1(c)(30)(iii) Prepayment penalty total term, which requires the
total number of months after the origination of the loan that the
prepayment penalty may be in effect. This single data point defines
the information required (prepayment penalty period), how to report
the information (in months) and the time frame the information
represents (from origination). In contrast, we believe under MISMO,
this data point would be provided through the responses to several
MISMO data definitions. One MISMO data definition defines the form
of count, such as the number of periods the prepayment penalty
applies. A second MISMO data definition would define what
constitutes a period (e.g., day, week, month, and year). A third
MISMO data definition indicates, for a group of responses, whether
the information was as of closing, the current reporting period, at
modification or at some other time frame. This approach allows the
entity reporting the information to define prepayment penalty period
by day, week, month or year.
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    We understand, however, that requiring data points that deviate
from how issuers capture and store data may raise costs for both
issuers and investors because issuers will need to create new systems
or adjust their current systems to provide the data to satisfy our
rules. In addition, investors will need to adjust their existing tools
to read and analyze the newly required data. To further minimize the
need to revise systems to provide the required data, we are revising
data points to better align with MISMO data definitions. If a proposed
data point and a MISMO data definition require the same or similar data
and aligning to the MISMO data definition would not affect the value of
the information or deviate from how information is reported under the
requirements, we revised the proposed data point to better align with
the MISMO data definition.\274\ We believe these changes will help to
minimize any burden or costs that may arise from the reporting of
similar information under different standards.
---------------------------------------------------------------------------

    \274\ See, e.g., letters from eSign, MBA I, MERS, and MISMO (all
suggesting that the final requirements follow the MISMO standards).
---------------------------------------------------------------------------

    We also acknowledge that some disclosures we are requiring are not
part of the MISMO data dictionary or provided to Fannie Mae and Freddie
Mac. Many of these disclosures relate to the ongoing performance of
pool assets. We are requiring these disclosures so that an investor may
conduct his or her own evaluation of the risk and return profile of the
pool assets at issuance and throughout the life of the investment.
    We also considered the alternative of requiring asset-level data
generally and allowing the industry to develop the reporting
requirement. While issuers in recent RMBS offerings have been providing
asset-level disclosure in line with the disclosure templates developed
by Project RESTART, providing such data to investors in this format is
not mandatory. As noted above, we believe that, unless asset-level
disclosures are standardized across all issuers, the benefits of asset-
level data is generally limited. We believe that, without requiring and
standardizing the asset-level requirements, issuers may choose to not
provide asset-level data to investors, provide it inconsistently, or
provide it under differing standards. These alternatives would limit
the ability for investors and market participants to cost-effectively
compare and analyze offerings of RMBS.
    Finally, we also received many comments directed at individual data
points, many of which were seeking changes to the format of the
information, the range of possible responses for a particular data
point, or the data point's title or definition. Other commenters made
suggestions on how we could make the data points better align with an
industry standard. We also received comments suggesting that certain
data points should not be required if the data is derivable from other
required data points.\275\ We considered each of these comments, and we
made changes that we believe improve or clarify the disclosure,\276\

mitigate cost and burden concerns and/or implement industry standards
when doing so would not materially diminish the value of the
disclosures to investors.
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    \275\ See letters from ASF I and Wells Fargo I.
    \276\ For example, we proposed a data point that would require
issuers to indicate the percentage of mortgage insurance coverage
obtained. In response to comments, we revised the data point to
confirm that the percentage disclosed should represent the total
percentage of the original loan balance that is covered by insurance
(e.g., 40% for an insurance policy that covers payment default only
from 60% of the loan balance to 100% of the balance). See new Item
1(f)(2) of Schedule AL.
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    In addition to revising the data points to align with industry
standards or to address comments received,\277\ we omitted some data
points that were proposed for other reasons, such as to address
concerns about disclosure of sensitive information or reduce
repetition. As discussed below, certain proposed data points would have
required disclosure of sensitive information and could have increased
the re-identification risk.\278\ While the changes we are making should
reduce the risk of re-identification and the related privacy concerns,
we do not believe that the changes will limit investors' ability to
conduct due diligence and make informed investment decisions.
---------------------------------------------------------------------------

    \277\ As noted elsewhere, we made revisions to the title,
definition or required response of some data points, in part, based
on comments received. As noted in Section III.A.2.a) Disclosure
Requirements for All Asset Classes and Economic Analysis of These
Requirements, these changes include changes to the definition or
title to clarify when the data should be captured. Other changes
include, based on comments received, technical changes to clarify
how the information should be reported. For instance, data points
capturing ``Date'' were changed to ``YYYY/MM'' and data points
requiring a ``%'' were changed to ``number.'' We also made revisions
to make the terminology used throughout the template consistent. For
example, in some instances, certain data points used the term ``note
rate'' and others used ``interest rate.'' For consistency, we use
``interest rate'' throughout.
    \278\ See Section III.A.3 Asset-Level Data and Individual
Privacy Concerns.
---------------------------------------------------------------------------

    As noted below, proposed Schedules L and L-D contained identical or
substantially identical data points, so by aggregating the schedules we
are able to omit one of the identical or nearly identical data
points.\279\ We also proposed data points that would have required
information about ARM loans that were modified during a reporting
period. This information would have included pre-modification and post-
modification characteristics of the ARM loans. We are not adopting the
pre-modification data points since investors will have access to pre-
modification information through other asset-level data.\280\ We also
aggregated several data points into either one data point or fewer data
points based on comments received.\281\ We are omitting some proposed
data points in favor of other data points that we are adding to the
requirements to address comments received. For instance, as discussed
further below, we replaced some data points that capture advances with
data points that disclose different categories of advances and how
those advances were reimbursed.\282\ We are also omitting, based on
comments received, data points that relate to the Home Affordable
Modification Program, a temporary government program, over concerns
about the value of these data points over other modification data
points and about adopting data points for a temporary government
program.\283\ We also are not adopting a proposed data point that
commenters suggested would provide limited value to investors.\284\
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    \279\ See Section III.B.2 The Scope of New Schedule AL.
    \280\ The following proposed data points were omitted from
Schedule AL: Items 2(e)(4) Pre-modification interest (note) rate;
2(e)(7) Pre-modification P&I payment; 2(e)(10) Pre-modification
initial interest rate decrease; 2(e)(12) Pre-modification subsequent
interest rate increase; 2(e)(14) Pre-modification payment cap;
2(e)(17) Pre-modification maturity date: 2(e)(19) Pre-modification
interest reset period (if changed); 2(e)(21) Pre-modification next
interest rate change date; and 2(e)(26) Pre-modification interest
only term.
    \281\ For instance, a data point was added to the final
requirements to capture why a loan balance was reduced to zero. See
new Item 1(32)(g)(ii) of Schedule AL. This data point includes a
coded list of reasons why the loan balance was reduced to zero, such
as the loan was liquidated, repurchased, or paid off. As a result,
the following proposed data points contained in Schedule L-D were
omitted from the final requirements: Items 1(i) Repurchase
indicator; 1(l)(1) Paid-in-full indicator; 1(j) Liquidated
indicator; 1(k) Charge-off indicator; 2(h) Deed-in-lieu date; and
2(l)(7) Actual REO sale closing date.
    \282\ See the discussion further below in this section titled
Advances: Principal, Interest, Taxes and Insurance, and Corporate.
    \283\ See proposed Items 2(e)(47) through 2(e)(47)(x) of
Schedule L-D.
    \284\ We proposed a data point that would have required issuers
to provide the date on which the original LTV ratio was calculated.
See proposed Item 2(b)(17) of Schedule L. Some commenters suggested
we not adopt this data point as this date is immaterial because the
date on which the value used in the calculation was determined is
more important. See letters from ASF I and SIFMA I. We are not
adopting this data point as we agree with commenters that this date
is not necessary given that the date on which the value used in the
calculation was determined is required to be provided.
---------------------------------------------------------------------------

    Some commenters, however, suggested we expand the asset-level
disclosures to include more data points than proposed.\285\ For
instance, commenters suggested adding data points that would correlate
to information captured in ASF's Project RESTART disclosure and
reporting template,\286\ that would capture information about
government sponsored loan modification programs,\287\ and debt-to-
income (``DTI'') ratios or property valuations.\288\ Another commenter
suggested that we add data points that increase the granularity of
certain obligor-related data.\289\ A commenter also suggested adding
data points that captured more information about the characteristics of
modified loans.\290\ We added those data points to the extent we
believe the data point improves or clarifies the proposed requirements
or aids an investor's ability to make an informed investment decision,
monitor loan performance for ongoing investment decisions, or
understand loss mitigation efforts without significantly increasing re-
identification risk.\291\ We also took into consideration whether
issuers have ready access to the information and whether requiring the
information in the format requested would place an undue burden on
issuers or market participants. The final requirements do not include
every data point that commenters recommended we add because we are
concerned they could impose an undue burden and we are not persuaded
that the data would aide an investor's ability to analyze or price the
security or monitor its ongoing performance. We believe that, to the
extent issuers want to provide additional asset-level disclosures in
order to capture the unique attributes of a particular pool, issuers
can provide the additional asset-level disclosures in an Asset Related
Document.\292\
---------------------------------------------------------------------------

    \285\ See, e.g., letters from ASF I, CU, MSCI, Wells Fargo I and
SFIG I.
    \286\ See letters from ASF I and Wells Fargo I. For example, ASF
I suggested that, like in Project RESTART, we include a 4506-T
indicator data point, a paid-in-full amount data point and master
servicer, special servicer and subservicer data points. Because
these data points are consistent with our other requirements and
capture information that should be readily available to issuers, we
have added them. See new Items 1(e)(8), 1(g)(30), 1(h)(3), 1(h)(4)
and 1(h)(5) of Schedule AL.
    \287\ See letter from Wells Fargo I.
    \288\ See letter from Mass. Atty. Gen.
    \289\ See letter from SFIG II (also suggesting changes to
clarify certain asset-level data points).
    \290\ See letter from Wells Fargo I.
    \291\ See Section III.A.3 Asset-Level Data and Individual
Privacy Concerns.
    \292\ See Section III.B.4 Asset Related Documents.
---------------------------------------------------------------------------

    We discuss below the significant comments we received about
individual data points along with the revisions we have made in
response to those comments.
Information About Payment Status and Payment History
    The proposal included a group of data points that would require
disclosure of information about the status of required payments. These
data points would capture, both at the time of the offering and on an
ongoing basis, current

delinquency status,\293\ the number of days a payment is past due,\294\
and current payment status.\295\ In addition, on an ongoing basis, a
data point would capture the payment history over the past twelve
months.\296\
---------------------------------------------------------------------------

    \293\ See proposed Items 1(b)(5) of Schedule L and 1(f)(12) of
Schedule L-D.
    \294\ See proposed Items 1(b)(6) of Schedule L and 1(f)(13) of
Schedule L-D.
    \295\ See proposed Items 1(b)(7) of Schedule L and 1(f)(14) of
Schedule L-D.
    \296\ See proposed Item 1(f)(15) of Schedule L-D.
---------------------------------------------------------------------------

    One commenter suggested that we add, revise or delete data points
in this group in order to align with servicing practices or to increase
transparency.\297\ In lieu of the proposed data points capturing
current delinquency status, current payment status and the number of
days a payment is past due, we are adopting, based on comments
received, the following data points: Most recent 12-month pay
history,\298\ number of payments past due \299\ and paid through
date.\300\ We discuss below the group of data points we are adopting.
Taken together, we believe this group of data points should provide
insight into the payment performance of each pool asset and allow
investors to track delinquencies.
---------------------------------------------------------------------------

    \297\ See letter from ASF I.
    \298\ See new Item 1(g)(33) of Schedule AL.
    \299\ See new Item 1(g)(34) of Schedule AL.
    \300\ See new Item 1(g)(28) of Schedule AL.
---------------------------------------------------------------------------

Paid Through Date
    The proposed data point titled ``Number of days payment is past
due'' would have required disclosure, at the time of the offering, of
the number of days between the scheduled payment date and the cut-off
date if the obligor did not make the full scheduled payment. The
proposed ongoing disclosure requirements included a similar data point,
but required the number of days between the scheduled payment date and
the reporting period end date, instead of the cut-off date. A commenter
indicated the final requirements should omit the proposed data point
because servicers currently track delinquencies in 30-day intervals,
measured on a monthly basis, rather than number of days past due at any
given date, including the reporting date, and because the cost to
capture the proposed information is not justifiable.\301\ As an
alternative, the commenter suggested the number of days past due could
be derived from the interest paid through date reported in proposed
Item 2(a)(14) of Schedule L and the measurement date.
---------------------------------------------------------------------------

    \301\ See letter from ASF I.
---------------------------------------------------------------------------

    We are not adopting, as a commenter suggested, the data point
titled ``Number of days payment is past due'' because the proposed data
point may have required data that differs from how data is
captured.\302\ We believe an alternative approach may provide investors
similar information with lower costs to issuers. We believe investors
can derive information about the number of days payment is past due
from the date through which the loan is paid. Therefore, to address the
commenter's concern and provide information in each report to derive
the number of days a payment is past due, we are adopting a data point
titled ``Paid through date'' which requires disclosure of the date the
loan's scheduled principal and interest is paid through as of the end
of the reporting period.\303\ For each reporting period the response to
this data point will disclose, regardless of when the last payment was
made, the date the loan is paid through. The response to this data
point will also indicate when a loan is paid several months in advance.
We believe this approach addresses the commenter's cost concerns
because the required information should be readily available.\304\
---------------------------------------------------------------------------

    \302\ We do not agree, however, with the alternative the
commenter suggested, that the number of days a payment is past due
could be derived from the interest paid through date reported in
proposed Item 2(a)(14) of Schedule L and the measurement date,
because the interest paid through date is calculated on the payment
due for that period. Therefore, in future periods where a payment is
missed, the response to this data point would not provide the paid
through date since no payment was made.
    \303\ See new Item 1(g)(28) of Schedule AL.
    \304\ We also note that this data has been provided in some RMBS
offerings.
---------------------------------------------------------------------------

Most Recent 12-Month Pay History
    The proposed data point titled ``Current delinquency status'' would
have required that issuers disclose the number of days the obligor is
delinquent at the time of the offering \305\ and on an ongoing
basis.\306\ One commenter suggested that for RMBS we replace this data
point with a data point contained in the Project RESTART disclosure
package that required a string indicating the payment status per month
over the most recent 12 months.\307\ The commenter stated this string,
with the addition of foreclosure and REO disclosures, would provide
considerably more useful information than the proposed data point and
would subsume the proposed data point instead of requiring the number
of days an obligor is past due. We are persuaded that a payment history
data point indicating the payment status per month over the most recent
12 months would provide more useful information than the number of days
an obligor is past due. In addition, we believe, as a commenter
suggested, that the payment history data point subsumes the proposed
data point. Therefore, we are adopting a payment history data point and
omitting the proposed current payment status data point.\308\ Because
this information should be readily available to issuers for the entire
history of the loan, we believe any additional costs incurred from
providing the disclosures in the format requested, to the extent that
such format differs from how such information is collected and stored,
will be limited.
---------------------------------------------------------------------------

    \305\ See proposed Item 1(b)(5) of Schedule L.
    \306\ See proposed Item 1(f)(12) of Schedule L-D.
    \307\ See letter from ASF I (suggesting the adoption of field 97
of the ASF RMBS Disclosure Package--Most Recent 12-month Pay
History). ASF provided this comment with respect to proposed Item
1(b)(5) Current Delinquency Status of Schedule L. They did not
provide a similar comment with respect to proposed Item 1(f)(12) of
Schedule L-D. We believe under the one schedule format that we are
adopting the payment history string subsumes the data captured by
this data point. Therefore, we are not adopting the proposed Current
delinquency status data point.
    \308\ See new Item 1(g)(33) of Schedule AL. This data point
requires an issuer to provide a string that indicates the payment
status per month listed from oldest to most recent. The possible
responses based on field 97 of ASF's RMBS Disclosure Package are:
0=Current; 1=30-59 days delinquent; 2=60-89 days delinquent; 3=90-
119 days delinquent; 4=120+ days delinquent; 5=Foreclosure; 6=REO;
7=Loan did not exist in period; 99=Unknown. The value furthest to
the left in the string would be the most recent month and the value
furthest to the right would be the 12th month. For example, for a
loan that was current in the most recent month, 30-59 days
delinquent from months two to five and current from months six to
twelve the string would be as follows:<PHONE_NUMBER>00.
---------------------------------------------------------------------------

Number of Payments Past Due
    We also proposed a data point titled ``Current payment status''
that would capture the number of payments the obligor is past due.\309\
We are revising the title to ``Number of payments past due'' to more
accurately convey the information the data point requires.\310\ A
commenter requested we omit the proposed data point because it would be
redundant with the proposed the ``Current delinquency status'' data
point, which would have captured the number of days the obligor is
delinquent.\311\ There are many ways to present the status of payments,
and the data point we are adopting will require disclosure of the
number of payments an obligor is behind at any point in time.
Therefore, we are not adopting the ``Current delinquency status'' data
point

which should eliminate any potential redundancy.
---------------------------------------------------------------------------

    \309\ See proposed Items 1(b)(7) of Schedule L and 1(f)(14) of
Schedule L-D.
    \310\ See new Item 1(g)(34) of Schedule AL.
    \311\ See proposed Items 1(b)(5) of Schedule L and 1(f)(12) of
Schedule L-D.
---------------------------------------------------------------------------

Information About Junior Liens and Senior Liens
    We proposed data points that would require disclosure, at the time
of the offering, about the junior liens and senior liens that existed
at origination. For loans with subordinate liens at origination, the
combined balances of all subordinate loans would be required.\312\ For
junior loans being securitized, the combined balances of all senior
mortgages at the time the junior loan was originated would be
required.\313\ Where the associated most senior lien is a hybrid, the
hybrid period of the most senior lien would be required.\314\ Where the
associated most senior lien features negative amortization, the
negative amortization limit of the senior mortgage as a percentage of
the senior lien's original unpaid principal balance would be
required.\315\ We did not propose a data point to capture the effort an
originator or sponsor made to discover if the same property secures
other loans, but we asked if this type of disclosure should be
required.\316\
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    \312\ See proposed Item 2(a)(16) of Schedule L.
    \313\ See proposed Item 2(a)(17)(i) of Schedule L.
    \314\ See proposed Item 2(a)(17)(iii) of Schedule L.
    \315\ See proposed Item 2(a)(17)(iv) of Schedule L.
    \316\ See the 2010 ABS Proposing Release at 23363.
---------------------------------------------------------------------------

    Comments on this group of data points varied. A few commenters
requested that the data points capturing junior lien balances include
an ``if known'' or similar qualifier to address concerns that
originators may not always have knowledge of, or access to, balance
information on loans not originated by them.\317\ A few commenters also
suggested that the combined senior loan and combined junior loan
balances, if known, be captured on an ongoing basis.\318\ Two
commenters supported a data point capturing what effort an originator
or sponsor made to discover if the same property secures other
loans.\319\ One of these commenters noted, however, that there may be
difficulties providing this disclosure because the existence of a debt
obligation may not be discovered before the required asset-level
disclosures are provided.\320\ The other commenter noted that the
disclosure should be required because the failure to account for an
additional loan will result in an inaccurately reported combined LTV
ratio and, therefore, investors would want to know if the verification
was made.\321\
---------------------------------------------------------------------------

    \317\ See letters from ASF I and SIFMA I.
    \318\ See letters from ASF I and Wells Fargo I.
    \319\ See letters from Epicurus and Mass. Atty. Gen.
    \320\ See letter from Epicurus (suggesting that, to address the
problem, the attorney or title company at closing should be required
to certify that a title search was completed and whether that title
search identified the existence of other debts, if any, held against
the property).
    \321\ See letter from Mass. Atty. Gen.
---------------------------------------------------------------------------

    We are adopting the group of data points described above, but with
revisions to address comments received.\322\ In response to comments
that expressed concern that originators may not always have knowledge
of, or access to, balance information on loans not originated by them,
we revised this group of data points to require that the information be
provided if the information was obtained or available to them.
Regardless of whether the loan being securitized was originated by
parties affiliated or unaffiliated to the issuer, we expect, however,
that an issuer would make efforts to discern whether junior loans were
originated concurrently to or immediately following the origination of
the loan being securitized and the balances of those loans. We believe
the review required under existing Rule 193 of the Securities Act,
which requires a review of the pool assets underlying the asset-backed
security may address concerns about verification. The review required
under Rule 193 must be designed and effected to provide reasonable
assurance that the disclosure regarding the pool assets in the
prospectus, which includes the asset-level disclosures, is accurate in
all material respects. We believe a Rule 193 review would necessarily
include consideration of whether the disclosures about junior or senior
liens are accurate in all material respects. We are not adopting a
separate data point that would require disclosure of the effort an
originator or sponsor made to discover if the same property secures
other loans.\323\ This data would be difficult to capture in a
standardized way, and we are uncertain, at this time, whether this
information is best captured within these particular asset-level
requirements.
---------------------------------------------------------------------------

    \322\ See new Items 1(c)(12)(i) Most recent junior loan balance;
Item 1(c)(12)(ii) Date of most recent junior loan balance;
1(c)(13)(i) Most recent senior loan amount; 1 (c)(13)(ii) Date of
most recent senior loan amount; 1(c)(13)(iii) Original loan type of
most senior lien; 1(c)(13)(iv) Hybrid period of most senior lien;
and 1(c)(13)(v) Negative amortization limit of most senior lien of
Schedule AL.
    \323\ See the 2010 ABS Proposing Release at 23363.
---------------------------------------------------------------------------

    We believe investors will benefit from ongoing disclosure about the
aggregate balances of all known senior and junior lien(s) and,
therefore, we are revising the data points to capture the most recent
senior lien(s) and junior lien(s) balances.\324\ We understand,
however, that obtaining updated balances on an ongoing basis may
involve some burden and cost, particularly if the junior liens are
originated by parties unaffiliated with the issuer. Therefore, to
address burden concerns, these data points do not require that issuers
obtain updated information each month. Instead, the definitions of
these data points indicate that a response is required if the most
recent junior or senior mortgage balances are obtained or
available.\325\
---------------------------------------------------------------------------

    \324\ See new Items 1(c)(12)(i) Most recent junior loan balance
and 1(c)(13)(i) Most recent senior loan amount of Schedule AL. We
are also adopting data points that capture the dates of the most
recent loan balances. See new Items 1(c)(12)(ii) Date of most recent
junior loan balance and 1(c)(13)(ii) Date of most recent senior loan
amount.
    \325\ For example, if the asset in an RMBS is a senior lien, and
subsequent to the securitization, a junior lien is originated by an
affiliate of the depositor, the information about the junior lien
would be available to the issuer and should be reported to the
investors in the RMBS in an ongoing report.
---------------------------------------------------------------------------

Information About the Property
    We proposed a group of data points that would capture information
related to the property, such as the property type, occupancy status,
geographic locations and valuations.\326\ Taken together, these data
points would provide insight into the physical asset underlying the
mortgage. The response to this group of data points varied with some
commenters suggesting the group of data points was too granular \327\
and others suggesting we expand the information captured about
valuations.\328\ We discuss below the significant comments we received
about this group of data points and the revisions we have made to data
points within this group.
---------------------------------------------------------------------------

    \326\ See proposed Items 2(b)(2) through 2(b)(19) of Schedule L.
    \327\ See, e.g., letter from CMBP.
    \328\ See, e.g., letter from Mass. Atty. Gen.
---------------------------------------------------------------------------

Property Location
    We proposed to require that the location of the property by
Metropolitan Statistical Area, Micropolitan Statistical Area or
Metropolitan Division (collectively, ``MSA'') be provided in lieu of
zip code due to privacy concerns arising from providing the property's
zip code.\329\ The response to this

approach varied. On the one hand, we received some comments suggesting
we not require zip code because it would make the ability to identify
an obligor within a loan pool easier.\330\ On the other hand, some
commenters indicated that 5-digit zip codes or 3-digit zip codes should
be provided instead of MSA because zip codes provide more information
about the property.\331\ For instance, one commenter was concerned that
disclosing only the MSA would result in less information than is
currently available.\332\ As another commenter noted, the zip code
provides information such as whether the property is in a flood plain
or earthquake zone.\333\ One commenter indicated that using MSA rather
than zip codes would restrict the information available to investors
and, as such, issuers expect to receive substantially lower pricing for
new RMBS offerings resulting in substantially higher costs for
consumers of residential mortgage loans.\334\ Another commenter echoed
this concern.\335\ Another commenter suggested that the ``County
Code,'' which is a federal information processing standard code, is an
appropriate alternative to other geographic location identifiers.\336\
---------------------------------------------------------------------------

    \329\ MSAs are geographic areas designated by a 5-digit number
defined by the U.S. Office of Management and Budget (OMB) for use by
Federal statistical agencies in collecting, tabulating and
publishing Federal Statistics. A Metropolitan Statistical Area
contains a core urban area of at least 10,000 (but less than 50,000)
population. Each Metro or Micro area consists of one or more
counties and includes the counties containing the core urban area,
as well as any adjacent counties that have a high degree of social
and economic integration (as measured by commuting to work) with the
urban core. The OMB also further subdivides and designates New
England City and Town Areas. The OMB may also combine two or more of
the above designations and identify it as a Combined Statistical
Area.
    \330\ See letters from CU and WPF.
    \331\ See letter from ASF I (expressed views of investors only).
See also letter from Beached Consultancy (suggesting use of 3-digit
zip codes).
    \332\ See letter from ASF I (expressed views of investors only).
    \333\ See letter from Epicurus.
    \334\ See letter from Wells Fargo I.
    \335\ See letter from ASF I (noting that not disclosing zip
codes for the property would be a step backwards in disclosure
practice).
    \336\ See letter from MERS.
---------------------------------------------------------------------------

    As discussed below in response to the 2014 Re-Opening Release,
several commenters stressed the importance of geography in assessing
re-identification risk and recommended requiring issuers to identify
assets by a broader geographic area to reduce the ability to re-
identify.\337\ One commenter recommended that, instead of requiring MSA
as proposed, we require geography by 2-digit zip code.\338\ Based on
the reasons discussed in Section III.A.3 Asset-Level Data and
Individual Privacy Concerns, we are requiring disclosure of the 2-digit
zip code, which will allow investors to assess market risk associated
with a particular geographic location without resulting in unnecessary
re-identification risk.
---------------------------------------------------------------------------

    \337\ See letters from ABA III, ELFA II, Lewtan, SIFMA/FSR I-
dealers and sponsors, SFIG II, the Treasurers of Royal Bank of
Canada, Canadian Imperial Bank of Commerce, The Bank of Nova Scotia,
The Toronto-Dominion Bank, Bank of Montreal and National Bank of
Canada dated Apr. 28, 2014 submitted in response to the 2014 Re-
Opening Release (``Treasurer Group''), and Wells Fargo III.
    \338\ See letter from ABA III.
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Property Valuations
    We proposed a group of data points that would capture information
about original property valuations.\339\ The comments we received on
this group of data points varied with some commenters seeking more
granularity and others seeking less granularity. Commenters seeking
more granularity suggested expanding this group of data points to
require data about recent property sales, more detail about the
characteristics of the property, such as the gross living area, room
count, and construction style,\340\ and the disclosure of appraiser
credentials and prior complaints against them.\341\ A commenter also
recommended including valuations captured as part of a ``valuation
diligence'' process, including recalculated loan-to-value ratios and
combined loan-to-value ratios based on these valuations.\342\ Another
commenter said there is no uniformity in how values are determined
because the proposal would allow issuers to select from a long menu of
valuation methods, approaches and sources for establishing property
values.\343\ This flexibility would allow issuers to pick-and-choose
which valuation method best serves their purposes, and the proposed
rule would not establish any qualification requirements or standards of
care and/or competency for valuations performed in connection with
mortgage-backed securities.
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    \339\ See proposed Items 2(b)(5), 2(b)(6), 2(b)(7), 2(b)(8), and
2(b)(9) of Schedule L.
    \340\ See letter from AI.
    \341\ See letter from Epicurus. See also letter from ASA
(suggesting issuers of mortgage-backed securities (and those with
ongoing Exchange Act reporting requirements relative to those
securities) be required to use state certified and licensed
professional real property appraisers and require adherence to the
Uniform Standards of Professional Appraisal Practice to value loan-
level real estate and real property collateral assets).
    \342\ See letter from the Mass. Atty. Gen.
    \343\ See letter from the ASA.
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    One commenter stated that the data captured about property
valuations was too granular and not relevant to an investor.\344\ With
respect to the data point capturing the valuation date, a commenter
suggested the purpose of disclosing the valuation date is to ensure
that the loan-to-value ratio used in the underwriting process was
current enough to not overstate the collateral value of the mortgaged
property, particularly during periods of declining home prices.\345\
The commenter stated that the precise date of the valuation may be
difficult for some originators to track. As an alternative, the
commenter suggested that we permit issuers to either provide the
valuation date or represent in the relevant transaction agreement that
the valuation was conducted not more than a specified number of days
prior to the original closing of the loan. According to the commenter,
such a representation would ensure that the issuer or originator is
allocated the risk of stale valuation. Further, to address any concern
about the effectiveness of a representation in lieu of disclosure, the
commenter's suggested alternative would only apply in a transaction in
which the transaction agreements provide for a robust third-party
mechanism for evaluating and resolving breaches of representations.
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    \344\ See letter from CMBP.
    \345\ See letter from ASF I.
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    As discussed in Section III.A.3 Asset-Level Data and Individual
Privacy Concerns below, we are concerned that providing data about
original property valuations may increase re-identification risk;
therefore, we are not adopting any of the proposed data points related
to original property valuations. In particular, we are concerned that
data about original property valuations could provide a close
approximation of sales price, and thus raise the same re-identification
concern as sales price. Although we are not adopting the proposed data
points related to original property valuations, we are adopting other
data points, such as Original loan amount and Original loan-to-value,
which will provide investors with key information that they need to
perform due diligence and make an informed investment decision.
    We also proposed data points requiring disclosure about the most
recent property value, if an additional property valuation was obtained
after the original appraised property value.\346\ One commenter
indicated that these data points appeared to relate only to valuations
obtained by the originator.\347\ The commenter suggested that we
require any sponsor who obtains an alternative property valuation as
part of due diligence to disclose that value to the extent it is the
most recent property value. The commenter also suggested that we
consider disclosure of the lowest alternative property value in the
last six months (in addition to the most recent property value) to
prevent the sponsor from evading the requirements

by getting alternate values only when the most recent value is lower
than the sponsor would like. Another commenter also suggested that the
``Most recent property value'' data point should only require property
values obtained by the securitization sponsor, although the investor
members of this commenter recommended that this include affiliates of
the securitization sponsor.\348\
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    \346\ See proposed Items 2(b)(10), 2(b)(11), 2(b)(12), 2(b)(13),
and 2(b)(14) of Schedule L.
    \347\ See letter from Mass. Atty. Gen.
    \348\ See letter from SIFMA I.
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    We are adopting these data points, as proposed, with revisions to
address comments received.\349\ In particular, we revised the
definitions to require disclosure of any valuation obtained by or for
any transaction party or their affiliates.\350\ This revision addresses
comments that these data points appear to relate to valuations obtained
only by the originator. The reference to ``obtained by or for any
transaction party or its affiliates'' contained in each definition
should be construed broadly and should include, but not be limited to,
valuations obtained as part of any due diligence conducted by credit
rating agencies, underwriters or other parties to the transaction. We
also made conforming changes to the titles and definitions ``Most
recent AVM model name'' and ``Most recent AVM confidence score''
because these disclosures are providing information about the most
recent property value.
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    \349\ See new Items 1(d)(5) Most recent property value; 1(d)(6)
Most recent property valuation type; 1(d)(7) Most recent property
valuation date; 1(d)(8) Most recent AVM model name; and 1(d)(9) Most
recent AVM confidence score of Schedule AL.
    \350\ The final rules also require disclosure of the date on
which the most recent property value was reported.
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    We also considered, as a commenter suggested, adopting data points
to capture the lowest alternative property valuation obtained in the
last six months by, in addition to the originator, the sponsor or its
affiliates. We did not adopt these data points because we are not
persuaded, at this time, that the potential benefits investors may
receive from such information would justify the potential costs and
burdens that may be associated with providing the data. If, however,
alternative property valuations are obtained that reflect substantially
lower valuations, an issuer should consider whether these valuations
need to be disclosed or whether additional narrative disclosure is
necessary so that the disclosure about property valuations is not
misleading.\351\ Originators, sponsors or other transaction parties are
not required to obtain updated valuations in order to respond to the
data points capturing information about recent valuations. Instead,
this requirement is meant to capture valuations conducted subsequent to
the original valuation for whatever reason, such as updated valuations
obtained in the normal course of their business or because other facts
or circumstances required an updated valuation.
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    \351\ See footnote 186 and accompanying text.
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Information About the Obligor(s)
    We proposed a group of asset-level data points that would provide
data about an obligor's credit quality.\352\ This group of data points
was intended to capture information about the obligor(s) income, debt,
employment, credit score and DTI ratio. In light of privacy concerns,
the proposal included ranges, or categories of coded responses, instead
of requiring disclosure of an exact credit score, income or debt amount
in order to prevent the identification of specific information about an
individual. We discuss below the significant comments we received about
this group of data points and the revisions we have made in response to
those comments.
---------------------------------------------------------------------------

    \352\ See proposed Items 2(c)(1) through 2(c)(31) of Schedule L.
---------------------------------------------------------------------------

Use of Coded Ranges, Updated Information and Information About Co-
Obligors
    The comments we received on this group of data points varied. As
discussed below, several commenters noted that some data points related
to obligors may cause individual privacy concerns if linked to the
obligor even if that information, like obligor credit score, was
provided in ranges.\353\ On the other hand, some commenters generally
opposed coded ranges because they believe exact credit scores are
necessary to evaluate risk, appropriately price the securities or
verify issuer disclosures.\354\
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    \353\ See, e.g., letters from ABA I, AFSA I, CDIA, CU, Epicurus,
SIFMA I, TYI LLC dated Aug. 2, 2010 submitted in response to the
2010 ABS Proposing Release (``TYI''), and WPF I. See also Section
III.A.3 Asset-Level Data and Individual Privacy Concerns.
    \354\ See letters from ASF I (expressed views of investors
only), Interactive Data Corporation dated August 2, 2010 submitted
in response to the 2010 ABS Proposing Release (``Interactive''),
Prudential I, and Wells Fargo I.
---------------------------------------------------------------------------

    With respect to whether updated obligor information should be
required, one commenter believed that servicers should provide updated
borrower information whenever such information is obtained by the
servicer.\355\ Other commenters, without providing a reason, also
suggested updated credit score information should be provided.\356\
Another commenter, however, suggested that updated credit scores are
obtained infrequently, if at all, and the benefit investors may receive
from updated monthly credit scores across all securitized loans would
not justify the costs to provide such disclosures.\357\ The commenter
recommended requiring this information only if the servicer obtains the
information. We also received a few comments suggesting that we
eliminate the co-obligor categories for various reasons,\358\ and
received a comment suggesting that we provide obligor information for
up to four different obligors.\359\
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    \355\ See letter from MetLife I (suggesting that certain obligor
information be disclosed whenever a servicer obtains updated
information).
    \356\ See letters from ASF I and Wells Fargo I.
    \357\ See letter from MBA I.
    \358\ See letters from BoA I (suggesting that for proposed Items
2(c)(1)-2(c)(12), 2(c)(23) and 2(c)(26)-2(c)(31), if there are
multiple borrowers the data should be aggregated (e.g., income or
assets) and if the data cannot be aggregated (e.g., DTI) the most
conservative value should be used) and CMBP (suggesting that
separate obligor and co-obligor categories are unnecessary because
total obligor income to service the debt and the nature of that
income is sufficient).
    \359\ See letter from SFIG I.
---------------------------------------------------------------------------

    We are eliminating certain data about obligor income based on
comments received and in light of the recent adoption by the CFPB of
the ability-to-repay requirements under the Truth in Lending Act or
Regulation Z, which includes minimum standards for creditors to
consider in making an ability-to-pay determination when underwriting a
mortgage loan.\360\ We note that all originators will need to adhere to
these requirements and, therefore, it is appropriate to align our
disclosure requirements with how originators will be required to assess
the obligor's income when considering their ability to repay a loan
while not requiring the disclosure of a significant amount of
potentially sensitive obligor information that could increase re-
identification risk.\361\ To achieve this, we omitted the data points
capturing obligor and co-obligor wage income,\362\ obligor and co-
obligor other income,\363\ all obligor wage income,\364\ all obligor

total income,\365\ and monthly debt.\366\ A commenter suggested that we
require monthly income used to calculate the DTI ratio.\367\ However,
as discussed below in Section III.A.3 Asset-Level Data and Individual
Privacy Concerns, to help reduce re-identification risk, we are not
adopting a number of data points that disclose potentially sensitive
obligor information, such as debt or income.
---------------------------------------------------------------------------

    \360\ 12 CFR 1026. See also Ability-to-Repay and Qualified
Mortgage Standards Under the Truth in Lending Act (Regulation Z)
(Jan. 30, 2013) [78 FR 6407], as amended by Ability-to-Repay and
Qualified Mortgage Standards Under the Truth in Lending Act
(Regulation Z) (June 12, 2013) [78 FR 35429] and Amendments to the
2013 Mortgage Rules Under the Real Estate Settlement Procedures Act
(Regulation X) and the Truth in Lending Act (Regulation Z) (July 24,
2013) [78 FR 44686].
    \361\ Accordingly, we are not requiring that obligor information
such as credit score, credit score type, income verification,
employment verification, asset verification and length of employment
be provided for more than one obligor.
    \362\ See proposed Items 2(c)(26) and 2(c)(27) of Schedule L.
    \363\ See proposed Item 2(c)(28) and 2(c)(29) of Schedule L.
    \364\ See proposed Items 2(c)(30) of Schedule L.
    \365\ See proposed Item 2(c)(31) of Schedule L.
    \366\ See proposed Item 2(c)(15) of Schedule L.
    \367\ See letter from Mass. Atty. Gen.
---------------------------------------------------------------------------

    We are also adopting data points capturing the obligor credit
score, modified from the proposal.\368\ The proposal would have
required issuers to indicate the credit score type and score. If the
score used was FICO, issuers would have been required to indicate the
code that represented a range of FICO credit scores within which the
score fell. The rules we are adopting require disclosure of the exact
credit score used to evaluate the obligor during the origination
process.\369\ We are persuaded by commenters that exact credit scores
are necessary to evaluate risk and to appropriately price
securities.\370\ We also added, in response to comments received, data
points that capture the most recent credit score, credit score type and
credit score date.\371\ We are persuaded that updated scores should be
provided, if obtained, since such information will provide investors
with a picture of the obligor's ongoing ability to repay the loan.
These data points do not require originators, sponsors or transaction
parties to obtain updated information. Instead, this requirement is
meant to capture credit scores obtained, for whatever reason, after the
original score was obtained.
---------------------------------------------------------------------------

    \368\ See new Items 1(e)(2) Original obligor credit score and
1(e)(3) Original obligor credit score type of Schedule AL.
    \369\ The 2010 ABS Proposal required a coded response
representing ranges of FICO score, if FICO was used. If another type
of credit score was used, an exact score would have been required.
    \370\ See letters from ASF I (requesting exact credit score be
required because it has historically been provided on a loan-level
basis and stating that investor members were concerned that moving
from disclosing precise scores to score ranges ``would represent a
significant step backwards in loan-level transparency''), ASF II
(noting that actual FICO score has been provided for some time in
the RMBS industry and that loan-level investors ``believe that it
would be extremely useful in the auto space as well'') Capital One I
(stating that current FICO scores would be very useful for an
investor's credit analysis), Interactive (stating that providing
FICO score ranges would reduce precision by assuming that all loans
within a certain band will behave the same), MetLife I (requesting
specific FICO score for each loan), Prudential I (stating that
ranges of FICO scores or grouped data disclosure are not sufficient
to appreciate the linkages between collateral characteristics),
Prudential III (discussing the importance of certain data points,
such as credit score, to an investor's credit risk analysis and
asserting that predictive risk factors, such as FICO score must be
evaluated in conjunction with other factors, as the combination of
individual loan characteristics and economic environment can add or
diminish the risk of a given loan), Vanguard (stating that providing
investors with specific data, such as FICO scores, that is updated
periodically should foster independent analysis in the ABS market
and improve pricing), and Wells Fargo I (expressing its concern that
by providing investors with ranges of credit scores, issuers would
receive substantially lower pricing for new offerings, which would
lead to substantially higher costs for consumers). In addition,
Ginnie Mae, Fannie Mae and Freddie Mac all disclose exact credit
scores. We understand that certain asset-level information about an
obligor, including credit score, may be considered a ``consumer
report'' subject to regulation under FCRA. As discussed below, the
CFPB has provided guidance to the Commission stating that FCRA will
not apply to asset-level disclosures where the Commission determines
that disclosure of certain asset-level information is ``necessary
for investors to independently perform due diligence,'' in
accordance with the mandate of Securities Act Section 7(c). For a
discussion of the importance of credit scores to predicting
delinquency, see Section III.A.3 below.
    \371\ See new Items 1(e)(4) Most recent obligor credit score,
1(e)(5) Most recent obligor credit score type and 1(e)(6) Date of
most recent obligor credit score of Schedule AL. See letters from
ASF I, MetLife I, and Wells Fargo I.
---------------------------------------------------------------------------

Length of Employment
    We proposed data points requiring information about the length of
time the obligor and co-obligor have been employed.\372\ We received a
comment that this level of detail about the obligor's length of
employment is unnecessary.\373\ As an alternative, the commenter stated
that it would be sufficient to know if the obligor has been employed by
his or her current employer for 24 months or less or more than 24
months because this is the standard demarcation in industry
underwriting standards. In line with the commenter's suggestion, we
revised the data point to require the issuer to indicate whether the
obligor has been employed by his or her current employer for greater
than 24 months as of the origination date. We believe this approach
will mitigate the burden on issuers, but still provide investors with
valuable information about the obligor's length of employment.
---------------------------------------------------------------------------

    \372\ See proposed Items 2(c)(22) and 2(c)(23) of Schedule L.
    \373\ See letter from CMBP.
---------------------------------------------------------------------------

Months Bankruptcy and Months Foreclosure
    We proposed a data point that would require disclosure of the
number of months since any obligor was discharged from bankruptcy.\374\
We also proposed a data point that would require disclosure, if the
obligor has directly or indirectly been obligated on any loan that
resulted in foreclosure, of the number of months since the foreclosure
date.\375\ We received a comment suggesting this information may be
difficult or costly for many lenders to capture, and that a suitable
substitute would consist of a representation designed to ensure that
the obligor has not recently been discharged from bankruptcy and a
representation designed to ensure that the obligor has not recently
been obligated on a loan that resulted in a foreclosure sale.\376\ The
commenter suggested requiring representations in the relevant
transaction agreements, in lieu of the disclosure of the number of
months since the obligor was discharged from bankruptcy or the number
of months since the foreclosure date, to the effect that at least a
specified number of years have passed since any obligor was discharged
from bankruptcy or was a direct or indirect obligor on a loan that
resulted in a foreclosure sale.
---------------------------------------------------------------------------

    \374\ See proposed Item 2(c)(24) of Schedule L.
    \375\ See proposed Item 2(c)(25) of Schedule L.
    \376\ See letter from ASF I.
---------------------------------------------------------------------------

    Another commenter stated, with respect to the data point capturing
the number of months since an obligor has directly or indirectly been
obligated on any loan that resulted in foreclosure, that its dealer and
sponsor members believe that this data point should be limited to
direct obligations, whereas its investor members believed that
guaranteed or co-signed obligations should be included.\377\ Both
groups agreed that this disclosure should be limited to obligations on
residential property that resulted in foreclosure within the last seven
years (so that such foreclosure would appear on a credit report).
---------------------------------------------------------------------------

    \377\ See letter from SIFMA I.
---------------------------------------------------------------------------

    In response to privacy concerns, we are not adopting either
proposed data point. Section III.A.3 Asset-Level Data and Individual
Privacy Concerns below provides a discussion of these and other related
data points that we are not adopting due to the potential re-
identification risk. As noted below, if an obligor had experienced a
past bankruptcy or foreclosure, we would expect that those events would
have been considered in generating a credit score. Because we are
requiring disclosure of an exact credit score, investors will receive
information they need about past payment behavior to perform due
diligence.
Debt-to-Income
    We proposed data points that would require at the time of
securitization disclosure about the total DTI ratio used

by the originator to qualify the loan.\378\ In addition, at the time of
securitization and on an ongoing basis the front-end and back-end DTI
\379\ ratios would be required for any modified loans.\380\
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    \378\ See proposed Item 2(c)(16) of Schedule L.
    \379\ The front-end DTI is calculated by dividing the obligor's
total monthly housing expense by the obligor's total monthly income.
The back-end DTI is calculated by dividing the obligor's total
monthly debt expense, which includes expenses such as mortgage
payments, car loan payments, child support and alimony payments,
credit card payments, student loans payments and condominium fees,
by the obligor's total monthly income.
    \380\ See proposed Items 2(a)(21)(iv)-(v) of Schedule L and
Items 2(e)(23) and 2(e)(25) of Schedule L-D.
---------------------------------------------------------------------------

    One commenter suggested DTI ratio disclosure provided at
origination include both front-end and back-end DTI ratios.\381\ The
commenter also suggested we require the DTI ratio for an ARM loan to be
recalculated using the fully indexed interest rate and that we require
disclosure of any subsequent calculations.\382\
---------------------------------------------------------------------------

    \381\ See letter from Mass. Atty. Gen.
    \382\ Id. (also requesting other updated information be
provided, for instance, any values that have been corrected as a
result of due diligence process, such as monthly income and DTI, as
well as any post-modification DTI ratios).
---------------------------------------------------------------------------

    The data points we are adopting today require, as proposed and
consistent with the comment received, front-end and back-end DTI ratios
calculated during the loan origination process and at the time of any
loan modification.\383\ We believe both front-end and back-end DTI
ratios provide important data about the total debt load of the obligor,
which provides insight into the obligor's ability to repay the loan. We
are not adopting, as one commenter recommended, data points capturing
information about the DTI ratio recalculated using the fully indexed
interest rate. We believe the DTI figures provided in response to this
data point will be adequate for investors to use, in part, to assess a
borrower's ability to repay. We also note that our approach is
generally consistent with Regulation Z, which requires all loans
covered by Regulation Z to consider DTI ratios calculated using the
fully indexed interest rate.
---------------------------------------------------------------------------

    \383\ See new Items 1(e)(9) Originator front-end DTI, 1(e)(10)
Originator back-end DTI, 1(m)(12) Modification front-end DTI, and
1(m)(13) Modification back-end DTI of Schedule AL.
---------------------------------------------------------------------------

Information About Servicer Advances
Servicer Advances
    We made various changes to the group of data points capturing
information about servicer advances. The proposal included information
about the servicer's responsibility, if any, to advance principal or
interest on a delinquent loan, the method of those advances, the
outstanding cumulative balance advanced and how those advances were
subsequently reimbursed. The requirements we are adopting today include
the information proposed and described above, but also include the
addition and deletion of some data points capturing advances to address
comments received. We discuss immediately below the various changes to
the group of data points capturing information about servicer advances.
Advancing Method
    The final rule includes a data point suggested by a commenter
titled ``Advancing method.'' \384\ The data point includes a coded list
that indicates the servicer's responsibility for advancing principal or
interest on delinquent loans. We believe that the response to this data
point will help investors understand the servicer's responsibility with
respect to advances for each particular loan and the pool as a whole.
---------------------------------------------------------------------------

    \384\ See new Item 1(g)(5) Advancing method of Schedule AL. See
letter from ASF I.
---------------------------------------------------------------------------

Advances: Principal, Interest, Taxes and Insurance, and Corporate
    We proposed a general disclosure data point that would require, if
amounts were advanced by the servicer during the reporting period, the
disclosure of the amount advanced.\385\ One commenter \386\ suggested
that for RMBS, we split this information into three categories that
would capture principal and interest advances,\387\ tax and insurance
advances,\388\ and corporate advances because these categories of
information are more useful.\389\ In addition, the investor membership
of another commenter requested disclosure about the servicer's
methodologies regarding advances of interest and principal on
delinquent loans, the reimbursement of those advances,\390\ and, for
modified loans, disclosure about non-capitalized and capitalized
advances.\391\ The commenter also suggested aggregating the data points
capturing, for liquidated loans, the various advances the servicer had
made to cover expenses incurred due to concerns that the information
was too granular and the information is immaterial to investors.\392\
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    \385\ See proposed Item 1(g)(4) of Schedule L-D.
    \386\ See letter from ASF I.
    \387\ Id. (noting that principal and interest advances consist
of due but unpaid principal and/or interest on the loan for the
period, as required by the methodology specified in the transaction
agreements).
    \388\ Id. (stating that tax and insurance advances consist of
due but unpaid escrow amounts for payment of property taxes and
insurance payments with respect to the mortgaged property).
    \389\ Id. (defining corporate advances as consisting of property
inspection and preservation expenses with respect to defaulted
loans).
    \390\ See letter from SIFMA I (suggesting that we amend current
pool-level disclosure requirements so that more disclosure is
provided about a servicer's methodologies for advancement of
principal and interest and the reimbursement of advances).
    \391\ Id. (referring to the disclosures required under proposed
Items 2(e)(45) Reimbursable modification escrow and corporate
advances (capitalized) and 2(e)(46) Reimbursable modification
servicing fee advances (capitalized) of Schedule L-D).
    \392\ See proposed Items 2(m)(1)(iv) through 2(m)(1)(xii) of
Schedule L-D.
---------------------------------------------------------------------------

    In light of these comments, we have split the final data points
into the following four categories: Principal advances, interest
advances, taxes and insurance advances, and corporate advances. While
one commenter recommended aggregating the principal advances and
interest advances into one data point, the final rule includes data
points capturing interest and principal advances separately since that
is consistent with how other information that relates to principal and
interest is captured in Schedule AL.
    We agree with commenters that requiring disclosures about advances
made by the servicer, the outstanding cumulative balance advanced and
how those advances were subsequently reimbursed or addressed will
provide investors insight into the payment status of a particular asset
within the pool and the potential losses that may pass on to the trust.
Therefore, in order to capture how these advances were reimbursed, the
final rule includes additional data points that capture for these same
categories of advances, the cumulative outstanding advanced amount or,
if these advances were subsequently reimbursed, how they were
reimbursed or resolved, such as through the obligor becoming current on
payments, or being reimbursed at the time the loan was liquidated.
Since this information is likely readily available to issuers, we
believe the cost to provide this data should be low.
    We have omitted from the final requirements, as a commenter
recommended, proposed data points that would have required the
disclosure of the amount of various expenses advanced and reimbursed,
such as property inspection expenses, insurance premiums, attorney fees
and property taxes paid for liquidated loans. Since the asset-level
reporting requirements do not require that advances be reported in this
fashion at each reporting period, we are uncertain at this time whether
this level of granularity about outstanding advances at loan
liquidation would be beneficial to

investors. In general, we believe these expenses are captured by other
data points that detail reimbursements at loan liquidation for advances
of taxes and insurance and corporate expenses.\393\
---------------------------------------------------------------------------

    \393\ See new Items 1(t)(1)(iii) Servicer advanced amounts
reimbursed--principal; 1(t)(1)(iv) Servicer advanced amounts
reimbursed--interest; 1(t)(1)(v) Servicer advanced amount
reimbursed--taxes and insurance; and 1(t)(1)(vi) Servicer advanced
amount reimbursed--corporate of Schedule AL.
---------------------------------------------------------------------------

Information About Modified Loans
    We proposed a group of data points that would capture information
about modified loans. The responses to this group of data points would
provide data about whether a loan has been modified, the modification
terms and the loan characteristics that were modified. We received
comments suggesting we add \394\ or delete \395\ data points from this
group of data points, and comments suggesting we revise certain data
points within this group.\396\ A commenter suggested adding a
requirement for data that details the number of modification requests
that are granted and denied and the average time that elapses between a
borrower's request for a loan modification and a determination of that
application.\397\ The commenter also requested disclosure of the number
and percentage of modified loans which have re-defaulted.
---------------------------------------------------------------------------

    \394\ See letters from ASF I and Wells Fargo I.
    \395\ See letter from ASF I.
    \396\ See letter from SIFMA I.
    \397\ See letter from CU.
---------------------------------------------------------------------------

    We are adopting most of this group of proposed data points,\398\ as
well as additional data points, mainly based on comments received to
provide further transparency around modifications, including any change
in loan characteristics or other loan features.\399\ For instance, the
final requirements include, in addition to the proposed data points,
data points that capture information about step provisions,\400\ the
actual and scheduled ending balances of the total debt owed,\401\ the
date a trial modification was violated,\402\ and the interest rate and
amortization type after modification.\403\ For loans that remain an
adjustable rate mortgage after a modification, additional data points
capture information, such as the index look-back, the post-modification
initial interest rate, the maximum amount a rate can increase or
decrease and information about negative amortization caps.\404\ We did
not add, as a commenter suggested, requirements about the number of
modification requests received, the average time that elapses between a
borrower's request for a loan modification and when a determination is
made, or the number and percentage of modified loans which have re-
defaulted.\405\ We are not persuaded these disclosures would provide a
clear benefit to investors, especially in light of the costs issuers
would incur to provide such information.
---------------------------------------------------------------------------

    \398\ We are not adopting certain items related to a
modification that would be captured elsewhere in the requirements,
such as information on servicer advances. See, e.g., proposed Items
2(e)(44) through 2(e)(46) of Schedule L-D.
    \399\ See letters from ASF I and Wells Fargo I.
    \400\ See new Items 1(m)(24)(i) Post-modification interest rate
step indicator; 1(m)(24)(ii) Post-modification step interest rate;
1(m)(24)(iii) Post-modification step date; 1(m)(24)(iv) Post-
modification--step principal and interest; and 1(m)(24)(v) Post-
modification--number of steps of Schedule AL.
    \401\ See new Items 1(m)(19) Actual ending balance--total debt
owed and 1(m)(20) Scheduled ending balance--total debt owed of
Schedule AL.
    \402\ See new Item 1(n)(3) Most recent trial modification
violated date of Schedule AL.
    \403\ See new Items 1(m)(4) Post-modification interest rate type
and 1(m)(5) Post-modification amortization type of Schedule AL.
    \404\ See, e.g., new Items 1(m)(21)(vi) Post-modification index
look-back; 1(m)(21)(vii) Post-modification ARM round indicator;
1(m)(21)(viii) Post-modification ARM round percentage; 1(m)(21)(xi)
Post-modification ARM payment recast frequency; 1(m)(21)(xx) Post-
modification ARM interest rate teaser period; 1(m)(21)(xxiii) Post-
modification ARM negative amortization cap; 1(m)(22)(ii) Post-
modification interest only last payment date; 1(m)(24)(ii) Post-
modification step interest rate and 1(m)(24)(iv) Post-modification--
step principal and interest. The group of data points capturing data
about modifications include some data points beyond those proposed
or those that commenters suggested be added. These additional data
points were added to make the required disclosure about modified ARM
loans consistent with the required disclosure about original ARM
loans. See new Items 1(m)(21)(ii) Post-modification ARM Index;
1(m)(21)(ix) Post-Modification initial minimum payment;
1(m)(21)(xiv) Post-modification initial interest rate increase;
1(m)(21)(xvii) Post-modification subsequent interest rate decrease;
and 1(m)(21)(xix) Post-modification payment method after recast of
Schedule AL.
    \405\ See letter from CU.
---------------------------------------------------------------------------

Most Recent Loan Modification Event Type
    We also proposed a data point as part of the ongoing disclosure
requirements that would require the issuer to specify, if the loan has
been modified, the code that describes the type of action that has
modified the loan terms.\406\ The proposed codes were:
1=capitalization-fees or interest have been capitalized into the unpaid
principal balance; 2=change of payment frequency; 3=construction to
permanent; and 4=other. One commenter requested we delete this data
point because the coded list only describes a subset of possible loan
modifications and the type of modification can be determined based on a
comparison of pre-modification and post-modification
characteristics.\407\ Another commenter recommended we expand the coded
list to add forgiveness of principal, rate reductions, maturity
extensions and forgiveness of interest to the list of possible
responses.\408\
---------------------------------------------------------------------------

    \406\ See proposed Item 2(a)(21)(ii) of Schedule L.
    \407\ See letter from ASF I.
    \408\ See letter from SIFMA I.
---------------------------------------------------------------------------

    We are adopting this data point because we believe this disclosure
will allow investors to focus on what terms may have changed due to a
modification, which should allow investors to quickly assess whether
changes in the terms of an asset will affect future cash flows or the
risk profile of the asset pool.\409\ We added, as a commenter
recommended, additional codes to the coded list.\410\ We also note that
a loan may go through several loan modifications. Therefore, we revised
the data point to clarify that information about the most recent loan
modification is required each time the disclosure is filed.\411\
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    \409\ See new Item 1(m)(1) Most recent loan modification event
type of Schedule AL.
    \410\ The coded list was revised to also include the following
possible responses: 4=forgiveness of principal, 5=rate reductions,
6=maturity extensions and 7=forgiveness of interest. If, however,
the type of action that has modified the loan terms is not
identified in the list of possible responses, the issuer should
select the code ``other'' and we encourage the issuer to provide
explanatory language in an Asset Related Document. See Section
III.B.4 Asset Related Documents for a discussion on providing
additional explanatory disclosure about the asset-level disclosures.
    \411\ Because asset-level data will be provided monthly,
investors will be able to track previous loan modifications.
---------------------------------------------------------------------------

Effective Date of the Most Recent Loan Modification
    We proposed a data point titled ``Loan modification effective
date,'' which is the date on which the most recent modification of the
loan has gone into effect. A commenter suggested omitting this data
point from the RMBS requirements because loan modifications are
effective on the mortgage loan's next due date after entry.\412\ While
we acknowledge that may be current practice, we are adopting this data
point as we are mindful that other practices regarding loan
modifications may develop. Further, since responses to this data point
will be provided on an ongoing basis after a loan is modified, we
believe this date will provide a clear indication about the length of
time that has passed since the loan was last modified. We are adopting
this data point with a revision to clarify that only information about
the most recent loan modification is required because, as noted above,
a loan

may go through several modifications.\413\
---------------------------------------------------------------------------

    \412\ See letter from ASF I.
    \413\ See new Item 1(m)(2) Effective date of the most recent
loan modification of Schedule AL.
---------------------------------------------------------------------------

(2) Commercial Mortgage-Backed Securities
    Between Schedule L and Schedule L-D, we proposed 108 data points
that relate specifically to CMBS. The data points we proposed to
require in Schedule L and Schedule L-D were primarily based on the data
template included in the CREFC Investor Reporting Package (``CREFC
IRP''), current Regulation AB requirements, and staff review of current
disclosure. We did not propose, however, to include every piece of
information exactly as specified in the CREFC IRP for two reasons.
First, some of the disclosures required by the CREFC IRP would have
already been captured by proposed data points in the Item 1 General
Requirements, and we believed that those data points would apply to all
types of ABS. Second, we did not believe the level of detail in the
CREFC IRP was necessary for investor analysis because we believed that
the most important data for CMBS is data that relates to the loan term
and the property.
    The response to the proposal indicated a general preference for
CREFC IRP in lieu of the proposed requirements.\414\ The preference
applied to both information in the prospectus and ongoing
reporting.\415\ For asset-level reporting at the time of
securitization, commenters seemed to favor initial reporting schedules
commonly attached by issuers to the prospectus (typically referred to
as Annex A) that frequently contain asset-level data based on the
specific types of commercial mortgages in the transaction. Some of
these commenters suggested that the proposed requirements would
duplicate the data provided in the Annex A schedules provided with the
prospectus \416\ and the existence of duplicative data may confuse
investors.\417\ One commenter, who supported requiring Annex A in lieu
of the proposed Schedule L disclosures, suggested that Schedule L does
not reflect the practices that CMBS market participants have developed
to provide ``CMBS investors with clear, timely and useful disclosure
specifically tailored for use by those investors.'' \418\ Finally, one
investor believed it is reasonable to require the disclosures because
much of the same information is currently provided in Annex A of the
offering documents.\419\ The investor suggested, however, that
additional disclosure items to improve current industry disclosure
practices, such as requiring disclosure of actual versus underwritten
property performance metrics, including disclosure of the same
performance metrics for the preceding three years, complete tenant
information versus top three tenant information, rent rolls, full
indebtedness information for each property and standardized tenant and
borrower information.
---------------------------------------------------------------------------

    \414\ See, e.g., letters from ABA I (suggesting that we conform
Schedule L data points to IRP standards and the Schedules L and L-D
standards should be a ``guideline'' and that the ``traditional
standards of materiality'' should be the overriding factor in
determining the appropriateness of the disclosure in the offering
document), BoA I (suggesting that we require asset-level disclosure
generally, but allow the industry to set the requirements for
disclosure in the prospectus because requiring a separate Schedule L
would be repetitive of the relevant information already provided in
CREFC's Annex A), CREFC I (suggesting that we conform proposed
Schedule L asset-level data disclosure to the then-current ``Annex
A'' data points formulated by the CREFC ``Annex A'' Committee and/or
consider that the Schedule L filing requirement be satisfied if the
issuer files a Schedule L with the data points identical to the
then-current form of ``Annex A'' adopted by CREFC), CREFC III, MBA I
(suggesting that to the extent we believe more standardized
terminology and a defined core of shared data points for Schedule L
would be benefit investors, that we adopt the core disclosures in
the current industry Annex A schedules and leverage the definitions
already provided in CREFC's IRP), MBA IV, and Wells Fargo I
(suggesting that proposed Schedule L asset-level data disclosure
conform to the then-current ``Annex A'' data points contained in
CREFC's IRP).
    \415\ See letters from ABA I, BoA I, CMBS.com I (suggesting that
we establish rules consistent with existing standards where possible
to limit disruptions and costs), CoStar, CREFC I, CREFC III, MBA I,
MBA IV, MetLife I, and Wells Fargo I.
    \416\ See letters from BoA I, MBA I, and MBA IV.
    \417\ See letter from MBA I (urging that we consider any
increase in cost to be incurred by the issuer to provide the
additional data and cautioning against including duplicative or
extraneous data points at securitization that may hinder rather than
enhance investor review of the loans in the pool).
    \418\ See letter from Wells Fargo I.
    \419\ See letter from MetLife I.
---------------------------------------------------------------------------

    For ongoing reporting, commenters indicated a preference for
previously established industry standards in lieu of the proposal for
several reasons.\420\ For instance, one commenter was concerned that
requiring data points unrelated to CMBS, such as those found in the
general requirements, would cause undue programming burdens without a
material benefit to investors.\421\ Another commenter stated that ``IRP
guidelines identify which data points are restricted (i.e., only
available to certain users), while the SEC data filings to be contained
in Schedule L-D would be public information.'' \422\ The commenter then
stated that publicly disclosing certain sensitive information could put
the underlying properties at a competitive disadvantage, which could
negatively influence the securities. Other commenters also believed
that proprietary information should be considered sensitive
information, and therefore CMBS issuers should not be required to
publicly disclose such information on EDGAR.\423\ Commenters also noted
that based on current requirements, investors would receive CREFC IRP
disclosures 15 days prior to the required filing date of the Schedule
L-D disclosure.\424\ One of these commenters also stated that CMBS
transactions often involve multiple loans with different financial
reporting dates, and the information has to be reviewed by the
appropriate parties, and therefore, any particular reporting date may
not reflect information for the current reporting period.\425\ One
investor suggested, in lieu of adopting our ongoing disclosure
proposal, that we require disclosure of complete rent rolls at least
once per year, the alternatives evaluated with respect to
modifications, all terms related to a modification or assumption and
that we require the format of the industry reporting standard to be in
XML.\426\
---------------------------------------------------------------------------

    \420\ See letters from CREFC I (suggesting that we tailor
Schedule L-D to take into consideration the data already captured by
the IRP), CREFC III, CoStar, MBA I, MBA IV, MetLife I, and Wells
Fargo I (suggesting that all of the data captured by Schedule L-D is
either captured by the IRP or is not applicable to CMBS with the
exception of only two data points, which they indicated would be
added to what is captured by the IRP).
    \421\ See letter from CREFC I.
    \422\ See letter from Wells Fargo I.
    \423\ See letters from CREFC III (stating that ``the CRE Finance
Council's member constituencies, including investment-grade
investors, believe that most--if not all--of the information on
Schedule L and Schedule L-D should be considered sensitive, and
therefore should continue to be hosted on the issuer's (or trustee's
or third-party's) Web site''), MBA IV, and SFIG II.
    \424\ See letters from CREFC I, MetLife I, MBA IV, and Wells
Fargo I.
    \425\ See letter from Wells Fargo I.
    \426\ See letter from MetLife I.
---------------------------------------------------------------------------

    After considering the comments we received, we are adopting a
requirement that issuers of CMBS provide the disclosures contained
under Item 2 of Schedule AL. We believe that investors and market
participants should have access to information to assess the credit
quality of the assets underlying a securitization transaction at
inception and over the life of a security. While we recognize the
current market practice is to include provisions in CMBS transactions
that provide investors with asset-level data for each pool asset, we
note that this market practice is not a mandatory requirement and is
subject to change. As such, we believe the asset-level disclosure
requirements that we are adopting will require a minimum level of
standardized asset-level

disclosures in the prospectus and over the life of a security
regardless of market practices. We acknowledge commenters' concerns
that requiring asset-level disclosures that deviate from the data
template in the CREFC IRP may raise costs for both issuers and
investors because users are accustomed to working with the CREFC IRP
data templates. We also understand that investors are involved in the
ongoing development of the CREFC IRP. For these reasons, we made
efforts to align our requirements, as much as possible, with pre-
established industry codes, titles and definitions to allow for the
comparability of future offerings with past offerings and to minimize
the burden and cost of reporting similar information in different
formats.
    The requirements that we are adopting contain several revisions
from the proposal aimed at aligning our standards with the CREFC IRP.
We reconsidered and are not adopting some data points that do not
correspond to the CREFC IRP or are typically disclosed in Annex A
because they are no longer necessary due to other changes we made, such
as aggregating Schedules L and L-D, or because we are adding data
points based on the CREFC IRP to capture the same or similar
information.\427\ Some data points that we are adopting, however, do
not correspond exactly to data captured by the CREFC IRP, but we
believe the responses to these data points will improve or clarify the
requirements, or aid an investor's ability to make an investment
decision.\428\ We are also adding some data points that correspond to
data captured by the CREFC IRP based on comments received, because the
responses to these data points clarify other data points or they add
more granularity to the data captured by other data points.\429\ In
total, the proposal for CMBS included a total of 182 data points
between the proposed general item requirements of Schedules L and L-D
and the data points specific to CMBS in proposed Schedules L and L-D.
Based on the changes described above, the final requirements include
152 data points.
---------------------------------------------------------------------------

    \427\ See, e.g., proposed Items 1(a)(17) Servicing fee--flat
dollar; 1(b)(5) Current delinquency status; 1(b)(6) Number of days
payment is past due; 3(a)(9) Current hyper-amortizing date of
Schedule L and 1(f)(3) Actual principal paid; 1(f)(4) Actual other
amounts paid; 1(f)(14) Current payment status; 1(g)(5) Cumulative
outstanding advanced amount; 1(g)(8) Other loan level servicing
fee(s) retained by servicer; 1(g)(9) Other assess but uncollected
servicer fees; 1(l)(2)(ii) Pledged prepayment penalty waived;
1(l)(2)(iii) Reason for not collecting pledged prepayment penalty;
3(a)(4)(i) Rate at next reset; and 3(a)(4)(iii) Payment at next
reset of Schedule L-D.
    \428\ See new Items 2(a)(1) Asset number type; 2(b)(1) Reporting
period begin date; 2(b)(2) Reporting period end date; 2(c)(1)
Originator; 2(c)(2) Origination date; 2(c)(11) Original interest-
only term; 2(c)(13) Underwriting indicator; 2(c)(25) Prepayment
premium indicator; 2(d)(15) Valuation source at securitization;
2(e)(16)(i) Servicing advance methodology; 2(f)(1) Primary servicer;
2(g) Asset subject to demand; 2(g)(3) Demand resolution date;
2(g)(4) Repurchaser; 2(g)(5) Repurchase or replacement reason;
2(k)(5) Post-modification maturity date and 2(k)(6) Post-
modification amortization period of Schedule AL.
    \429\ See, e.g., new Items 2(c)(18) Scheduled principal balance
at securitization; 2(d)(2) Property address; 2(d)(3) Property city;
2(d)(4) Property state; 2(d)(5) Property zip code; 2(d)(6) Property
county; 2(d)(13) Year last renovated; 2(d)(28)(i) Date of financials
as of securitization; 2(d)(28)(xiv) Most recent debt service amount;
2(d)(28)(xxi) Date of the most recent annual lease rollover review;
2(e)(3) Reporting period beginning scheduled loan balance; 2(e)(10)
Unscheduled principal collections; 2(e)(14) Paid through date;
2(e)(16)(iv) Total taxes and insurance advances outstanding;
2(e)(16)(v) Other expenses advance outstanding; 2(e)(17) Payment
status of loan; 2(e)(18)(i) ARM index rate; 2(f)(2) Most recent
special servicer transfer date; 2(f)(3) Most recent master servicer
return date; 2(h) Realized loss to trust; 2(i)(1) Liquidation/
Prepayment code; 2(i)(2) Liquidation/Prepayment date; 2(k)(2)
Modification code of Schedule AL. We are also adopting a few data
points that do not correspond to data captured by the CREFC IRP
because our data points clarify the requirements or we received
comments requesting the data points be added and we believe the data
points aid an investor's ability to make an informed investment
decision. See, e.g., new Items 2(d)(19) Most recent valuation
source; 2(e)(1) Asset added indicator; 2(g)(1) Status of asset
subject to demand; and 2(g)(2) Repurchase amount of Schedule AL.
---------------------------------------------------------------------------

    Finally, we are adjusting the codes, titles, and definitions of
many of the data points to make them largely comparable to the data
definitions set in the CREFC IRP.\430\ We believe that through these
changes and by making the asset-level data requirements for CMBS
largely align with the CREFC IRP many of the disclosures provided under
the CREFC IRP can be used to provide the required disclosures. As a
result, we believe we have mitigated, to a great extent, cost and
burden concerns expressed by commenters and the concern that CMBS
investors will not be able to compare the data with the data from past
deals.
---------------------------------------------------------------------------

    \430\ See, e.g., new Items 2(c)(28)(xi) Rate of reset frequency;
2(d)(7) Property type; 2(d)(11) Number of units/beds/rooms at
securitization; 2(d)(15) Valuation source at securitization;
2(d)(24) Defeasance status; 2(d)(28)(vii) Operating expenses; and
2(d)(28)(xii) Net operating income/net cash flow indicator at
securitization.
---------------------------------------------------------------------------

    We also considered concerns raised by commenters as well as
alternatives to the final rules. For instance, one commenter suggested
that the proposed ongoing reporting requirement would add no value to
investors since the industry standard is to make ongoing asset-level
disclosures available earlier than when the proposal would require
them.\431\ We are not persuaded by this comment. We believe that many
transaction agreements, while they provide investors with access to
asset-level disclosures on an ongoing basis, they do not guarantee that
these disclosures will remain available or continue. We believe that
requiring asset-level disclosures, which to a large extent aligns with
how data is currently provided to investors, to be filed on EDGAR will
preserve the information and result in greater transparency in the CMBS
market.
---------------------------------------------------------------------------

    \431\ See letter from Wells Fargo I.
---------------------------------------------------------------------------

    We also considered the concerns raised by some commenters about
requiring disclosure of proprietary information due to the sensitive
nature of the entire data set.\432\ While we acknowledge this concern,
we believe that information about the underlying properties, including
information about the borrowers, will provide CMBS investors and
potential investors with information they need to perform due diligence
and make informed investment decisions and therefore should be
disclosed. We also note that some of the asset-level data that we are
adopting is available to the public, for a fee, through third-party
data providers.\433\
---------------------------------------------------------------------------

    \432\ See letters from CREFC III, MBA IV, SFIG II, and Wells
Fargo I. Commenters did not identify specific data points that
should be revised or eliminated to help address potential
competitive harm.
    \433\ See, e.g., Trepp (providing CMBS data and analytics
services), https://www.trepp.com/cmbs/.
---------------------------------------------------------------------------

    We considered, as an alternative to the final rules, that issuers
provide standardized asset-level disclosures based solely on an
industry standard, such as the CREFC IRP. We are not persuaded that
this alternative is appropriate because as market practices evolve the
consistency of the data provided by each transaction may differ since
there is no mandatory requirement that all transactions provide the
same type of data. Therefore, we believe adopting a standardized set of
asset-level disclosures helps ensure that investors and other market
participants will always have access to a minimum set of asset-level
disclosures, both at the time of the offering and on an ongoing basis.
While we have tailored the asset-level disclosure requirements for each
asset class, we also understand from comments received that certain
commercial mortgages in a pool may have unique features and that the
standardized set of requirements may not capture all of the unique
attributes of a particular asset or pool due to the various types of
commercial properties.\434\ Although we are not adopting all of the
data points in the CREFC IRP, CMBS issuers may provide

those data points as additional asset-level disclosures in an Asset
Related Document, as appropriate.\435\
---------------------------------------------------------------------------

    \434\ See letter from CREFC I.
    \435\ See Section III.B.4 Asset Related Documents for further
discussion on how to provide such additional disclosures.
---------------------------------------------------------------------------

    With respect to ongoing reporting, we are not adopting a
commenter's suggestion that disclosures about alternatives evaluated
related to a modification or disclosure of all terms related to a
modification or assumption be provided. We believe this information
would be difficult to capture in a standardized way, and we are
uncertain, at this time, whether this information is best captured
within these particular asset-level requirements. We are adopting as
proposed, with revisions to address comments received, expanded
disclosures about tenants. We discuss the comments received on tenant
disclosures below. We are also requiring that asset-level disclosures
be provided in XML. We discuss the requirement that asset-level
disclosures be provided in XML in Section III.B.3 XML and the Asset
Data File.
Tenant Disclosures
    We proposed data points about the three largest tenants (based on
square feet), including square feet leased by the tenant and lease
expiration dates of the tenant. Several commenters suggested that we
expand the scope of these disclosures.\436\ For instance, one
commenter, an investor, suggested the initial reporting requirements
include a requirement to capture rent roll information (i.e., detailed
schedules of lease payments for each tenant over time) and additional
tenant and operating performance information, full indebtedness
information and a way to identify borrowers and tenants.\437\ This
commenter also suggested that we require full rent rolls for every
property in a transaction at least once per year. Other commenters also
supported requiring full rent roll and tenant information.\438\
---------------------------------------------------------------------------

    \436\ See letters from CMBS.com I, CoStar, MetLife I, and
Realpoint LLC dated Aug. 2, 2010 submitted in response to the 2010
ABS Proposing Release (``Realpoint'').
    \437\ See letter from MetLife I (suggesting that we also
require: (1) A minimum 3-year history of operating performance for
each underwriting performance metric such as NOI, NCF, etc.; (2)
complete tenant information versus providing information on just the
top three tenants; (3) rent rolls for every property detailing lease
terms for every tenant; (4) full indebtedness information for each
property and terms for any other debt that is serviced with the cash
flows from the property regardless of the ranking of such other debt
in relation to the securitized debt and the conditions under which
borrowers are permitted under the transactions documents to place
additional debt on the same property in the future; and (5) a
practical way to quickly identify borrowers and tenants, perhaps
through a standardized convention to allow investors to more easily
be able to identify their portfolio level exposures). See also
letters from CMBS.com I and Realpoint (suggesting that we require
similar information).
    \438\ See letters from CoStar (suggesting that we require
disclosures of the full rent roll rather than just the largest three
tenants and that these disclosures should include: (1) Tenant name
(unless a residential property); (2) tenant business line; (3) lease
start date; (4) lease amount including any concessions or associated
expenses such as tenant improvements; (5) expense sharing
arrangements; (6) co-tenancy clauses; and (7) lease renewal
options), CMBS.com I, and Realpoint (suggesting that we require
disclosure of either the entire rent roll, or at least the largest
tenants and all other tenants with lease expiration dates that occur
within five years of the cut-off date, and that these disclosures
should include: (1) Base rent; (2) pass-through expense
reimbursements (taxes, insurance, repairs, maintenance, utilities
and other operating expenses); and (3) capital improvement
reimbursements because these disclosures would permit them to
conduct testing of gross rents, net operating income, net cash flow,
debt service coverage ratio and other financial metrics).
---------------------------------------------------------------------------

    We are adopting as proposed data points about the three largest
tenants (based on square feet), including square feet leased by the
tenant and lease expiration dates of the tenant.\439\ While some
commenters requested several changes to the tenant disclosures for
CMBS, the consensus among commenters was that rent roll information for
each property supporting the mortgages underlying the CMBS was needed.
We are not adopting a requirement within the asset-level requirements
to require rent roll information at this time because it is not clear
how to standardize detailed schedules of lease payments for each tenant
over time on an asset-level basis, and we did not receive comment
suggesting how this could be done.
---------------------------------------------------------------------------

    \439\ See new Items 2(d)(25)(i) Largest tenant; 2(d)(25)(ii)
Square feet of largest tenant; 2(d)(25)(iii) Date of lease
expiration of largest tenant; 2(d)(26)(i) Second largest tenant;
2(d)(26)(ii) Square feet of second largest tenant; 2(d)(26)(iii)
Date of lease expiration of second largest tenant; 2(d)(27)(i) Third
largest tenant; 2(d)(27)(ii) Square feet of third largest tenant and
2(d)(27)(iii) Date of lease expiration of third largest tenant of
Schedule AL.
---------------------------------------------------------------------------

Valuations
    Proposed Schedule L and Schedule L-D both included data points
aimed at capturing valuation information on the properties underlying
the commercial mortgages.\440\ The valuation data points contained in
Schedule L would provide disclosure of the most recent property
valuation as of the measurement date in the prospectus. The valuation
data points contained in Schedule L-D would require the most recent
property valuation available as of the reporting period that the
Schedule L-D covered. One commenter suggested that the final rule
should capture data on periodic updating and monitoring of commercial
real estate assets because periodic (annual) appraisal and evaluation
``updates'' of commercial real estate are commonly performed.\441\
---------------------------------------------------------------------------

    \440\ See proposed Items 3(b)(7), 3(b)(8) and 3(b)(9) of
Schedule L.
    \441\ See letter from AI.
---------------------------------------------------------------------------

    We are adopting, with some revisions, data points that capture the
most recent appraisals or valuations available at the time of the
securitization and on an ongoing basis.\442\ While the information
required by these data points is substantially similar to information
captured by the CREFC IRP, the data points that we are adopting
specifically require, in line with revisions made to RMBS property
valuation data points, disclosure of any valuation ``obtained by or for
any transaction party or its affiliates.'' The reference to ``obtained
by or for any transaction party or its affiliates'' contained in each
definition should be construed broadly to include, but not be limited
to, valuations obtained as part of any due diligence conducted by
credit rating agencies, underwriters or others parties to the
transaction. We are also adopting data points that identify the source
of the property valuation and the date of the valuation.\443\ These
data points do not require that originators, sponsors or transaction
parties obtain updated valuations. Instead, this requirement is meant
to capture valuations conducted subsequent to the original valuation
for whatever reason, such as updated valuations obtained in the normal
course of their business or because other circumstances require an
updated valuation. We believe providing investors updated valuation
information will allow them to understand changes in the value of
collateral that is meant to protect against losses. Furthermore, since
we are requiring issuers to disclose the information only if it is
already available to them, we believe that the disclosures will not be
unduly burdensome.
---------------------------------------------------------------------------

    \442\ See Items 2(d)(14) Valuation amount at securitization and
2(d)(17) Most recent value of Schedule AL.
    \443\ See Items 2(d)(15) Valuation source at securitization,
2(d)(16) Valuation date at securitization, 2(d)(18) Most recent
valuation date, and 2(d)(19) Most recent valuation source of
Schedule AL.
---------------------------------------------------------------------------

(3) Automobile Loan or Lease ABS
    Between Schedule L and Schedule L-D, we proposed 110 data points
that relate to ABS backed by auto loans and 116 data points that relate
to ABS backed by auto leases. These proposed data points were comprised
of a combination of data points, some of which were proposed to apply
to all

asset types and others which were proposed to apply only to auto loans
or auto leases. The proposed data points were derived from the
aggregate pool-level disclosure that has been commonly provided in Auto
ABS prospectuses. The proposal also included data points related to
obligor and co-obligor income, assets, employment and credit scores.
    For Auto ABS, support for the proposal varied between issuers and
investors. Many investors supported the asset-level model with certain
modifications from the proposal.\444\ Investor commenters stated that
``the provision of loan-level data will strengthen the Auto ABS market
and make it more resilient over the long term.'' \445\ We note,
however, that even the investors that support asset-level disclosure
have suggested various modifications and limitations to address issues
such as privacy and competitive concerns. One investor commenter
acknowledged that the incremental benefit of some proposed fields may
be difficult to justify as compared to the costs of providing such
information.\446\ In light of standard industry practices and issuer
concerns about costs and the disclosure of proprietary information,
investor commenters recommended adopting fewer data points than were
originally proposed.\447\
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    \444\ See letters from ASF II (expressed views of loan-level
investors only), MetLife I, and Vanguard. There were, however, other
investors who did not support the asset-level model. See letters
from ASF II (expressed views of grouped-account investors only)
(supporting a grouped account approach for Auto ABS) and Capital One
II (noting that they invest in more senior tranches of Auto ABS and
recommending that no additional asset-level disclosure be adopted
for Auto ABS).
    \445\ See letter from ASF II (expressed views of loan-level
investors only).
    \446\ See letter from MetLife I.
    \447\ See letters from ASF II (expressed views of loan-level
investors only), MetLife I, and Vanguard.
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    Issuers typically commented that asset-level reporting was not
necessary for Auto ABS because they claimed that the Auto ABS market
continues to be robust and active despite no material changes to
disclosure practices.\448\ One group of issuers also raised concerns
that asset-level data requirements would push certain investors \449\
and issuers \450\ out of the Auto ABS market. They were also concerned
that the auto industry could be affected if Auto ABS sponsors have to
pass increased costs to automobile purchasers because Auto ABS sponsors
are unable to access more cost-effective financing through the Auto ABS
market.\451\ These issuer commenters noted that several Auto ABS
sponsors estimated the costs and employee hours necessary to reprogram
systems and business procedures to capture, track and report all of the
items for auto loans currently set forth in the proposal. The average
cost estimated by those sponsors was approximately $2 million, and the
average number of employee hours was approximately 12,000.\452\ This
group of issuer commenters also argued that Congress never intended to
require asset-level data for Auto ABS by pointing to a Senate report
published three months prior to the adoption of the Dodd-Frank
Act.\453\ One trade association commented that such requirements were
not necessary for Auto ABS because ``most investors have been able to
adequately underwrite auto loan transactions--including during the
economic downturn--on the basis of current disclosure, due to the
conservative nature of the structure, the deleveraging and granularity
of the underlying assets, and their understanding of the issuer's
servicing capabilities.'' \454\ One group of issuer commenters noted
possible re-identification risks.\455\ These same commenters also
expressed concern about the potential release of proprietary
information.\456\
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    \448\ See letter from VABSS IV.
    \449\ See letter from VABSS IV (stating that they ``understand
that some investors who do not have the internal resources to
analyze data at the loan-level may choose not to invest in Auto ABS
because they perceive that they would be at an informational and
analytic disadvantage to other investors or because they believe
they have a potential risk of liability to their own investors for
not being able to utilize all the available data in their
analysis'').
    \450\ See letter from VABSS IV (stating that they ``believe that
loan-level disclosure requirements could act as a barrier to entry
for smaller finance companies that may not have the necessary
systems, personnel or resources to capture, track and report loan-
level data, thus discouraging the entry of new issuers into the Auto
ABS market . . . [and] that these sponsors that are unable to access
the Auto ABS markets due to concerns about loan-level disclosure
could be placed at a competitive disadvantage to banks and more
highly-rated sponsors that are able to either comply with loan-level
disclosure or access other less burdensome sources of funding (e.g.,
bank deposits)'').
    \451\ See letter from VABSS IV.
    \452\ Id.
    \453\ See letter from VABSS III (quoting a portion of the
Committee on Banking, Housing, and Urban Affairs' discussion of
Section 942 of the Dodd-Frank Act in Senate Report No. 111-176:
``The Committee does not expect that disclosure of data about
individual borrowers would be required in cases such as
securitizations of credit card or automobile loans or leases, where
asset pools typically include many thousands of credit agreements,
where individual loan data would not be useful to investors, and
where disclosure might raise privacy concerns'').
    \454\ See letter from ASF II (expressed views of issuer members
and grouped account investors only).
    \455\ See letter from VABSS IV.
    \456\ See letter from VABSS IV (noting that Auto ABS sponsors
make ``considerable investments in technology and human capital to
capture, maintain and analyze [the asset-level] data, and to build
proprietary credit scoring models and models that predict residual
value of leased vehicles'' and stating that making such data
publicly available could harm them in the marketplace).
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    Issuer commenters generally noted that, if any data reporting was
to be required, alternative models such as grouped account data, more
robust pool-level reporting or some combination of the two would be
sufficient.\457\ Several commenters argued that alternatives such as
grouped account data or expanded pool stratification would provide
additional meaningful information to investors while at the same time
addressing individual privacy concerns and proprietary concerns.\458\
One group of issuer commenters suggested we consider conditioning the
provision of asset-level reporting to compliance with potential risk
retention rules.\459\ These commenters also stated that certain data
points are often the same for all assets in an Auto ABS.\460\ They
suggested that, if we adopt asset-level reporting for Auto ABS such
data points should not be required if (1) the responses would be
identical for each asset in the pool \461\ and (2) adequate pool-level
disclosure is given in the prospectus. In response to the 2014 Re-
Opening Release, some commenters expressed opposition to asset-level
requirements for Auto ABS.\462\
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    \457\ See, e.g., letters from ABA I, AmeriCredit, ASF II
(expressed views of dealers and sponsors only), BoA I, Capital One
I, VABSS I, and Wells Fargo I.
    \458\ See letters from ABA I and VABSS IV (in which the
commenters also conceded that ``presenting grouped data is in many
ways more difficult, as it required more time and resources to
gather the loan-level data and then compile it for presentation as
grouped data).
    \459\ See letter from VABSS IV (suggesting that we consider ``an
outright exemption from all loan-level data requirements for any
Auto ABS sponsor that satisfies the final risk retention
requirements adopted by the Commission'' or, at the very least, ``an
exemption for Auto ABS sponsors who retain a horizontal or first-
loss position as required by the final risk retention requirements
given the direct alignment of interests of sponsors, servicers and
investors in Auto ABS and the absorption of all possible losses on
these structures by the horizontal `slice' retained by the
sponsor'').
    \460\ See letter from VABSS IV.
    \461\ These commenters also suggested that a response to a data
point may be omitted if no more than 1% of the securitized pool
would have a different response. See letter from VABSS IV.
    \462\ See, e.g., letters from AFSA II (opposing requirements for
Auto ABS for several reasons including its belief that the Auto ABS
market is liquid, many proposed data points would not apply to Auto
ABS and for proprietary concerns), Capital One II (opposing
requirements for Auto ABS by suggesting that asset-level data is not
necessary for investor due diligence, and also noting that the
benefits for Auto ABS do not outweigh the costs), SFIG II (noting
auto loan ABS has not traditionally included asset-level
disclosures), and Wells Fargo III (suggesting that asset-level data
for Auto ABS would provide little to no incremental value to
investors).

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    As we developed the standards we are adopting today, we took into
consideration how the proposed data points relate to how information is
collected, tracked and reported in the Auto ABS marketplace, as well as
how auto loans and leases differ from RMBS and CMBS, and how those
differences impact the type of information available for collection and
the utility of such information to investors. We also considered
potential impacts on the automobile industry if Auto ABS sponsors pass
down higher financing costs to consumers. After considering the
comments received, we are adopting, as proposed, with some modification
to individual data points and some reduction in the amount of data
required to be provided, asset-level disclosures specific to Auto ABS.
We did consider, as an alternative, whether asset-level reporting
should be required in Auto ABS at all. We considered the legislative
history of Section 942 of the Dodd-Frank Act, which was cited by
commenters.\463\ We also considered whether an alternative reporting
model, such as grouped account data, pool stratifications or some
combination of the two, would provide adequate information to
investors. In the end, we concluded that none of these alternatives
provide the benefits that we believe investors should receive. We
agreed with investors that ``[g]rouped data is preset, which prohibits
a customizable analysis of pool information by an investor and
presupposes that critical credit metrics and indicators do not change
over time . . . [while] the transparency afforded by loan-level data
will allow all investors to evaluate, in any market and on an
independent basis, whether the pools and structures are robust and the
ratings assigned are appropriate.'' \464\ We also do not agree that
Auto ABS sponsors should be exempt from providing asset-level data if
that sponsor has retained a certain amount of risk. As stated in
Section II.A Economic Motivations, while we expect risk retention rules
will result in better underwriting practices, we believe that more is
needed to fully restore incentive alignment and credit screening in the
securitization market. If sponsors are exempt from asset-level
disclosure based on compliance with risk retention requirements,
investors and market participants would have fewer Auto ABS pools
available for asset-level comparisons. Finally, we are not making any
data points optional on the basis that such data point may be the same
across an Auto ABS pool. While we understand that commenters intended
to consolidate repetitive data points, we believe that the asset-level
presentation of data in a standardized format is an important tool to
investors who want to make asset-to-asset comparisons across different
Auto ABS pools. If responses to certain data points are omitted, an
investor wanting to make pool-to-pool comparisons would first have to
locate the omitted information in one or more prospectuses and then
recreate portions of the asset-level data files before accurate
comparisons could be made.
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    \463\ We note that we first proposed asset-level disclosure
requirements for Auto ABS prior to the enactment of the Dodd-Frank
Act. While we believe the asset-level disclosure requirements being
adopted today are consistent with the mandate in Section 7(c) of the
Securities Act, as added by Section 942 of the Dodd-Frank Act, we do
not view that mandate as limiting our long standing authority to
prescribe disclosure standards, as necessary and appropriate, for
purposes of federal securities laws.
    \464\ See letter from ASF II (expressed views of loan-level
investors only).
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    We believe that the requirements we are adopting for Auto ABS will
provide a better picture of the composition and characteristics of the
pool assets, which is critical to an investor's ability to make an
informed investment decision about the securities. We have considered
commenters' concerns that Auto ABS is, in many ways, different from
RMBS and CMBS, including that Auto ABS generally fared better during
the recent financial crisis. We do not believe, however, that the
grouped account data model proposed by commenters would provide
information in sufficient detail for investors to compare and evaluate
various Auto ABS pools and structures. With asset-level data, users
would not have to rely on pre-determined groupings of information, and
instead would be able to compare and evaluate the underlying assets
using the individual pieces of information they consider to be
material.\465\
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    \465\ Id. See also letter from Prudential I.
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    While we are requiring that Auto ABS issuers provide asset-level
data, we have significantly reduced the scope of the asset-level data
required from the amount proposed. In doing so, we considered an
estimate provided by several Auto ABS sponsors that, if we only adopted
the data points proposed in their comment letter,\466\ the average
costs and employee hours necessary to reprogram systems and otherwise
comply with the asset-level disclosures would be approximately $750,000
and 3,500, respectively.\467\ In line with this suggestion, we have
attempted to reduce burden and cost concerns by reducing the scope of
the asset-level data required to align with the smaller scope of
information that commenters, including investors, believed should be
required for Auto ABS. While the final rules do not exactly mirror the
scope of information the group of Auto ABS sponsors suggested be
required, we believe that the significantly smaller scope of
information we are requiring, coupled with revisions to align the data
points with current industry standards should lead to substantially
lower costs versus what was originally proposed. These substantially
lower costs should also reduce any potential impact on the automobile
industry. We also believe that the smaller scope of information and the
revisions we made to the data points still provide investors with
sufficient information to evaluate the security. Under the final
requirements we are adopting, issuers are required to disclose the
information described in Item 3, with respect to auto loans, and Item
4, with respect to auto leases, of Schedule AL for each auto loan or
lease in the pool, as applicable. As noted above, we proposed 110 data
points that relate to ABS backed by auto loans and 116 data points that
relate to ABS backed by auto leases. In addition to the data points
that were eliminated when Schedules L and L-D were condensed,\468\ 40
of the proposed data points for auto loans are not being adopted and 57
of the proposed data points for auto leases are not being adopted. We
are adopting 12 new data points for auto loans and 15 new data points
for auto leases.\469\ Accordingly, the final rules will require issuers
to provide 72 data points for ABS backed by auto loans and 66 data
points for ABS backed by auto leases. Fewer data points should reduce
the cost of providing asset-level data for Auto ABS issuers and also
should help to address

individual privacy concerns.\470\ We also believe that this reduction
in scope should help address competitive concerns that were raised by
issuers. While we acknowledge that some competitive concerns may still
exist, we believe that the information we are requiring about the
underlying assets will provide Auto ABS investors and potential
investors with information they need to perform due diligence and make
informed investment decisions and therefore should be disclosed. We
also note that some of the asset-level data that we are adopting is
available to the public, for a fee, through third-party data
providers.\471\
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    \466\ See letter from VABSS IV. For ABS backed by auto loans,
these commenters proposed that 29 data points should be adopted
unconditionally (i.e., for each asset regardless of the response or
the structure of the transaction) and 28 data points be adopted
conditionally (i.e., they may be omitted if certain conditions are
met, such as homogenous responses). For ABS backed by auto leases,
these commenters proposed that 30 data points should be adopted
unconditionally and 26 data points be adopted conditionally.
    \467\ The estimate of $750,000 and 3,500 hours is in contrast to
this commenter's estimate of $2 million and 12,000 hours for all of
the Auto ABS data points as originally proposed.
    \468\ When the Schedules L and L-D were condensed (as discussed
in Section III.B.2 The Scope of New Schedule AL), we eliminated 10
repetitive data points for ABS backed by auto loans and 8 repetitive
data points for ABS backed by auto leases.
    \469\ Data points that have been added since the proposing
release were either based on comments or added for purposes of
clarity or consistency.
    \470\ See Section III.A.3 Asset-Level Data and Individual
Privacy Concerns.
    \471\ See letter from VABSS II (stating that there are
relatively inexpensive databases containing car owner information
linked to vehicle make, model, year, and more). New and used vehicle
values can also be obtained for free via publicly available sources.
See, e.g., www.kbb.com.
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    We are not adopting a significant number of data points where we
agreed with commenters that the data point was not applicable to Auto
ABS or where we are concerned that the benefits investors may receive
from the disclosures may not justify the potential costs and burdens to
issuers to provide the disclosures.\472\ Solely with respect to ABS
backed by auto leases, we are also not adopting several data points
that were part of the general schedule of data points proposed for all
asset classes because the information required to be provided in the
items is not something that is relevant for auto leases (for example,
items that require issuers to provide interest, principal or
amortization information would not be relevant because auto leases do
not have amortization, interest, interest rates or principal
balances).\473\
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    \472\ For all Auto ABS, these include the following Schedule L
data points: Item 1(a)(3) Asset group number; Item 1(a)(9) Original
amortization term; Item 1(b)(6) Number of days payment is past due;
Item 1(b)(7) Current payment status; Items 4(b)(1) and 5(b)(1)
Geographic location of dealer; Items 4(c)(13) and 5(c)(13)--Length
of employment: obligor; and Items 4(c)(11) and 5(c)(11) Obligor
asset verification. And the following Schedule L-D data points: Item
1(c) Asset group number; Item 1(f)(8) Current scheduled asset
balance; Item 1(f)(13)--Number of days payment is past due; Item
1(f)(14) Current payment status; Item 1(f)(15) Pay history; Item
1(f)(16) Next due date; Item 1(g)(5) Cumulative outstanding advance
amount; Item 1(g)(7) Stop principal and interest advance date; Item
1(j) Liquidated indicator; Item 1(k) Charge-off indicator; Item
1(k)(2) Charged-off interest amount; Item 1(l)(1) Paid-in-full
indicator; Item 1(l)(2)(i) Pledged prepayment penalty paid; Item
1(l)(2)(ii) Pledged prepayment penalty waived; and Item 1(l)(2)(iii)
Reason for not collecting pledge prepayment penalty.