MASTER MORTGAGE LOAN
PURCHASE AGREEMENT
GENEVA MORTGAGE CORP.
Dated
November 1Oth, 2003
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
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This Mortgage Loan Purchase Agreement ("Agreement"), dated as 10th,
November, 2003 between Gateway Bank, a Federal Savings Bank having an address at
0000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (together with its successors
and assigns, "Purchaser") and Geneva Mortgage Corp.("Seller") having an address
at 000 X. Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxx, XX x0000.
PRELIMINARY STATEMENT
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It is anticipated that, from time to time, Seller shall sell to Purchaser,
and that Purchaser shall purchase, certain residential mortgage loans in
accordance with the terms and conditions set forth in this Agreement.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND MATTERS OF CONSTRUCTION
SECTION 1.1 DEFINITIONS.
As used in this Agreement, the following terms have the following meanings:
"ACT OF INSOLVENCY": (a) the commencement by Seller as debtor of any case
or proceeding under any bankruptcy, insolvency, reorganization, liquidation,
dissolution or similar law, or Seller's seeking the appointment of a receiver,
trustee, custodian or similar official for Seller or any substantial part of its
property, or (b) the commencement of any such case or proceeding against Seller,
or another's seeking such appointment, or the filing against Seller of an
application for a protective decree which (i) is consented to or not timely
contested by Seller, or (ii) results in the entry of an order for relief, such
an appointment, the issuance of such a protective decree or the entry of an
order having a similar effect, or (iii) is not dismissed within sixty (60) days,
(c) the making by Seller of a general assignment for the benefit of creditors,
or (d) the admission in writing by Seller that Seller is unable to pay its debts
as they become due or the nonpayment generally by Seller of its debts as they
become due.
"ACQUISITION DATE": with respect to any Mortgage Loan, the date of payment
by Purchaser to Seller of the Acquisition Price.
"ACQUISITION PRICE": with respect to each Mortgage Loan, the amount set
forth on the related Loan Purchase Detail as the Acquisition Price, provided,
however, that in no event shall the Acquisition Price be less than 95%, or
exceed 99%, of the lesser of (1) the face amount of the related Mortgage Note;
or (2) the related Takeout Price.
"ADJUSTED ACQUISITION PRICE": for any Mortgage Loan means the Acquisition
Price for such Mortgage Loan PLUS the aggregate amount obtained by the daily
application of the Investment Return Rate to the Acquisition Price for such
Mortgage Loan on a 360-day-per-year
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basis for the actual number of days in the period from and including the
Acquisition Date to and excluding the Settlement Date for such Purchased Loan,
or the date on which such Purchased Loan is re-purchased by Seller pursuant to
Section 2.9, as the case may be.
"ADJUSTED TAKEOUT PROCEEDS" with respect to any Purchased Loan, means the
Takeout Proceeds less any Administrative Costs incurred in connection with such
Purchased Loan.
"ADMINISTRATIVE COSTS": means the fees, charges and expenses listed on
SCHEDULE A.
"AGREEMENT" OR "MASTER MORTGAGE LOAN PURCHASE AGREEMENT" means this Master
Mortgage Loan Purchase Agreement and all amendments, schedules, exhibits, and
restatements hereof and/or supplements hereto.
"ADVANCE SUBMISSION DOCUMENTS" means, with respect to any Mortgage Loan,
the documents designated as such on EXHIBIT A hereto, each in form and substance
satisfactory to Purchaser in its sole discretion.
"AGENCIES": FHA, FNMA, VA and FHLMC.
"AGENCY GUIDELINES": those requirements, standards and procedures which may
be adopted by the Agencies from time to time with respect to their purchase or
guaranty of residential mortgage loans, which requirements govern the Agencies'
willingness to purchase and/or guaranty such loans.
"APPRAISAL": shall mean a valuation of the Mortgaged Property and all
improvements located thereon securing each Mortgage Loan meeting all federal
laws, standards and regulations which govern appraisals that Purchaser may rely
upon and which appraisal is applicable to the type of loan represented by the
Mortgage Loan offered by Seller.
"ASSIGNMENT IN BLANK": each assignment of mortgage in recordable form and
otherwise in form and substance satisfactory to Purchaser, executed in blank by
Seller and delivered to Purchaser as part of the Submission, Package Documents.
"BANK PRIME LOAN": Rate posted by a majority of top 25 (by assets in
domestic offices) insured U.S. -chartered commercial banks. Prime is one of
several base rates used by banks to price short-term business loans. This is the
same as "Prime Rate" and is published in Federal Reserve Statistical Release
H.15.
"BANKRUPTCY LAW": any Requirement of Law in any jurisdiction relating to
bankruptcy, reorganization, arrangement, insolvency, and readjustment of debt,
dissolution or liquidation.
"BUSINESS DAY": any day other than a Saturday, Sunday or other day on which
banks located in the City of San Francisco, California are authorized or
obligated by law or executive order to be closed.
"COMMITMENT EXPIRATION DATE"; with respect to any Takeout Commitment, the
last day on which the Takeout Investor will accept delivery of the Mortgage Loan
for purchase, as set forth in such Takeout Commitment.
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"CREDIT FILE DOCUMENTS": with respect to each Mortgage Loan, all papers and
records of whatever kind or description, whether developed or originated by
Seller or others, required to document or service such Mortgage Loan (other than
any Mortgage Loan papers, documents or records which are contained in the
Submission, Package Documents).
"CUSTODIAL ACCOUNT": a separate custodial account, established and
maintained by Seller under the conditions set forth in Section 3.2, for the
deposit by Seller of all collections in respect of a Mortgage Loan that are
payable to Purchaser as the owner of the Mortgage Loan.
"CUSTODIAN": has the meaning set forth in Section 7.1 hereof.
"DEPOSIT ACCOUNTS": accounts, including but not limited to, Deposit
Accounts and Settlement Accounts, established by Seller at Purchaser in the
minimum amount of $120,000.00 (required minimum balance to be maintained at all
times) to be used by Purchaser to complete the transactions contemplated hereby.
Purchaser may at their discretion place a hold on the Sellers Deposit Accounts
and Settlement Accounts (typically a Gateway Bank Business Checking Account) in
the amount of the required minimum balance.
"DEFAULT": the occurrence or non-occurrence of any event, which, with the
giving of notice, the lapse of time, or both, would become an Event of Default.
"DEFECTIVE MORTGAGE LOAN": a Mortgage Loan (i) as to which Submission
Package Documents are not received within two (2) Business Days after the
Acquisition Date, or (ii) that does not conform to any of the representations or
warranties of the Seller contained in Section 2.6 of this Agreement.
"DEFECTIVE SETTLEMENT INFORMATION": any Settlement Information (i) that
does not accurately identify a Mortgage Loan by the Mortgagor's name, or (ii) in
which the aggregate disbursement information does not equal the precise amount
of Takeout Proceeds received by Purchaser from the Takeout Investor.
"DESIGNATED INVESTOR": the Takeout Investor identified as such with respect
to a Mortgage Loan by Seller in the Submission Package Documents or Advance
Submission Documents with respect to such Mortgage Loan.
"DIRECT (WET) FUNDING": a Mortgage Loan that is being closed with the
Mortgagor on the Acquisition Date therefore and accordingly, as to which
Submission Package Documents cannot be sent to Purchaser prior to the
Acquisition Date.
"DOCUMENT FILE": with respect to each Mortgage Loan, the Credit File
Documents, the Submission Package Documents and the Advance Submission Documents
relating to such Mortgage Loan.
"DUE DATE": the first day of each calendar month.
"EFFECTIVE DATE": the date this Agreement is executed by both parties,
(which shall conclusively be deemed to be the date appearing at the top of the
first page hereof absent manifest error), unless a contrary intent specifically
appears herein.
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"ELIGIBLE BANK": any bank selected by Seller, including the Purchaser and
approved by Purchaser in writing and licensed to conduct trust and other banking
business in the States where it purports to conduct business.
"ELIGIBLE MORTGAGE LOAN": any Mortgage Loan, originated not more than
thirty (30) days prior to delivery to Purchaser that has an original Mortgage
Note amount equal to or less than One Million Five Hundred Thousand and No/100
Dollars ($1,500,000.00), as to which all of the representations and warranties
contained in Section 2.5 hereof are true and the Submission Package Documents or
Advance Submission Documents have been received by or on behalf of Purchaser.
"EVENTS OF DEFAULT": any of the following events shall have occurred and be
continuing;
(i) the Seller shall fail to re-purchase any Defective
Mortgage Loan at the time and for the amount, required
hereby; or
(ii) any representation or warranty made by the Seller in
connection with this Agreement or contained herein
shall be inaccurate or incomplete in any material
respect on or as of the date made or hereafter becomes
untrue; or
(iii) the Seller shall fail in the observance or performance
of any duty, responsibility or obligation contained in
this Agreement and such failure shall continue
un-remedied for a period of thirty (30) days; or
(iv) any Act of Insolvency occurs; or
(v) one or more judgments or decrees shall be entered
against the Seller involving claims not paid or not
fully covered by insurance and all such judgments or
decrees shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days
from entry thereof; or
(vi) any Agency, or private investor, or any other party
shall seize or take control of Seller's servicing
portfolio for breach of any servicing agreement
applicable to such servicing portfolio, or for any
other reason whatsoever; or
(vii) any Agency revokes Seller's authority to originate
Mortgage Loans; or
(viii) Seller defaults under any mortgage loan purchase
arrangement similar to the one described herein which
it may have with any other purchaser, or under any
warehouse lending arrangement which may support its
residential loan program, beyond applicable notice and
grace periods; or
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(ix) any Purchased Loan is rejected by the Designated
Investor; or
(x) Seller is required to re-purchase Mortgage Loans under
subsection 2.9.2 having an aggregate Sales Price in
excess of nine percent (9%) of the aggregate Sales
Price of all Mortgage Loans theretofore acquired by
Purchaser from Seller during the immediately
proceeding twelve (12) months.
(xi) Seller is required to maintain a minimum balance in
their Deposit Account (Gateway Bank Business Checking
Account) at all times as defined under "Deposit
Accounts".
"FDIC": shall mean the Federal Deposit Insurance Corporation
"FHA": the organization known as the Federal Housing Administration
"FNMA" OR " XXXXXX XXX": the organization known as the Federal National
Mortgage Association or Xxxxxx Mae.
"FHLMC" OR "XXXXXXX MAC": the organization known as the Federal Home Loan
Mortgage Corporation or Xxxxxxx Mac.
"GAAP" means generally accepted accounting principles in the United States
consistently applied.
"HIGHEST LAWFUL RATE": shall mean the maximum non-usurious interest allowed
from time to time by law as it is now, or to the extent allowed by law, as may
hereafter be in effect.
"INDIVIDUALLY COMMITTED LOAN": a Mortgage Loan as to which the applicable
Takeout Commitment, if any, is specific to such Mortgage Loan.
"INSURANCE POLICY": shall mean a hazard insurance policy in an amount
representing coverage at 1east equal to the outstanding principal balance of the
applicable Mortgage Loan, or the full insurable value of the improvements
securing such Mortgage Loan, whichever is greater, and of a type substantially
in the form of and at least as protective as the fire and extended coverage
contained in the "New York" loss mortgagee clause (also known as "standard" or
"union" loss mortgage clause) which provides that the Seller's hazard insurance
is not invalidated by acts of the loan debtor.
"INVESTOR PURCHASE AGREEMENT": each agreement to acquire Mortgage Loans
between the Seller and a Designated Investor, in form and substance satisfactory
to Purchaser in its sole discretion.
"INVESTMENT RETURN RATE": the lesser of (a) One & one-half percent (1.500%)
above Prime Rate per annum, or (b) the Highest Lawful Rate, but not less than,
(c) the minimum rate of 5.500% per annum, provided however, that the Investment
Return Rate on the Bulge Amount will be increased by adding .500%, per annum to
the applicable rate.
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"JUMBO LOAN": a mortgage loan secured by a one- to four- family residence
which generally conforms to Agency Guidelines in all respects other than the
principal amount of the related Mortgage Note.
"LEVERAGE RATIO": the ratio of Total Indebtedness divided by Tangible Net
Worth.
"LITIGATION": as to any Person, means any action, suit, investigation,
claim, proceeding, judgment, order, decree or resolution pending or threatened
against or affecting such Person or the business, operations, properties or
assets of such Person before, or by, any Regulatory Authority.
"LOAN APPLICATION": shall mean an application for a Mortgage Loan signed by
the borrower or its agent, in such form and containing such information as will
disclose the purpose for which the Mortgage Loan is sought and the identity of
the Mortgaged Property.
"LOAN PURCHASE DETAIL": a loan purchase detail, transmitted via facsimile
in the form of EXHIBIT B, or transmitted electronically in an appropriate data
layout, provided to Purchaser (and Custodian, if applicable) prepared by Seller,
containing certain information regarding the characteristics of all Mortgage
Loans being offered for sale by Seller on a particular Business Day.
"LOAN QUARTER": each consecutive three (3) month period commencing on the
Effective Date.
"LOAN TRANSFER FORM": with respect to each Mortgage Loan purchased by
Purchaser from Seller, the trade confirmation, substantially in the form of
EXHIBIT C hereto, confirming the terms of Purchaser's purchase of such Mortgage
Loans, to be prepared by Seller and delivered to Purchaser (or Custodian, if
applicable),
"Losses": any and all losses, claims, damages, liabilities or expenses
(including reasonable attorneys' fees and disbursements) incurred by any Person
specified.
"OTS": shall mean the Office of Thrift Supervision
"MATERIAL ADVERSE EFFECT" means any (i) material adverse effect upon the
validity, performance or enforceability of this Agreement, (ii) material adverse
effect upon the properties, business or condition, financial or otherwise, of
Seller, (iii) material adverse effect, upon the ability of Seller to fulfill its
obligations under this Agreement, or (iv) occurrence or state of facts that
causes a Default.
"MATERIAL AGREEMENT" means any contract, lease, instrument or other
agreement, the non-performance of which by either party could have a Material
Adverse Effect.
"MAXIMUM PURCHASE AMOUNT": means $10,000,000.00, provided that Purchaser,
upon payment of the applicable fee, if any, by Seller, at it's sole and absolute
discretion may increase this amount to $12,000,000.00 ("Bulge Amount")
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"MONTHLY PAYMENT": the scheduled monthly payment of principal and interest
on a Mortgage Loan.
"MORTGAGE": the mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage Note,
"MORTGAGE FILE" means the file containing the Mortgage Loan Documents with
respect to a Mortgage Loan, as well as the credit and closing packages,
custodial documents, servicing documents, escrow documents, mortgage documents,
loan modification and forbearance agreements, assumption agreements, and all
other files, records and documents necessary to: (a) establish the eligibility
of the Mortgage Loans for purchase by Purchaser or for insurance by an Insurer,
and (b) service the Mortgage Loans in accordance with Applicable Requirements.
"MORTGAGE LOAN": a mortgage loan secured by a one- to four- family
residence situated in any State within the continental United States other than
Alaska, or Puerto Rico, that (i) either conforms to Agency Guidelines for the
Agency specified in the related Takeout Commitment (or if the Mortgage Loan is
sold without a Takeout Commitment, or the Takeout Commitment fails to specify an
Agency, then the Agency selected by Purchaser), or conforms to such Agency
Guidelines in all respects other than the principal amount of the related
Mortgage Note, or (ii) conforms to the terms of the applicable Takeout
Commitment, if any, or a Jumbo Loan.
"MORTGAGE LOAN DOCUMENTS" means with respect to each Mortgage Loan, the
original Mortgage Instrument, the Mortgage Note bearing all intervening
endorsements, endorsed, at the direction of the Purchaser, in blank and signed
in the name of the Seller by an officer, and the original Assignment. These are
documents contained in the Mortgage File and each and every collateral document,
account or security agreement securing such Mortgage Loan including, without,
limitation, any UCC Financing Statement, pledge agreement, guaranty, title
insurance policy, tax and insurance escrows or deposits or escrows of any kind,
fire and casualty insurance policies, other insurance and other documents,
agreements or instruments under which legal rights or obligations are created or
exist, if any, provided to Seller or a predecessor in interest to secure such
Mortgage Loan.
"MORTGAGE LOAN SCHEDULE": a schedule of Mortgage Loans in the form of
EXHIBIT D, (or its electronically transmitted equivalent), provided to Purchaser
(or Custodian, if applicable) as part of the Submission Package Documents or
Advance Submission Documents, setting forth the following information with
respect to each Mortgage Loan to be acquired by Purchaser: (1) Seller's Mortgage
Loan identifying number; (2) the Mortgagor's first and last name; (3) the street
address of the Mortgaged Property including the state and zip code; (4) a code
indicating whether the Mortgaged Property is owner-occupied; (5) the type of
residential dwelling constituting the Mortgaged Property; (6) the loan-to-value
ratio at origination; (7) the first adjustment date; (8) the gross margin; (9) a
code indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing); (10) the maximum mortgage interest rate
under the terms of the Mortgage Note; (11) the periodic rate cap; (12) the
index; (13) whether or not each Mortgage Loan has a prepayment penalty and if
so, the duration of such penalty; (14) a code indicating the documentation
style; and (15) a code indicating whether or not the Mortgage
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Loan is the subject of a private mortgage insurance policy and the name of the
related insurance carrier.
"MORTGAGE NOTE": the note or other evidence of the indebtedness evidencing
a Mortgage Loan.
"MORTGAGED PROPERTY": the property subject to the lien of the Mortgage
securing a Mortgage Note.
"MORTGAGOR": The obligor on a Mortgage Note.
"NASD": shall mean the National Association of Securities Dealers
"PERSON": means an individual, partnership, corporation, business trust,
limited liability company, joint stock company, trust, unincorporated
association, joint venture, governmental authority, or other entity of whatever
nature.
"POOLED LOAN": a Mortgage Loan as to which the applicable Takeout
Commitment, if any, relates to a pool of unspecified Mortgage Loans.
"PRIME RATE": shall mean the highest rate of interest published in FEDERAL
RESERVE STATISTICAL RELEASE H, 15 (519) as constituting the most recent daily
"bank prime loan", "prime rate" or "base rate" in such publications table of
Money Rates or, in the absence of the publication of such rate, the variable
rate of interest per annum established, announced or set by Citibank, N. A. from
time to time as its "prime rate," "reference rate" or "base rate". Such rate is
a general reference rate of interest, and is not necessarily the lowest or best
rate actually charged by any lender to any customer.
"PROPERTY CHARGES": all taxes, fees, governmental assessments, water, sewer
and municipal charges (general or special) and all insurance premiums, leasehold
payments or ground rents.
"PURCHASED ITEMS": the Purchased Loans, including all rights and
appurtenances related thereto, including, without limitation, all servicing
rights related thereto, any Custodial Accounts, the Takeout Commitments, any
Mortgage Notes and the proceeds of any and all of the foregoing.
"PURCHASED LOAN": any Mortgage Loan with respect to which Purchaser has
paid the applicable Sales Price.
"QUICK$ALE(R) LIMIT": The Maximum Purchase Amount, without given any
regard to any Bulge Amount.
"QUICK$ALE(R) SUB-LIMIT": The Maximum Purchase Amount subdivided by the
class of Mortgage Loans as set forth on Schedule D.
"REGULATORY AUTHORITY" with respect to any Person means any governmental or
quasi-governmental department, commission, board, regulatory authority, bureau,
agency or instrumentality, domestic, foreign, federal, state or municipal
(including, without limitation, the
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OTS, FDIC, SEC or the NASD), any court or arbitration panel, or any private body
having regulatory jurisdiction over such Person or its business or assets
(including any insurance company or underwriter through whom such Person has
obtained insurance coverage).
"REQUIREMENT OF LAW" with respect to any Person means any law, ordinance,
requirement, order, direction, rule, regulation, decision, ruling, writ,
injunction, instruction, resolution, decree, or other similar document,
instrument or directive, whether currently existing or promulgated hereafter, of
any Regulatory Authority, or any requirement of the organizational documents of
such Person.
"SEC": shall mean the Securities and Exchange Commission.
"SELLER'S OPERATING ACCOUNT": the Deposit Account to be established for
Seller with the Custodian, if any, or Purchaser through which the Acquisition
Price shall be paid.
"SELLER'S SETTLEMENT ACCOUNT": the Deposit Account to be established with
the Custodian, if any, or Purchaser into which shall be deposited from time to
time any Sale Commissions which are due to the Seller.
"SELLER'S WIRE INSTRUCTIONS": standing written instructions, in form
reasonably acceptable to Purchaser, delivered by Seller to Purchaser, setting
forth the bank wire co-ordinates to be used for the payment of all amounts due
and payable to Seller hereunder.
"SETTLEMENT ADVICE": the advice by a Takeout Investor, to be delivered to
Purchaser, confirming the amount of Takeout Proceeds allocable to each Mortgage
Loan to be purchased by the Takeout Investor on the date such advice is
delivered.
"SETTLEMENT DATE": with respect to any Mortgage Loan, the Business Day on
which the applicable Takeout Proceeds and Settlement Advice(s) together with all
Settlement Information are received by Purchaser (or Custodian, if applicable)
from a Takeout Investor as confirmed by receipt of the related Settlement
Information; PROVIDED, that if such funds and/or advices(s) are received after
11:00 a. m. San Francisco, California time on such Business Day, the "Settlement
Date" shall be deemed to be the next succeeding Business Day.
"SETTLEMENT INFORMATION": the Settlement Advice or group of Settlement
Advices which shall identify each Mortgage Loan by the Mortgagor's name, and
indicating that the aggregate disbursement amount equals the precise dollar
amount of Takeout Proceeds to be received by Purchaser from the Takeout Investor
and states the Business Day for such settlement.
"SHORTFALL PREMIUM": a fee equal to 0.25% per month on the daily average
unused portion of 50% of the Seller's Quick$ale(R) Limit per month
"SUBMISSION PACKAGE DOCUMENTS" means, with respect to any Mortgage Loan,
the applicable documents designated as such on EXHIBIT A hereto, each inform and
substance satisfactory to Purchaser in its sole discretion.
"SUCCESSOR SERVICER": an entity designated by Purchaser, in conformity with
subsection 3.1.4, to replace Seller as Servicer of Purchased Loans on behalf of
Purchaser.
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"TAKEOUT COMMITMENT": an irrevocable commitment, issued by a Designated
Investor, to acquire a Mortgage Loan on or before a specified delivery date, as
set forth in such commitment, which date shall in no event be less than three
(3) Business Days before the Acquisition Date, and which shall be otherwise in
such form as shall be acceptable to Purchaser in its sole discretion.
"TAKEOUT INVESTOR": any of the investors acceptable to Purchaser in its
sole discretion or FNMA or FHLMC.
"TAKEOUT PRICE": the price at which a Designated Investor will acquire a
particular Mortgage Loan as set forth on the related Takeout Commitment plus the
amount of any accrued but unpaid interest on the related Mortgage Note.
"TAKEOUT PROCEEDS": the amount of funds a Takeout Investor pays with
respect to a Mortgage Loan as identified by the related Settlement Information.
"TAKEOUT SETTLEMENT DATE": a date set by the Takeout Investor for the
payment of the proceeds for acquired Mortgage Loans pursuant to the Takeout
Commitment, which in no event shall exceed forty-five (45) days after the
Acquisition Date, with respect to Individually Committed Loans and sixty (60)
days with respect to Pooled Loans.
"TANGIBLE NET WORTH": at the time of such determination, the excess of
total assets over total liabilities, each to be determined in accordance with
GAAP, excluding, however, from the determination of total assets, all assets
which would be classified as intangible assets under GAAP, including, without
limitation, goodwill, licenses, patents, trademarks, copyrights and franchises.
"TERM": the period between the Effective Date and the date on which this
Agreement shall he terminated in accordance with the provisions of Section 7.2.
"TITLE POLICY": shall mean a fully paid-up mortgagee's or lender's policy
of title insurance with respect to a Mortgage Loan naming Seller as the insured
in an amount at least equal to the unpaid balance of the Mortgage Loan, which
policy shall be in form and substance that is customarily used to affirm the
quality, priority and validity of a lender's lien against real property in the
jurisdiction where the mortgaged Property is located.
"TOTAL INDEBTEDNESS": at any date, all items (other than capital stock,
capital surplus, retained earnings, deferred taxes and deferred credits) which
in accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of Seller as at the date on which
Total Indebtedness is to be determined.
"UCC": the Uniform Commercial Code, as adopted in the relevant
jurisdiction.
"VA": the organization known as the Department of Veteran Affairs.
"WAREHOUSE LENDER": any lender providing interim financing to the Seller in
any fractional amount for the purpose of originating or purchasing Mortgage
Loans, which lender has
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security interest in such Mortgage Loans as collateral for the obligations of
a Seller to such lender.
"WAREHOUSE LENDER'S RELEASE": a letter substantially in the form of EXHIBIT
E hereto, from a Warehouse Lender to Purchaser, conditionally releasing all of
Warehouse Lender's right, title and interest in certain Mortgage Loans
identified therein upon receipt of payment by Warehouse Lender.
"WAREHOUSE LENDER'S WIRE INSTRUCTIONS": written instructions, in form
reasonably acceptable to Purchaser, delivered by a Warehouse Lender to
Purchaser, setting forth the bank wire co-ordinates and instructions to be used
for the payment of all amounts due and payable to such Warehouse Lender
hereunder.
SECTION 1.2 CONSTRUCTION; INTENT OF THE PARTIES.
1.2.1 The headings used in this Agreement are for convenience only and
shall not he deemed to constitute a part hereof. All uses herein of the
masculine gender or of singular or plural terms shall he deemed to include uses
of the feminine or neuter gender or plural or singular terms, as the context may
require.
1.2.2 THIS AGREEMENT HAS BEEN FULLY REVIEWED AND NEGOTIATED BY THE
PARTIES HERETO AND THEIR RESPECTIVE COUNSEL. ACCORDINGLY, IN INTERPRETING THIS
AGREEMENT, NO WEIGHT SHALL BE PLACED UPON WHICH PARTY HERETO OR ITS COUNSEL
DRAFTED THE PROVISION BEING INTERPRETED.
1.2.3 FOR THE AVOIDANCE OF DOUBT, PURCHASER AND SELLER CONFIRM THAT THE
TRANSACTIONS CONTEMPLATED HEREIN ARE INTENDED TO BE TRUE SALES AND ABSOLUTE
ASSIGNMENTS OF THE MORTGAGE LOANS BY SELLER TO PURCHASER RATHER THAN BORROWINGS
SECURED BY THE MORTGAGE LOANS. Purchaser shall own the purchased loans and have
all right and entitlement appurtenant thereto, including, without limitation,
the right to pledge or transfer its interest (subject only to any contractual
obligations Purchaser may have assumed with respect to any Designated Investor),
to take over servicing any Purchased Loan or replace Seller as the servicing
agent with respect to any Purchased Loan, to sell any Purchased Loan as to which
there is no Designated Investor to such third party, and on such terms, as it
deems appropriate. Seller shall not take any action inconsistent with
Purchaser's ownership of any Purchased Loans and shall not claim any legal,
beneficial, or other interest in any Purchased Loan.
1.2.4 It is the intention of the Seller and the Buyer that each
assignment, transfer and conveyance hereunder constitutes a sale and assignment
of the Mortgage Documents from the Seller to the Buyer. If, notwithstanding the
express intention of the parties, this Agreement is deemed not to constitute a
sale, conveyance and assignment of the Mortgage Documents from the Seller to the
Buyer, this Agreement shall be deemed to be a security agreement within the
meaning of Article 8 and Article 9 of the Uniform Commercial Code as in effect
in the State of California and the conveyance provided for shall be deemed to be
a grant by the Seller to the Buyer of a valid first priority perfected security
interest in all of the Seller's right, title and
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interest in and to the Mortgage Documents. The Buyer does not assume and shall
not be liable for any of the Seller's liabilities, duties, or obligations under
or in connection with the Takeout Commitments.
ARTICLE 2
PURCHASE AND SALE PROCEDURES
SECTION 2.1 SALE OF MORTGAGE LOANS.
2.1.1 Seller agrees to sell to Purchaser, and Purchaser agrees to buy,
from time to time, Eligible Mortgage Loans, in accordance with the terms
hereof. Seller acknowledges that (i) the terms offered to Seller represent a
premium available only for bulk purchases, and (ii) Purchaser may enter into
various financial arrangements to make funds available to acquire Eligible
Mortgage Loans. Accordingly, Seller guarantees that the average daily aggregate
Acquisition Price for all Eligible Mortgage Loans offered by Seller to
Purchaser in any Month shall not fall below fifty percent (50%) of the Seller's
Quick$ale(R) Limit. If Seller's daily aggregate Acquisition Price for all
Eligible Mortgage Loans falls below Fifty percent (50%) of the Seller's
Quick$ale(R) Limit for any two consecutive months, then Buyer, at Buyer's sole
and absolute discretion may (i) reduce the Seller's Quick$ale(R) Limit or (ii)
cancel this Agreement.
2.1.2 In connection with such sale, Seller shall deliver, or cause to be
delivered, to Purchaser (or Custodian, if so directed by the Purchaser) a Loan
Purchase Detail (either electronically or via facsimile transmission) and all
Submission Package Documents. In the case of a Direct Funding, Seller shall
initially deliver Advance Submission Documents and shall, within two Business
Days thereafter, deliver Submission Package Documents.
2.1.3 Upon receipt of a Loan Purchase Detail and the related Submission
Package Documents or Advance Submission Documents, as the case may be, subject
to satisfaction of the conditions precedent contained in Section 2.2 hereof,
Purchaser shall purchase the related Eligible Mortgage Loan at the Acquisition
Price.
2.1.4 For the avoidance of doubt, Seller shall have no right to replace
or re-purchase any Purchased Loan other than a Defective Mortgage Loan.
2.1.5 In no event shall Purchaser be required to purchase any Mortgage
Loan (a) if the Acquisition Price of such Mortgage Loan, when combined with the
aggregate Acquisition Price of all Purchased Loans then held by Purchaser, is in
excess of the Seller Quick$ale(R) Limit; or (b) if such Mortgage Loan is in a
category to which a Seller Quick$ale(R). Sub-limit applies and the Acquisition
Price of such Mortgage Loan, when combined with the aggregate Acquisition Price
of any Purchased Loans in the same category which are then held by Purchaser,
exceeds the applicable Seller Quick$ale(R) Sub-limit.
2.1.6 From and after the Acquisition Date, Seller shall hold a copy of
each Mortgage Note, together with any Credit File Documents, and other
Submission Package Documents or Advance Submission Documents, that are in, or
may thereafter come into, its possession, for the benefit of Purchaser.
Purchaser, as the case may be, shall appropriately identify such Credit File
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Documents, Submission Package Documents, or Advance Submission Documents, in
Seller's computer system to clearly reflect the ownership of any Purchased
Loans.
SECTION 2.2 PURCHASE.
2.2.1 In order to effect the purchase of an Eligible Mortgage Loan,
Purchaser shall the same Business Day (or the following Business Day if the
Loan Purchase Detail and all Submission Package Documents, or Advance Submission
Documents, as the case may be, are not received prior to 10:30 a.m. San
Francisco, California time) pay, or cause to be paid, the Acquisition Price
therefore by wire transfer of immediately available funds, as follows:
(a) If such Mortgage Loan has been, previously assigned by Seller
to a Warehouse Lender in connection with any interim,
financing thereof, the amount owing to the Warehouse Lender
shall be disbursed in accordance with the Warehouse Lender's
Wire Instructions furnished in connection with such Mortgage
Loan; and
(b) if such Mortgage Loan has not been previously assigned by
Seller to a Warehouse Lender in connection with any interim
financing thereof, or if any balance of the Acquisition Price
remains after disbursement in accordance with the
instructions contained in the Warehouse Lender's Release
furnished in connection with such Mortgage Loan, then to
Seller or as directed by Seller in accordance with the
Seller's Wire Instructions.
2.2.2 Simultaneously with the payment by Purchaser of the Acquisition
Price with respect to any Mortgage Loan in accordance with the provisions of
subsection 2.2.1, Seller shall convey to Purchaser absolutely, and not by way
of collateral assignment, all rights title and interest in and to such Mortgage
Loan, free and clear of any lien, claim or encumbrance. Seller shall confirm
such conveyance by promptly executing a Loan Transfer Form.
2.2.3 If, at any time after payment of the Acquisition Price, Seller
holds, or receives, any documents or funds relating to a Purchased Loan, Seller
agrees to immediately notify Purchaser, and to segregate and hold such documents
and/or funds in trust for Purchaser and to deliver such documents or funds at
the time and as directed by Purchaser or the Custodian.
2.2.4 The terms and conditions of each purchase of a Mortgage Loan are
set forth in this Agreement and each Loan Transfer Form.
2.2.5 If Purchaser rejects any Mortgage Loan pursuant to the provisions
of Section 2.7 hereof, all Submission Package Documents, or Advance Submission
Documents, as the case may be, delivered to Purchaser (or Custodian, as the case
may be) in anticipation of such purchase shall be returned to the transmitting
party.
SECTION 2.3 FEES.
2.3.1 After the first sixty (60) days of the Term, if the average daily
aggregate Acquisition Price of all Eligible Mortgage Loans offered to Purchaser,
in any month is less than Seventy-five Percent (50%) of the Seller Quick$ale(R)
Limit, Seller shall pay to Purchaser a
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Shortfall Premium with respect to Purchaser's agreement hereunder to hold funds
available to acquire from Seller Eligible Mortgage Loans.
2.3.2 Seller shall pay to Purchaser, within ten (10) days after receipt
of a statement therefore, any outstanding Administrative Costs or cost related
to Defective Mortgage Loans.
2.3.3 Purchaser reserves the right, and Seller expressly authorizes
Purchaser, to deduct any Shortfall Premiums and Administrative Costs owed by
Seller to Purchaser pursuant to subsections 2.3.1. and 2.3.2 from any Sale
Commissions then due and payable.
SECTION 2.4 SALE COMMISSIONS.
Provided no Default has occurred and is continuing, Purchaser shall pay to
Seller a commission in connection with the re-sale of each Purchased Loan to a
Designated Investor as compensation for the introduction of such Designated
Investor to Purchaser (each, a "Sale Commission"), The Sale Commission with
respect to a Mortgage Loan shall vary in accordance with the Takeout Price that
Seller is able to negotiate with the Designated Investor, and shall equal the
amount, if any, by which the Adjusted Takeout Proceeds exceed the Adjusted
Acquisition Price. The Sale Commission for each Mortgage Loan shall be deposited
into Seller's Settlement Account on the Settlement Date for such Mortgage Loan.
If a Mortgage Loan is purchased without a Takeout Commitment from a Designated
Investor, or the Designated Investor fails to honor its Takeout Commitment with
respect to a Purchased Loan, no Sale Commission shall be due.
SECTION 2.5 UPDATED REPRESENTATIONS CONCERNING THE SELLER.
2.5.1 Each delivery of a Loan Purchase Detail by Seller shall be deemed
to constitute a representation that at the time of such delivery:
(a) Seller is solvent and will not be rendered insolvent by the
sale of the Mortgage Loans referred to thereon on the terms
indicated; Seller does not intend to file a petition for
relief under any Bankruptcy Law;
(b) no Default has occurred and is continuing; and
(c) all of the representations contained in Section 5.1 hereof
are accurate in all respects as of such date;
(d) the sale of the Mortgage Loans referred to thereon is being
entered into by Seller voluntarily, and in the absence of any
omission of fact, undue influence, duress, coercion or
similar constraint;
(e) this Agreement and the relevant Submission Package Documents
represent the only agreements of the parties thereto with
respect to the transfer Mortgage Loans from the Seller to the
Purchaser; and
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(f) this Agreement has not been modified and there has been no
waiver of any of the provisions hereof in writing, orally, or
by any other action or conduct of the parties or otherwise.
SECTION 2.6 REPRESENTATIONS AND WARRANTIES CONCERNING MORTGAGE LOANS.
2.6.1 Each delivery of a Loan Purchase Detail by Seller shall be deemed
to constitute, as of the date of such delivery (or, it another date is expressly
provided in such representation or warranty, as of such, other date), the
following representations and warranties concerning the Mortgage Loan to which
the Loan Purchase Detail relates:
(a) Seller is the sole owner of the Mortgage Loan, subject to no
lien, claim or encumbrance whatsoever except the lien, if
any, of a Warehouse Lender reflected by a Warehouse Lender's
Release delivered with the Submission Package Documents, or
Advance Submission Documents, as the case may be, for such
Mortgage Loan; Seller has full right and authority, subject
to no interest or participation of, or agreement with, any
other party, to sell the same pursuant to this Agreement;
(b) except for the amount of the Mortgage Note related to any
Jumbo Loan, the Mortgage Loan conforms in all respects to
Agency Guidelines for the Agency specified in the related
Takeout Commitment;
(c) any and all Requirements of Law, including, without
limitation, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit
opportunity or disclosure laws, and payment of any and all
recording fees, charges and taxes, applicable to the Mortgage
Loan have been, complied with, and Seller shall deliver to
Purchaser upon demand, evidence of compliance with all such
requirements;
(d) the Document File is accurate and complete and contains all
documents or instruments required by Agency Guidelines for
the Agency specified in the related Takeout Commitment and as
dictated by good practice in the industry; the Document File
is either in Purchaser's possession, Custodian's possession,
or Seller's possession and held in trust by Seller for
benefit of Purchaser, or in the possession of the Designated
Investor in accordance with customary practice;
(e) no servicing agreement, has been entered into with respect to
the Mortgage Loan, or any such servicing agreement has been
terminated and there are no restrictions, imposed by any
contractual agreement or Regulatory Authority, which would
impair the ability of Purchaser to service the Mortgage Loan;
(f) the Mortgage is a valid and subsisting first lien on the
Mortgaged Property, subject only to liens for Property
Charges not yet due and payable;
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(g) neither Seller nor any prior holder of the Mortgage has
modified the Mortgage in any material respect; satisfied,
canceled or subordinated the Mortgage in whole or in part; or
released the Mortgaged Property in whole or in part from the
lien of the Mortgage;
(h) all Monthly Payments and Property Charges due under the
Mortgage Loan prior to the Acquisition Date have been paid
when due and the Mortgage Loan is not otherwise in default;
no event has occurred which, with the passage of time or with
notice and the expiration of any grace or cure period, would
constitute a default under the Mortgage Loan; and Seller has
not waived any default, breach, violation or event of
acceleration;
(i) the Mortgage Loan was closed by the Seller thereof not more
than thirty (30) days prior to the Acquisition Date;
(j) the Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right
thereunder, render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, or subject to any right
of rescission, set-off, counterclaim or defense, including
the defense of usury, and no such right of rescission,
set-off, counterclaim or defense has been asserted with
respect thereto;
(k) Seller has not advanced funds, or induced or solicited any
advance of funds by a party other than the Mortgagor directly
or indirectly, for the payment of any amount required by the
Mortgage Loan; the collection practices used by each entity
which has serviced the Mortgage Loan have been in all
respects legal, proper, prudent, and customary in the
mortgage servicing business; with respect to escrow deposits
and payments in those instances where such were required,
there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been
made and no escrow deposits or other charges or payments have
been capitalized under any Mortgage or the related Mortgage
Note;
(1) all parties to the Mortgage Note and the Mortgage had legal
capacity to execute the Mortgage Note and the Mortgage and
each Mortgage Note and Mortgage have been duly and properly
executed by the Mortgagor; the Mortgage Note and the related
Mortgage are genuine and each is the legal, valid and binding
obligation of the maker thereof, enforceable in accordance
with its terms;
(m) either: (i) Seller and every other holder of the Mortgage, if
any, were authorized and licensed to transact and do business
in the jurisdiction in which the Mortgage Loan was originated
and/or the Mortgaged Property is located at all times when
such party held the Mortgage; or (ii) the loan of
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mortgage funds, the acquisition of the Mortgage (if Seller
was not the original lender), the holding of the Mortgage and
the transfer of the Mortgage did not constitute the
transaction of business or the doing of business in such
jurisdiction or require a license from any Regulatory
Authority;
(n) the proceeds of the Mortgage Loan have been fully disbursed,
there is no requirement for future advances thereunder and
any and all requirements as to completion of any on-site or
off-site improvements and as to disbursements of any escrow
funds, therefore, have been complied with; all costs, fees
and expenses incurred in making, or closing or recording the
Mortgage Loan were paid;
(o) the related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the
holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security,
including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure; there is no homestead or other exemption
available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage;
(p) each Mortgage Loan was originated by or is owned by an
institution that is authorized to sell Mortgage Loans to the
Agencies;
(q) at origination, the Mortgaged Property was free and clear of
all mechanics' and materialmen's liens or liens in the nature
thereof which are or could be prior to the Mortgage lien, and
no rights are outstanding that under law could give rise to
any such lien;
(r) the Mortgaged Property consists of a single parcel of real
property; all of the improvements which are included for the
purpose of determining the appraised value of the Mortgaged
Property lie wholly within the boundaries and building
restriction lines of such property, and no improvements on
adjoining properties encroach upon the Mortgaged Property;
(s) no improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or
regulation and all inspections, licenses and certificates
required to be made or issued with respect to the Mortgaged
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 the Mortgaged
Property is lawfully occupied under applicable law;
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(t) there is no proceeding pending for the total or partial
condemnation of the Mortgaged Property and the Mortgaged
Property is undamaged by waste, fire, earthquake or earth
movement, windstorm, flood, tornado or other casualty;
(u) all buildings upon the Mortgaged Property are insured against
loss by fire and such other hazards as are customary in the
area where the Mortgaged Property is located, pursuant to
fire and hazard insurance policies with extended coverage or
other insurance required by Agency Guidelines, in an amount
at least equal to the lesser of (i) the outstanding principal
balance of the Mortgage Loan or (ii) the maximum insurable
value (replacement cost without deduction for depreciation)
of the improvements constituting the Mortgaged Property; if
applicable laws limit the amount of such insurance to the
replacement cost of the improvements constituting the
Mortgaged Property, or to some other amount, then such
insurance is in an amount equal to the maximum allowed by
such laws; such insurance amount is sufficient to prevent the
Mortgagor or the loss payee under the policy from becoming a
co-insurer; the insurer issuing such insurance is acceptable
pursuant to Agency Guidelines; all individual insurance
policies contain a standard mortgagee clause naming Seller,
its successors and assigns, as mortgagee and all premiums
thereon have been paid; each Mortgage obligates the Mortgagor
thereunder to maintain all such insurance at Mortgagor's cost
and expense, and upon the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to obtain and maintain
such insurance at Mortgagor's cost and expense and to seek
reimbursement therefor from the Mortgagor; any flood
insurance required by applicable law has been obtained;
(v) the related Mortgage Note is payable on each Due Date in
self-amortizing monthly installments of principal and
interest, with interest payable in arrears, providing for
full amortization by maturity, over an original term of not
more than thirty years;
(w) The Mortgage Loan conforms in all respects with the
requirements of the Designated Investor under any applicable
Investor Purchase Agreement and any Takeout Commitment; the
related Takeout Commitment is a bona fide current, unused and
un-expired commitment by a Takeout Investor pursuant to which
such Takeout Investor has irrevocably agreed to acquire the
Mortgage Loan and for which the Takeout Settlement Date
thereof is within forty-five (45) days of the Acquisition
Date, in the case of Individually Committed Loans, and sixty
(60) days in the case of Pooled Loans, upon the satisfaction
only of those terms and conditions contained in the Takeout
Commitment, all of which, in the reasonably anticipated
course of events, can be complied with; and
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(x) any related Takeout Commitment for bulk or security trades
has been duly assigned to Purchaser, and Takeout Investor has
recognized such assignment to Purchaser;
(y) there are no circumstances or conditions with respect to the
Mortgage, the Mortgaged Property, the Mortgagor or the
Mortgagor's credit standing that can be reasonably expected
to cause the Takeout Investor or private institutional
investors to regard the Mortgage Loan as an unacceptable
investment, cause the Mortgage Loan to become delinquent or
adversely affect the value or marketability of the Mortgage
Loan.
(z) Seller has in its possession copies of each of the Mortgage
Documents and a complete Mortgage File
(aa) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or other generally acceptable form of policy
of insurance acceptable to FNMA or FHLMC, issued by a title
insurer acceptable to FNMA or FHLMC and qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring the Seller, its successors and assigns, as
to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan (or to the extent that
a Mortgage Note provides for negative amortization, the
maximum amount of negative amortization in accordance with
the Mortgage), and against any loss by reason of the
invalidity or unenforceability of the lien resulting from the
provisions of the Mortgage providing for adjustment in the
mortgage interest rate and Monthly Payment, subject only to
the exceptions permitted under Agency Guidelines.
(bb) The Assignment in Blank is in recordable form and is
acceptable for recording under the laws of the jurisdiction
in which the Mortgaged Property is located.
(cc) None of the Mortgage Loans are simple interest Mortgage
Loans.
(dd) With respect to each Mortgage Loan that has a prepayment fee
feature, each such prepayment fee is enforceable, and each
prepayment fee is permitted pursuant to federal, state and
local law. No Mortgage Loan will impose a prepayment penalty
for a term in excess of five years from the date such
Mortgage Loan was originated. Except as otherwise set forth
in the applicable Mortgage Loan Schedule, with respect to
each Mortgage Loan that contains a prepayment fee, such
prepayment fee is at least equal to the lesser of (A) the
maximum amount permitted under applicable law and (B) six
months interest at the related mortgage interest rate on the
amount prepaid in excess of 20% of the original principal
balance of such Mortgage Loan; and
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(ee) The information contained with respect to each Mortgage Loan
on the Mortgage Loan Schedule and Purchase Loan Detail is
true, accurate and correct and is consistent with the Takeout
Commitment for such Mortgage Loan and all the information
conveyed to the Takeout Investor with respect to such
Mortgage Loan.
2.6.2 The representations and warranties of Seller in this Section 2.6
are (1) unaffected by, and supersede any provision in, any endorsement of any
Mortgage Loan or in any assignment with respect to such Mortgage Loan to the
effect that such endorsement or assignment is without recourse or without
representation or warranty, and (2) survive the delivery of the Purchased Items,
the purchase by Purchaser of each Mortgage Loan, the transfer of the Purchased
Loan to Purchaser's successors and assigns and the termination of this
Agreement. The representations and warranties of Seller in this Section 2.6
shall inure to the benefit of Purchaser and Purchaser's successors and assigns.
2.6.3 Subject to Seller's obligations to re-purchase a Defective
Mortgage Loan under subsection 2.9.1 or re-purchase a Mortgage Loan as to which
a first or second payment default has occurred pursuant to subsection 2.9.2, the
sale of Mortgage Loans hereunder is without recourse to Seller. Seller does not
represent or guaranty that any Mortgagor will not default after the Acquisition
Date, or that any Designated Investor will honor its Takeout Commitment or that
Purchaser will be able to sell any Purchased Loan at the Adjusted Acquisition
Price and Seller shall have no liability with respect to such matters.
SECTION 2.7 REJECTION OF MORTGAGE LOANS.
2.7.1 Purchaser's obligation to purchase any Eligible Mortgage Loan
shall be subject to the following conditions precedent:
(a) all actions required by subsection 2.1.2 to be taken by the
Seller have been taken and, if Purchaser has directed that
deliveries thereunder are to be made to Custodian, Custodian
shall have confirmed to Purchaser that such deliveries have
been made to Custodian as required herein;
(b) Seller is solvent;
(c) no Default or Material Adverse Effect has occurred and is
continuing;
(d) all of the representations contained in Sections 2.6 and 5.1
hereof are still accurate in all respects;
(e) the purchase of such Mortgage Loan shall not cause Seller's
Quick$ale(R) Limit or Maximum Purchase Amount, whichever is
applicable to be exceeded;
(f) the expiration date specified in the related Takeout
Commitment shall not be later than three after the
Acquisition Date
(g) this Agreement shall not have been terminated.
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SECTION 2.8 SALE OF MORTGAGE LOANS TO TAKEOUT INVESTORS.
2.8.1 If Seller designates a Takeout Investor and provided the Adjusted
Takeout Proceeds equal or exceeds the Adjusted Acquisition Price, Purchaser
agrees to sell each Purchased Loan to the Designated Investor identified in, and
party to, the Takeout Commitment included as part of the Submission Package
Documents furnished in connection with such Purchased Loan. Such sale shall be
made pursuant to the provisions of such Takeout Commitment. If no Designated
Investor or Takeout Commitment is provided with respect to any Purchased Loan at
the time of purchase, or such Designated Investor fails to honor its Takeout
Commitment then Purchaser shall have the right, as owner of the Purchased Loan,
to sell the Purchased Loan on such terms and to such third party, as Purchaser
deems appropriate.
2.8.2 The sale of each Mortgage Loan to Purchaser shall include, and
Seller hereby assigns to Purchaser, free of any security interest, lien, claim
or encumbrance of any kind, Seller's rights, and by purchasing such Mortgage
Loans, Purchaser assumes Seller's deliver obligations, under each Takeout
Commitment for the Mortgage Loan(s) specified therein to the Designated Investor
and to receive the Takeout Price therefore from such Designated Investor.
2.8.3 Seller shall cause each Designated Investor to provide Settlement
Information with respect to the Mortgage Loan(s) as to which, it has delivered
a Takeout Commitment.
2.8.4 The Settlement Date shall occur on the Business Day upon which
the Settlement Information and the applicable Takeout Proceeds are received by
Purchaser (or Custodian, if applicable). Any Settlement Information and/or
Takeout Proceeds received by Purchaser (or Custodian, if applicable) after
12:00 p.m. San Francisco, California time on a Business Day (or at any time on
a day which is not a Business Day) shall be deemed for all purposes to have
been received on the next Business Day.
2.8.5 If a Designated Investor delivers Takeout Proceeds but fails to
provide the Settlement Information or provides Defective Settlement Information,
Purchaser (or Custodian on Purchaser's behalf) will notify the Designated
Investor and Seller. If the Designated Investor fails to provide the Settlement
Information or to correct the Defective Settlement Information, within one (1)
Business Day after receipt of such notification, Purchaser may, in its sole
discretion:
(a) return any Takeout Proceeds for which it has incomplete
Settlement Information to the Designated Investor; or
(b) place such Takeout Proceeds in a non-interest bearing account
until the requisite Settlement Information is provided.
SECTION 2.9 SELLER'S OBLIGATIONS WITH RESPECT TO DEFECTIVE MORTGAGE LOANS.
2.9.1 The sale of Mortgage Loans described herein are not CAVEAT
EMPTOR, it being understood that the Purchaser is expressly relying on the
representations as to each Mortgage Loan provided in Section 2.6 hereof.
Accordingly, if, after Purchaser purchases a Mortgage Loan, Purchaser determines
or receives notice (whether from Seller, Takeout Investor, Custodian or
otherwise) that a Purchased Loan is a Defective Mortgage Loan, Purchaser (or
Custodian, on
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Purchaser's behalf) shall promptly notify Seller and Seller shall, within one
(1) business day, re-purchase such Purchased Loan at the Adjusted Acquisition
Price.
2.9.2 The parties further agree that if a payment default occurs on the
first or second date payment was due under a Mortgage Note, Purchaser may notify
Seller and Seller shall, within one (1) business day, re-purchase such Purchased
Loan at the Adjusted Acquisition Price. Notwithstanding the foregoing, if Seller
gives to Purchaser the notice concerning first and second payment defaults
required by paragraph 3.1.l(f) of this Agreement, then in no event shall the
aggregate Acquisition Price for all Mortgage Loans that Seller is required to
re-purchase under this subsection exceed ten percent (10%) of the aggregate
Acquisition Price of all Mortgage Loans theretofore acquired by Purchaser from
Seller.
2.9.3 In the case of a Direct Funding, if the Seller fails to deliver
or cause to be delivered to the Purchaser (or Custodian on behalf of Purchaser)
the Submission Package Documents within two (2) Business Days following the
Acquisition Date, Purchaser (or Custodian on Purchaser's behalf) shall promptly
notify Seller, and Seller shall within one Business Day, re-purchase such
Purchased Loan at the Adjusted Acquisition Price.
2.9.4 Upon receipt of the Adjusted Acquisition Price from the Seller,
Purchaser (or Custodian on behalf of Purchaser) shall deliver, or cause to be
delivered, to Seller all Submission Package Documents, or Advance Submission
Documents, as the case may be, previously delivered to Purchaser (or Custodian,
as the case may be).
ARTICLE 3
SERVICING OF MORTGAGE LOANS
SECTION 3.1 SERVICING OF MORTGAGE LOANS.
3.1.1 As a condition to purchasing a Mortgage Loan, Purchaser may
elect, in its sole discretion, to require Seller to service such Mortgage Loan
as agent for Purchaser for a period not to exceed ninety (90) days. If, and, to
the extent, Purchaser so elects with respect to any Purchased Loan:
(a) no compensation shall be payable to Seller in connection with
interim servicing responsibilities during the first ninety
(90) days; and
(b) Seller shall service and administer such Purchased Loan on
behalf of Purchaser in accordance with prudent mortgage loan
servicing standards and procedures generally accepted in the
mortgage banking industry and in accordance with any Investor
Purchase Agreement with the Designated Investor, all
requirements of the Agencies, Requirements of Law, and the
requirements of any applicable guarantor so that any third
party liability in respect of any Purchased Loan is not
voided or reduced;
(c) Seller shall at all times maintain a servicing file
consisting of all documents necessary to service such
Purchased Loan and accurate and complete records of its
servicing of such Purchased Loan; Seller's
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possession of such servicing file being for the sole purpose
of servicing such Purchased Loan and such retention and
possession by Seller being in a custodial capacity only;
(d) Purchaser may, at any time during Seller's business hours on
reasonable notice, examine and make copies of such records or
request that Seller make copies of such records and deliver
them to Purchaser for Purchaser's quality control review
purposes.
(e) Seller shall at Purchaser's request deliver to Purchaser (and
Custodian, if applicable), monthly reports regarding the
status of any such Purchased Loan, which reports shall
include, but shall not be limited to, a description of any
default thereunder for more than thirty (30) days, and such
other circumstances that could cause a Material Adverse
Effect on any such Purchased Loan, Purchaser's title to any
such Purchased Loan or the collateral securing such Purchased
Loan; Seller may be required to deliver such reports until
the purchase of such Purchased Loan by a Takeout Investor, or
the re-purchase of such Purchased Loan (in the case of a
Defective Mortgage Loan) by Seller; and
(f) Seller shall immediately notify Purchaser if it becomes aware
of any payment default that occurs on the first or second
date payment is due under a Mortgage Note.
3.1.2 Seller shall not attempt to sell or transfer any rights to service
a Purchased Loan without the prior consent of Purchaser or except in accordance
with the exercise of a Takeout Commitment.
3.1.3 Seller shall release its custody of the contents of any servicing
file and Mortgage File only in accordance with the written instructions of
Purchaser, except when such release is required as incidental to Seller's
servicing of any Purchased Loan or is in connection with the purchase or
re-purchase of any Purchased Loan pursuant to this Agreement.
3.1.4 Purchaser reserves the right to appoint a successor servicer to
service any Purchased Loan (each a "Successor Servicer"). In the event of such
an appointment Seller shall perform all acts and take all action so that any
part of the Document File held by Seller, together with all Custodial Accounts
and receipts relating to such Purchased Loans, are promptly delivered to
Successor Servicer.
SECTION 3.2 CUSTODIAL ACCOUNT.
Seller shall establish and maintain a segregated trust account for the benefit
of Purchaser (the "Custodial Account") with an Eligible Bank, which may be the
Purchaser and shall promptly deposit into such Custodial Account, any interest
and/or principal payments received with respect to each Purchased Loan (but
not any interest accrued on such Purchased Loan up to but not including the
Acquisition Date for such Loan), and all other receipts in respect of each
Purchased Loan that are payable for the benefit of the owner of each such
Purchased Loan (including, without limitation, any escrows for Property
Charges). Additionally, Loans not
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purchased by an Investor or repurchased by Seller within 45 days of their
purchase by Buyer shall be assessed an additional Investment Return Rate equal
to 10% of the loans unpaid principal balance monthly and a 10% principal
curtailment monthly will be required until the earlier of the purchase of the
loan by an Investor or repurchase by Seller. The Seller will also be charged an
administrative fee of $250 monthly for any loan not purchased by an Investor or
repurchased by Seller by the forty-sixth (46th) day after purchase by
Purchaser.
3.2.1 Under no circumstances shall Seller deposit any funds belonging
to it into the Custodial Account, or otherwise commingle its own funds with the
funds belonging to Purchaser as owner of any Purchased Loans.
3.2.2 Any interest and/or principal payments, and other amounts received
with respect to each Purchased Loan (but not any interest accrued on such
Purchased Loan) up to but not including the Acquisition Date for such Loan,
whether or not deposited in the Custodial Account, shall be held in trust for
the exclusive benefit of Purchaser as the owner of such Purchased Loan and shall
be released only as follows:
(a) following receipt by Purchaser (or Custodian, if applicable)
of the Takeout Proceeds for such Purchased Loan, all amounts
deposited in the Custodial Account with respect to such
Purchased Loan shall be paid to the Takeout Investor unless
the Takeout Investor has agreed to release such amounts to
Seller;
(b) if a Successor Servicer is appointed by Purchaser, all
amounts deposited in the Custodial Account shall be
transferred into an account established by the Successor
Servicer pursuant to its agreement with Purchaser;
(c) if no Designated Investor is designated with respect to a
Purchased Loan, or if a Purchased Loan is not purchased by
the Designated Investor before the Commitment Expiration
Date, all amounts deposited in the Custodial Account shall be
released only in accordance with a Purchaser's written
instructions.
3.2.3 The terms of the Custodial Account shall specifically provide that
the funds therein contained shall be released at the direction of Purchaser
upon occurrence of any Default hereunder.
3.2.4 Seller shall not change the identity or location of the Custodial
Account without thirty (30) days prior written notice to Purchaser. Seller shall
from time to time, at its own cost and expense, execute such financing
statements pursuant to the UCC, directions to the applicable Eligible Bank and
other papers, documents or instruments, as may be reasonably requested by
Purchaser to reflect Purchaser's ownership interest in the Custodial Account,
and Seller hereby authorizes Purchaser to execute and file at any time and from
time to time precautionary financing statements or copies thereof with respect
to the Custodial Account signed only by Purchaser.
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3.2.5 Seller shall promptly deliver to Purchaser copies of all bank
statements and other records relating to the Custodial Account as Purchaser may
from time to time request.
SECTION 3.3. FIDELITY BONDS.
Seller shall maintain fidelity bonds and policies of insurance in form and
substance satisfactory to Purchaser insuring itself and Purchaser and the
principals, successors, and heirs and assigns of Purchaser, in the greater of
(a) $500,000, or (b) that amount required by FNMA in Section 1.01 of the FNMA
Guaranteed Mortgage Backed Securities Sellers' and Servicers' Guide, or (c) that
amount required by any other Agency Guidelines, against loss or damage from any
breach of fidelity by Seller or any officer, director, employee or agent of
Seller, and against any loss or damage from loss or destruction of documents,
fraud, theft, misappropriation, or errors or omissions.
ARTICLE 4
RECORD TITLE TO MORTGAGE LOANS;
INTENT OF PARTIES; SECURITY INTEREST
SECTION 4.1 TITLE.
Purchaser may elect, in its sole discretion, not to complete and record any
Assignments in Blank for the sole purpose of facilitating the servicing of the
related Mortgage Loan. In such event, Seller agrees until further notice to
remain the last named payee or endorsee of each Mortgage Note and the mortgagee
or assignee of record of each Mortgage in trust for the benefit of Purchaser.
SECTION 4.2 BOOKS AND RECORDS.
Seller shall maintain a complete set of books and records for each
Purchased Loan, which shall be clearly marked to reflect the Purchaser's
ownership interest in such Purchased Loan.
SECTION 4.3 SECURITY INTEREST.
Without prejudice to the provisions of subsection 1.2.3 and the expressed
intent of the parties, in the event, for any reason, any transaction involving a
Mortgage Loan is construed by any Regulatory Authority as a borrowing rather
than as a true sale and absolute conveyance, the Seller and Purchaser intend and
agree that Purchaser shall have a perfected first priority security interest in
the Purchased Items. In such case, Seller shall be deemed to have hereby granted
to Purchaser (and possession of any promissory notes, instruments and documents
by Custodian shall constitute possession on behalf of Purchaser for this
purpose) a security interest in and lien upon the Purchased Items. In such an
event, the Purchaser agrees that such security interest shall be of first
priority and shall be free and clear of adverse claims, liens and interests. In
such event, this Agreement shall constitute a security agreement, the Custodian,
if any, shall, be deemed to be an independent custodian for purposes of
perfection of the security interest granted to Purchaser, and Purchaser shall
have all of the rights of a secured party under applicable law.
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SECTION 4.4 TRANSFERS OF MORTGAGE LOANS BY PURCHASER.
For the avoidance of doubt, Purchaser may, in its sole discretion, assign
all of its right, title and interest in, or grant a security interest in, any
Purchased Loan, subject only to its obligation to deliver such Purchased Loan to
any Designated Investor pursuant to Section 2.8. Purchaser need give no notice
of such assignment to Seller or the Takeout Investor. Assignment by Purchaser of
the Mortgage Loans as provided in this Section 4.4 shall not release Purchaser
from its obligations otherwise under this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 REPRESENTATIONS AND WARRANTIES.
5.1.1 As a material inducement to enter into this Agreement and the
transactions contemplated hereby, Seller hereby represents and warrants to
Purchaser as of the date hereof that:
(a) Seller is duly organized, validly existing and in good
standing under the laws of the United States and has all
licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in
the state where the Mortgage Loan was originated or the
Mortgaged Property is located, if the laws of such State
require licensing or qualification in order to conduct
business of the type conducted by Seller;
(b) Seller has all requisite power and, authority (including, if
applicable, corporate power) to execute this Agreement and to
perform its obligations hereunder;
(c) the execution, delivery and performance of this Agreement
(including all instruments of transfer to be delivered
pursuant to this Agreement) by Seller and the consummation of
the transactions contemplated hereby have been duly and
validly authorized by all requisite action (including, if
applicable, corporate action);
(d) this Agreement evidences the valid and binding obligation of
Seller, enforceable against Seller in accordance with its
terms;
(e) Seller is an approved Seller of Mortgage Loans for loans
purchased hereunder by the applicable Agencies and/or Takeout
Investor.
(f) no consent or approval of any Person (including, without
limitation, any stockholder, partner or other principal of
Seller, or any Regulatory Authority having jurisdiction over
Seller or any of its properties) is required in connection
with the execution by Seller of this Agreement, or
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the performance of the transactions contemplated by this
Agreement, or if required, such consent or approval has been
obtained;
(g) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of Seller
and will not result in the breach of any term or provision
of, or conflict with or constitute a default under or result
in the acceleration of any obligation under, any Material
Agreement, or result in the violation of any Requirement of
Law to which Seller or its property is subject;
(h) there is no Litigation affecting Seller, which would
adversely affect its ability to perform hereunder.
(i) the transfers, assignments and conveyances provided for
herein are not subject to the bulk transfer or any similar
statutory provisions in effect in any applicable
jurisdiction;
(j) the information that Seller has delivered, or caused to be
delivered to Purchaser, in connection with this Agreement and
the transactions contemplated herein (including, but not
limited to, all documents related to this Agreement and
Seller's financial statements), is an accurate reflection of
the matters referred to therein; no such information contains
any untrue statement of a material fact, or omits to state a
material fact necessary to make the statements made therein,
or herein, in light of the circumstances under which they
were made, not misleading;
(k) each sale of Mortgage Loans by Seller pursuant to this
Agreement will be intended to be a sale in which Seller shall
receive new value and consideration constituting reasonably
equivalent value and fair consideration for such Mortgage
Loans;
(l) Seller will not acquire at any time any direct, or indirect,
ownership, or other economic interest in, or other rights or
obligations with respect to, any Purchased Loans, except as
expressly described in Section 2.9 with respect to Defective
Mortgage Loans or pursuant to Seller's repurchase
obligations, if any, to a Takeout Investor;
(m) Seller will be solvent at all relevant times prior to, will
not be rendered insolvent by, will have a valid business
reason for and not have any intent to hinder, delay or
defraud any of Seller's creditors in connection with, any
sale of Mortgage Loans pursuant to this Agreement; and
(n) under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, Seller will report each sale
of a Mortgage Loan hereunder as a sale of such Mortgage Loan.
Seller will have been advised by or confirmed with its
independent public accountants that such sale can be so
reported under GAAP.
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SECTION 5.2 SURVIVAL.
The representations and warranties herein contained shall survive execution
and termination of this Agreement.
ARTICLE 6
COVENANTS
Seller covenants and agrees that during the Term:
SECTION 6.1 CHANGE OF NAME/ADDRESS.
Seller will notify Purchaser not less than sixty (60) days prior to (i) any
change of its name or use of any trade names, or (ii) any change in the address
of the chief executive officer and/or chief place of business of Seller, or
(iii) any change in the location of any part of the Purchased Items being held
by Seller pursuant to the terms hereof, or any records pertaining thereto.
SECTION 6.2 PAYMENT OF TAXES, CLAIMS AND INDEBTEDNESS.
Seller will pay and discharge promptly all taxes, assessments, fees and
other governmental charges or levies imposed upon it or upon any of its
properties and all lawful claims and indebtedness, which, if unpaid, might have
a Material Adverse Effect.
SECTION 6.3 PROTECTION OF ASSETS.
6.3.1 Seller will do or cause to be done all things necessary to
maintain its properties and assets (including properties and assets leased by it
and the leases related thereto) in such condition, as would prudent Persons
engaged in the same or a similar business similarly situated.
6.3.2 Seller will keep complete and accurate books of record and
account with respect to its business in accordance with GAAP;
6.3.3 Seller shall NOT default under any Material Agreement, or be
in violation of any Requirement of Law to which it is subject, where such
default or violation may have a Material Adverse Effect;
SECTION 6.4 CORPORATE CHANCES.
6.4.1 Seller shall do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, and all
material rights, licenses, permits, franchises and other authorizations,
including, without limitation, taking all action necessary:
(a) to avoid dissolution or liquidation;
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(b) to remain in good standing with respect to all governmental
licenses authorizations and permits held by Seller which are
necessary for the lawful conduct of Seller's business
(including its status as an approved Seller of Mortgage Loans
for purchase or guarantee by each of the Agencies for which
it is currently approved or for which it becomes approved
while this Agreement is in full force and effect);
(c) to renew such licenses, authorizations and permits as the
same shall, be required to be renewed;
(d) to prevent any restriction or condition limiting the conduct
of Seller's business as now conducted or proposed to be
conducted from being placed on any such license or permit;
and
(e) to defend such licenses and permits in any proceedings with
respect thereto instituted against Seller before any
Regulatory Authority.
6.4.2 Seller shall not enter into any transaction with Purchaser that it
intends to be a loan, whether secured by collateral or otherwise.
SECTION 6.5 PURCHASED ITEMS.
6.5.1 Seller shall:
(a) NOT cause or permit any liens to attach to any of the
Purchased Items; or
(b) NOT assign any rights thereto (including any servicing
rights); or
(c) NOT undertake with respect to any Mortgage Loan, by execution
of any document or otherwise, or otherwise expose Purchaser
or its assigns to any liability for cleanup or other
obligation under any Requirement of Law designed to protect
the environment;
(d) under GAAP and for federal income tax purposes, report each
sale of a Mortgage Loan to the Purchaser as a sale of the
ownership interest in the Mortgage Loan;
(e) NOT sell any Mortgage Loan to the Purchaser with any intent
to hinder, delay or defraud any of the Seller's creditors;
(f) NOT characterize, whether such characterization occurs in
its books, records, communications or otherwise, the
transactions pursuant to which Purchased Loans are
transferred to Purchaser as loans from (and/or conditional
assignments to) Purchaser secured by the Purchased Loans;
(g) NOT assert or represent to any Person that the transactions
pursuant to which Purchased Loans are transferred to
Purchaser are loans from (and/or conditional assignments to)
Purchaser secured by the Purchased Loans;
30
(h) correct any known misunderstanding with respect to the nature
of the transactions pursuant to which Purchased Loans are
sold and absolutely assigned to Purchaser;
(i) oppose all requests by any Person before any Regulatory
Authority or otherwise, seeking a determination that any
transactions pursuant to which Purchased Loans are
transferred to Purchaser should be re-characterized as loans
from (and/or conditional assignments to) Purchaser secured by
the Purchased Loans.
SECTION 6.6 FINANCIAL STATEMENTS AND OTHER REPORTS.
6.6.1 Seller will deliver or cause to be delivered to Purchaser:
(a) as soon as practicable after the end of each fiscal year of
Seller, and in any event within ninety (90) days thereafter,
a balance sheet and related statements of income, retained
earnings and changes in financial position of Seller, each
prepared in reasonable detail and audited in accordance with
GAAP by a firm of certified public accountants, with no
qualification except as to Receivables;
(b) if requested by Purchaser (at Purchaser's discretion),
within, forty-five (45) days after the end of (he first three
(3) fiscal quarters of each fiscal year, an unaudited balance
sheet as at the end of such fiscal quarter and unaudited
statements of income and retained earnings of Seller for the
period from the beginning of the fiscal year to the end of
such fiscal quarter, each prepared in reasonable detail and
in accordance with GAAP (except for the absence of footnotes
and for year end adjustments which would not have a material
effect, and inconsistencies specifically disclosed therein),
and certified by an authorized financial or accounting
officer of Seller;
(c) promptly upon receipt thereof, one copy of each other report
submitted to the Seller by any certified public accountants
in connection with any annual, interim or special, audit made
by them of the books of the Seller;
(d) promptly upon their becoming available, one copy of:
(i) each financial statement, report, notice or request for
a waiver or proxy statement sent by the Seller to
shareholders generally;
(ii) any regular or periodic report, registration statement
or prospectus concerning the Seller's existence,
liabilities, assets or operations filed with, or sent
to, or received from (to the extent the Seller is aware
of such filing, transmission or receipt) any Regulatory
Authority.
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(e) with reasonable promptness, such other data and information
as to the business, operations, properties, assets or
prospects, or the condition, financial or otherwise, of the
Seller or the ability of the Seller to perform its
obligations hereunder, as from time to time may be reasonably
requested by Purchaser.
SECTION 6.7 NOTICE OF DEFAULTS; LITIGATION: FINANCIAL CHANGES.
6.7.1 Seller will promptly give Purchaser written notice of:
(a) any Mortgage Loan that is a Defective Mortgage Loan;
(b) any condition or event that constitutes a Default,
specifying the nature and period of existence thereof and the
action which Seller is taking or proposes to take with
respect thereto;
(c) the cancellation, revocation, suspension or restriction or
expiration of any Material Agreement, authorization, consent,
permit or license (including, specifically, the loss of
Agency status for the origination of Mortgage Loans), or the
commencement of a dispute with any Regulatory Authority;
(d) any Litigation affecting Seller;
(e) if any holder of indebtedness or security of the Seller gives
any notice or takes any other action in respect to a claimed
default; and
(f) any other events or changes in the business, properties,
capitalization, ownership (in which Seller is a non-public
entity), condition, financial or otherwise, of Seller, that
when individually or cumulatively viewed in light of prior
financial statements, may have a. Material Adverse Effect.
(g) any events or changes in the personal financial condition(s)
of all principals (shareholders, partners or any parties
having equity ownership in Seller) that when individually or
cumulatively viewed in light of prior financial, statements,
may have a Material Adverse Effect.
In each case Seller shall advise Purchaser of the action, which Seller is
taking or proposes to take with respect to such matter.
SECTION 6.8 INSPECTION.
6.8.1. Seller will permit representatives of Purchaser and any lender to
the Purchaser and the Custodian to examine all its books of account and other
financial records and reports related thereto, to make copies and extracts
therefrom and to discuss its affairs, finance and accounts with its employees,
officers and certified public accountants, all at such reasonable times and as
often as may reasonably be requested.
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SECTION 6.9 FURTHER ASSURANCES.
Seller shall, upon request of Purchaser, promptly execute and/or deliver to
Purchaser all such confirmatory or supplementary agreements and other and
further documents and instruments of transfer, conveyance and assignment, and
shall take such other action as Purchaser may require more effectively to
transfer, convey, assign to and vest in Purchaser, and to put Purchaser in
possession of, the Purchased Items, and otherwise to carry out more effectively
the intent of the provisions under this Agreement.
SECTION 6.10 FINANCIAL COVENANTS.
6.10.1 Seller shall not permit its Tangible Net Worth to fall below
$2,000,000.
6.10.2 Seller shall maintain a Leverage Ratio of not more than 15:1.
Section 6.11 BANKRUPTCY PROCEEDINGS.
Prior to the date one year and one day after the termination of this
Agreement, Seller shall not commence or instigate proceedings under any
Bankruptcy Law with respect to Purchaser.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 CUSTODIAN.
7.1.1. Purchaser may elect, in its sole discretion, to nominate a
custodian (the "Custodian") to settle the transactions contemplated hereby. In
the event that Purchaser hereafter notifies Seller of the appointment of such a
Custodian, Seller shall direct all future deliveries of documents and funds
hereunder to such Custodian at the address/wiring instructions furnished to
Seller in writing. Seller shall accept performance by such Custodian as if it
were performance by Purchaser hereunder.
7.1.2 Xxxxxx hereby acknowledges that Custodian, if, any, is acting as
agent for, and for the benefit of, Purchaser and/or its assignees. Seller agrees
that it shall have no claim or cause of action against Custodian for any act or
failure to act on the part of Custodian in connection with the transactions
contemplated under this Agreement. Seller waives any such claim or cause of
action against Custodian now existing or hereafter arising.
SECTION 7.2 TERM.
7.2.1 This Agreement shall continue until APRIL 30, 2004 or until
terminated as to future transactions (a) by written instruction signed by either
Seller or Purchaser and delivered to the other, not less than thirty (30) days
prior to the date of termination, in which event termination will not affect the
obligations hereunder as to any of the Mortgage Loans with respect to which
Submission Package Documents, or Advance Submission Documents, as the case may
be, have been accepted by Purchaser or Custodian pursuant to the terms of this
33
Agreement; or (b) by written notice of immediate termination from Purchaser
following the occurrence of, and during the continuance of, an, Event of
Default, in which event termination will not affect the obligations hereunder as
to any Purchased Loans, except that no sales commissions shall be due to Seller
in respect of any Purchased Loan thereafter sold to a Designated Investor unless
and until all Purchased Loans have been sold by Purchaser without regard to
Seller's obligation to re-purchase pursuant to Section 2.9 hereof,
7.2.2 Notwithstanding anything to the contrary contained in this
Agreement, Purchaser shall have no obligations to purchase Mortgage Loans during
any period from and after the resignation or termination of any Custodian to the
appointment of a successor Custodian.
SECTION 7.3 NOTICES; SERVICE.
7.3.1 To be effective, all notices, consents, approvals, responses or
other communications required or desired to be given hereunder must be in
writing (it being understood that telex and telecopy communications shall be
deemed to be "writings" for the purposes hereof), and shall be deemed given
when delivered if delivered in a scaled envelope by hand, or when received if
given by telex or telecopy, or five (5) days after mailing if sent by United
Slates mail registered or certified, return receipt requested, postage prepaid,
to the following addresses:
If to the Seller: to the address set forth on page 1
of this Agreement.
Attention: Xxxxx Xxxxxxx
Telecopy No.: 000-000-0000
If to Purchaser: to the address set forth on page 1
of this Agreement.
Attention: Xxxxxxx X. Xxxxx
Telecopy No.: 000-000-0000
or to such other address or telex, or telecopy number as the party to be served
may direct by written notice to the other party in the manner hereinabove
provided.
7.3.2 SELLER IRREVOCABLY CONSENTS TO THE SERVICE IN ANY ACTION OR
PROCEEDING BY DELIVERY THEREOF TO IT BY HAND OR BY MAIL IN THE MANNER PROVIDED
FOR UNDER SUBSECTION 7.3.1 HEREOF. NOTHING CONTAINED HEREIN SHALL AFFECT
PURCHASER'S RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
SECTION 7.4 FEES AND EXPENSES; INDEMNITY.
7.4.1 In respect to any Defective Mortgage Loans, Seller will promptly
pay all costs and expenses incurred by Purchaser in connection with (i) the
protection of the Purchased Items (including, without limitation, all costs of
filing or recording any assignments, financing statements and other documents),
and (ii) the enforcement of Purchaser's rights hereunder (including, without
limitation, costs and expenses suffered or incurred by Purchaser in
34
connection with any bankruptcy proceedings relating to Seller, appeals and any
anticipated post-judgment collection services),
7.4.2 In addition to its other rights hereundcr, Seller shall indemnify
Purchaser and Purchaser's directors, officers, agents (including any Custodian)
and employees against, and hold Purchaser and them harmless from, any loss,
liabilities, damages, claims, costs and expenses (including reasonable
attorneys' fees and disbursements) suffered or incurred by Purchaser or any of
them arising out of, resulting from, or in any mariner connected with, the
purchase by Purchaser of any Defective Mortgage Loans.
7.4.3 The provisions of this Section 7.4 shall survive the termination
of this Agreement.
SECTION 7.5 MODIFICATIONS, CONSENTS AND WAIVERS; ENTIRE AGREEMENT.
No modification, amendment or waiver of, or with respect to, any provision
of this Agreement or any other instruments and documents delivered pursuant
hereto or thereto, nor consent to any departure by Seller from any of the terms
or conditions hereof or thereof, shall in any event be effective unless it
shall be in writing and signed by Purchaser. Any such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
consent to or demand on the Seller in any case shall, of itself, entitle it to
any other or further notice or demand in similar or other circumstances. This
Agreement embodies the entire agreement and understanding between Purchaser and
Seller and supersedes all prior agreements and understandings relating to the
subject matter hereof.
SECTION 7.6 REMEDIES CUMULATIVE.
Each and every right granted to Purchaser hereunder or under any other
document delivered hereunder or in connection herewith, or allowed Purchaser by
law or equity, shall be cumulative and may be exercised from time to time. No
course of dealing on the part of Purchaser, nor any failure on Purchaser's part
to exercise, nor any delay in exercising, any right shall operate as a waiver
thereof, or otherwise prejudice the rights, powers and remedies of Purchaser. No
single or partial exercise of any right shall preclude any other or future
exercise thereof or the exercise of any other right. The due payment and
performance of Seller's obligations hereunder shall be without regard to any
counterclaim, right of offset or any other claim whatsoever which Seller may
have against Purchaser and without regard to any other obligation of any nature
whatsoever which Purchaser may have to Seller, and no such counterclaim or
offset shall be asserted by Seller, in any action, suit or proceeding instituted
by Purchaser to enforce this Agreement.
SECTION 7.7 COUNTERPARTS.
This Agreement may be signed in any number of counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 7.8 GOVERNING LAW.
THIS AGREEMENT IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, ALL MATTERS
OF CONSTRUCTION, INTERPRETATION, VALIDITY, ENFORCEMENT
35
AND PERFORMANCE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAW.
SECTION 7.9 CONSENT TO JURISDICTION; WAIVER OF TRIAL BY JURY.
7.9.1 The Seller and Purchaser waives trial by jury in any litigation in
any court with respect to, in connection with, or arising out of, this
Agreement, or any instrument or document delivered pursuant hereto, or the
validity, protection, interpretation, collection or enforcement hereof.
7.9.2 EXCEPT AS MANDATORILY REQUIRED BY APPLICABLE LAW WITH RESPECT TO
THE ENFORCEMENT OF PURCHASER'S RIGHTS, SELLER AND PURCHASER IRREVOCABLY CONSENTS
THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT UNDER, ARISING OUT OF, OR IN ANY
MANNER RELATING TO, ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY COURT IN THE
STATE OF CALIFORNIA COUNTY OF ALAMEDA, OR, AT PURCHASER'S ELECTION, IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA. SELLER
AND PURCHASER, BY THE EXECUTION OF THIS AGREEMENT, EXPRESSLY AND IRREVOCABLY
ASSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF ANY SUCH COURTS IN ANY SUCH
ACTION OR PROCEEDING. SELLER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES ANY CLAIM
OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON, AND AGREES NOT TO ASSERT,
ANY ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND ANY DEFENSE GIVEN OR ALLOWED UNDER THE LAWS OF ANY STATE OTHER
THAN THE STATE OF CALIFORNIA UNLESS SUCH DEFENSE IS ALSO GIVEN OR ALLOWED BY THE
LAWS OF THE STATE OF CALIFORNIA. NOTHING IN THIS SUBSECTION 7.9.2 SHALL AFFECT
OR. IMPAIR IN ANY MANNER OR TO ANY EXTENT THE RIGHT OF PURCHASER TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST SELLER IN ANY JURISDICTION.
SELLER AGREES THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
7.9.3 ANY ACTION OR PROCEEDING BROUGHT AGAINST PURCHASER (OTHER THAN A
COUNTERCLAIM IN AN ACTION PREVIOUSLY BROUGHT BY PURCHASER IN ANOTHER
JURISDICTION) SHALL BE BROUGHT ONLY IN ANY STATE OR FEDERAL COURT SITTING IN
OAKLAND (OR ALAMEDA COUNTY), CALIFORNIA.
SECTION 7.10 SEVERABILITY.
The provisions of this Agreement are severable, and if any clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction
36
and shall not in any manner affect any other clause or provision or such clause
or provision in any other jurisdiction.
SECTION 7.11 BINDING EFFECT; ASSIGNMENT OR DELEGATION.
7.11.1 This Agreement shall be binding upon and shall inure to the
benefit of Seller, Purchaser and their respective successors and permitted
assigns. It is expressly agreed that Purchaser may assign its right to enforce
this Agreement as to any Mortgage Loan to any party that subsequently purchases,
or provides financing with respect to, such Mortgage Loan from Purchaser.
7.11.2 The rights and obligations of Seller under this Agreement shall
not be assigned or delegated without the prior written consent of Purchaser,
which consent may be withheld in Purchaser's sole discretion, and any purported
assignment or delegation without such consent shall be void.
SECTION 7.12 TIME OF THE ESSENCE.
TIME IS OF THE ESSENCE WITH REGARD TO THE PERFORMANCE OF SELLER'S
OBLIGATIONS UNDER THIS AGREEMENT.
SECTION 7.13 MERS.
Purchaser reserves the right to settle the acquisition and re-sale of
Mortgage Loans hereunder by use of the Mortgage Electronic Registry System,
provided Seller and the Designated Investor are subscribers to such System.
SECTION 7.14 LIMITED RECOURSE.
Notwithstanding anything to the contrary contained herein, no recourse
under any obligation, covenant, commitment, representation, warranty or
agreement of or relating to the Purchaser contained in this Agreement shall be
had against any incorporator, stockholder, officer, director, member, manager,
authorized person, affiliate, agent or employee of the Purchaser, as such, by
the enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood
that this Agreement is solely a corporate obligation of the Purchaser, and that
no personal liability whatever shall attached to, or be incurred by, the
incorporators, stockholders, officers, directors, members, managers, authorized
persons, affiliates, agents or employees of the Purchaser, as such, or any of
them under, or by reason of, any of the obligations, covenants, commitments,
representations, warranties or agreements of the Purchaser contained in this
Agreement, or implied therefrom, and that any and all personal liability for
breaches by the Purchaser of any of such obligations, covenants, commitments,
representations, warranties or agreements, either at common law or in equity, or
by statute or constitution, of every such incorporator, stockholder, officer,
director, member, manager, authorized person, affiliate, agent or employee is
hereby expressly waived as a condition of and in consideration for the execution
of this Agreement.
37
IN WITNESS WHEREOF, Purchaser and Seller have duly executed this Agreement
as of the date and year set forth above.
GATEWAY BANK F.S.B.
By: /s/ Xxxxxxx X. Xxxxx for Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
GENEVA MORTGAGE CORP.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
38
INDEX
PAGE
ARTICLE 1 DEFINITIONS AND MATTERS OF CONSTRUCTION.............................................2
Section 1.1 Definitions..................................................................2
Section 1.2 Construction; Intent of the Parties..........................................12
ARTICLE 2 PURCHASE AND SALE PROCEDURES........................................................12
Section 2.1 Sale of Mortgage Loans.......................................................12
Section 2.2 Purchase.....................................................................13
Section 2.3 Fees.........................................................................14
Section 2.4 Sales Commissions............................................................14
Section 2.5 Updated Representations Concerning the Seller................................15
Section 2.6 Representations and Warranties Concerning
Mortgage Loans...............................................................15
Section 2.7 Rejection of Mortgage Loans..................................................21
Section 2.8 Sale of Mortgage Loans to Take-Out Investors.................................21
Section 2.9 Seller's Obligations with respect to Defective
Mortgage Loans...............................................................22
ARTICLE 3 SERVICING OF MORTGAGE LOANS.........................................................23
Section 3.1 Servicing of Mortgage Loans..................................................23
Section 3.2 Custodial Account............................................................24
Section 3.3 Fidelity Bonds...............................................................25
ARTICLE 4 RECORD TITLE TO MORTGAGE LOANS; INTENT OF PARTIES; SECURITY INTEREST................26
Section 4.1 Title........................................................................26
Section 4.2 Books and Records............................................................26
Section 4.3 Security Interest............................................................26
Section 4.4 Transfers of Mortgage Loans by Purchaser.....................................26
ARTICLE 5 REPRESENTATIONS AND WARRANTIES......................................................27
Section 5.1 Representations and Warranties...............................................27
Section 5.2 Survival.....................................................................28
ARTICLE 6 COVENANTS...........................................................................28
Section 6.1 Change of Name/Address.......................................................29
Section 6.2 Payment of Taxes, Claims and Indebtedness....................................29
Section 6.3 Protection of Assets.......,-................................................29
Section 6.4 Corporate Changes............................................................29
Section 6.5 Purchased Items..............................................................30
Section 6.6 Financial Statements and Other Reports.......................................31
Section 6.7 Notice of Defaults; Litigation; Financial Changes............................31
Section 6.8 Inspection...................................................................32
Section 6.9 Further Assurances...........................................................32
Section 6.10 Financial Covenants..........................................................32
Section 6.11 Bankruptcy Proceedings.......................................................33
ARTICLE 7 MISCELLANEOUS.......................................................................33
Section 7.1 Custodian....................................................................33
Section 7.2 Term.........................................................................33
Section 7.3 Notices; Service..........................................:..................33
i
Section 7.4 Fees and Expenses; Indemnity.................................................34
Section 7.5 Modifications, Consents and Waivers; Entire Agreement........................34
Section 7.6 Remedies Cumulative..........................................................35
Section 7.7 Counterparts.................................................................35
Section 7.8 Governing Law................................................................35
Section 7.9 Consent to Jurisdiction; Waiver of Trial by Jury.............................35
Section 7.10 Severability.................................................................36
Section 7.11 Binding Effect; No Assignment or Delegation..................................36
Section 7.12 Time of the Essence..........................................................37
Section 7.13 MERS.........................................................................37
Section 7.14 Limited Recourse.............................................................37
Schedule A Administrative Costs
Schedule B Corporate Resolution
Schedule C Approved Takeout Investors
Schedule D Sub-Limits
Exhibit A Submission Package Documents/Advance Submission Documents
Exhibit B Form of Loan Purchase Detail
Exhibit C Form of Loan Transfer Form
Exhibit D Mortgage Loan Schedule
ii
SCHEDULE A
ADMINISTRATIVE COSTS
--------------------
All usual and customary cost and expense incurred by the Purchaser, in
connection with processing, administering and settling of mortgage loans,
currently including, without limitation:
(a) A processing fee of $50.00 per Purchased Loan and $75.00 per
Directed (Wet) Funded loan;
(b) A $25.00 per wire transfer fee for sending or receiving all wire
transfers in connection with the acquisition of any Mortgage
Loan by Purchaser or any Takeout Investor;
(c) A $50.00 fee for changing investors to whom Buyer is to deliver a
loan on behalf of a Seller in accordance with the terms of the
Agreement.
(d) A fee for receiving all drafts in connection with the acquisition
of any Mortgage Loan by Purchaser or any Takeout Investor which
fee will be established pursuant to a schedule published by the
Purchaser from time to time; (fee currently not listed on
schedule)
(e) A fee of $15.00 for processing files that are deficient in
presentation and require correction;
(f) A fee for messenger and overnight courier; and
(g) The usual and customary fees and charges of the Custodian in
connection with the settlement of Mortgage Loans, if not otherwise
included in items, if any, (a) through (e) above. (please define
dollar amount)
(h) FACILITY ISSUANCE FEE: $500.00
(i) Any third party due diligence expenses.
SCHEDULE B
CORPORATE RESOLUTION
WHEREAS, there has been submitted to this board copies of a certain Master
Mortgage Loan
Purchase Agreement and all attachments thereto ("The Agreement")
proposed to be entered into by and between Geneva Mortgage Corp. ("Seller") and
Gateway Bank, wherein the Seller agrees to sell loans to Gateway Bank, from
time to time.
WHEREAS, Pursuant to the terms of the Agreement, the Seller will from time to
time, execute Purchase Requests and Loan Transfers to Gateway Bank to purchase
such mortgage loans,
NOW, THEREFORE, BE IT RESOLVED, that The Agreement is hereby authorized and
approved, each transaction accepted or to be accepted pursuant to The Agreement
is hereby authorized and approved, and any officer of the Seller or anyone
designated by such officer as designee is hereby authorized to execute and
deliver in the name of and behalf of the Seller.
FUTHER RESOLVED, that the officers of the Seller and other such individuals as
may be designated from time to time, may execute Purchase Requests and Loan
Transfers to Gateway Bank for the purchase of Mortgage loans;
The undersigned the secretary of the Seller hereby certifies that the above
resolutions where duly adopted at a meeting of the Board of Directors of Seller
duly held on the ______________ day of ___________________________, 2003 at
which a quorum of such Board of Directors was present and acting throughout, and
said resolution has not been modified and is still in force and effect.
Date:
-------------------------
------------------------------ Corporate Seal
Secretary
Attest:
---------------------------
RESOLUTION MUST BE DATED PRIOR TO THE EXECUTION OF THE MASTER LOAN
PURCHASE
AGREEMENT
SCHEDULE C
APPROVED TAKEOUT INVESTORS
--------------------------
TAKEOUT INVESTORS LIMIT
----------------- ----------------
SCHEDULE
SUB-LIMITS
----------
NONE
EXHIBIT A
Submission Package Documents/ Advance Submission Documents
SUBMISSION PACKAGE DOCUMENTS
THE ORIGINAL AND ONE COPY OF THE FOLLOWING:
------------------------------------------
1. Takeout Commitment
2. Seller's Wire Instructions
3. Warehouse Lender's Wire Instructions, as applicable
4. The original Mortgage Note bearing all intervening endorsements, endorsed
"Pay to the order of _____________ without recourse" and signed in the name
of the last endorsee (the "LAST ENDORSEE") by an authorized Person (in the
event that the Mortgage Loan was acquired by the Last Endorsee in a merger,
the signature must be in the following form: "[Last Endorsee], successor by
merger to [name of predecessor]"; in the event that the Mortgage Loan was
acquired or originated by the Last Endorsee while doing business under
another name, the signature must be in the following form: "[Last
Endorsee], formerly known as [previous name]").
5. The original of the guarantee executed in connection with the Mortgage Note
(if any).
6. The original Mortgage with evidence of recording thereon, or a copy thereof
together with an Officer's Certificate of the Seller certifying that such,
represents a true and correct copy of the original and that such original
has been submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property is
located.
7. The originals of all assumption, modification, consolidation or extension
agreements with evidence of recording thereon, or copies thereof together
with, an Officer's Certificate of the Seller certifying that such represent
true and correct copies of the originals and that such originals have each
been submitted for recordation in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located.
8. The original Assignment of Mortgage in blank for each Mortgage Loan, in
form and substance acceptable for recording and signed in the name of the
Last Endorsee (in the event that the Mortgage Loan was acquired by the Last
Endorsee in a merger, the signature must be in the following form: "[Last
Endorsee], successor by merger to [name of predecessor]"; in the event that
the Mortgage Loan was acquired or originated while doing business under
another name, the signature must be in the following form: "[Last
Endorsee], formerly known as [previous name]") or MERS equivalent.
9. The originals of all intervening assignments of mortgage with evidence of
recording thereon, showing an unbroken chain of title from the Seller
thereof to the Last Endorsee or copies thereof together with an Officer's
Certificate of the Seller certifying that such represent true and correct
copies of the originals and that such originals have each been submitted
for
recordation in the appropriate governmental recording office of the
jurisdiction where the Mortgaged Property is located.
10. LTV/PMI Certificate or other evidence of PMI
11. Warehouse Lender's Release, if applicable
12. Seller's Release, if applicable
13. Copy of Limited Power of Attorney [only if any other Submission Package
Documents are signed by a person as attorney-in fact for the Mortgagor(s)]
14. Copy of Signature/Name Affidavit [only if a Mortgagor signed any Submission
Package Documents in various forms, e.g., "Xxxx Xxxxx" and "Xxxx X. Xxxxx"]
19.
15. Takeout Investor Delivery Instructions
16. The original attorney's opinion of title and abstract of title or the
original mortgagee title insurance policy, or if the original mortgagee
title insurance policy has not been issued, the irrevocable commitment to
issue the same.
17. The original of any security agreement, chattel mortgage or equivalent
document executed in connection with the Mortgage Loan.
18. Mortgage Loan Schedule or electronically delivered equivalent
19. The first and second page of the Appraisal
20. Loan Application
21. FNMA Form 1008
22. Acceptable Desk Top Underwriting or Loan Prospector conformation
23. Schedule of Estimated Closing Cost or preliminary HUD1 or 1a
24. Proof of Hazard Insurance
25. DISCO- if applicable.
ADVANCE SUBMISSION DOCUMENTS
1. Takeout Commitment (copy)
2. Closing Agent's Wire Instructions
3. Insured Closing Protection Letter (blanket original on file with Custodian)
4. Escrow Instruction Letter (Purchaser to Closing Agent) (copy)
QUICK$ALE(R) SUBMISSION PACKAGE
STACKING ORDER FORM
LEFT SIDE, TOP TO BOTTOM RIGHT SIDE, TOP TO BOTTOM
--------------------------------------------------- --------------------------------------------------
1. Shipping Airway Xxxx, Fully Completed PLUS 1. Quick$ale(R) Purchase Request and Loan
Shipping instructions. Transfer Form
2. Original PLUS ONE COPY of Promissory Note 2. Certified Copy of the Deed of Trust, with legal
with Riders, if any, endorsed in blank or with description and all riders.
an allonge, as needed.
3. Intervening Assignment of the Deed of Trust, 3. Investor (Gateway Approved) Open Commitment
assigned in blank. to Purchase, showing Specific Loan, Interest
Rate, and "Take-out" Price.
NOTE: Needs to HAVE A MINIMUM OF 3 DAYS
REMAINING before it expires.
4. Schedule of Estimated Closing Cost or 4. Investor Underwriting Approval, as applicable
Preliminary HUD1 or 1a ALL APPROVALS MUST SHOW CREDIT SCORE.
a. DU or LP approval
b. Investor Approval (all Sheets)
c. Seller's Underwriter approval if Investor-
delegated (Send 1008).
d. Investor Contract Underwriter approval.
(Example: Magic, Radian, e.t.c.)
5. Preliminary Title Report showing property 5. Copy of Final Completed and Signed Loan
address Application (1003).
6. Page 1 and 2 of final Appraisal (Show Comps).
7. If Loan is subject to Private Mortgage Insurance,
send a copy of the Certificate.
EXHIBIT B
FORM OF LOAN PURCHASE DETAIL
----------------------------
DATE:
WET / DRY (CIRCLE ONE)
SELLER: GENEVA MORTGAGE CORP.
EXPECTED DELIVERY DATE OF
SUBMISSION PACKAGE IS: ______________, 2003
LOAN # LAST NAME FACE AMOUNT NOTE RATE WIRE AMOUNT LOAN TYPE TAKEOUT INVESTOR
---- --------- ----------- --------- ----------- --------- ----------------
Total $___________
Prepared by:
-------------------------------
Authorized Officer
Date Prepared:
--------------------------
EXHIBIT C
FIRST MORTGAGES
GATEWAY BANK
QUICK$ALE(R) PURCHASE REQUEST AND LOAN TRANSFER FORM
Date of Request: ______________________________________
Buyer: GATEWAY BANK
Lead Lender Name (Seller): ______________________________________
Borrower Name: ______________________________________
Property Address: ______________________________________
City _____________________________________ State _____________ Zip _____________
Lead Lender (Seller) Loan No. __________________________________________________
Loan Note Rate: ____% Loan Amount: $_______ First Pmt Date: _________ LTV _____%
Note Date: _____________________ Mortgage Insurance Co. (if any)________________
Take-Out Commitment Investor: _____________________
Commitment Amount (Take-out Price):
All-in Price: ___________________ Commitment Expiration Date:___________________
Anticipated Date of Purchase by Investor: ______________________
FICO Score (1st page of credit report if not available)_______________________
Requested Date of Funding: __________________________________________
Instructions For Funding:
Wire Payee: ____________________________________________________________________
ACQUISITION PRICE CALCULATION: FOR FIRST MORTGAGES
1. Note Amount: $
2 Total Commitment Price $
3 Quick$ale(R) Purchase Price to Seller: $
Lower of line 1 or 2
4 ENTER WIRE AMOUNT TO TITLE COMPANY $
5 LINE 3 MINUS LINE 4--ENTER A POSITIVE OR NEGATIVE NUMBER: $
EQUALS AMOUNT TO/(FROM) CHECKING.
FORM OF LOAN TRANSFER FORM
--------------------------
PARTIES The parties to this Purchase Confirmation are the
following:
SELLER:
PURCHASER: GATEWAY BANK
MORTGAGE LOANS THE MORTGAGE LOAN(S) COVERED BY THE PURCHASE
CONFIRMATION ARE LISTED AND DESCRIBED IN THE
ATTACHED SCHEDULE OF MORTGAGE LOANS
SALE: For value received, the Seller hereby
conveys to the Purchaser all rights, title
and interest in and to the following:
(a) The Mortgage Note and the related
Mortgage for each Mortgage Loan; (b) all
rights to payment there under; (c) all
rights related thereto, such as financing
statements, guaranties and insurance
policies (issued by governmental
agencies or otherwise), including (i)
mortgage and title insurance policies, (ii)
fire and extended coverage insurance
policies (including the right, if any, to
any return premiums), and (iii) if
applicable, FHA insurance, VA guaranties, or
private mortgage insurance and all rights,
if any, in escrow deposits consisting of
impounds, insurance premiums, or other funds
held in account thereof; (d) all right,
title and interest of the owner of such loan
in the real property, including all
improvements thereon, and the personal
property (tangible and intangible) that are
encumbered by such mortgage (or deed of
trust) and/or security agreements; (e) all
rights to service, administer, and/or
collect such loan and all rights to the
payment of money on account of such
servicing, administration and/or collection
appraisals, computer programs, tapes, discs,
cards, accounting records, and other books,
records, information, and data relating to
such loan necessary to the administration or
servicing of such loan; and (f) all
accounts, contract rights (including, but
not limited to, all contract rights with
respect to such loans under the Master Loan
Purchase Agreement, (entered into between
Seller and Buyer) and the related Takeout
Commitment, and general intangibles
constituting or relating to such loan.
PRICE The price paid for the above-described
rights is as set forth above [Purchase
Price]
The Seller hereby reaffirms the
representations, warranties and covenants
made in the Master Mortgage Loan Purchase
Agreement with respect to the Mortgage Loans
on and as of the date and hereby remakes all
such representations, warranties and
covenants on and as of the effective date of
sale set forth below.
DEFINITIONS Terms used but not defined herein shall have
the meanings assigned to them in the above
referenced Master Mortgage Loan Purchase
Agreement, dated as of; November 10, 2003.
EFFECTIVE DATE OF SALE: _______________________, 2003.
NAME OF SELLER: ________________________________
AUTHORIZED SIGNATURE: ________________________________
NAME AND TITLE: ________________________________
EXHIBIT D
To Loan Purchase Agreement
MORTGAGE LOAN SCHEDULE
CONTAINING THE FOLLOWING: with respect to each Mortgage Loan to be acquired
by Purchaser: (1) Seller's Mortgage Loan identifying number; (2) the Mortgagor's
first and last name; (3) the street address of the Mortgaged Property including
the state and zip code; (4) a code indicating whether the Mortgaged Property is
owner-occupied; (5) the type of residential dwelling constituting the Mortgaged
Property; (6) the loan-to-value ratio at origination; (7) the first adjustment
date; (8) the gross margin; (9) a code indicating the purpose of the loan (i.e.,
purchase financing, rate/term refinancing, cash-out refinancing); (10) the
maximum mortgage interest rate under The terms of the Mortgage Note; (11) the
periodic rate cap; (12) the index; (13) whether or not each Mortgage Loan has a
prepayment penalty and if so, the duration of such penalty; (14) a code
indicating the documentation style; and (15) a code indicating whether or not
the Mortgage Loan is the subject of a private mortgage insurance policy and the
name of the related insurance carrier.
ADDENDUM NO. 1 TO
MASTER MORTGAGE LOAN PURCHASE AGREEMENT
THIS ADDENDUM NO. 1 TO THE MASTER MORTGAGE LOAN PURCHASE AGREEMENT is made as
of the 1st of December 1, 2003, by and between Geneva Mortgage Corp.
(hereinafter "Seller") and Gateway Bank, F.S.B. (hereinafter "Buyer" and
"Custodian") and shall be deemed to further amend and modify that certain
Master Loan Participation and Custodian Agreement dated November 10, 2003
(the "Agreement"), as follows:
1. The minimum required deposit (as referenced under "Deposit
Accounts" in Section 1.1 Definitions) shall now be $90,000
This amendment will remain into effect until formally modified by the
executing parties shown below.
IN WITNESS WHEREOF, the parties have executed this Addendum No. 1 as of
the day, month and year first above written.
GATEWAY BANK, F.S.B.
By:/s/ Xxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxx X. Xxxxx
A.V.P. Credit Analysis Officer
Geneva Mortgage Corp.
By:/s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: President
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