When reviewing a 75+ page consumer loan sale agreement, you slow-pedal some provisions and fast-pedal others. You’re more focused on the recourse sections — repurchase and indemnification — because that’s where the action and exposure can be down the line. You home in on interrelated provisions, such as the loan-level representations and warranties, the definition of “repurchase price,” and the limitation on liability section. There are other important sections, including nonsolicitation and termination in a servicing retained deal. Naturally, to do your job right, you review the whole agreement.
In a moment of accidental poetry, this writer found himself reviewing a repurchase sunset clause in a loan sale agreement at sundown the other day. Yes, really, a sunset clause at sunset — perhaps a sign that a client alert on repurchases is in order?1
