Registrant’s
telephone number, including area code (212)
761-4700
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
Section
8
– Other Events
Item
8.01 Other Events.
On
November 30, 2007 MSM Mortgage Loan Trust 2007-15AR (the “Issuing Entity”) was
created pursuant to a Pooling and Servicing Agreement, dated as of November1,2007 (the “Pooling and
Servicing Agreement”), among Morgan Stanley Capital I Inc. (the “Registrant”),
LaSalle
Bank National Association, as trustee and custodian, and Wells Fargo Bank,
National Association, as master servicer and securities
administrator. Certain of the terms and conditions of the Pooling and
Servicing Agreement, the Underwriting Agreement and the Mortgage Loan Purchase
Agreements have been described in a Prospectus Supplement filed on December3,2007 on behalf of the Registrant, which filing was made pursuant to Rule
424(b)(5) of the Securities Act of 1933, as amended, under the Registrant’s Form
S-3 registration statement number 333-130684, for the Issuing
Entity. The description of those agreements, together with other
purchase and servicing agreements and derivatives contracts identified in that
filing, are hereby incorporated herein by reference. On December 18, 2007 a
separate Current Report on Form 8-K was filed by the Registrant which included
a
copy of the Pooling and Servicing Agreement, the Underwriting Agreement, the
Certificate Purchase Agreement, the Mortgage Loan Purchase Agreement, the
Purchase and Servicing Agreements, the Assignment, Assumption and Recognition
Agreements and certain other agreements for the MSM Mortgage Loan Trust
2007-15AR.
GMAC
Mortgage Corporation (“GMAC”) and Morgan
Stanley Mortgage Capital Holdings LLC, successor by merger to Morgan Stanley
Mortgage Capital Inc., as owner (“MSMCI” or “Owner”)
are parties
to a Servicing Agreement, dated as of May 20, 2005 and a First Amended and
Restated Servicing Agreement, dated as of January 1, 2006 (the “GMAC Servicing
Agreement”), pursuant to which GMAC has agreed to service certain
Mortgage Loans on behalf of the Owner. On January 7, 2008, the
servicing of approximately 2.03% of the Mortgage Loans in the Mortgage Pool,
by
aggregate stated principal balance of the mortgage loans as of November 1,2007,
was transferred from GMAC to Saxon Mortgage Services, Inc. (“Saxon” or “Servicer”).
Pursuant
to Section 9.01(b) of the Pooling and Servicing Agreement, the Owner has
exercised its right to terminate GMAC, without cause, as servicer for the
Issuing Entity. Owner has chosen the Servicer to service and the Servicer,
subject to the terms of that certain Servicing Agreement, dated as of July1,2007 (the “Servicing Agreement”), between the Servicer and the Owner, as
modified by the Omnibus Assignment, Assumption and Recognition Agreement, dated
as of December 1, 2007, (the “Omnibus AAR” and, together with the Servicing
Agreement, the “Saxon Servicing Agreement”) and Servicer agrees to service the
Specified Mortgage Loans in accordance with the provisions of the Saxon
Servicing Agreement. The Omnibus AAR is annexed hereto as Exhibit
99.1a and the Servicing Agreement is annexed hereto as Exhibit 99.1b.
Capitalized
terms used herein and not defined herein have the same meanings ascribed to
such
terms in the Pooling and Servicing Agreement.
2
Information
relating to Saxon as a servicer is summarized below. The information set forth
below has been provided by Saxon, and none of the Registrant, the Issuing
Entity, the Master Servicer, the Trustee or any person other than Saxon makes
any representation as to the accuracy or completeness of such
information.
Servicing
Experience and Procedures of Saxon Mortgage Services, Inc.
The
Sponsor has contracted with Saxon to service certain of the Mortgage Loans
owned
by the Issuing Entity with respect to which the Sponsor owns the servicing
rights (the “Sponsor
Servicing
Rights Mortgage Loans”). Saxon did not originate any of the
Sponsor Servicing Rights Mortgage Loans. Pursuant to the Saxon
Servicing Agreement, the Sponsor has the right to terminate Saxon as servicer
of
the Sponsor Servicing Rights Mortgage Loans at any time, without cause, and
sell
the servicing rights to a third party.
History. Saxon,
a
Texas corporation, is an indirect subsidiary of Saxon Capital, Inc., which
itself is a direct subsidiary of Morgan Stanley Mortgage Capital Holdings
LLC. As a result, Saxon is an affiliate of the sponsor, the
depositor, Morgan Stanley Credit Corporation, the Issuing Entity and Morgan
Stanley & Co. Incorporated (the underwriter). Saxon began its
mortgage loan servicing operations in 1960 under the name Cram Mortgage Service,
Inc., changed its name in September 1994 to Meritech Mortgage Services, Inc.,
and changed its name to Saxon Mortgage Services Inc. in April
2002. Saxon services mortgage loans for its affiliates as well as
other non-affiliated lenders and investors.
Experience
and
Procedures. In 2001, Saxon began acquiring servicing from
third parties in addition to servicing the mortgage loans of
affiliates. Currently a substantial majority of the loans in Saxon’s
servicing portfolio are serviced for third parties. Of over 120
securitizations Saxon services, 29 were issued by an affiliate of Saxon and
the
rest were issued by third party issuers. On November 1, 2007, Saxon
purchased the servicing rights for certain mortgage loans from a third party,
the majority of which are related to 37 securitizations issued by such third
party. The total unpaid principal balance of mortgage loans that were
added to Saxon’s servicing portfolio through this purchase is approximately
$13.6 billion. At this time, substantially all of Saxon’s servicing
portfolio consists of sub-prime mortgage loans, comprised of fixed rate and
adjustable rate, first- and second-lien conventional mortgage
loans. Saxon’s servicing platform, MortgageServ, is able to service
virtually any type of mortgage loan product. Saxon has serviced
interest-only products for two years, in 2005 started servicing mortgage loans
with amortization periods of up to forty years, and in 2006 started servicing
mortgage loans with amortization periods of up to fifty years.
Saxon
services all mortgage loans according to its life of loan credit risk management
strategy which was developed substantially for the servicing of sub-prime
mortgage loans. The risk of delinquency and loss associated with sub-prime
mortgage loans requires active communication with borrowers. Beginning with
an
introductory call made as soon as the loans are activated on Saxon’s servicing
system, Saxon attempts to establish a consistent payment relationship with
the
borrower. In addition, Saxon’s call center uses a predictive dialer to create
calling campaigns for delinquent loans based upon the borrower’s historical
payment patterns and the borrower’s risk profile. Saxon’s
representatives have technology available to enhance service and delinquency
management. Contact with borrowers is tailored to reflect the
3
borrower’s
payment habit, loan risk profile, and loan status. Borrower contact is initiated
through outbound telephone campaigns, monthly billing statements, and direct
mail. Saxon’s website provides borrowers with access to account information and
online payment alternatives. Mortgage loan documents and financial
guides offering alternatives to foreclosure are available on the
website. Saxon Call Center representatives are blended agents with
customer focused collections skill sets.
Saxon’s
goal is to provide the most efficient and economical
solutions. Outsourcing of appropriate servicing functions has allowed
Saxon to maintain a high quality of performance at reduced costs while allowing
Saxon to focus its expertise on managing the outsourced service
providers. In the past, Saxon has successfully outsourced areas
including tax, insurance, foreclosure and bankruptcy processing and tracking.
In
2004, Saxon outsourced the document management area, resulting in faster imaging
of mortgage loan documents with lower document exception rates.
Between
the 35th and 48th day of delinquency, the borrower receives a demand notice
depending on the risk and the early indicator score of the mortgage
loan. If required by applicable law, 30 days or more is allowed to
cure the default before the account is referred to
foreclosure. The Call Center continues active collection
campaigns and may offer the borrower relief through an informal repayment
arrangement designed to resolve the delinquency in ninety days or less.
Accounts
moving from 30 days delinquent to 60 or more days delinquent are transferred
to
the Loss Mitigation Department, which is supported by the predictive dialer,
as
well as the MortgageServ system. The Loss Mitigation Department continues to
actively attempt to resolve the delinquency while Saxon’s Foreclosure Department
refers the file to local counsel to begin the foreclosure process.
The
MortgageServ system is Saxon’s core servicing platform. It provides all the
mortgage loan level detail and interacts with all of Saxon’s supplemental
applications such as the dialer, pay-by-phone and website.
Delinquent
accounts not resolved through collection and loss mitigation activities are
foreclosed in accordance with state and local laws. Foreclosure timelines are
managed through an outsourcing relationship that uploads data into the
MortgageServ system. The MortgageServ system schedules key dates throughout
the
foreclosure process, enhancing the outsourcer’s ability to monitor and manage
foreclosure counsel. Properties acquired through foreclosure are transferred
to
the REO Department to manage eviction and marketing of the properties.
Once
REO
properties are vacant, they are listed with one of three national asset
management firms that develop a marketing strategy designed to ensure the
highest net recovery upon liquidation. The REO Department monitors these asset
managers. Property listings are reviewed monthly to ensure the properties are
properly maintained and actively marketed.
Saxon
services nine securitizations for which servicer events of default have
occurred. Eight were triggered by delinquency levels, and one was
triggered by the cumulative loss level. Each of these securitizations
was issued in or prior to 2001. Saxon has never been removed as
4
servicer
and has not failed to comply with servicing criteria in any servicing agreements
other than as set forth herein. In addition to the nine
securitizations above, Saxon services another three securitizations issued
before 2001, two of which have more than one servicer, in which performance
triggers have occurred due to delinquency levels. Typically, this
results in a re-direction of bond principal payments to the most senior
classes. Saxon has not failed to make required advances with respect
to any securitizations for which it is servicer.
Saxon’s
assessment of compliance with applicable servicing criteria discloses that
it
was not in compliance with Items 1122(d)(4)(i) and 1122(d)(1)(ii) of Regulation
AB due to the failure to send certain lien releases to consumers or to the
recording jurisdiction, as appropriate, within the timeframes required by
Saxon’s guidelines or due to an error in Saxon’s guidelines regarding the
required means of delivery of lien releases. The assessment of
compliance indicates that delays in timeliness were caused by the failure of
Saxon’s vendor’s database to upload data regarding payments-in-full provided by
Saxon in order to produce lien releases in a timely manner. Saxon has taken
remedial actions to remedy the exceptions, to prevent exceptions going forward,
and to remedy applicable procedures.
In
addition, the assessment of compliance with applicable servicing criteria
performed by a servicing function participant contracted by Saxon reflects
that
it was not in compliance with Item 1122(d)(4)(xi) of Regulation AB due to one
payment having been made after the expiration date of the insurance policy,
based on a sample of loans reviewed for purposes of such
assessment. Based on discussions Saxon has had with this servicing
function participant, Saxon believes that the servicing function participant
has
taken actions designed to remedy the procedures that led to this compliance
exception.
Size,
Composition and Growth of
Saxon’s Portfolio of Serviced Assets. Currently, substantially
all of Saxon’s servicing portfolio consists of non-prime mortgage loans,
represented by fixed rate and adjustable rate, first- and second-lien
conventional mortgage loans. The following table reflects the size and
composition of Saxon’s affiliate-owned and third party servicing portfolio as of
the end of each indicated period.
Saxon’s
Portfolio of Mortgage Loans
Unpaid
Principal Balance as of: (Dollar Amounts, in thousands)
(1)
Saxon
Affiliate includes securitizations in which Saxon Asset Securities Company
is
the depositor and servicing of mortgage loans originated or purchased by Saxon
Mortgage, Inc. and Saxon Funding Management LLC.
Saxon
Rating
Information. Saxon’s residential sub-prime servicing
operations are currently rated as “Above Average” by S&P. Fitch
has rated Saxon “RPS2+” as a primary servicer of residential Alt-A and sub-prime
products. Moody’s has rated Saxon “SQ2+” as a
5
primary
servicer of residential sub-prime mortgage loans. Saxon is an
approved Freddie Mac and Fannie Mae servicer.
No
Material Changes to Servicer
Policies and Procedures. There have been no material changes
in Saxon’s servicing policies and procedures during the past three years.
Relationships
with Transaction
Parties. As a result of a merger, completed on December 4,2006, between Saxon Capital, Inc. and a subsidiary of the predecessor of the
sponsor, Saxon is an affiliate of the sponsor, the depositor, the Issuing
Entity, Morgan Stanley Credit Corporation and Morgan Stanley & Co.
Incorporated (the underwriter).
6
Section
9 Financial Statements and Exhibits.
Item
9.01 Financial
Statements and
Exhibits.
(a) Financial
statements of
businesses acquired:
Not
applicable.
(b) Pro
forma financial
information:
Not
applicable.
(c)
Exhibits: Page:
Exhibit
99.1a Omnibus Assignment, Assumption and Recognition Agreement,
dated as of December 1, 2007, among Morgan Stanley Mortgage Capital Holdings
LLC, Saxon Mortgage Services, Inc., as servicer, and LaSalle Bank National
Association, as trustee, and acknowledged by Wells Fargo Bank, National
Association, as master servicer and securities administrator.
Exhibit
99.1b Servicing Agreement, dated as of July 1, 2007, between Morgan
Stanley Mortgage Capital Holdings LLC and Saxon Mortgage Services, Inc.
7
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Omnibus
Assignment, Assumption and Recognition Agreement, dated as of December1,2007, among Morgan Stanley Mortgage Capital Holdings LLC, Saxon Mortgage
Services, Inc., as servicer, and LaSalle Bank National Association,
as
trustee, and acknowledged by Wells Fargo Bank, National Association,
as
master servicer and securities administrator.
E
99.1b
Servicing
Agreement, dated as of July 1, 2007, between Morgan Stanley Mortgage
Capital Holdings LLC and Saxon Mortgage Services, Inc.
E
9
Dates Referenced Herein and Documents Incorporated by Reference