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Mortgage Note Purchase Agreement for Saudi Arabia

Mortgage Note Purchase Agreement Template for Saudi Arabia

This document governs the sale and purchase of mortgage notes in Saudi Arabia, structured in compliance with both Saudi banking regulations and Islamic finance principles. It details the transfer of rights and obligations related to mortgage notes from the seller to the purchaser, including specific provisions for Sharia compliance, regulatory requirements, and the mechanics of transfer under Saudi law. The agreement encompasses comprehensive representations, warranties, and covenants specific to Saudi Arabian mortgage financing, while ensuring adherence to SAMA guidelines and Islamic banking practices.

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What is a Mortgage Note Purchase Agreement?

The Mortgage Note Purchase Agreement is a specialized financial instrument used in Saudi Arabia when one financial institution seeks to acquire mortgage notes from another. This document is particularly relevant in scenarios involving portfolio sales, securitization transactions, or strategic realignment of mortgage assets. It must carefully balance conventional banking practices with Islamic finance principles, ensuring compliance with Saudi Arabia's strict regulatory framework and Sharia requirements. The agreement typically includes detailed provisions for the transfer of mortgage rights, underlying security interests, and associated documentation, while incorporating necessary Sharia-compliant structures. It's commonly used by banks, finance companies, and investment firms operating within Saudi Arabia's financial services sector, requiring approval from both regulatory authorities and Sharia advisory boards.

What sections should be included in a Mortgage Note Purchase Agreement?

1. Parties: Identification of the Seller and Purchaser of the mortgage notes, including full legal names and registration details

2. Background: Context of the transaction, including reference to the underlying mortgage notes and their origination

3. Definitions: Key terms used throughout the agreement, including technical banking and Islamic finance terminology

4. Sale and Purchase: Core transaction terms, including identification of mortgage notes being sold and purchase price

5. Sharia Compliance: Declarations and structures ensuring compliance with Islamic finance principles

6. Conditions Precedent: Prerequisites for closing, including regulatory approvals and documentation requirements

7. Completion: Mechanics and timing of the transfer, including delivery of notes and payment procedures

8. Representations and Warranties: Seller's confirmations regarding the validity and status of the mortgage notes

9. Seller's Covenants: Ongoing obligations of the Seller regarding the mortgage notes and supporting documentation

10. Transfer Mechanics: Detailed procedures for legally transferring the mortgage notes under Saudi law

11. Payment Terms: Structure and timing of payments, ensuring Sharia-compliant consideration

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution procedures

What sections are optional to include in a Mortgage Note Purchase Agreement?

1. Security Agent Provisions: Required when a security agent is involved in holding or managing the mortgage notes

2. Multiple Closings: Include when the purchase will occur in multiple tranches

3. Servicing Arrangements: Required when ongoing servicing of the mortgage notes is part of the transaction

4. Buy-Back Provisions: Optional provisions for repurchase of non-performing notes

5. Third Party Rights: Required when rights are created for third parties such as regulators or beneficiaries

6. Tax Provisions: Detailed tax treatment section required for cross-border transactions

7. Registration Requirements: Additional section needed when special registration with SAMA or other authorities is required

What schedules should be included in a Mortgage Note Purchase Agreement?

1. Schedule 1 - List of Mortgage Notes: Detailed inventory of all mortgage notes being purchased, including key details

2. Schedule 2 - Form of Transfer Instruments: Templates for documentation required to effect the transfer

3. Schedule 3 - Conditions Precedent Documents: List of required documentation for closing

4. Schedule 4 - Seller's Power of Attorney: Form of power of attorney for executing transfer documents

5. Schedule 5 - Completion Checklist: Step-by-step checklist for closing procedures

6. Appendix A - Sharia Approvals: Copies of relevant Sharia board approvals and certifications

7. Appendix B - Regulatory Approvals: Copies of required SAMA and other regulatory approvals

8. Appendix C - Form of Notices: Templates for required notices to mortgagors and other parties

Authors

Alex Denne

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

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Loan Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions

























































Clauses








































Relevant Industries

Banking

Islamic Finance

Real Estate

Financial Services

Investment Management

Mortgage Finance

Asset Management

Capital Markets

Relevant Teams

Legal

Islamic Banking

Treasury

Risk Management

Real Estate Finance

Compliance

Investment

Portfolio Management

Transaction Management

Corporate Finance

Asset Management

Regulatory Affairs

Relevant Roles

Chief Financial Officer

Head of Islamic Banking

Legal Counsel

Sharia Compliance Officer

Treasury Manager

Mortgage Portfolio Manager

Risk Manager

Investment Director

Real Estate Finance Manager

Regulatory Compliance Officer

Transaction Manager

Portfolio Analyst

Senior Banking Executive

Chief Investment Officer

Industries








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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