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A Mortgage Servicing Agreement is essential when a financial institution in India wishes to outsource or formally structure its mortgage servicing operations. This document becomes necessary when a mortgage lender decides to engage a specialized servicer to handle the day-to-day administration of mortgage loans, including payment processing, borrower communications, and default management. The agreement ensures compliance with Indian banking regulations, particularly RBI guidelines on housing finance and outsourcing of financial services. It details the servicer's responsibilities, performance standards, compliance requirements, and fee structures while incorporating necessary protections for borrower data and establishing clear operational procedures. This document is particularly relevant in the current Indian financial market where specialized mortgage servicing is becoming increasingly common, especially among housing finance companies and banks with large mortgage portfolios.

1. Parties: Identifies the contracting parties - typically the mortgage originator/lender and the mortgage servicer

2. Background: Explains the context of the agreement, including the lender's desire to outsource mortgage servicing and the servicer's capabilities

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Appointment and Scope of Services: Details the formal appointment of the servicer and outlines the comprehensive scope of mortgage servicing activities

5. Servicer's Obligations: Specifies the detailed responsibilities and duties of the mortgage servicer

6. Lender's Obligations: Outlines the responsibilities of the lender, including providing necessary information and support

7. Service Levels: Establishes performance metrics and service quality standards

8. Fees and Payment Terms: Details the fee structure, payment calculations, and payment procedures

9. Compliance Requirements: Addresses compliance with Indian banking laws, RBI guidelines, and other relevant regulations

10. Reporting and Documentation: Specifies required reports, documentation, and record-keeping obligations

11. Default Management: Procedures for handling borrower defaults and loan workouts

12. Data Protection and Confidentiality: Requirements for protecting borrower information and maintaining confidentiality

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

14. Liability and Indemnification: Allocation of risks and responsibilities between parties

15. Dispute Resolution: Procedures for resolving disputes between parties

16. General Provisions: Standard contractual provisions including notices, amendments, and governing law