Has there been any success in negotiating a materiality standard with regard to breaches of reps and warrants, especially as to TRID matters?

There have been some successes in negotiating a materiality standard. Typically, where I’ve seen it most successfully done is by including the materiality standard in the repurchase demand section, or the remedy section. It’s always helpful to have materiality in the actual rep and warrant also, but it helps and it’s important to have materiality language in the remedy section. I don’t have any specific examples of this being done in connection with TRID issues or liability, other than what we discussed earlier in the presentation which is the “substantial compliance with law” language being a concern of the rating agencies. So “material compliance with law” would be similarly concerning to the rating agencies. I would suggest trying to limit the liability in the remedy section, as opposed to in the rep and warrant section.

Answered By: Amanda Raines Lawrence