Loan Servicing Agreement Template for Belgium

A comprehensive agreement governed by Belgian law that establishes the terms and conditions under which a loan servicer will manage and administer a portfolio of loans on behalf of a financial institution or loan owner. The document incorporates Belgian financial regulations, including FSMA requirements, data protection laws, and consumer protection provisions. It details the servicer's responsibilities, performance standards, compliance obligations, reporting requirements, and the procedures for collecting and managing loan payments, while ensuring adherence to Belgian banking and financial services legislation.

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What is a Loan Servicing Agreement?

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.

What sections should be included in a Loan Servicing Agreement?

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

What sections are optional to include in a Loan Servicing Agreement?

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

What schedules should be included in a Loan Servicing Agreement?

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

Jurisdiction

Belgium

Publisher

Genie AI

Document Type

Service Agreement

Cost

Free to use

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