Question
From: (redacted)
Sent: Monday, October 04, 2004 2:42 PM
To: Verne, B. Michael
Subject: RE: My HSR Compliance Inquiry
Michael,
Ihave a quick follow-up question pertaining to the transaction regarding whichyou previously provided me with the advice set forth in the e-mail below.
Theassets acquired in the transaction will include (a) mortgage servicing rightswithout the right to purchase the underlying mortgages and (b) mortgageservicing rights coupled with the right to purchase the underlying mortgages inthe future, althought the underlying mortgages are not being purchased in thecurrent acquisition.
Section7A(c)(2) of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, asamended (the "Act"), provides that acquisitions of mortgage loans areexempt from the requirements of the Act. However, the Premerger NotificationOffice has taken the position that mortgage servicing rights that are notcoupled to mortgages/mortgage loans are not exempt from the requirements of theAct (See, for example, Informal Staff Opinions 9908010 and 9206006).
Basedon the positions taken in Informal Staff Opinions 9908010 and 9206006, the mortgageservicing rights in (a) above clearly are subject to the Act, and I willinclude the consideration being paid for them for purposes of calculating theacquisition price. However, I was wondering if there is any precedent fortreating the acquisition of mortgage servicing rights coupled with the right topurchase the underlying mortgages in the future as an exempt mortgage forpurposes of Section 7A (c)(2)? I suspect that the answer is no because nomortgages are being acquired in the current acquisition, but I wanted toconfirm.