For purposes of this part, the following definitions
apply:
ABS interest means:
(1) Any type of interest or obligation
issued by an issuing entity, whether or not in certificated form,
including a security, obligation, beneficial interest or residual
interest (other than an uncertificated regular interest in a REMIC
that is held by another REMIC, where both REMICs are part of the same
structure and a single REMIC in that structure issues ABS interests
to investors, or a non-economic residual interest issued by a REMIC),
payments on which are primarily dependent on the cash flows of the
collateral owned or held by the issuing entity; and
(2) Does not include common or preferred
stock, limited liability interests, partnership interests, trust certificates,
or similar interests that:
(i) Are issued primarily to evidence
ownership of the issuing entity; and
(ii) The payments, if any, on which
are not primarily dependent on the cash flows of the collateral held
by the issuing entity; and
(3) Does not include the right to receive
payments for services provided by the holder of such right, including
servicing, trustee services and custodial services.
Affiliate of, or a person affiliated with, a specified
person means a person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the person specified.
Appropriate Federal
banking agency has the same meaning as in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
Asset means
a self-liquidating financial asset (including but not limited to a
loan, lease, mortgage, or receivable).
Asset-backed security has the same meaning as in section 3(a)(79) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(79)).
Collateral means,
with respect to any issuance of ABS interests, the assets that provide
the cash flow and the servicing assets that support such cash flow
for the ABS interests irrespec tive of the legal structure of issuance, including
security interests in assets or other property of the issuing entity,
fractional undivided property interests in the assets or other property
of the issuing entity, or any other property interest in or rights
to cash flow from such assets and related servicing assets. Assets
or other property collateralize an issuance of ABS interests
if the assets or property serve as collateral for such issuance.
Commercial real estate loan has the same meaning as in
section 244.14.
Commission means the Securities and
Exchange Commission.
Control including the terms “controlling,”
“controlled by” and “under common control with”:
(1) Means the possession, direct or indirect,
of the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting securities,
by contract, or otherwise.
(2) Without
limiting the foregoing, a person shall be considered to control another
person if the first person:
(i) Owns, controls or holds with power
to vote 25 percent or more of any class of voting securities of the
other person; or
(ii) Controls
in any manner the election of a majority of the directors, trustees
or persons performing similar functions of the other person.
Credit risk means:
(1) The risk of loss that could result
from the failure of the borrower in the case of a securitized asset,
or the issuing entity in the case of an ABS interest in the issuing
entity, to make required payments of principal or interest on the
asset or ABS interest on a timely basis;
(2) The risk of loss that could result
from bankruptcy, insolvency, or a similar proceeding with respect
to the borrower or issuing entity, as appropriate; or
(3) The effect that significant changes
in the underlying credit quality of the asset or ABS interest may
have on the market value of the asset or ABS interest.
Creditor has the same meaning as in 15 U.S.C. 1602(g).
Depositor means:
(1) The person that receives or purchases and transfers or sells
the securitized assets to the issuing entity;
(2) The sponsor, in the case of a securitization
transaction where there is not an intermediate transfer of the assets
from the sponsor to the issuing entity; or
(3) The person that receives or purchases
and transfers or sells the securitized assets to the issuing entity
in the case of a securitization transaction where the person transferring
or selling the securitized assets directly to the issuing entity is
itself a trust.
Eligible horizontal residual interest means, with respect to any securitization transaction, an ABS interest
in the issuing entity:
(1) That is an interest in a single class or multiple classes in
the issuing entity, provided that each interest meets, individually
or in the aggregate, all of the requirements of this definition;
(2) With respect to which, on any
payment date or allocation date on which the issuing entity has insufficient
funds to satisfy its obligation to pay all contractual interest or
principal due, any resulting shortfall will reduce amounts payable
to the eligible horizontal residual interest prior to any reduction
in the amounts payable to any other ABS interest, whether through
loss allocation, operation of the priority of payments, or any other
governing contractual provision (until the amount of such ABS interest
is reduced to zero); and
(3) That,
with the exception of any non-economic REMIC residual interest, has
the most subordinated claim to payments of both principal and interest
by the issuing entity.
Eligible horizontal cash
reserve account means an account meeting the requirements of section
244.4(b).
Eligible vertical interest means, with respect
to any securitization transaction, a single vertical security or an
interest in each class of ABS interests in the issuing entity issued as
part of the securitization transaction that constitutes the same proportion
of each such class.
Federal banking agencies means the
Office of the Comptroller of the Currency, the Board of Governors
of the Federal Reserve System, and the Federal Deposit Insurance Corporation.
GAAP means generally accepted accounting principles as
used in the United States.
Issuing entity means, with
respect to a securitization transaction, the trust or other entity:
(1) That owns or holds the
pool of assets to be securitized; and
(2) In whose name the asset-backed securities are issued.
Majority-owned affiliate of a person means an entity (other
than the issuing entity) that, directly or indirectly, majority controls,
is majority controlled by or is under common majority control with,
such person. For purposes of this definition, majority control means
ownership of more than 50 percent of the equity of an entity, or ownership
of any other controlling financial interest in the entity, as determined
under GAAP.
Originator means a person who:
(1) Through an extension of credit
or otherwise, creates an asset that collateralizes an asset-backed
security; and
(2) Sells the asset
directly or indirectly to a securitizer or issuing entity.
REMIC has the same meaning as in 26 U.S.C. 860D.
Residential mortgage means:
(1) A transaction that is a covered transaction
as defined in section 1026.43(b) of Regulation Z (12 CFR 1026.43(b)(1));
(2) Any transaction that is exempt
from the definition of “covered transaction” under section 1026.43(a)
of Regulation Z (12 CFR 1026.43(a)); and
(3) Any other loan secured by a residential
structure that contains one to four units, whether or not that structure
is attached to real property, including an individual condominium
or cooperative unit and, if used as a residence, a mobile home or
trailer.
Retaining sponsor means, with respect
to a securitization transaction, the sponsor that has retained or
caused to be retained an economic interest in the credit risk of the
securitized assets pursuant to subpart B of this part.
Securitization
transaction means a transaction involving the offer and sale of
asset-backed securities by an issuing entity.
Securitized
asset means an asset that:
(1) Is transferred, sold, or conveyed to
an issuing entity; and
(2) Collateralizes
the ABS interests issued by the issuing entity.
Securitizer means, with respect to a securitization transaction,
either:
(1) The depositor
of the asset-backed securities (if the depositor is not the sponsor);
or
(2) The sponsor of the asset-backed
securities.
Servicer means any person responsible
for the management or collection of the securitized assets or making
allocations or distributions to holders of the ABS interests, but
does not include a trustee for the issuing entity or the asset-backed
securities that makes allocations or distributions to holders of the
ABS interests if the trustee receives such allocations or distributions
from a servicer and the trustee does not otherwise perform the functions
of a servicer.
Servicing assets means rights or other
assets designed to assure the servicing or timely distribution of
proceeds to ABS interest holders and rights or other assets that are
related or incidental to purchasing or otherwise acquiring and holding
the issuing entity’s securitized assets. Servicing assets include
amounts received by the issuing entity as proceeds of securitized
assets, including proceeds of rights or other assets, whether as remittances
by obligors or as other recoveries.
Single vertical security means, with respect to any securitization transaction, an ABS interest
entitling the sponsor to a specified percentage of the amounts paid
on each class of ABS interests in the issuing entity (other than such
single vertical security).
Sponsor means a person who organizes
and initiates a securitization transaction by selling or transferring
assets, either directly or indirectly, including through an affiliate,
to the issuing entity.
State has the same meaning as
in section 3(a)(16) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(16)).
United States or U.S. means the
United States of America, including its territories and possessions,
any State of the United States, and the District of Columbia.
Wholly-owned affiliate means a person (other than an issuing
entity) that, directly or indirectly, wholly controls, is wholly controlled
by, or is wholly under common control with, another person. For purposes
of this definition, “wholly controls” means ownership of 100 percent
of the equity of an entity.
