Common use of Defaulted Loans Clause in Contracts

Defaulted Loans. Upon any Loan becoming a Defaulted Loan, (i) with respect to a monetary default, the Servicer shall promptly notify the Seller, the Buyer and the Sub-Servicer and (ii) with respect to a monetary (with respect to the Initial Loan and any Permitted Escrow Loan) or non-monetary default, the Sub-Servicer shall promptly notify the Seller, the Buyer and the Servicer. Within thirty (30) days after receipt of notice that a Loan has become a Defaulted Loan, the Sub-Servicer shall send a summary of the status of such Defaulted Loan and any negotiations with the applicable Borrower to the Seller, the Buyer and the Servicer, together with the Sub-Servicer’s proposed course of action with respect to such Defaulted Loan. Without duplication of any of the approvals under the Master Contract, the Seller and the Buyer shall have the right to approve any proposed course of action; provided however, all such modifications, consents or waivers shall be subject to the terms and conditions provided in Section 3.07 herein. Any approval of such strategy by the Seller and the Buyer shall not, in and of itself for purposes of Section 3.07 or any other provision of this Agreement, satisfy any requirement for the consent of the Buyer or approval of actions of the Sub-Servicer or of a Material Modification and any failure to approve the proposed course of action shall not be deemed an approval of any such action; the Seller (except during the continuance of a Default) and the Buyer shall have consultation rights throughout the workout and/or foreclosure process. In addition, for so long as such Loan remains a Defaulted Loan, the Sub-Servicer shall send an updated summary of the status of such Defaulted Loan to each of the parties on each Remittance Date as to the status of such Defaulted Loan or the Sub-Servicer’s proposed course of action, which shall be approved by the Seller and the Buyer, with respect thereto since the date of delivery of the prior report delivered by the Sub-Servicer. If Seller is required to repurchase such Defaulted Loan as a result of it becoming an “Ineligible Asset” (as defined in the Master Contract), Servicer shall transfer such Loan to the Seller upon consummation of the repurchase obligation in the Master Contract and this Agreement shall be terminated with respect to such Loan. Servicer shall have no obligation to service the Defaulted Loan, except to collect any principal and interest payments.

Defaulted Loans. Upon A Loan shall default upon the occurrence of any of the following: (a) the Borrower fails to make any payment when due, (b) the Borrower makes any statement or representation in connection with obtaining a Loan becoming which is false, (c) the Borrower fails to keep any promise or agreement it made to Lender in any promissory note evidencing a Defaulted Loan, or (id) with respect the CSO Contract related to such Loan is cancelled for any reason prior to Lender receiving payment in full on such Loan. Pursuant to each CSO Contract, and regardless of whether the CSO Contract is cancelled, CSO agrees to, and hereby does, unconditionally guaranty, on behalf of the Borrower, and for the benefit of Lender, the prompt payment of all amounts due under each Loan to Lender. In full satisfaction of such guaranty obligations, CSO will purchase such Loan from Lender for an amount equal to the principal, interest and fees accrued and outstanding as of the time of purchase, which shall be either (1) at the close of business on the day the Loan defaults, for defaults for which there is no cure period, or (2) immediately after (A) any applicable cure or collection period expires as provided in the Program Guidelines, (B) the Borrower does not renew, extend or repay in full the Loan and (C) the initiation of an electronic funds transfer on behalf of Lender does not result in the Loan being paid in full. All such purchased Loans will be assigned by Lender to CSO without recourse pursuant to a monetary defaultMaster Assignment of Promissory Notes to be executed by CSO and Lender concurrently herewith. Following such assignment, the Servicer shall promptly notify the Seller, the Buyer and the Sub-Servicer and (ii) with respect to a monetary (with respect to the Initial Loan and any Permitted Escrow Loan) or non-monetary default, the Sub-Servicer shall promptly notify the Seller, the Buyer and the Servicer. Within thirty (30) days after receipt of notice that a Loan has become a Defaulted Loan, the Sub-Servicer shall send a summary of the status of such Defaulted Loan and any negotiations with the applicable Borrower to the Seller, the Buyer and the Servicer, together with the Sub-Servicer’s proposed course of action all amounts paid by Borrowers with respect to such Defaulted Loan. Without duplication purchased Loans (including the proceeds of any new Loans made to Borrowers by Lender for the purpose of the approvals under the Master Contract, the Seller and the Buyer shall have the right to approve any proposed course of action; provided however, all refinancing such modifications, consents or waivers purchased Loans) shall be subject to the terms and conditions provided in Section 3.07 herein. Any approval of such strategy by the Seller and the Buyer shall not, in and of itself for purposes of Section 3.07 or any other provision of this Agreement, satisfy any requirement for the consent account of the Buyer or approval of actions of the Sub-Servicer or of a Material Modification and any failure to approve the proposed course of action shall not be deemed an approval of any such action; the Seller (except during the continuance of a Default) and the Buyer shall have consultation rights throughout the workout and/or foreclosure process. In addition, for so long as such Loan remains a Defaulted Loan, the Sub-Servicer shall send an updated summary of the status of such Defaulted Loan to each of the parties on each Remittance Date as to the status of such Defaulted Loan or the Sub-Servicer’s proposed course of action, which shall be approved by the Seller and the Buyer, with respect thereto since the date of delivery of the prior report delivered by the Sub-Servicer. If Seller is required to repurchase such Defaulted Loan as a result of it becoming an “Ineligible Asset” (as defined in the Master Contract), Servicer shall transfer such Loan to the Seller upon consummation of the repurchase obligation in the Master Contract and this Agreement shall be terminated with respect to such Loan. Servicer shall have no obligation to service the Defaulted Loan, except to collect any principal and interest paymentsCSO.