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Abstract
Wilmington Trust is proposing to utilize blockchain technology to enhance the process of enforcing the implementation of representations and warranties (R&Ws). In the past, the R&W enforcement process has taken months, if not years, to get to a proposed solution, and even then, there has been much difficulty in getting to an agreement on how best to enforce R&Ws. The blockchain technology will enhance the speed and accuracy of the process, thus solving a problem that has vexed the investor community that buys mortgage products.
By utilizing blockchain technology, Wilmington Trust proposes to do the following:
1. Centralize all documentation in one system, including the documents related to R&Ws at time of origination, at time of servicing, and for the life of the servicing, as well as the supporting documents needed to make a decision.
2. Speed up identification of issues related to non-compliance with R&Ws.
3. Arrive at decision resolutions in days instead of the current months/years-long process that is often accompanied by disagreements, disputes, and lawsuits.
TOPICS: Legal and regulatory issues for structured finance, MBS and residential mortgage loans
Key Findings
• Enforcement of R&Ws has been a huge, time-consuming, costly, acrimonious, and investor-unfriendly process.
• Wilmington Trust proposes to utilize blockchain technology to centralize the process, improve the time frames dramatically, and remove the issues listed above.
• Investors have expressed strong interest, hoping to remove impediments to a more efficient, fair, and balanced process that ensures adherence to the R&Ws of both origination and servicing of loans they purchase.
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Don’t have access? Click here to request a demo
Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600