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LOAN SALE AGREEMENT
This LOAN SALE AGREEMENT dated as of December 1, 1997 (the
"Agreement"), is made and entered into by and between IMC SECURITIES, INC., as
purchaser (together with its successors and assigns, being referred to herein as
the "Depositor") and IMC MORTGAGE COMPANY, as seller (together with its
successors and assigns, being referred to herein as the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of originating,
purchasing and servicing home equity loans secured by first lien mortgages and
deeds of trust on residential property;
WHEREAS, the Seller desires to sell to the Depositor and the Depositor
desires to purchase from the Seller on a whole loan basis the Home Equity Loans
and all monies due and to become due thereunder after December 1, 1997;
WHEREAS, the Depositor intends to transfer the Home Equity Loans to IMC
Home Equity Loan Owner Trust 1997-8 (the "Trust") in order to facilitate the
issuance by the Trust of a series of asset backed notes (the "Notes");
NOW, THEREFORE, in consideration of these premises and of the mutual
agreements herein set forth, the Depositor and the Seller each agree as follows:
SECTION 1. Representations and Warranties.
The Seller hereby represents, warrants and covenants to the Depositor
that as of the Closing Date:
(i) The information with respect to each Home Equity Loan set
forth in the Schedule of Home Equity Loans is true and correct as of
the Cut-Off Date;
(ii) All the original or certified documentation set forth in
Section 2.05 of the Sale and Servicing Agreement, dated as of
December 1, 1997 (the "Sale and Servicing Agreement"), by and
between the Seller, the Servicer, the Depositor, the Trust, as
Issuer and The Chase Manhattan Bank, as Indenture Trustee (including
all material documents related thereto) with respect to each Home
Equity Loan has been or will be delivered to the Custodian (on
behalf of the Depositor) on the Closing Date or as otherwise
provided in Section 2.05 of the Sale and Servicing Agreement;
(iii) Each Home Equity Loan being transferred to the Depositor
is secured by a Mortgage;
(iv) Each Property is improved by a single (one-to-four)
family residential dwelling (except for 3.30% of the Home Equity
Loans in the amount of $297,642,381), that are condominiums, planned
unit developments, townhouses, manufactured housing or multifamily
residential, provided that no more than 0.13% of the Properties are
secured by manufactured homes, each of which is considered to be
real property under the applicable local law;
(v) As of the Cut-Off Date, no Home Equity Loan has a
Loan-to-Value Ratio in excess of 85%, except for 394 Home Equity
Loans in the amount of $44,743,895 that had a Loan-to-Value Ratio
not greater than 100%;
(vi) Each Home Equity Loan is being serviced by the Servicer
in accordance with the terms of the Sale and Servicing Agreement;
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(vii) The Mortgage Note related to each Home Equity Loan bears
a current Coupon Rate of at least 7.10% per annum;
(viii) Each Mortgage Note with respect to the Home Equity
Loans will provide for a schedule of substantially level and equal
Monthly Payments which are sufficient to amortize fully the
principal balance of such Mortgage Note on or before its maturity
date, except for 9 Home Equity Loans in the amount of $997,384
representing 0.32% of the aggregate Loan Balance of the Home Equity
Loans as of the Cut-Off Date, which may provide for a "balloon"
payment due at the end of the 15th year (except for 1 Home Equity
Loan in the amount of $108,361, which provide for a "balloon"
payment at the end of the 10th year);
(ix) As of the Closing Date, each Mortgage is a valid and
subsisting first lien of record (or is in the process of being
recorded) on the Property as noted on Schedule I to the Sale and
Servicing Agreement subject in all cases to the exceptions to title
set forth in the title insurance policy or attorney's opinion of
title, with respect to the related Home Equity Loan, which
exceptions are generally acceptable to banking institutions in
connection with their regular mortgage lending activities, and such
other exceptions to which similar properties are commonly subject
and which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be
provided by such Mortgage;
(x) Immediately prior to the transfer and assignment of the
Home Equity Loans by the Seller to the Depositor herein
contemplated, the Seller held good and indefeasible title to, and
was the sole owner of, each Home Equity Loan (including the related
Mortgage Note) conveyed by the Seller subject to no liens, charges,
mortgages, encumbrances or rights of others except as set forth in
clause (ix) or other liens which will be released simultaneously
with such transfer and assignment; and immediately upon the transfer
and assignment herein contemplated, the Depositor will hold good and
indefeasible title to, and be the sole owner of, each Home Equity
Loan subject to no liens, charges, mortgages, encumbrances or rights
of others except as set forth in paragraph (ix) or other liens which
will be released simultaneously with such transfer and assignment
and except for the lien of the Indenture;
(xi) As of the opening of business on the Cut-Off Date, no
Home Equity Loan is 30 days or more Delinquent except that there are
83 Home Equity Loans with an outstanding aggregate Loan Balance of
$10,507,857 that are 30 or more days Delinquent but not more than 59
days Delinquent;
(xii) There is no delinquent tax or assessment lien on any
Property, and each Property is free of substantial damage and is in
good repair;
(xiii) There is no valid and enforceable offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation of the related Mortgagor to pay the unpaid principal of
or interest on such Mortgage Note;
(xiv) There is no mechanics' lien or claim for work, labor or
material affecting any Property which is or may be a lien prior to,
or equal with, the lien of the related Mortgage except those which
are insured against by any title insurance policy referred to in
paragraph (xvi) below;
(xv) Each Home Equity Loan at the time it was made complied in
all material respects with applicable state and federal laws and
regulations, including, without limitation, the federal
Truth-in-Lending Act (as amended by the Xxxxxx Community Development
and Regulatory Improvement Act of 1994) and other consumer
protection laws, usury, equal credit opportunity, disclosure and
recording laws;
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(xvi) With respect to each Home Equity Loan either (a) an
attorney's opinion of title has been obtained but no lender's title
insurance policy has been obtained, or (b) a lender's title
insurance policy, issued in standard American Land Title Association
form by a title insurance company authorized to transact business in
the state in which the related Property is situated, in an amount at
least equal to the original balance of such Home Equity Loan,
insuring the mortgagee's interest under the related Home Equity Loan
as the holder of a valid first mortgage lien of record on the real
property described in the related Mortgage, as the case may be,
subject only to exceptions of the character referred to in paragraph
(ix) above, was effective on the date of the origination of such
Home Equity Loan, and, as of the Closing Date, such policy is valid
and thereafter such policy shall continue in full force and effect
(provided that an attorney's opinion of title without a lender's
title insurance policy has been obtained with respect to no more
than 2% of the Original Aggregate Loan Balance);
(xvii) The improvements upon each Property are covered by a
valid and existing hazard insurance policy with a carrier generally
acceptable to the Servicer that provides for fire and extended
coverage representing coverage not less than the least of (A) the
outstanding principal balance of the related Home Equity Loan, (B)
the minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the full insurable value of the
Property;
(xviii) If any Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy in a form
meeting the requirements of the current guidelines of the Flood
Insurance Administration is in effect with respect to such Property
with a carrier generally acceptable to the Servicer in an amount
representing coverage not less than the least of (A) the outstanding
principal balance of the related Home Equity Loan, (B) the minimum
amount required to compensate for damage or loss on a replacement
cost basis or (C) the maximum amount of insurance that is available
under the Flood Disaster Protection Act of 1973;
(xix) Each Mortgage and Mortgage Note are the legal, valid and
binding obligation of the maker thereof and are enforceable in
accordance with their terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity (whether considered in
a proceeding or action in equity or at law), and all parties to each
Home Equity Loan had full legal capacity to execute all documents
relating to such Home Equity Loan and convey the estate therein
purported to be conveyed;
(xx) The Seller has caused and will cause to be performed any
and all acts required to be performed to preserve the rights and
remedies of the Indenture Trustee in any Insurance Policies
applicable to any Home Equity Loans delivered by the Seller
including, without limitation, any necessary notifications of
insurers, assignments of policies or interests therein, and
establishments of co-insured, joint loss payee and mortgagee rights
in favor of the Depositor;
(xxi) As of the Closing Date, no more than 0.27% of the
aggregate Loan Balance of the Home Equity Loans will be secured by
Properties located within any single zip code area;
(xxii) Each original Mortgage was recorded or is in the
process of being recorded, and all subsequent assignments of the
original Mortgage have been delivered for recordation or have been
recorded in the appropriate jurisdictions wherein such recordation
is necessary to perfect the lien thereof as against creditors of or
purchasers from the Seller (or, subject to Section 2.05 of the Sale
and Servicing Agreement, are in the process of being recorded); each
Mortgage and
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assignment of Mortgage is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the property
securing such Mortgage is located;
(xxiii) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which has been recorded, if necessary, to protect
the interest of the Owners and the Note Insurer and which has been
delivered to the Depositor. The substance of any such alteration or
modification is reflected on the related Schedule of Home Equity
Loans;
(xxiv) The proceeds of each Home Equity Loan have been fully
disbursed, and there is no obligation on the part of the mortgagee
to make future advances thereunder. Any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or
recording such Home Equity Loans were paid;
(xxv) The related Mortgage Note is not and has not been
secured by any collateral, pledged account or other security except
the lien of the corresponding Mortgage;
(xxvi) No Home Equity Loan has a shared appreciation feature,
or other contingent interest feature;
(xxvii) Each Property is located in the state identified in
the respective Schedule of Home Equity Loans and consists of one or
more parcels of real property with a residential dwelling erected
thereon;
(xxviii) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Home Equity Loan in the event the related Property is sold
without the prior consent of the mortgagee thereunder;
(xxix) Any advances made after the date of origination of a
Home Equity Loan but prior to the Cut-Off Date have been
consolidated with the outstanding principal amount secured by the
related Mortgage, and the secured principal amount, as consolidated,
bears a single interest rate and single repayment term reflected on
the Schedule of Home Equity Loans. The consolidated principal amount
does not exceed the original principal amount of the related Home
Equity Loan. No Mortgage Note permits or obligates the Servicer to
make future advances to the related Mortgagor at the option of the
Mortgagor;
(xxx) There is no proceeding pending or threatened for the
total or partial condemnation of any Property, nor is such a
proceeding currently occurring, and each Property is undamaged by
waste, fire, water, flood, earthquake or earth movement;
(xxxi) All of the improvements which were included for the
purposes of determining the Appraised Value of any Property lie
wholly within the boundaries and building restriction lines of such
Property, and no improvements on adjoining properties encroach upon
such Property, and are stated in the title insurance policy and
affirmatively insured;
(xxxii) No improvement located on or being part of any
Property is in violation of any applicable zoning law or regulation.
All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of each Property and,
with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting
certificates, have been made or obtained from the appropriate
authorities and such Property is lawfully occupied under the
applicable law;
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(xxxiii) With respect to each Mortgage constituting a deed of
trust, a trustee, duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is
named in such Mortgage, and no fees or expenses are or will become
payable by the Depositor to the trustee under the deed of trust,
except in connection with a trustee's sale after default by the
related Mortgagor;
(xxxiv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder
thereof adequate for the realization against the related Property of
the benefits of the security, including (A) in the case of a
Mortgage designated as a deed of trust, by trustee's sale and (B)
otherwise by judicial foreclosure. There is no homestead or other
exemption other than any applicable Mortgagor redemption rights
available to the related Mortgagor which would materially interfere
with the right to sell the related Property at a trustee's sale or
the right to foreclose the related Mortgage;
(xxxv) Other than with respect to the Delinquencies noted in
item (xi) hereof, there is no default, breach, violation or event of
acceleration existing under any Mortgage or the related Mortgage
Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; and neither the
Servicer nor the Seller has waived any default, breach, violation or
event of acceleration;
(xxxvi) No instrument of release or waiver has been executed
in connection with any Home Equity Loan, and no Mortgagor has been
released, in whole or in part, except in connection with an
assumption agreement which has been approved by the primary mortgage
guaranty insurer, if any, and which has been delivered to the
Depositor;
(xxxvii) Reserved;
(xxxviii) Each Home Equity Loan was underwritten in accordance
with the credit underwriting guidelines of the Seller as set forth
in the Seller's Policies and Procedures Manual, as in effect on the
date hereof and such Manual conforms in all material respects to the
description thereof set forth in the Prospectus Supplement;
(xxxix) Each Home Equity Loan was originated based upon a full
appraisal, which included an interior inspection of the subject
property;
(xl) The Home Equity Loans were not selected for sale to the
Depositor by the Seller on any basis intended to adversely affect
the Depositor;
(xli) No more than 6.53% of the aggregate Loan Balance of the
Home Equity Loans are secured by Properties that are non-owner
occupied Properties (i.e., investor-owned and vacation);
(xlii) The Seller has no actual knowledge that there exist any
hazardous substances, hazard wastes or solid wastes, as such terms
are defined in the Comprehensive Environmental Response Compensation
and Liability Act, the Resource Conservation and Recovery Act of
1976, or other federal, state or local environmental legislation on
any Property;
(xliii) The Seller was properly licensed or otherwise
authorized, to the extent required by applicable law, to originate
or purchase each Home Equity Loan; and the consummation of the
transactions herein contemplated including, without limitation, the
ownership of the Home Equity Loans by the Seller will not violate
such laws;
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(xliv) With respect to each Property subject to a ground lease
(i) the current ground lessor has been identified and all ground
rents which have previously become due and owing have been paid;
(ii) the ground lease term extends, or is automatically renewable,
for at least five years beyond the maturity date of the related Home
Equity Loan; (iii) the ground lease has been duly executed and
recorded; (iv) the amount of the ground rent and any increases
therein are clearly identified in the lease and are for
predetermined amounts at predetermined times; (v) the ground rent
payment is included in the borrower's monthly payment as an expense
item in determining the qualification of the borrower for such Home
Equity Loan; (vi) the Depositor has the right to cure defaults on
the ground lease; and (vii) the terms and conditions of the
leasehold do not prevent the free and absolute marketability of the
Property. As of the Cut-Off Date, the Loan Balance of the Home
Equity Loans with related Properties subject to ground leases does
not exceed 1% of the Original Aggregate Loan Balance;
(xlv) Reserved;
(xlvi) No Home Equity Loan is subject to a temporary rate
reduction pursuant to a buydown program;
(xlvii) No more than 4.36% of the aggregate Loan Balance of
the Home Equity Loans was originated under the Seller's non-income
verification program;
(xlviii) The Coupon Rate on each Home Equity Loan is
calculated on the basis of a year of 360 days with twelve 30-day
months;
(xlix) Neither the operation of any of the terms of each
Mortgage Note and each Mortgage nor the exercise of any right
thereunder will render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, nor subject it to any right of
rescission, set-off, counterclaim or defense, including, without
limitation, the defense of usury;
(l) Any adjustment to the Coupon Rate on a Home Equity Loan
has been legal, proper and in accordance with the terms of the
related Mortgage Note;
(li) No Home Equity Loan is subject to negative amortization;
and
(lii) As of the Cut-Off Date, the FTC holder regulation
provided in 16 C.F.R. Part 433 applies to none of the Home Equity
Loans.
SECTION 2. Purchase and Delivery.
In consideration for the sale and transfer of the Home Equity Loans to
the Depositor by the Seller, and upon transfer of such Home Equity Loans to the
Depositor or the Depositor's designee from the Seller on the date hereof with
respect to the Home Equity Loans, the Depositor shall pay or cause to be paid to
the Seller good and valuable consideration, (the "Purchase Price") including
(without limitation) (a) the net proceeds of the sale of the Notes and (b)
certain residual classes of securities subordinate to the Notes. The transfer of
funds from the Depositor to the Seller for the Purchase Price for all Home
Equity Loans purchased shall be made by wire transfer of immediately available
funds to the bank account designated by the Seller.
On the date hereof with respect to the Home Equity Loans, the Seller
shall transfer, assign and convey to the Depositor all of the Seller's right,
title and interest in and to each Home Equity Loan and the related File, free
and clear of any adverse claims, rights or interests therein. The Seller shall,
or shall cause its agent to, deliver to the Depositor or the Depositor's
designee the related File.
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SECTION 3. Sale Treatment.
It is the express intent of the parties hereto that the conveyance of
the Home Equity Loans by the Seller to the Depositor, as contemplated by this
Agreement be and be treated as an absolute transfer and conveyance of all of the
Seller's right, title, ownership and other interest in the Home Equity Loans. In
the event that, notwithstanding the intent of the parties, the Home Equity Loans
are held by a court to be the property of the Seller, then (i) this Agreement
shall be deemed to be a security agreement within the meaning of Articles 8 and
9 of the applicable Uniform Commercial Code; (ii) the transfer of the Home
Equity Loans provided for herein shall be deemed to be a grant by the Seller to
the Depositor of a security interest (and/or an assignment of any security
interest that the Seller may hold) in all of the Seller's right, title,
ownership and other interest in and to the Home Equity Loans and all amounts
payable to the holders of the Home Equity Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, to the extent
the Depositor would otherwise be entitled to own such Home Equity Loans and
proceeds thereof; (iii) the possession by the Depositor or the Custodian on
behalf of the Indenture Trustee of the Mortgage Note and such other items of
property as constitute instruments, money, negotiable documents or chattel paper
shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 (or comparable
provision) of the applicable Uniform Commercial Code; and (iv) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor for the purpose of perfecting
such security interest under applicable law. Any assignment of the interest of
the Depositor pursuant to any provision hereof or pursuant to the Sale and
Servicing Agreement shall also be deemed to be an assignment of any security
interest created hereby. The Seller and the Depositor shall, to the extent
consistent with this Agreement, take such actions as may be reasonably necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Home Equity Loans, such security interest would be deemed to be a perfected
first priority security interest under applicable law and will be maintained as
such throughout the term of the Sale and Servicing Agreement.
SECTION 4. Binding Effect.
This Loan Sale Agreement shall be binding upon and inure to the benefit
of the successors and assigns of the Depositor and the Seller.
SECTION 5. Governing Law.
This Loan Sale Agreement shall be governed by and construed under the
laws of the State of New York, without regard to the conflict of laws provisions
thereof.
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SECTION 6. Capitalized Terms.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement.
SECTION 7. Counterparts.
This Loan Sale Agreement may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same Agreement.
SECTION 8. Third-Party Beneficiary.
The Seller and the Depositor each agree that MBIA Insurance Corporation
and The Chase Manhattan Bank, as Indenture Trustee, shall be deemed to be
third-party beneficiaries of this Loan Sale Agreement as if they were each a
party hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Loan Sale
Agreement as of the 1st day of December, 1997.
IMC MORTGAGE COMPANY, as Seller
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Chief Executive Officer
IMC SECURITIES, INC., as Depositor
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
Chief Executive Officer
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