Management of REO Property Clause Samples
The "Management of REO Property" clause defines the responsibilities and procedures for handling real estate owned (REO) properties, typically acquired by a lender through foreclosure. It outlines who is responsible for maintaining, securing, and marketing the property, as well as managing expenses such as repairs, insurance, and taxes during the period of ownership. This clause ensures that REO properties are properly cared for and preserved, minimizing losses and maintaining property value until the asset can be sold or otherwise disposed of.
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Management of REO Property. (a) Prior to the acquisition by it of title to a Mortgaged Property (other than a Mortgaged Property that secures an Outside Serviced Loan Combination), the Special Servicer shall review the operation of such Mortgaged Property and determine the nature of the income that would be derived from such property if it were acquired by the Trust Fund. If the Special Servicer determines from such review that:
(i) None of the income from Directly Operating such Mortgaged Property would be subject to tax as "net income from foreclosure property" within the meaning of the REMIC Provisions or would be subject to the tax imposed on "prohibited transactions" under Section 860F of the Code (either such tax referred to herein as an "REO Tax"), then such Mortgaged Property may be Directly Operated by the Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as REO Property could result in income from such property that would be subject to an REO Tax, but that a lease of such property to another party to operate such property, or the performance of some services by an Independent Contractor with respect to such property, or another method of operating such property would not result in income subject to an REO Tax, then the Special Servicer may (provided that in the good faith and reasonable judgment of the Special Servicer, it is commercially reasonable) acquire such Mortgaged Property as REO Property and so lease or operate such REO Property; or
(iii) It is reasonable to believe that Directly Operating such property as REO Property could result in income subject to an REO Tax and that no commercially reasonable means exists to operate such property as REO Property without the Trust Fund incurring or possibly incurring an REO Tax on income from such property, the Special Servicer shall deliver to the Tax Administrator, in writing, a proposed plan (the "Proposed Plan") to manage such property as REO Property. Such plan shall include potential sources of income, and, to the extent reasonably possible, estimates of the amount of income from each such source. Upon request of the Special Servicer, the Tax Administrator shall advise the Special Servicer of the Tax Administrator's federal income tax reporting position with respect to the various sources of income that the Trust Fund would derive under the Proposed Plan. After receiving the information described in the preceding sentence from the Tax Administrator, the Special Servicer shall implement th...
Management of REO Property. (a) Prior to the acquisition of title to any Mortgaged Property securing a defaulted Mortgage Loan, the Special Servicer shall review the operation of such Mortgaged Property and determine the nature of the income that would be derived from such property if it were acquired by the Trust. If the Special Servicer determines from such review that:
(i) None of the income from Directly Operating such Mortgaged Property would be subject to tax as “net income from foreclosure property” within the meaning of the REMIC Provisions (such tax referred to herein as an “REO Tax”), then such Mortgaged Property may be Directly Operated by the Special Servicer as REO Property, other than holding such REO Property for sale or lease or performing construction work thereon;
(ii) Directly Operating such Mortgaged Property as an REO Property could result in income from such property that would be subject to an REO Tax, but that a lease of such property to another party to operate such property, or the performance of some services by an Independent Contractor with respect to such property, or another method of operating such property would not result in income subject to an REO Tax, then the Special Servicer may (provided that in the judgment of the Special Servicer, exercised in accordance with the Servicing Standard, it is commercially reasonable) so lease or otherwise operate such REO Property; or
(iii) It is reasonable to believe that Directly Operating such property as REO Property could result in income subject to an REO Tax and either (i) that the income or earnings with respect to such REO Property will offset any REO Tax relating to such income or earnings and will maximize the net recovery from the applicable REO Property to the Certificateholders (taking into account that any related Companion Loan Holder(s) do not have any obligation under the related Intercreditor Agreement to bear the effect of any such REO Tax) or (ii) that no commercially reasonable means exists to operate such property as REO Property without the Trust incurring or possibly incurring an REO Tax on income from such property, then the Special Servicer shall deliver to the Tax Administrator and the Subordinate Class Representative, in writing, a proposed plan (the “Proposed Plan”) to manage such property as REO Property. Such plan shall include potential sources of income and good faith estimates of the amount of income from each such source. Within a reasonable period of time after receipt of such...
Management of REO Property. Section 3.18 Resolution of Defaulted Mortgage Loans and REO Properties....
Management of REO Property. Section 3.18 Sale of Defaulted Mortgage Loans and REO Properties.......... Section 3.19 Additional Obligations of Master Servicer and Special Servicer.................................................... Section 3.20 Modifications, Waivers, Amendments and Consents..............
Management of REO Property. (a) If the Trustee acquires any REO Property pursuant to Section 4.17, the Servicer shall have full power and authority, subject only to the specific requirements and prohibitions of this Agreement, to do any and all things in connection therewith as are consistent with the manner in which the Servicer manages and operates similar property owned by the Servicer or any of its Affiliates, all on such terms and for such period as the Servicer deems to be in the best interests of Certificateholders, and, consistent therewith, shall withdraw from the REO Account, to the extent of amounts on deposit therein with respect to such REO Property, funds necessary for the proper operation, management and maintenance of such REO Property, including:
(i) all insurance premiums due and payable in respect to such REO Property;
(ii) all real estate taxes and assessments in respect to such REO Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO Property. To the extent that amounts on deposit in the REO Account in respect of any REO Property are insufficient for the purposes set forth in (i)-(iii) above with respect to such REO Property, the Servicer shall advance from its own funds such amount as is necessary for such purposes if, but only if, the Servicer would make such advances if the Servicer owned such REO Property and if in the Servicer's judgment, the payment of such amounts will be recoverable from the operation or sale of such REO Property.
(b) Notwithstanding the foregoing, the Servicer shall not:
(i) authorize or permit any construction on any REO Property, other than the completion of a building or other improvement thereon, and then only if more than ten percent of the construction of such building or other improvement was completed before default on the related Contract became imminent, all within the meaning of Section 856(e)(4)(B) of the Code; or
(ii) directly operate, or allow any other Person to directly operate, any REO Property on any date more than 90 days after its date of acquisition; unless, in any such case, the Servicer has requested and received an Opinion of Counsel to the effect that such action will not cause such REO Property to fail to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code at any time that it is held by the Trust Fund, in which case the Servicer may take such actions as are specified in such Opinion of Counsel.
(c) The Ser...
Management of REO Property. (a) Prior to the acquisition of title to a Mortgaged Property, the Special Servicer shall review the operation of such Mortgaged Property and determine the nature of the income that would be derived from such property if it were acquired by the Trust Fund. If the Special Servicer determines from such review in compliance with the Servicing Standard that in its good faith and reasonable judgment:
(i) None of the income from Directly Operating such REO Property would be subject to tax as "net income from foreclosure property" within the meaning of the REMIC Provisions (such tax referred to herein as an "REO Tax"), and the Special Servicer does not engage in any of the activities described in the definition of "Directly Operate" that would cause the REO Property to cease to qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code, then such Mortgaged Property may be Directly Operated by the Special Servicer as REO Property;
Management of REO Property. Section 3.18 Resolution of Defaulted Mortgage Loans and REO Properties........ Section 3.19 Additional Obligations of Master Servicer and Special Servicer......................................................... Section 3.20 Modifications, Waivers, Amendments and Consents.................. Section 3.21 Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping......................................... Section 3.22 Sub-Servicing Agreements......................................... Section 3.23 Representations and Warranties of Master Servicer and Special Servicer................................................. Section 3.24 Sub-Servicing Agreement Representation and Warranty.............. Section 3.25 Designation of Controlling Class Representative and the Thousand Oaks Representative..................................... Section 3.26
Management of REO Property. [Prior to the acquisition of title to any Mortgaged Property securing a defaulted Mortgaged Loan, the Special Servicer shall review the operation of such Mortgaged Property and determine the nature of the income that would be derived from such property if it were acquired by the Trustee, on behalf of the Bondholders and, subject to the lien of the Indenture, the Trustee. If the Special Servicer determines from such review that:
Management of REO Property. Section 3.18 Fair Value Purchase Option; Sale of REO Properties...................................................... Section 3.19
Management of REO Property. SECTION 3.18 Resolution of Defaulted Mortgage Loans and REO Properties...................................................... SECTION 3.19 Additional Obligations of the Master Servicer and the Special Servicer................................................ SECTION 3.20 Modifications, Waivers, Amendments and Consents................. SECTION 3.21 Transfer of Servicing Between Master Servicer and Special Servicer; Record Keeping; Asset Status Report; Directing Certificateholder; CML Representative................. SECTION 3.22 Sub-Servicing Agreements........................................