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WiseOwl58, Attorney
Category: Business Law
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when a mortgage note is sold and placed into a pool of loans

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when a mortgage note is sold and placed into a pool of loans then transferred into a trust and securitized it is governed by a pooling and servicing agreement. does the PSA always contain conditions for what to do in case one of the loans becomes non-performing like it must be replaced with a performing one etc...? and does the PSA allow for a blank indorsment of the note?
No, the defaulted notes are not replaced in the trust, they are merely subtracted out in the final accounting for the trust. The PSA usually does allow for blank endorsement as part of the trustee's responsibilities.

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