Allocation of risk retention to an originator.

CFR · 2024-01-01 · US · Title 12

(a) (1) At the closing of the securitization transaction: (i) The originator acquires the eligible interest from the sponsor and retains such interest in the same manner and proportion (as between horizontal and vertical interests) as the sponsor under § 244.4, as such interest was held prior to the acquisition by the originator; (ii) The ratio of the percentage of eligible interests acquired and retained by the originator to the percentage of eligible interests otherwise required to be retained by the sponsor pursuant to § 244.4, does not exceed the ratio of: (A) The unpaid principal balance of all the securitized assets originated by the originator; to (B) The unpaid principal balance of all the securitized assets in the securitization transaction; (iii) The originator acquires and retains at least 20 percent of the aggregate risk retention amount otherwise required to be retained by the sponsor pursuant to § 244.4; and (iv) The originator purchases the eligible interests from the sponsor at a price that is equal, on a dollar-for-dollar basis, to the amount by which the sponsor's required risk retention is reduced in accordance with this section, by payment to the sponsor in the form of: (A) Cash; or (B) A reduction in the price received by the originator from the sponsor or depositor for the assets sold by the originator to the sponsor or depositor for inclusion in the pool of securitized assets. (2) (3) (b) (2) A retaining sponsor relying on this section: (i) Shall mainta

official document · source cfr-2024 · id 12:§ 244.11