ASF Issues Counseling Guidance

The American Securitization Forum has issued guidelines to help mortgage servicers and borrower-counseling organizations implement procedures for reimbursing counseling-related expenses. The ASF advised in October 2007 that borrower counseling fees may be reimbursable from securitization cash flows if the servicer concludes that the counseling has mitigated losses and maximized recovery (or is likely to do so) on loans that are in default or seen as likely to default. The latest guidance, intended chiefly for securitized residential mortgage loans, advises that servicers may reimburse up to $150 out of securitization trust proceeds for an approved counseling session. The ASF also recommended contracting with high-quality counseling organizations that will help borrowers connect with servicers, collect information relevant to loss mitigation evaluations, recommend appropriate loss mitigation options to servicers, or assist borrowers in restructuring their overall debt to better meet their mortgage obligations. The ASF can be found online at http://www.americansecuritization.com.