Loan Servicing Agreement Template for Belgium

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Key Requirements PROMPT example:

Loan Servicing Agreement

"I need a Loan Servicing Agreement governed by Belgian law for a mortgage loan portfolio of €50 million, where our bank will outsource servicing to a third-party servicer starting March 2025, with special attention to GDPR compliance and reporting requirements."

Document background
The Loan Servicing Agreement is essential for financial institutions operating in Belgium that wish to outsource the administration and management of their loan portfolios to specialized servicers. This document is typically used when a financial institution needs to engage a professional loan servicer to handle various aspects of loan administration, including payment collection, borrower communication, regulatory compliance, and reporting. The agreement must comply with Belgian financial regulations, including FSMA requirements, banking laws, and EU directives applicable to credit servicing. It becomes particularly relevant in scenarios involving portfolio acquisitions, securitizations, or when institutions want to focus on core activities while delegating loan administration. The document includes detailed provisions for service levels, regulatory compliance, data protection, and operational procedures specific to the Belgian market.
Suggested Sections

1. Parties: Identification of the loan servicer and the loan owner/financial institution

2. Background: Context of the agreement, including reference to the loan portfolio and purpose of the servicing arrangement

3. Definitions and Interpretation: Detailed definitions of terms used throughout the agreement and interpretation rules

4. Appointment and Scope: Formal appointment of the servicer and detailed scope of services to be provided

5. Servicer's Obligations: Detailed responsibilities and duties of the servicer including collection, reporting, and compliance obligations

6. Standard of Care: Performance standards and service levels the servicer must maintain

7. Fees and Expenses: Compensation structure, payment terms, and reimbursable expenses

8. Compliance and Regulatory Matters: Obligations regarding regulatory compliance, licenses, and permits

9. Data Protection and Confidentiality: GDPR compliance and confidentiality obligations

10. Representations and Warranties: Statements of fact and assurances from both parties

11. Record Keeping and Reporting: Requirements for maintaining records and providing reports

12. Liability and Indemnification: Allocation of risks and indemnification obligations

13. Term and Termination: Duration of agreement and circumstances for termination

14. Post-Termination: Obligations and procedures following termination, including transfer of services

15. Governing Law and Jurisdiction: Specification of Belgian law and jurisdiction for disputes

Optional Sections

1. Sub-Servicing: Terms governing the appointment and oversight of sub-servicers, include when sub-servicers may be needed

2. Special Servicing: Provisions for handling defaulted or non-performing loans, include for portfolios with significant default risk

3. Cross-Border Provisions: Additional requirements for servicing loans in multiple jurisdictions, include for international portfolios

4. Insurance Requirements: Specific insurance obligations beyond standard coverage, include for high-value portfolios

5. Business Continuity: Detailed disaster recovery and business continuity requirements, include for critical service arrangements

6. Step-In Rights: Rights of the loan owner to take over services in specific circumstances, include for significant portfolios

7. Enhanced Reporting: Additional reporting requirements beyond standard reports, include for complex portfolios or regulatory requirements

Suggested Schedules

1. Schedule 1 - Loan Portfolio: Detailed description of the loans being serviced, including key characteristics and terms

2. Schedule 2 - Services: Detailed description of all services to be provided, including specific procedures and requirements

3. Schedule 3 - Service Levels: Specific performance metrics, KPIs, and service level requirements

4. Schedule 4 - Fees: Detailed fee structure, calculation methods, and payment terms

5. Schedule 5 - Form of Reports: Templates and requirements for all required reporting

6. Schedule 6 - Contact Details: Key contacts and escalation procedures for both parties

7. Schedule 7 - Data Processing Requirements: Detailed GDPR compliance requirements and procedures

8. Schedule 8 - Transfer Procedures: Detailed procedures for transferring services upon termination

9. Appendix A - Power of Attorney: Form of power of attorney granted to the servicer

10. Appendix B - Compliance Procedures: Detailed compliance procedures and requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Relevant Industries

Banking

Financial Services

Investment Management

Asset Management

Debt Collection

Credit Services

Alternative Lending

Mortgage Services

Consumer Finance

Commercial Lending

Relevant Teams

Legal

Compliance

Risk Management

Operations

Finance

Treasury

Credit Administration

Collections

Portfolio Management

Data Protection

Client Relations

Business Development

Relevant Roles

Chief Financial Officer

Head of Loan Operations

Compliance Officer

Legal Counsel

Portfolio Manager

Credit Risk Manager

Operations Director

Collections Manager

Relationship Manager

Contract Manager

Data Protection Officer

Treasury Manager

Chief Risk Officer

Loan Administrator

Business Development Manager

Industries
Belgian Civil Code (Code Civil/Burgerlijk Wetboek): Fundamental law governing contracts, obligations, and civil matters in Belgium. Articles 1101-1369 specifically deal with contractual obligations.
Belgian Financial Services and Markets Authority (FSMA) Regulations: Regulatory framework overseeing financial services activities, including loan servicing operations in Belgium.
Law of 21 December 2013 on Various Financial Provisions: Legislation governing various aspects of financial services including requirements for credit institutions and loan servicers.
Belgian Consumer Credit Act: Regulates consumer credit relationships and provides protection for consumers in credit agreements, including servicing aspects.
EU GDPR and Belgian Data Protection Act: Regulations governing the processing of personal data, which is crucial for loan servicing activities involving individual borrowers.
Belgian Anti-Money Laundering Law of 18 September 2017: Implements preventive measures against money laundering and terrorism financing, including requirements for financial service providers.
Belgian Banking Law of 25 April 2014: Defines the legal framework for banking activities and financial institutions, including provisions relevant to loan servicing.
Book VI of the Belgian Code of Economic Law: Contains provisions on market practices and consumer protection that may affect loan servicing relationships.
EU Directive 2021/2167 on Credit Servicers: European legislation implemented in Belgian law regarding credit servicers and credit purchasers.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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