The §3(c)(5)(C) asset test runs the qualifying-interest framework against the fifty-five-percent floor and the real-estate-related framework against the eighty-percent floor on each measurement date. This article walks the five-step framework against the fund's balance sheet on the quarterly cycle.Step 1: Build the asset inventoryThe [...]
Section 3(c)(5)(C) of the Investment Company Act of 1940 runs the real-estate exception against a private mortgage fund primarily engaged in the business of purchasing or acquiring mortgages and other liens on and interests in real estate. Seven mistakes recur on a mortgage fund [...]
The Investment Company Act of 1940 runs the federal framework against an entity that runs as an investment company under §3(a)(1). The Investment Company Act runs the registration framework against the investment company and runs the operational and reporting framework against the registrant. A [...]
Mortgage fund managers run a recurring set of questions on the subservicing framework. This article answers the questions on the diligence framework, the Subservicing Agreement framework, the SOC report framework, the audit-rights framework, the trust-account framework, and the investor-reporting framework.What diligence runs against a [...]
A mortgage fund runs the servicing framework on one of two structures — the subservicing framework under 12 CFR §1024.31 or the in-house servicing framework under direct execution. This article compares the two frameworks across the fixed-cost burden, the regulatory exposure, the SOC engagement [...]
This article runs a composite case framework against a mortgage fund whose subservicer received a qualified opinion on the SOC 1 Type II audit. The case framework runs against the fund's own financial-statement audit, the regulator framework, and the lender-investor base, and runs the [...]
Onboarding a mortgage fund portfolio to a subservicer runs a five-stage framework — diligence on the subservicer, execution of the Subservicing Agreement, loan-level boarding, trust-account integration, and the first investor reporting cycle. This article walks each stage in order and runs the fund-manager checklist [...]
Mortgage fund subservicing runs against the Subservicing Agreement under 12 CFR §1024.31 and the investor-reporting framework against the fund's operating agreement. Seven mistakes recur on a fund subservicing engagement, and each runs the fund into an audit exposure against the lender-investor base or the [...]
A mortgage fund runs a portfolio of mortgage notes against a pooled investor base under a Reg D §506 offering and an Investment Company Act §3(c)(5)(C) real-estate exception. The fund runs the loans against the investor base under a preferred-return waterfall and runs the [...]
The California §10238 Multi-Lender Law and the Corporate Code §25102(f) private offering exemption run two different frameworks on private real estate notes held by multiple lender-investors. The two frameworks run different investor caps, different disclosure forms, different broker-arrangement structures, and different servicing requirements. This [...]
