LOAN PURCHASE PROGRAMS ELECTRONIC ANNOUNCEMENT #88 Date: June 17, 2010 To: FFEL Program Community From: James W. Runcie, Deputy Chief Operating Officer Federal Student Aid Subject: 2009-2010 MLSA Updated Bill of Sale Submission Instructions In Electronic Announcement #26, posted on September 9, 2008, the Department provided instructions for the submission of the Bill of Sale documents that must be executed under the Master Loan Sale Agreement (“the MLSA”) under the Department’s Loan Purchase Program (PUT Program). In Electronic Announcement #66, posted on June 16, 2009, the Department provided the revised 2009-2010 MLSA for the 2009-2010 PUT Program. Exhibit E provides the Bill of Sale form, Exhibit F provides the Security Release Certification, and Exhibit G provides the Form of Notice of Assignment and Designation of Payee. At that time, the procedures for submission of the Bill of Sale documents under the 2009-2010 PUT Program did not change from the process previously in place for the 2008-2009 PUT Program. The Department required the submission of the Loan Detail Schedule in PDF form with the Bill of Sale to ensure that the Department would have a record of the transfer of ownership of the loans, in a form that was stable and not readily malleable. However, the PDF versions of the pre-sale Loan Detail Schedule (Loan Detail Schedule) created and sent by Department servicers to the Sellers were often so large that some Sellers reported difficulty in transmitting them by email back to the Department with the Bill of Sale, as required under the Department’s PUT Program. We reviewed the sale procedures and now believe that the sale procedure can be modified to achieve the same objective without requiring the Seller to submit with the Bill of Sale a PDF record of the Loan Detail Schedule. The purpose of this Electronic Announcement is to provide Sellers with updated instructions for the submission of the Bill of Sale documents for the 2009-2010 PUT Program only. There are no changes to the process for submitting the Bill of Sale documents for the Conduit Program. In place of the PDF version of the Loan Detail Schedule, we have devised a new form, the Certificate of Loan Detail File, for a Seller to submit with the Bill of Sale. The Sellers will no longer be required to return a PDF of the Loan Detail Schedule with the Bill of Sale and instead must execute the Certificate of Loan Detail File and must return this document as a PDF attachment to the email sent with the Bill of Sale form (Exhibit F) five business days before the sale date. The Certificate of Loan Detail File will constitute the Loan Schedule for the sale. The deadline for Sellers to begin using the revised document submission procedures for the Bill of Sale, implementing the Certificate of Loan Detail File, will be for any Puts with Bill of Sale packages submitted on or after June 22, 2010. Revised Document Submission Procedures for the Bill of Sale As under current procedures, the ED Servicer will send the Seller a Loan Detail Schedule for the Put six business days prior to the scheduled Purchase Date. The Loan Detail Schedule will be provided in both a PDF and Excel format. To simplify the sale process, the Department will now assign a unique identifier to each Loan Detail Schedule at the time the file is created. The Department currently assigns a unique deal number to each proposed sale at the time the Department receives a 45-Day Notice of Intent to Sell. The unique identifier will include that deal number. The date the file is created will also be included in the unique identifier. Last, the Department will total the number of loans included on the Loan Detail Schedule, and will include that total number in the unique identifier. The Department will label the Loan Detail Schedule it sends the Seller with the unique identifier, and will provide the Seller with a Certificate of Loan Detail File that memorializes the Department’s agreement to purchase the loans included in the pre-sale Loan Detail Schedule bearing the unique identifier listed on the Certificate. Six business days before the scheduled Purchase Date, the ED Servicer will provide to the Seller the Certificate of Loan Detail File, bearing the unique identifier that has been assigned, sent with the associated Loan Detail Schedule. The Seller continues to be responsible for reviewing the Loan Detail Schedule to confirm the pre-sale totals. If the Seller objects to exclusion of some loans it proposed to sell, it must present that objection to the Department and the ED Servicer. Any exceptions must be resolved for the scheduled sale to continue. To complete the Bill of Sale, the Seller will not submit the PDF version of the Loan Detail Schedule sent to it by the ED Servicer as the Loan Schedule for the Bill of Sale. Instead, the Seller will now countersign and submit, for each PUT, the Certificate of Loan Detail File bearing the unique identifier. The Seller recites there that by submitting the Certificate, the Seller identifies the loans being sold under the accompanying Bill of Sale as those loans listed on the Loan Detail Schedule to which that unique identifier has been assigned. To complete the Certificate of Loan Detail File, the Seller must provide in the places indicated the information requested in the third paragraph of the form, under the heading “The following to be completed when submitted with the Bill of Sale.” The Seller must fill in the bill of sale date and provide the contact information and signature for the Seller along with the Eligible Lender Trustee contact information and signatures, if applicable. Five business days before the scheduled Purchase Date, the Seller must submit to the Department the signed Bill of Sale, the Final Loan Schedule Summary, and the signed Certificate of Loan Detail File. In addition, if there is a security interest on the loans being sold, a Security Release Certification that has been signed by both the Seller and the Secured Lender must be submitted. Finally, if the Seller chooses, the Notice of Assignment and Designation of Payee (along with a copy of the instrument of assignment between the Seller and the Creditor) may be submitted. All these documents must be submitted as PDF attachments to an email sent to the appropriate ED Servicer mailbox (mailbox associated with the ED Servicer handling the Put). The subject line of the email must say “BOS, Deal ID, Seller LID, Seller Name, PUT Date” (Example: BOS, X1234, 123456, ABC Bank, 7/15/2010). This will expedite processing of the Bill of Sale package once received by the Department and the ED Servicer. If you have any questions on the revised document submission procedures for the Bill of Sale, please email them to email@example.com.