Q4 Filings Must Disclose Foreclosure-Related Risks, SEC Reminds

Posted by Orb Staff on November 02, 2010 No Comments
Categories : Mortgage Servicing

The Securities and Exchange Commission (SEC) sent out a letter last week reminding ‘certain public companies’ of their obligation to disclose in their quarterly 10-Q filings the potential risks and costs associated with foreclosure-related activity.

The SEC's Division of Corporate Finance sent the letter, which instructed companies to consider the impact of representations and warranties made to purchasers of mortgages or mortgage-backed securities, as well as the ‘uncertainties’ associated with potentially higher repurchase requests and litigation risks when filing their 10-Q's.

‘As appropriate, you should provide clear and transparent disclosure regarding your obligations relating to the various representations and warranties that you made in connection with your securitization activities and whole-loan sales,’ the letter said. ‘In addition, you should discuss any implications of any foreclosure review, including potential delays in completing foreclosures, if applicable.’

SOURCE: Securities and Exchange Commission

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