ESMA_QA_1376

Status: ✅ Answer Published

Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1376

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Regulatory Context

Regulation : SECR

Level 1 Regulation: Securitisation Regulation (EU) 2017/2402

Level 2 Regulation: No information available

Level 3 Regulation: No information available

Topic: Securitisation Disclosure Templates

Subject Matter: Primary Income - Annex 2 Underlying Exposures - Residential Real Estate

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Question

Submission Date: 19 November 2021

(a) How should the primary income fields be completed where a mortgage is a buy-to-let?

(b) In the case where an obligor is deceased, should the income be changed to 0 or should the income at the time of underwriting be kept in RREL16?

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ESMA Answer

Answer Date: 19-11-2021

[ESMA 33-128-563 Securitisation Q&A, Q&A 5.4.6] (a) RREL16 (Primary Income) should reflect the income of the obligor. This figure should not include expected future income such as expected future rental income on a property. Where the obligor income is not collected and only the future expected rental income is available, the relevant ND option should be reported in RREL16. Two optional fields have been included in the XML schema for the Collateral Information Section “Original Gross Annual Rental Income” after the field RREC17 and “Current Gross Annual Rental Income” after the field RREC13, in which rental income may be reported when available. (b) Where an obligor passes away, the income should generally be indicated as ‘0’ unless special circumstances dictate otherwise. See also Q&A 1295.

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This document was automatically extracted from the ESMA EMIR Q&A database.