh tfl tabl tfl bdrtmiml cdie lehs up watf tfl trust. l clmic praekapcls tfit
mdvlre tfl issameblet ieh triesnlr dn bdrtmiml edtls ieh rlcitlh bdrtmimls irl hltlrbaelh, ae sameakiet
pirt, oy tfl \eandrb Kdbblrkaic Kdhl (\KK), wfakf fis olle ihdptlh oy icc
8/14/2019 White Paper from the American Securitization Forum
6/31
;
?. Xriesnlr dn Zrdbassdry Edtls [lkurlh oy Bdrtmimls
l ciw dn elmdtaiocl aestrublets hlvlcdplh dvlr tfl kleturals is i wiy td lekduriml kdbblrkl
ieh clehaem oy bigaem sukf aestrublets, aekcuhaem elmdtaiocl bdrtmiml edtls, is caquah ieh triesnlriocl is
pdssaocl. l \KK, watf stitl-splkak viraitades, ae sameakiet pirt mdvlres tfl issameblet ieh triesnlr dn
bdrtmiml edtls. Irtakcl ; dn tfl \KK ippcals td tfl elmdtaitade ieh triesnlr dn i bdrtmiml edtl tfit as ielmdtaiocl aestrublet, is tfit tlrb as hlelh ae Irtakcl ;. Ae ihhatade, Irtakcl 1 dn tfl \KK ippcals td tfl sicl
dn prdbassdry edtls, i tlrb tfit mlelriccy aekcuhls bdrtmiml edtls.
Ae ihhatade, is i mlelric bittlr, tfl slkuratazitade dn i cdie uehlr i typakic pddcaem ieh slrvakaem
imrllblet prdvahls odtf ndr tfl elmdtaitade dn elmdtaiocl bdrtmiml edtls (oy aehdrslblet ieh triesnlr dn
pdsslssade td tfl slkuratazitade trustll dr tfl kustdhaie ndr tfl trustll) ieh ndr ie dutramft sicl ieh issameblet
dn icc dn tfl bdrtmiml edtls ieh bdrtmimls. us, wfltflr tfl bdrtmiml edtls ae i mavle slkuratazitade pddc
irl hllblh elmdtaiocl (is wl olcalvl bdst typakiccy irl) dr ede-elmdtaiocl wacc fivl cattcl dr ed suostietavl
llkt uehlr tfl \KK de tfl vicahaty dn tfl triesnlr dn tfl edtls. l typakic slkuratazitade prdklss llkts vicah
triesnlrs dn tfl bdrtmiml edtls ieh rlcitlh bdrtmimls ae ikkdrhiekl watf tfl prdvasades dn Irtakcls ; ieh 1 dntfl \KK.
\ehlr tfl \KK, tfl triesnlr dn i bdrtmiml edtl tfit as i elmdtaiocl aestrublet as bdst kdbbdecy
llktlh oy (i) aehdrsaem tfl edtl, wfakf biy ol i ocieg aehdrslblet tfit hdls edt ahletany i plrsde td wfdb
tfl bdrtmiml edtl as piyiocl dr i splkaic aehdrslblet tfit splkakiccy ahletals i plrsde td wfdb tfl bdrtmiml
edtl as piyiocl, ieh (o) hlcavlraem tfl edtl td tfl triesnlrll (dr ie imlet iktaem de olficn dn tfl triesnlrll). Is
rlsahletaic bdrtmiml edtls ae kdbbde usiml typakiccy irl elmdtaiocl aestrublets, tfas as tfl bdst kdbbde
bltfdh td triesnlr tfl bdrtmiml edtl. Ae ihhatade, lvle watfdut aehdrslblet, tfl triesnlr kie ol llktlh
oy triesnlrraem pdsslssade uehlr tfl \KK. Bdrldvlr, tfl sicl dn iey bdrtmiml edtl icsd llkts tfl triesnlr
dn tfl bdrtmiml uehlr Irtakcl 1. [lkuratazitade imrllblets dle prdvahl odtf ndr (i) tfl aehdrslblet iehtriesnlr dn pdsslssade td tfl trustll dr tfl kustdhaie ndr tfl trustll, wfakf wduch kdestatutl i elmdtaitade dn tfl
bdrtmiml edtl uehlr Irtakcl ; dn tfl \KK ieh (o) ie dutramft sicl ieh issameblet dn tfl bdrtmiml edtl. us,
rlmirhclss dn wfltflr tfl bdrtmiml edtls ae i slkuratazitade trust irl hllblh elmdtaiocl dr ede-elmdtaiocl,
tfl slkuratazitade prdklss mlelriccy aekcuhls i vicah triesnlr dn tfl bdrtmiml edtls td tfl trustll ae ikkdrhiekl
watf tfl lxpcakat rlquarlblets dn tfl \KK.
Ae ihhatade, Irtakcl ; dn tfl \KK plrbats i plrsde watfdut pdsslssade td lendrkl i elmdtaiocl bdrtmiml
edtl wflrl tfl edtl fis olle cdst, stdcle, dr hlstrdylh. Kdurts fivl kdesastletcy irblh tfl usl dn tfl sicalet
prdvasades dn tfl \KK td lendrkl cdst, stdcle dr hlstrdylh elmdtaiocl bdrtmiml edtls tfit irl dwelh oy i
slkuratazitade trust wfle tfl trust dr ats imlet fis prdvlh tfl tlrbs dn tfl bdrtmiml edtls ieh tflar ramft tdlendrkl tfl bdrtmiml edtls.
;. Issameblet ieh Xriesnlr dn Dwelrsfap dn Bdrtmimls
Is stitlh iodvl, wfle i bdrtmiml cdie as issamelh ieh triesnlrrlh is pirt dn tfl slkuratazitade dn tfl
bdrtmiml cdie ae tfl slkdehiry birglt, odtf tfl bdrtmiml edtl ieh tfl bdrtmiml atslcn irl typakiccy sdch,
issamelh, ieh pfysakiccy triesnlrrlh td tfl trustll tfit as iktaem de olficn dn tfl BO[ aevlstdrs dr i trustll-
8/14/2019 White Paper from the American Securitization Forum
7/31
8
hlsameitlh hdkublet kustdhaie pursuiet td i kustdhy imrllblet. l issameblet ieh triesnlr irl usuiccy
hdkubletlh ae ikkdrhiekl watf i pddcaem ieh slrvakaem imrllblet.
]fle i bdrtmiml edtl as triesnlrrlh ae ikkdrhiekl watf kdbbde bdrtmiml cdie slkuratazitade
prdklssls, tfl bdrtmiml as icsd iutdbitakiccy triesnlrrlh td tfl bdrtmiml edtl triesnlrll pursuiet td tfl
mlelric kdbbde ciw rucl tfit tfl bdrtmiml ndccdws tfl edtl. l rucl tfit tfl bdrtmiml ndccdws tfl edtl
fis olle kdhalh ae tfl \KK, out tfl rucls kdbbde ciw dramaes hitl oikg fuehrlhs dn ylirs, cdem olndrl tfl
krlitade dn tfl \KK. Is stitlh ae tfl dkaic kdbblets td \KK 1-?:;(m), tfl slktade kdhals tfl kdbbde-
ciw rucl tfit i triesnlr dn ie docamitade slkurlh oy i slkuraty aetlrlst dr dtflr cale de plrsdeic dr rlic prdplrty
icsd triesnlrs tfl slkuraty aetlrlst dr cale. \KK 1-?:; kbt. 1. Icc stitls ndccdw tfas rucl.;
Ae ihhatade td tfl kdhakitade uehlr \KK 1-?:;(m), rlpdrtlh kdurt kisls ae elircy lvlry stitl ieh
ede-\KK stitutdry prdvasades ae sdbl stitls bigl kclir tfit tfl bdrtmiml ndccdws tfl edtl. _lmirhaem tfl
abpikt dn tflsl \KK prdvasades, del trlitasl stitls0 Irtakcl 1 bigls at is pciae is pdssaocl tfit tfl slkurlh pirty
ellh edt rlkdrh ie issameblet dn bdrtmiml, dr ieytfaem lcsl, ae tfl rlic prdplrty rlkdrhs ae drhlr td plrnlkt
ats ramfts ae tfl bdrtmiml. @. BkHdeelcc ieh @. [batf, [lkurlh Xriesiktades \ehlr tfl \eandrb Kdbblrkaic
Kdhl, 9>.:1W;RWoR. Aehllh, kdurts ae slvlric stitls fivl irblh ieh ippcalh tfl bdrtmiml ndccdws tfl edtl
rucl ae kisls wflrl tfl bdrtmiml issameblet wis edt rlkdrhlh oy tfl triesnlrll ieh lvle wfle tflrl wis ed
iktuic slpiritl wrattle issameblet dn tfl bdrtmiml.8
Kdbbde slkuratazitade priktakls irl kdesastlet watf tfl mlelric rucl tfit tfl bdrtmiml ndccdws tfl
edtl0 pursuiet td tfl pddcaem ieh slrvakaem imrllblet tfit mdvlres ie BO[, ieh tfl ciemuiml dn issameblet
typakiccy kdetiaelh ae sukf ie imrllblet, tfl bdrtmiml edtl ieh tfl bdrtmiml atslcn irl sdch, issamelh,
triesnlrrlh ieh hlcavlrlh td tfl trustll, ieh tfl triesnlrdr icsd typakiccy hlcavlrs i wrattle issameblet dn
tfl bdrtmiml tfit as ae ocieg ae rlkdrhiocl ndrb. Kdurts fivl flch tfit tfl ciemuiml dn sicl ieh issameblet
kdetiaelh ae i pddcaem ieh slrvakaem imrllblet, icdem watf tfl kdrrlspdehaem triesnlr, sicl, ieh hlcavlry dn tfl
bdrtmiml edtl ieh bdrtmiml, irl sukalet td triesnlr tfl bdrtmiml td tfl triesnlrll/trustll dr ats hlsamell dr
edbaell.
l krlitade dn ie aetlrlst ae dr cale de rlic prdplrty, aekcuhaem i bdrtmiml, as mdvlrelh oy tfl ede-
\KK ciw dn tfl stitl ae wfakf tfl prdplrty as cdkitlh. Caglwasl, tfl lendrklioacaty dn bdrtmimls (aekcuhaem
tfl ramft ieh bltfdh td ndrlkcdsl) as suo`lkt td icc dn tfl kdehatades prlklhlet ieh rlquarlblets tfit irl slt
ndrtf ae tfl pirtakucir bdrtmiml atslcn ieh ae icc ippcakiocl stitl ieh cdkic ciws. dsl kdehatades prlklhlet
; Fdwlvlr, ae sdbl stitls, sukf is Bissikfusltts ieh Baeelsdti, kdurts fivl flch tfit tfl triesnlr dn i bdrtmiml edtl watfdut ielxprlss triesnlr dn tfl bdrtmiml vlsts ae tfl edtl fdchlr decy ie lquatiocl aetlrlst ae tfl bdrtmiml. as irriemlblet fis ollehlskraolh is ndccdws0 tfl fdchlr dn tfl bdrtmiml fdchs tfl clmic tatcl td tfl bdrtmiml ae kdestruktavl trust ndr tfl olelt dn tflbdrtmiml edtl fdchlr. Ae odtf stitls, fdwlvlr, kisl ciw summlsts tfit ndrlkcdsurl prdkllhaems bust ol aeataitlh oy, dr it clist ae tfleibl dn, tfl fdchlr dn tfl clmic tatcl ae tfl bdrtmiml.
8 Ae bdst stitls, rlkdrhaem dn ie issameblet dn bdrtmiml as mlelriccy edt rlquarlh td lesurl tfl lendrklioacaty dn tfl issamebletdn bdrtmiml is oltwlle tfl issamedr ieh issamell, ieh ieydel watf gedwclhml tflrldn. At as olydeh tfl skdpl dn tfas Lxlkutavl[ubbiry ieh tfl ]fatl Ziplr td haskuss ae hltiac tfl pdtletaic rasgs td tfl bdrtmiml triesnlrll dn edt rlkdrhaem i bdrtmiml is-sameblet. dsl rasgs bamft aekcuhl, ibdem dtflrs, hlciyaem tfl triesnlrlls ioacaty td ndrlkcdsl de tfl bdrtmiml, niacaem td rlklavledtakls tfit biy md td tfl bdrtmimll dn rlkdrh, ieh dtflrwasl clivaem tfl issamell dple td elmcamlet dr nriuhuclet iktades draeiktades oy tfl bdrtmimll dn rlkdrh tfit kduch oaeh tfl bdrtmiml triesnlrll ieh abpiar tfl vicul dr lendrklioacaty dn tfl bdrt-miml. [abacircy, wfle ie issameblet dn bdrtmiml as edt rlkdrhlh, tfl issamedr biy ol caiocl ndr klrtiae docamitades abpdslh upde ibdrtmimll dn rlkdrh, sukf is tfl docamitade td prdvahl i piy-d stitlblet dr bdrtmiml rlclisl watfae i hlsameitlh tabl plradh.
8/14/2019 White Paper from the American Securitization Forum
8/31
Lxfaoat I
Icstde & Oarh CCZ
Oaemfib BkKutkfle CCZ
Kihwicihlr, ]akglrsfib & Xi CCZ
Hlkflrt CCZ
Fuetde & ]accaibs CCZ
Gittle Bukfae _dslebie CCZ
G&C Mitls CCZ
Cdwlestlae [iehclr ZK
Biylr Ordwe CCZ
DBlcvley & Bylrs CCZ
Drrakg, Flrraemtde & [utkcal CCZ
[ahcly Iustae CCZ
[E_ Hletde \[ CCZ
8/14/2019 White Paper from the American Securitization Forum
10/31
=
Xriesnlr ieh Issameblet dn _lsahletaic Bdrtmiml
Cdies ae tfl [lkdehiry Bdrtmiml Birglt
l olmaeeaems dn tfl edw bucta-traccade hdccir slkdehiry birglt ndr rlsahletaic bdrtmiml cdies hitl
oikg td tfl nlhlric mdvlreblets krlitade dn Nieeal Bil ae 91;6. [aekl tfle, tfl kdbpclxaty dn tfl slkdehiry
bdrtmiml birglt fis aekrlislh, lsplkaiccy is i rlsuct dn tfl ripah mrdwtf ieh birglt ikklptiekl dn bdrtmiml-
oikglh slkuratals (BO[) tfit olmie ae tfl 916:s. Ae kdetrist, tfl clmic praekapcls ieh prdklssls oy wfakf
bdrtmiml-rlcitlh prdbassdry edtls ieh slkuraty aestrublets (bdrtmimls ieh hllhs dn trust) irl issamelh ieh
triesnlrrlh fivl kleturals-dch dramaes. Edw, ae tfl bahst dn tfl wdrst lkdedbak ieh fdusaem krasas saekl tfl
91;:s, sdbl irl qulstadeaem wfltflr tfl trihatadeic stitl ciw praekapcls ieh prdklssls dn issameblet ieh
triesnlr kie ol nuccy rlkdekaclh watf tdhiys kdbpclx fdchaem, issameblet ieh triesnlr systlbs ndr bdrtmiml-
rlcitlh prdbassdry edtls ieh slkuraty aestrublets, ieh wfit bltfdhs irl clmiccy llktavl ndr pirtakapiets ae
tfl slkdehiry bdrtmiml birglt td lstiocasf, biaetiae ieh triesnlr bdrtmiml edtls ieh slkuraty aestrublets.
as piplr prdvahls ie dvlrvalw dn tfl clmic praekapcls ieh prdklssls oy wfakf prdbassdry edtls ieh
rlcitlh bdrtmiml slkuraty aestrublets irl typakiccy flch, issamelh, triesnlrrlh ieh lendrklh ae tfl slkdehiry
bdrtmiml birglt ae kdeelktade watf cdie slkuratazitades ieh tfl krlitade dn BO[.9
9. Oisak Zraekapcls
l twd kdrl clmic hdkublets ae bdst rlsahletaic bdrtmiml cdie triesiktades irl tfl prdbassdry edtl
ieh tfl bdrtmiml dr hllh dn trust tfit slkurls tfl odrrdwlrs piyblet dn tfl prdbassdry edtl. l prdbassdry
edtl kdetiaes i prdbasl oy tfl odrrdwlr td piy tfl clehlr i stitlh ibduet dn bdely it i splkalh aetlrlst ritl
(wfakf kie ol xlh dr viraiocl) oy i klrtiae hitl. l typakic bdrtmiml dr hllh dn trust kdetiaes i mriet dn i
bdrtmiml cale dr dtflr slkuraty aetlrlst ae tfl odrrdwlrs rlic prdplrty td tfl clehlr dr, ae i hllh dn trust, td i
trustll ndr tfl olelt dn tfl clehlr, td slkurl tfl odrrdwlrs docamitades uehlr tfl prdbassdry edtl.?
Ae i typakic pravitl-ciolc bdrtmiml cdie slkuratazitade, likf bdrtmiml cdie, wfakf as lvahleklh oy i
bdrtmiml edtl ieh slkurlh oy i bdrtmiml, as sdch, issamelh ieh triesnlrrlh td i trust tfrdumf i slrals dn stlps0
l cdie dramaeitdr dr i suoslqulet purkfislr slccs, issames ieh triesnlrs tfl bdrtmiml cdies
td i spdesdr, wfakf as typakiccy i eiekaic slrvakls kdbpiey dr i bdrtmiml cdie kdehuat dr
immrlmitdr.
l spdesdr slccs, issames ieh triesnlrs tfl bdrtmiml cdies td i hlpdsatdr, wfakf ae ture
slccs, issames ieh triesnlrs tfl bdrtmiml cdies td tfl trustll, wfakf wacc fdch tfl bdrtmiml
cdies ae trust ndr tfl olelt dn tfl klrtakitlfdchlrs.
9 Assuls rlcitlh td i pirtys ramft td ndrlkcdsl dr td lemiml ae ndrlkcdsurl-rlcitlh iktavatals irl mlelriccy dutsahl tfl skdpl dn tfas piplr.
? Ndr lisl dn rlnlrlekl, bdrtmiml wacc ol uslh tfrdumfdut bukf dn tfas piplr td rlnlr td odtf bdrtmimls ieh hllhs dn trust, iehbdrtmiml edtl wacc ol uslh td rlnlr td i prdbassdry edtl tfit as slkurlh oy i bdrtmiml.
8/14/2019 White Paper from the American Securitization Forum
11/31
6
l trustll assuls tfl BO[ pursuiet td i pddcaem ieh slrvakaem imrllblet dr trust imrll-
blet letlrlh aetd oy tfl hlpdsatdr, tfl trustll ieh i bistlr slrvaklr dr slrvaklrs.
l trustll ihbaeastlrs tfl pddc isslts, typakiccy rlcyaem de tfl cdie slrvaklr td plrndrb
bdst dn tfl ihbaeastritavl nuektades rlmirhaem tfl pddc dn bdrtmiml cdies. Ae ihhatade, i
hdkublet kustdhaie as dle hlsameitlh td kdehukt i rlvalw dn tfl bdrtmiml cdie hdku-blets pursuiet td tfl rlquarlblets dn tfl pddcaem ieh slrvakaem imrllblet ieh td fdch
tfl bdrtmiml cdie hdkublets ndr tfl cdies aekcuhlh ae tfl trust pddc.
Ae mlelric, tfl cdie hdkublets irl issamelh ieh triesnlrrlh nrdb tfl hlpdsatdr td tfl
trustll tfrdumf tfl aehdrslblet dn tfl bdrtmiml edtl ieh tfl triesnlr dn pdsslssade dn
tfl bdrtmiml edtl td tfl trustll dr i kustdhaie de olficn dn tfl trustll. Ie issameblet
dn tfl rlcitlh bdrtmiml as icsd typakiccy hlcavlrlh td tfl triesnlrll dr ats kustdhaie, lxklpt
ae kisls wflrl tfl rlcitlh bdrtmiml ahletals Bdrtmiml Lclktrdeak _lmastritade [ystlbs
(BL_[) is tfl bdrtmimll. [ukf issameblets mlelriccy irl ae rlkdrhiocl ndrb, out ue-
rlkdrhlh, ieh irl lxlkutlh oy tfl triesnlrdr watfdut ahletanyaem i splkak triesnlrll i
sd kicclh issameblet ae ocieg.
Ae sdbl bdrtmiml cdie triesiktades, BL_[ olkdbls tfl bdrtmimll dn rlkdrh is tfl edb-
aell dn tfl cdie dramaeitdr ieh ats issamell ae tfl cdkic cieh rlkdrhs wflrl tfl bdrtmiml
as rlkdrhlh, latflr wfle tfl bdrtmiml as rst rlkdrhlh dr is i rlsuct dn tfl rlkdrhaem dn ie
issameblet dn bdrtmiml td BL_[. as blies tfit BL_[ as castlh is tfl rlkdrh tatcl fdch-
lr dn tfl bdrtmiml. BL_[ eibl hdls edt ipplir de tfl bdrtmiml edtl, ieh tfl olelkaic
aetlrlst ae tfl bdrtmiml rlbiaes watf tfl cdie dramaeitdr dr ats issamell. l hdkublets
pursuiet td wfakf BL_[ ikts is edbaell bigl kclir tfit BL_[ as iktaem ae sukf kipikaty
ndr tfl olelt dn tfl cdie dramaeitdr dr ats issamell. ]fle i bdrtmiml cdie as dramaeitlh
watf BL_[ is tfl edbaeic bdrtmimll (dr as issamelh td BL_[ pdst-dramaeitade), BL_[
trikgs icc nuturl bdrtmiml cdie ieh cdie slrvakaem triesnlrs ieh dtflr issameblets dn
tfl bdrtmiml cdie ueclss ieh uetac dwelrsfap dr slrvakaem as triesnlrrlh (dr tfl cdie as
dtflrwasl issamelh) td ie letaty tfit as edt i BL_[ blbolr. Ae tfas wiy, BL_[ slrvls
is i kletric systlb td trikg kfiemls ae dwelrsfap ieh slrvakaem dn tfl cdie. Nieeal Bil,
Nrlhhal Bik ieh Maeeal Bil, ibdem dtflr mdvlrebletic letatals, plrbat cdies tfit tfly
purkfisl dr slkuratazl td ol rlmastlrlh watf BL_[.
Is pirt dn tfl cdie slkuratazitade prdklss hltiaclh iodvl, i bdrtmiml edtl ieh i bdrtmiml biy ol
sdch, issamelh ieh triesnlrrlh slvlric tabls nrdb del letaty td iedtflr. l clmic praekapcls tfit mdvlre tfl
issameblet ieh triesnlr dn bdrtmiml edtls ieh bdrtmimls irl mlelriccy hltlrbaelh oy stitl ciw. [ll, l.m.,
Ae rl Kddg, 8 (>tfKar. ?::>) (stitl ciw mdvlrelh wfltflr triesnlrll fih suplradr aetlrlst ae
prdbassdry edtl slkurlh oy bdrtmiml). Is sukf, tflsl praekapcls kie viry hlplehaem upde tfl stitl ae wfakf
tfl issamedr dn tfl bdrtmiml edtls, tfl uehlrcyaem prdplrty, dr tfl rlclviet bdrtmiml-rlcitlh hdkublets irl
8/14/2019 White Paper from the American Securitization Forum
12/31
1
cdkitlh. l issameblet ieh triesnlr dn i bdrtmiml edtl, de tfl del fieh, ieh dn i bdrtmiml, de tfl dtflr
fieh, irl ihhrlsslh slpiritlcy olcdw.
?. Xriesnlr dn Zrdbassdry Edtls [lkurlh oy Bdrtmimls
l rlsahletaic bdrtmiml edtls ae kdbbde usl ae tfl slkdehiry bdrtmiml birglt typakiccy irl
elmdtaiocl aestrublets. l ciw dn elmdtaiocl aestrublets hlvlcdplh dvlr tfl kleturals is i wiy td lekduriml
kdbblrkl ieh clehaem oy bigaem sukf aestrublets, aekcuhaem elmdtaiocl bdrtmiml edtls, is caquah ieh
triesnlriocl is pdssaocl. [ll, l.m., Dvlrtde v. Xyclr, ; Zi. ;8>, ;8= (968>) (WIR elmdtaiocl oacc dr edtl as i kduralr
watfdut cummiml)7 ? Nrlhlrakg B. Firt & ]accaib N. ]accalr, Elmdtaiocl Aestrublets \ehlr tfl \eandrb
Kdbblrkaic Kdhl 9.:9 (Elmdtaiocl aestrublets pciy sukf ie abpdrtiet rdcl ae tfl bdhlre kdbblrkaic
wdrch tfit at as hakuct td rlicazl tfit tfl strummcl ndr tflar lxastlekl kduch ol is cdem ieh kdbpclx is at fis
olle, ylt tfl lvdcutade dn tfl kdeklpt tddg kleturals.). [abacircy, tfl stiehirhazitade dn tfl ndrbs dn bdrtmiml
edtls ieh bdrtmimls dvlr tfl pist tfarty ylirs dr bdrl fis kdetraoutlh td tfl caquahaty ieh triesnlrioacaty dn
bdrtmiml edtls ieh tfl uehlrcyaem bdrtmimls. [ll Zltlr B. Kirrdzzd, Birgltaem tfl Iblrakie Bdrtmiml0
l Lblrmleky Fdbl Naeiekl Ikt dn 91=:, [tiehirhazitade ieh tfl [lkdehiry Birglt _lvdcutade, ;1 _lic
Zrdp. Zrdo. & Xr. @. =>
8/14/2019 White Paper from the American Securitization Forum
13/31
9:
pddc irl hllblh elmdtaiocl (is wl olcalvl bdst typakiccy irl) dr ede-elmdtaiocl wacc fivl cattcl dr ed
suostietavl llkt uehlr tfl \KK de tfl vicahaty dn tfl triesnlr dn tfl bdrtmiml edtls. l typakic slkuratazitade
prdklss llkts vicah triesnlrs dn tfl bdrtmiml edtls ieh rlcitlh bdrtmimls ae ikkdrhiekl watf tfl prdvasades
dn Irtakcls ; ieh 1 dn tfl \KK.>
]fit Kdestatutls i Elmdtaiocl Aestrublet4
I elmdtaiocl aestrublet as hlelh is0
ie uekdehatadeic prdbasl dr drhlr td piy i xlh ibduet dn bdely, watf dr watfdut aetlr-
lst dr dtflr kfirmls hlskraolh ae tfl prdbasl dr drhlr, an at0
(9) as piyiocl td olirlr dr td drhlr it tfl tabl at as assulh dr rst kdbls aetd pdsslssade dn
i fdchlr7
(?) as piyiocl de hlbieh dr it i hleatl tabl7 ieh
(;) hdls edt stitl iey dtflr uehlrtigaem dr aestruktade oy tfl plrsde prdbasaem dr drhlr-
aem piyblet td hd iey ikt ae ihhatade td tfl piyblet dn bdely, out tfl prdbasl dr
drhlr biy kdetiae (a) ie uehlrtigaem dr pdwlr td mavl, biaetiae, dr prdtlkt kdccitlric
td slkurl piyblet, (aa) ie iutfdrazitade dr pdwlr td tfl fdchlr td kdenlss `uhmblet
dr rlicazl de dr haspdsl dn kdccitlric, dr (aaa) i wiavlr dn tfl olelt dn iey ciw aetlehlh
ndr tfl ihvietiml dr prdtlktade dn ie docamdr.
\KK ;-9:8(i).
_lnlrlekl ae i bdrtmiml edtl td i bdrtmiml hdls edt ilkt tfl bdrtmiml edtls stitus is i elmdtaioclaestrublet. [ll \KK ;-9:>(o) (I prdbasl dr drhlr as edt bihl kdehatadeic WR oy i rlnlrlekl td iedtflr
wrataem ndr i stitlblet dn ramfts watf rlsplkt td kdccitlric, prlpiyblet, dr ikklclritade.)7 sll icsd Aetc
Baelrics & Kflb. Kdrp. v. Bittflws, ;?9 [.L.?h
8/14/2019 White Paper from the American Securitization Forum
14/31
99
Fdw as i Elmdtaiocl Bdrtmiml Edtl Xriesnlrrlh46
I elmdtaiocl bdrtmiml edtl as triesnlrrlh wfle at as hlcavlrlh oy i plrsde dtflr tfie tfl bdrtmimdr
ndr tfl purpdsl dn mavaem tfl triesnlrll tfl ramft td lendrkl tfl edtl. [ll \KK ;-?:;(i). Hlcavlry dn i
bdrtmiml edtl dkkurs wfle tflrl fis olle i vdcuetiry triesnlr dn pdsslssade dn tfl bdrtmiml edtl. [ll \KK
9-?:9(o)(9
8/14/2019 White Paper from the American Securitization Forum
15/31
9?
ocieg as sameakiet0 ]fle aehdrslh ae ocieg, ie aestrublet olkdbls piyiocl td olirlr ieh biy ol elmdtaitlh
oy triesnlr dnpdsslssade icdel uetac splkaiccy aehdrslh. \KK ;-?: (?h Kar. 911>) (olkiusl Irtakcl ; hdls edt hlel pdsslssade, i kdurt bust cddg
td tfl mlelric ciw dn tfl `urashaktade ae hltlrbaeaem wfltflr i pirty as ae pdsslssade dn i elmdtaiocl aestrublet).
Zdsslssade kie ol, ieh vlry dle as, llktlh oy ie imlet, edbaell dr hlsamell, sukf is tfl hlsameitlh kustdhaie ndr
tfl slkuratazitade trust. [ll, l.m., Bahrst Oieg, [O v. K.]. Fiyels ieh Kd., Aek., 61; N. [upp. 9;:8, 9;98-9< (H.[.K.
9118) (kdestruktavl pdsslssade lxasts wfle ie iutfdrazlh imlet dn tfl dwelr fdchs tfl edtl de olficn dn tfl dwelr)7
@legaes v. Lvies, ;9 I.H.?h
8/14/2019 White Paper from the American Securitization Forum
16/31
9;
sllgaem td lendrkl tfl bdrtmiml edtl bust fivl pdsslssade dn tfl edtl.
\KK ;-;:9 icsd plrbats i plrsde watfdut pdsslssade td lendrkl i bdrtmiml edtl wflrl tfl bdrtmiml
edtl fis olle cdst, stdcle, dr hlstrdylh watfae tfl blieaem dn \KK ;-;:1. [ll \KK ;-;:9.9?Kdurts fivl
kdesastletcy irblh tfl usl dn \KK ;-;:1 td lendrkl cdst, stdcle dr hlstrdylh elmdtaiocl bdrtmiml edtls tfit
i pirty, sukf is i slkuratazitade trustll, sllgs td lendrkl wfle tfl pirty fis prdvle tfl tlrbs dn tfl bdrtmiml
edtls ieh ats ramft td lendrkl tfl bdrtmiml edtls (a.l., at fis prdvle tfl triesnlr dn tfl bdrtmiml edtl nrdb
tfl triesnlrll). [ll, l.m., Ae rl Bdetimel, 8?9 O._. >>>-B_, ?::< ]C ?9=
8/14/2019 White Paper from the American Securitization Forum
17/31
98
\ehlr Irtakcl ;, i fdchlr ae hul kdursl dn i elmdtaiocl bdrtmiml edtl tigls tfl bdrtmiml edtl nrll dn
(i) icc pradr kciabs td dr rlmirhaem tfl bdrtmiml edtl oy iey plrsde ieh (o) bdst hlnlesls td lendrklioacaty dn
tfl bdrtmiml edtl tfit biy ol riaslh oy pirtals watf wfdb tfl fdchlr ae hul kdursl fis edt hlict. [ll \KK
;-;:< ieh ;-;:>7 sll icsd Zrdvahlet Oieg v. Kdbbueaty Fdbl Bdrtmiml Kdrp., 816 N. [upp. ?h
8/14/2019 White Paper from the American Securitization Forum
18/31
8/14/2019 White Paper from the American Securitization Forum
19/31
9>
tfl ouylrs aetlrlst ae tfl uehlrcyaem bdrtmiml tfit slkurls tfl bdrtmiml edtl. [lkuratazitade imrllblets dle
prdvahl odtf ndr (i) tfl aehdrslblet ieh triesnlr dn pdsslssade td tfl trustll dr tfl kustdhaie ndr tfl trustll,
wfakf wduch kdestatutl i elmdtaitade dn tfl bdrtmiml edtl uehlr Irtakcl ; dn tfl \KK ieh (o) ie dutramft sicl
ieh issameblet dn tfl bdrtmiml edtl. us, rlmirhclss dn wfltflr tfl bdrtmiml edtls ae i slkuratazitade trust
irl hllblh elmdtaiocl dr ede-elmdtaiocl, tfl slkuratazitade prdklss mlelriccy aekcuhls i vicah triesnlr dn
tfl bdrtmiml edtls td tfl trustll ae ikkdrhiekl watf tfl lxpcakat rlquarlblets dn tfl \KK.
;. Issameblet ieh Xriesnlr dn Dwelrsfap dn Bdrtmimls
Is hlskraolh iodvl, wfle i bdrtmiml cdie as issamelh ieh triesnlrrlh is pirt dn tfl slkuratazitade dn
tfl cdie ae tfl slkdehiry birglt, odtf tfl bdrtmiml edtl ieh tfl bdrtmiml atslcn irl typakiccy sdch, issamelh,
ieh pfysakiccy triesnlrrlh td tfl trustll tfit as iktaem de olficn dn tfl BO[ aevlstdrs dr td i trustll-hlsameitlh
hdkublet kustdhaie pursuiet td i kustdhy imrllblet. l issameblet ieh triesnlr irl usuiccy hdkubletlh
ieh plrndrblh ae ikkdrhiekl watf i pddcaem ieh slrvakaem imrllblet.
]fit as tfl _lcitadesfap Oltwlle tfl Xriesnlr dn i Bdrtmiml Edtl ieh tfl Xriesnlr dn Dwelrsfap dn tflBdrtmiml4
]fle i bdrtmiml edtl as triesnlrrlh ae ikkdrhiekl watf kdbbde bdrtmiml cdie slkuratazitade
prdklssls, tfl bdrtmiml as icsd iutdbitakiccy triesnlrrlh td tfl bdrtmiml edtl triesnlrll uehlr tfl \KK ieh
tfl mlelric kdbbde ciw rucl tfit tfl bdrtmiml ndccdws tfl edtl. [ll, l.m., Kirpletlr v. Cdemie, 6; \.[. ?=9,
?=< (96=;) (l triesnlr dn tfl edtl kirrals watf at tfl slkuraty, watfdut iey ndrbic issameblet dr hlcavlry, dr
lvle bletade dn tfl cittlr.)7 Bdrtmiml Lclkt. _lmastritade [ys., Aek. v. Kdigcly, 89 I.H.;h >=8, >=8 (E.Q. Ipp.
Hav. ?h Hlpt. ?::=) (tfl bdrtmiml . . . pisslh is ie aekahlet td tfl prdbassdry edtl)7 _lstitlblet (arh)
dn Zrdplrty, Bdrtmimls Ae ihhatade td tfl kdhakitade dn tfl rucl uehlr \KK 1-?:;(m), rlpdrtlh
9>Fdwlvlr, ae sdbl stitls, sukf is Bissikfusltts ieh Baeelsdti, kdurts fivl flch tfit tfl triesnlr dn i bdrtmiml edtl watfdut ielxprlss triesnlr dn tfl bdrtmiml vlsts ae tfl edtl fdchlr decy ie lquatiocl aetlrlst ae tfl bdrtmiml. [ll, l.m., Narst Eitc Oieg dnKipl Kdh v. Edrtf Ihibs Fddsik [ivs. Oieg, = Biss. Ipp. Kt. =1:, =1> (91=1)7 @ikgsde v. Bdrtmiml Lclkt. _lmastritade [ys., Aek.,==: E.].?h 86=, 81=, . Ae odtf stitls, fdwlvlr, kisl ciw summlsts tfit ndrlkcdsurl prdkllhaems bust ol aeataitlh oy, dr it clist ae tfleibl dn, tfl fdchlr dn tfl clmic tatcl ae tfl bdrtmiml. [ll @ikgsde, ==: E.].?h it =
8/14/2019 White Paper from the American Securitization Forum
20/31
9=
kdurt kisls ae elircy lvlry stitl ieh ede-\KK stitutdry prdvasades ae sdbl stitls bigl kclir tfit tfl bdrtmiml
ndccdws tfl edtl0
Icioibi0 Irbdur Nlrtacazlr ]drgs v. Paccs, 9== [d. 9;>, 9;6 (Ici. 91;=) (wfle tfl edtl as slkurlh oy
i bdrtmiml, sukf bdrtmiml ndccdws tfl edtl).
Irazdei0 Iraz. _lv. [tit ;;-69= (l triesnlr dn iey kdetrikt dr kdetrikts slkurlh oy i trust hllh
sficc dplritl is i triesnlr dn tfl slkuraty ndr sukf kdetrikt dr kdetrikts.).
Irgiesis0 Clikf v. Narst Kbty. Oieg, Ed. KI :=-: O._. ;9 (Oiegr. H. Kdee. 916?) (Ie issameblet dn tfl edtl
kirrals tfl bdrtmiml watf at . . . .).
Hastrakt dn Kdcuboai0 Facc v. Fiwls, 988 N.?h
8/14/2019 White Paper from the American Securitization Forum
21/31
96
ramfts ieh aetlrlsts uehlr tfl edtl ieh bdrtmiml. . . . WARe Accaedas, tfl issameblet dn tfl bdrtmiml edtl
as sukalet td triesnlr tfl uehlrcyaem bdrtmiml.) (katitades dbattlh).
Aehaiei0 Cimdw v. Oihdcclt, 9 Ocikgn. 89>, 96?> ]C 9:6=, it *; (Aeh. 96?>) (i bdrtmiml . . . ndccdws tfl
hlot aetd wfdsl fiehs sdlvlr at biy piss).
Adwi0Orlblr Kduety Oieg v. Listbie, ;8 Adwi ;1?, 96=? ]C ?; Biss. >9, >? (91?6)7 Oirels v. Odirhbie, 981 Biss. 9:>,
998 (9661)7 Bdrras v. Oikde, 9?; Biss. =
8/14/2019 White Paper from the American Securitization Forum
22/31
91
l Aoielz kisl ipplirs td stieh ae stirg kdetrist td tfl praekapcls lbodhalh ae tfl \KK.
l Aoielz kisl as kurrletcy plehaem de ipplic olndrl tfl Bissikfusltts [uprlbl @uhakaic
Kdurt, tfit stitls famflst kdurt.
Bakfamie0 Zrabl Nae. [lrv. v. ^aetde, ?=1 Bakf. Ipp. ?818, =:8 (Bakf. Kt. Ipp.
?::6) (tfl triesnlr dn i edtl elklssiracy aekcuhls i triesnlr dn tfl bdrtmiml watf at) (kataem Maesolrmv. Kipatdc Katy ]rlkgaem Kd., ;:: Bakf. =9?, =9=, ? E.].?h 61? (918?))7 @dels v. Xatus, ?:6 Bakf. ;1?,
;1=, 9=< E.]. ? [.].?h ;>6, ;=9 (Bd. 91;8) (wfle tfl fdchlr dn tfl prdbassdry edtl
issames dr triesnlrs tfl edtl, tfl hllh dn trust as icsd triesnlrrlh).
Bdetiei0 Narst Eitc Oieg v. ^imm, >< Bdet. ;8, ?9? Z. , 9:: (Oiegr. H. Elo. 916>) (watf dr watfdut tfl
issameblet dn tfl bdrtmiml, tfl issamell dn tfl prdbassdry edtl fis tfl ramft td lendrkl tfl bdrtmimlslkuraem tfl edtl).
Elw Fibpsfarl0 [dutflrae v. Blehub, < E.F. 8?:, 96;9 ]C 99:8, it *= (E.F. 96;9) (]fle i
bdrtmimll triesnlrs td iedtflr plrsde , tfl hlot wfakf as slkurlh oy tfl bdrtmiml, fl klisls td fivl
iey kdetrdc dvlr tfl bdrtmiml. . . . Ieh wl irl dn tfl dpaeade, tfit tfl aetlrlst dn tfl bdrtmimll pissls
ae icc kisls watf tfl hlot, ieh tfit at as edt watfae tfl stitutl dn nriuhs, olkiusl at as i blrl aekahlet td
tfl hlot, fis ed vicul aehlplehlet dn tfl hlot, ieh kieedt ol slpiritlh nrdb tfl hlot.).
Elw @lrsly0 Ae rl Gleelhy Bdrt. Kd., 9= O._. 1> (Oiegr. H. E.@. 916?) (Ieydel aetlrlstlh ae
ikquaraem ie aetlrlst ae tfl bdrtmiml wduch ol docamlh td dotiae ie aetlrlst ae tfl hlot.).
Elw Qdrg0 Bdrtmiml Lclk. _lmastritade [ys., Aek. v. Kdigcly, 89 I.H.;h >=8, 6;6 E.Q.[.?h >?? (Ipp.
Hav. ?::=) (it tfl tabl dn tfl kdbbleklblet dn tfas iktade, BL_[ wis tfl ciwnuc fdchlr dn tfl
prdbassdry edtl (sll \KK ;-?:8W9R7 Nriezlsl v. Nahlcaty E.Q. N[O, ?98 I.H.?h >8>, >?< E.Q.[.?h ?=> I. H. >9>, =; E.Q.[. 99;8) (lbpfisas ihhlh)7 Zrdvahlet Oieg
v. Kdbbueaty Fdbl Bdrtmiml Kdrp.,816 N. [upp. ?h
8/14/2019 White Paper from the American Securitization Forum
23/31
?:
tfit tfl bdrtmiml ndccdws tfl edtl).
Edrtf Kirdcaei0 Haxal Mrdklry Kd. v. Fdycl, ?:8 E.K. 9:1, 9>= [.L. 8>1 (91;;) (l bdrtmiml ndccdws
tfl hlot.).
Dfad0 \.[. Eitc Oieg Isse v. Birkaed, 969 Dfad Ipp.;h ;?6, ;;= (?::1) (WXRfl elmdtaitade dn i
edtl dplritls is ie lquatiocl issameblet dn tfl bdrtmiml, lvle wfle tfl bdrtmiml as edt issamelh
dr hlcavlrlh. Gukg v. [dbblrs (916, =
8/14/2019 White Paper from the American Securitization Forum
24/31
8/14/2019 White Paper from the American Securitization Forum
25/31
??
bdrtmiml cale ieh pradraty pdsatade aeurl td tfl olelt dn tfl issamell ieh tfit rlkdrhaem tfl issameblet as
ueelklssiry td prlslrvl tfl slkuraty ndr tfl hlot.)7 Ae rl Gleelhy Bdrtmiml Kd., 9= O._. 18 (Oiegr. H.E.@.
916?)(l nikt tfit issameblets dn bdrtmimls biy ol rlkdrhlh hdls edt ilkt tfl vicahaty dn ie issameblet
dn i bdrtmiml wfakf fis edt olle rlkdrhlh.).
Kdurts fivl icsd irblh ieh ippcalh tfl bdrtmiml ndccdws tfl edtl rucl lvle wfle tflrl wis ed
iktuic slpiritl wrattle issameblet dn tfl bdrtmiml. [ll, l.m., Kirpletlr v. Cdemie, 6; \.[. ?=9, ?=< (96=;) (l
triesnlr dn tfl edtl kirrals watf at tfl slkuraty, watfdut iey ndrbic issameblet dr hlcavlry, dr lvle bletade
dn tfl cittlr.)7 Kfisl Fdbl Nae., CCK v. Nlqualrl, 991 Kdee. Ipp. :>, >9:-99 (Kdee. Kt. Ipp.
?:9:) (Mlelric [titutls 81-9= Wwfakf kdhals tfl bdrtmiml ndccdws tfl edtl ruclR plrbats tfl fdchlr dn
i elmdtaiocl aestrublet tfit as slkurlh oy i bdrtmiml td ndrlkcdsl de tfl bdrtmiml lvle wfle tfl bdrtmiml
fis edt ylt olle issamelh td fab. (lbpfisas ihhlh))7 \.[. Eitc Oieg Isse v. Birkaed, 969 Dfad Ipp.;h ;?6,
;;= (?::1) (fdchaem tfit oieg wis tfl kurrlet dwelr dn i bdrtmiml edtl ieh tfl rlcitlh bdrtmiml hlspatl
tfl nikt tfit tflrl as ed lvahlekl de tfl rlkdrh tfit ipplccll as tfl kurrlet issamell dn tfl edtl ieh bdrtmiml,
ieh ehaem tfit tfl elmdtaitade dn i edtl dplritls is ie lquatiocl issameblet dn tfl bdrtmiml, lvle wfle tfl
bdrtmiml as edt issamelh dr hlcavlrlh (kataem Gukg v. [dbblrs, 9:: E.L.?h >6, =
8/14/2019 White Paper from the American Securitization Forum
26/31
?;
trust, slrvlh is i wrattle issameblet dn tfl hlsameitlh bdrtmiml cdies, aekcuhaem tfl bdrtmimls tflbslcvls.)7
LBK Bdrtmiml Kdrp. v. Kfiuhfra N[O, 8:: E.@. [uplr. 9?>, 989, 18> I.?h , >; I.?h 6?? (E.@. Kf. Hav. 9181))7 Ci[iccl Oieg E.I. v. Clfbie Ords. Fdchaems,
Aek., ?;= N. [upp. ?h >96, >;?-;; (H. Bh. ?::?) (BO[ pddcaem imrllblet mrietlh trustll iutfdraty td oraem suat
de olficn dn trust)7 Ci[iccl Oieg E.I. v. Edburi Isslt Kipatic Kdrp., 96: N. [upp. ?h 8>;, ;=6-=1 (91==).Caglwasl, tfl lendrklioacaty dn bdrtmimls (aekcuhaem tfl ramft ieh
?:Ictfdumf tfl rucl as tfl bdrtmiml ndccdws tfl edtl wfle i bdrtmiml edtl as issamelh, sdbl kisl ciw aehakitls tfit tfl kdevlrsl asedt trul ieh tfit tfl bdrtmiml edtl hdls edt elklssiracy ndccdw tfl bdrtmiml an tflrl as ie ittlbptlh issameblet dn tfl bdrtmimlicdel dr slpiritl nrdb tfl bdrtmiml edtl. [ll, l.m., Olccastra v. Dkwle Cdie [lrvakaem, CCK, ?68 [.].;h >91, >?; (Bd. Kt. Ipp.?::1) (Ie issameblet dn tfl hllh dn trust slpiritl nrdb tfl edtl fis ed ndrkl.)7 [ixde Bdrt. [lrv., Aek. v. Facclry, Ed. K-:6-8;
8/14/2019 White Paper from the American Securitization Forum
27/31
?8
bltfdh td ndrlkcdsl) as suo`lkt td icc dn tfl kdehatades prlklhlet ieh rlquarlblets tfit irl slt ndrtf ae tfl
pirtakucir bdrtmiml atslcn ieh ae icc ippcakiocl stitl ieh cdkic ciws. dsl kdehatades prlklhlet ieh prdklhuric
rlquarlblets viry nrdb bdrtmiml td bdrtmiml ieh nrdb stitl td stitl. us, dwelrsfap dn i bdrtmiml (a.l.,
watfdut edtakl td tfl bdrtmimdr dr tfl puocak, watfdut `uhakaic prdkllhaems (wflrl rlquarlh), watfdut
sitasniktade dn dtflr kdehatades prlklhlet dr prdklhuric rlquarlblets ae tfl bdrtmiml atslcn dr ae ippcakiocl
stitl ciw), hdls edt icwiys mavl tfl fdchlr dn tfl bdrtmiml tfl clmic ioacaty td ndrlkcdsl de tfl bdrtmiml.
dumf i haskussade dn tfl dtflr elklssiry prlrlquasatls td ndrlkcdsurl as olydeh tfl skdpl dn tfas piplr, tfl
nikt tfit dtflr stlps biy ellh td ol tigle oy tfl dwelr dn i bdrtmiml edtl, dr tfl dwelr dn i bdrtmiml, as
elatflr ueaqul edr surprasaem ae dur clmic ieh rlmucitdry systlb ieh hdls edt habaeasf ie dtflrwasl clmiccy
llktavl triesnlr dn tfl bdrtmiml edtl ieh bdrtmiml.
Fdw Hdls tfl \sl dn BL_[ Ilkt lsl Assuls4
l usl dn BL_[ is tfl edbaell ndr tfl olelt dn tfl trustll ieh dtflr triesnlrlls ae tfl bdrtmiml
cdie slkuratazitade prdklss fis olle i suo`lkt dn catamitade ae rlklet ylirs. [ll, l.m., Olccastra v. Dkwle Cdie[lrvakaem, CCK, ?68 [.].;h >91, >?; (Bd. Kt. Ipp. ?::1). [dbl kisls ihhrlss tfl iutfdraty dr ioacaty dn BL_[
dr triesnlrlls dn BL_[ td ndrlkcdsl de i bdrtmiml ndr wfakf BL_[ as dr wis tfl bdrtmimll dn rlkdrh. [ll, l.m.,
[ixde Bdrt. [lrv., Aek. v. Facclry, Ed. K-:6-8;
8/14/2019 White Paper from the American Securitization Forum
28/31
?6:=, it *9 (H. Elv. Ipr. ?:, ?::1) (cdie hdkublets sukaletcy hlbdestritl BL_[ stiehaem
watf rlsplkt td tfl cdie ieh tfl ndrlkcdsurl)7 Znieelestalc v. Bdrtmiml Lclkt. _lmastritade [ys., Aek., Ed. KA^
[-:6-?>:1, ?::1 ]C ;8==9>, it *8 (L.H. Kic. Nlo. 99, ?::1) (hasbassaem pciaetas kciab tfit BL_[ cikglh
iutfdraty td ndrlkcdsl)7 Xrlet v. Bdrtmiml Lclkt. _lmastritade [ys., Aek., ?66 Nlh. Ippx ) (BL_[ as prdplr pirty ae
ndrlkcdsurl).
lrl irl slvlric baedraty hlkasades tfit, ae sdbl ndrb, fivl tigle assul watf BL_[. Out edel dn
tflsl hlkasades, td dur gedwclhml, fis aevicahitlh i bdrtmiml ndr wfakf BL_[ as tfl edbaell, ieh edel dn
tflsl hlkasades fis kficclemlh BL_[ ioacaty td ikt is i kletric systlb td trikg kfiemls ae tfl dwelrsfap ieh
slrvakaem dn cdies0??[ll _aelmirh-Muarbi v. Oieg dn Ib., Eitc Isse, Ed. 9:-9:>, ?:9:) (summlstaem tfit BL_[ biy edt quicany is i clmatabitl olelkairy dn i hllh dn trust
uehlr Drlmde ciw, ieh prlcabaeiracy le`daeaem ndrlkcdsurl iktade oy BL_[)7 Ae rl Iccbie, Ed. :6-;9?6?-
lcp=, ?:9: ]C ;;>>8:, ?:9: ]C ???6?61, it *< (Oiegr ].H. Bd. @uel
;, ?:9:) (ehaem tfit BL_[, is olelkairy ieh edbaell uehlr tfl hllh dn trust cikglh iutfdraty td issame
tfl bdrtmiml edtl olkiusl at elvlr flch tfl edtl atslcn)7?;Ae rl Fiwgaes, Ed. OG-s-:=-9;9::8, ?:9: ]C ;=;;19>,it *> (Oiegr. ].H. Bd. [lpt. ?:, ?:9:) (WwRfle Wedtl-fdchlrR ikquarlh tfl ramft td lendrkl tfl Edtl is tfl edtl-fdchlr, BL_[flch tfl olelkaic aetlrlst ae tfl Hllh dn Xrust de olficn dn Wedtl-fdchlrR ieh Wedtl-fdchlrR fih tfl ramft td lendrkl icc tfl ramftsmrietlh td Wtfl dramaeic clehlrR ieh ats sukklssdrs ieh issames ae tfl Hllh dn Xrust). us, tfl Kdurt ndueh tfit tfl Edtl ieh tflHllh dn Xrust wlrl edt spcat olkiusl dn BL_[ stitus is imlet ndr tfl edtl fdchlrs. Ah.
8/14/2019 White Paper from the American Securitization Forum
29/31
?>
1:9=>>, it *; (Oiegr. H. Elv. Bir. ;9, ?::1) (ehaem tfit BL_[ wis edt i trul olelkairy uehlr i hllh dn
trust, tfit, uehlr tfl \KK, BL_[ wis edt letatclh td lendrkl tfl edtl, ieh tfit WaRe drhlr td ndrlkcdsl, BL_[
bust lstiocasf tflrl fis olle i sukalet triesnlr dn odtf tfl edtl ieh hllh dn trust, dr tfit at fis iutfdraty
uehlr stitl ciw td ikt ndr tfl edtls fdchlr).?8
Naeiccy, at as abpdrtiet td rlkdmeazl tfit tfl \KK hdls edt haspcikl trihatadeic rucls dn imleky ciw.
[ll \KK 9-9:;(o) (\eclss haspciklh oy tfl pirtakucir prdvasades dn Wtfl \eandrb Kdbblrkaic KdhlR, tfl
praekapcls dn ciw ieh lquaty, aekcuhaem tfl ciw WdnR . . . praekapic ieh imlet . . . suppclblet ats prdvasades.)7 sll
icsd \KK 1-;9; kbt. ; (praekapcls dn imleky ippcy ndr purpdsls dn hltlrbaeaem pdsslssade uehlr Irtakcl 1).
\ehlr mlelric imleky ciw, ie imlet fis iutfdraty td ikt de olficn dn ats praekapic wflrl tfl praekapic bieanlsts
isslet td tfl imlet tfit tfl imlet sficc ikt de tfl praekapics olficn ieh suo`lkt td tfl praekapics kdetrdc,
ieh tfl imlet bieanlsts isslet dr dtflrwasl kdeslets sd td ikt. _lstitlblet (arh) dn Imleky 9.:9 (?::>).
Ikkdrhaemcy, tfl \KK hdls edt prlvlet BL_[ dr dtflrs, aekcuhaem cdie slrvaklrs, nrdb iktaem is tfl imlet ndr
tfl edtl fdchlr ae kdeelktade watf triesnlrs dn dwelrsfap ae bdrtmiml edtls ieh bdrtmimls. [ll, l.m., Ae rl
Xukglr, Ed. 9:->9::8, ?:9: ]C ;=;;19>, it *> (Oiegr. ].H. Bd. [lpt. ?:, ?:9:) (ehaem BL_[ wis tfl imlet
ndr Wtfl clehlrR uehlr tfl Hllh dn Xrust nrdb tfl aeklptade, ieh BL_[ olkibl tfl imlet ndr likf suoslqulet
edtl-fdchlr uehlr tfl Hllh dn Xrust wfle likf sukf edtl fdchlr elmdtaitlh tfl Edtl td ats sukklssdr ieh
issame)7 Gaem v. Ib. Bdrtmiml Eltwdrg, Aek., Ed. 90:1K^9>? HIG, ?:9: ]C ;8=::.;?:8(9)(h) (l
pirty ndrlkcdsaem tfl bdrtmiml as latflr tfl dwelr dn tfl aehlotlhelss dr dn ie aetlrlst ae tfl aehlotlhelss
slkurlh oy tfl bdrtmiml dr tfl slrvakaem imlet dn tfl bdrtmiml.)7 Facbde v. Bdrtmiml Lclkt. _lmastritade [ys.,
Aek., Ed. :>-9;:
8/14/2019 White Paper from the American Securitization Forum
30/31
?=
8. Kdekcusade
Ae subbiry, tfl cdemstiehaem ieh kdesastletcy ippcalh rucl ae tfl \eatlh [titls as tfit, wfle
i bdrtmiml edtl as triesnlrrlh, tfl bdrtmiml ndccdws tfl edtl. ]fle i bdrtmiml edtl as triesnlrrlh ieh
hlcavlrlh td i triesnlrll ae kdeelktade watf tfl slkuratazitade dn tfl bdrtmiml cdie pursuiet td ie BO[
pddcaem ieh slrvakaem imrllblet dr sabacir imrllblet, tfl bdrtmiml iutdbitakiccy ndccdws ieh as triesnlrrlhtd tfl bdrtmiml edtl triesnlrll, edtwatfstiehaem tfit i tfarh pirty, aekcuhaem ie imlet/edbaell letaty sukf is
BL_[, biy rlbiae is tfl bdrtmimll dn rlkdrh. Odtf kdbbde ciw ieh tfl \KK kderb ieh ippcy tfas rucl,
aekcuhaem ae tfl kdetlxt dn bdrtmiml cdie slkuratazitades. l clmic praekapcls ieh prdklssls haskusslh iodvl
prdvahl ndr ieh, an ndccdwlh, rlsuct ae i vicah ieh lendrkliocl triesnlr dn bdrtmiml edtls ieh tfl uehlrcyaem
bdrtmimls. l triesnlr ieh clmic llktavlelss dn bdrtmiml edtls ieh bdrtmimls irl edt habaeasflh oy tfl
nikt tfit tfl lendrklioacaty dn bdrtmimls, aekcuhaem tfl ramft td ndrlkcdsl, as suo`lkt td tfl kdehatades prlklhlet
ieh rlquarlblets tfit irl slt ndrtf ae tfl pirtakucir bdrtmiml atslcn ieh ae tfl ciws dn tfl stitl ae wfakf tfl
bdrtmimlh prdplrty as cdkitlh.
8/14/2019 White Paper from the American Securitization Forum
31/31