17011002 Informal Interpretation

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Haynes, Lanea
From: 	Shaffer, Kristin
Sent: 	Wednesday, November 15, 2017 4:05 PM
To:
Cc: 	HSRHelp
Subject: 	RE: Inquiry about Mortgage Servicing Rights
,
The “REIT Exemption” does not apply to the acquisition of mortgage servicing rights standing alone. Therefore, none of
the three scenarios would be exempt.
Best regards,
Kristin
Kristin Shaffer
Attorney
Premerger Notification Office
Federal Trade Commission
202‐326‐3434 | kshaffer@ftc.gov
From:
Sent: Tuesday, November 14, 2017 1:41 PM
To: Walsh, Kathryn E.; Berg, Karen E.; Gillis, Diana L.; Whitehead, Nora; Shaffer, Kristin; Carson, Timothy; Sheinberg,
Samuel I.
Subject: Inquiry about Mortgage Servicing Rights
Dear All,
I am writing to seek your advice on whether a REIT's acquisition in several scenarios listed below qualifies for
the ordinary course of business exemption under Section 7A(c)(1), the "REIT exemption." In each scenario the
target will exit and thus the ordinary course of business exemption that applies to the acquisition of portfolios of
loans, leases, servicing rights and other financial instruments under Section 7A(c)(1) is not available. See
Premerger Notification Practice Manual (5 th ed.) 2015, Nos. 99 and 106.
As described in Informal Staff Opinions 99 and 105, a REIT's acquisition that is related to property may be
exempt even if the same acquisition by a non-REIT buyer would not be exempt (i.e., a REIT's acquisition of
nursing homes and assisted living facilities is exempt but a non-REIT's acquisition of these operations is not
exempt). It is not clear whether this principle applies to the acquisition of mortgage servicing operations. While
Informal Staff Opinion 106 indicates certain circumstances when the acquisition of mortgage servicing rights
can be exempt and states that the acquisition of mortgage servicing rights standing alone is not exempt, the
opinion does not indicate whether the latter rule is different when a REIT makes the acquisition.
Please advise:
1. 	REIT's acquisition of contracts that relate to mortgage servicing rights

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2. 	REIT's acquisition of the stock/assets of a company whose operations pertain to mortgage servicing
rights
3. 	REIT's acquisition, through its taxable subsidiary, of the stock/assets of a company with operations
pertaining to mortgage servicing rights
Thank you for your consideration and guidance.
Best,