LOAN ORIGINATOR AGREEMENT
Between the
HOUSING AUTHORITY OF THE CHEROKEE NATION
and
FIRST AMERICANS MORTGAGE CORPORATION
This Loan Originator Agreement (hereinafter referred to as
"Agreement'), is made and entered into this 9th day of March, 1999, by and
between the Housing Authority of the Cherokee Nation, 0000 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxx, 00000 (hereinafter referred to as the "IHA"), and First
Americans Mortgage Corporation, 8815 Xxxx, Xxxxxx, Xxxxxx 00000, (hereinafter
referred to as "FAMC").
WHEREAS, FAMC, in the conduct of its business, is desirous of
originating residential loans in the name of FAMC, and
WHEREAS, FAMC functions as a mortgage loan broker, selling loans
originated by loan originators, such as contemplated herein, to financial
institutions with which FAMC has executed loan purchase agreements (hereinafter
referred to as "Investors"), and
WHEREAS, the IHA wishes to enter into an agreement with FAMC to
originate residential loan applications for FAMC, and
WHEREAS, FAMC hereby affirms it is an independent corporation in
accordance with the laws of the State of Missouri and the Internal Revenue
Service, and further maintains it is qualified, willing, and able to perform the
services herein described, and
NOW THEREFORE, and in consideration of the mutual covenants, promises,
agreements, understandings, and conditions herein contained, the parties hereto
mutually promise to the other, agree, and understand as follows, to wit:
TERM: The term of this Agreement shall be for a period of two (2) year, from
the 9th day of March, 1999 to the 8th day of March, 2001.
NOTICES: All notices required hereunder shall be sent via U.S. Mail, postage
paid as follows:
To the IHA: Housing Authority of the Cherokee Nation
Xxxxx Xxxxxxxxxx, Executive Director
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx, 00000
To the FAMC: First Americans Mortgage Corporation
Attention: Xxxxxx X. Xxxxxxxx, President
X.X. Xxx 00000
Xxxxxxx Xxxxxxx, XX 00000-0000
PERFORMANCE REQUIREMENTS OF THE IHA AND FAMC:
The IHA agrees to originate residential mortgages in the name of FAMC
in the State of Oklahoma. All loans originated shall be subject to and
shall meet all underwriting standards set forth in FAMC's
Policy and Procedure Manual (attached hereto as Attachment ("1") and that of the
Investors which have committed to purchase the loans after closing. All Loans
are subject to FAMC approval prior to loan commitment. Any loan not meeting
these underwriting standards or approval conditions shall not be closed.
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The IHA agrees to use its best efforts to assist FAMC and their Investors in
obtaining documentation, authorizations, certifications, verifications, and any
other conditions required to close and subsequently sell residential loans. FAMC
agrees to use its best efforts to assist the IHA in processing and closing
residential loans.
FAMC shall provide to the IHA in conjunction with this Agreement, all necessary
training and software in order for the IHA to fulfill its performance
requirements under this Agreement.
The IHA agrees to adhere to the price schedule, charges, and terms (see Policy
and Procedure Manual; Exhibit section for a copy of the pricing schedule) as
provided by FAMC for those loans originated for FAMC. A rate quote may be
obtained from FAMC at any time during normal business hours via the telephone.
The following performance requirements shall be utilized during the first ninety
(90) days or until such time as FAMC and the IHA mutually decide to expand the
responsibilities of the IHA:
7. LOAN APPLICATION: The IHA shall assist the applicant with completion of
the Xxxxxx Xxx Form 1003 - Uniform Residential Loan Application.
8. APPLICATION ACTION: Once an application is accepted by the IHA a credit
report will be immediately ordered by the IHA. FAMC shall supply
software that will allow the IHA to contact, via a modem, FAMC's credit
reporting agency. The report can be quickly downloaded and then printed
with a laser printer. The IHA shall fax a photocopy of the credit
report along with the 1003 form and a Good Faith Estimate to FAMC for
review. Within 24 hours, FAMC shall notify the IHA of action to be
taken on the application. If the applicant is not prepared to proceed
with the loan process at this time the IHA, either through telephone or
face-to-face contact, will notify the applicant of FAMC's decision and
discuss possible alternatives. The Notice of Action Taken will then be
mailed to the applicant. All of the applicants information received by
the IHA on hard copy as well as the applicant's mortgage software file
should be forwarded to FAMC on the Friday following any action taken.
FAMC will be responsible for all long-term storage of loan file
information. If the applicant is prepared to proceed with the loan
process, the IHA shall be notified and the process to compile a
complete credit file will begin. FAMC will also notify the IHA of the
most appropriate loan program for the applicant.
9. BORROWER DOCUMENTS: The applicant shall bring all necessary
documentation to the mortgage application meeting. Income can be
calculated by obtaining the past two (2) years' 1040 forms, W-2 forms,
and a current year-to-date pay stub for each applicant. Assets can be
calculated by providing the past three (3) months statements on each
depository account of the applicants. A complete list of monthly
liabilities with account numbers, addresses, balances, and monthly
payments must be provided by each applicant as well as landlord and/or
mortgage information for the past two years.
10. Real Estate Settlement Procedures Act (RESPA): The IHA must provide the
following documents to each applicant within three (3) days of the loan
application date: a) Truth-in-Lending Disclosure; b) Good Faith
Estimate; c) Mortgage Servicing Disclosure; d) Special Information
Booklet "Settlement Costs" (to be supplied by the IHA); e) any
additional documents necessary. All documentation, except for the
Special Information Booklet, will be located within FAMC's mortgage
software.
11. CREDIT REPORT: A Credit Report for each applicant shall be ordered
immediately after a loan application is accepted by the IHA. The Credit
Report may take the form of a Three Repository Merged Credit Report or
a full Residential Mortgage Credit Report depending upon the loan
product needed and on the credit quality of the applicant. The cost of
the reports will be billed directly from the credit reporting company
to FAMC.
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FAMC will notify the IHA 15 days in advance of any change in the cost
of a credit report. It is the responsibility of the IHA to pay for any
reports pulled by the IHA. It will be the IHA'S responsibility to
collect the appropriate fee. FAMC will invoice the IHA on a monthly
basis for all loans pulled during the prior month. The will be
responsible to pay the invoice within 15 days of receipt in order to
allow FAMC sufficient time to pay the credit reporting agency under
their billing terms. When appropriate the IHA will be responsible for
faxing the credit reporting worksheet (see Policy and Procedure Manual)
to FAMC's credit reporting agency (i.e. the borrower pays the
designated cost to receive a copy of the report).
12. VERIFICATIONS: All loans are required to contain documentation
verifying. the information given by the applicant. If the IHA does not
collect the documentation mentioned in step 3 it will be necessary to
send independent verification requests to employer(s) and depositories.
The IHA shall verify the last 24 months of rental or mortgage history
if it is not included in the applicant's credit report. The source of
funds may include a gift from a family member or the sale of an asset.
If the applicant has obtained a divorce, the complete divorce decree
and settlement statement must be provided. Child support, alimony or
separate maintenance is available for consideration as income, if
received regularly. This form of income may be verified through a court
printout or canceled checks covering the past twelve (12) months.
Bankruptcy paperwork and explanations are required if applicable.
Derogatory credit, undisclosed credit and inquiries must be
satisfactorily explained by the applicant. Applicants must provide a
Certificate Degree of Indian Blood (CDIB) card (for Native American
loan programs), picture ID, and evidence of a Social Security Number.
All forms will be mailed to the verifying institutions with a stamped
return envelop to the FAMC. From time to time borrowers may drop off
miscellaneous documents to the IHA for delivery to FAMC (i.e. bank
statements, canceled rental checks, divorce decrees). These documents
should be forwarded to FAMC in the regular Friday overnight package.
13. PACKAGING: The IHA shall collect, review for discrepancies, and bind in
the proper stacking order in legal manila file folders, all necessary
loan documentation prior to submission to FAMC. A loan packaging
checklist for each loan is included in FAMC's mortgage software. All
manila file folders, along with a diskette containing all loan files
originated during the week should be forwarded to FAMC through
overnight delivery every Friday nights.
14. CREDIT SUBMISSION: FAMC will review the IHA's package and submit ft to
the appropriate decision maker. The decision will be based upon the
information received in R the loan package. Additional verifications
and/or credit documents may be necessary. The IHA will be advised of
loan approval and any conditions.
At this time the day-to-day handling of the loan package will be transferred to
FAMC. The IHA'S role will be to support FAMC:
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15. APPRAISAL: After the funds for payment of the appraisal are received
from the applicant, FAMC will order the appraisal report from a
qualified appraiser. FAMC may request assistance from the IHA in
receiving the funds for the cost of the appraisal and provide the
appraiser with a copy of the sales contract, new construction or
rehabilitation plans and specifications and other pertinent documents
needed to conduct the appraisal.
16. TITLE REPORT/ABSTRACT and TITLE STATUS REPORT (TSR): FAMC may request
assistance from the IHA in the ordering of the appropriate Title
Report/Abstract or TSR.
17. LAND STATUS FORM: FAMC may request assistance from the IHA in obtaining
a completed Land Status Form or other documents pertaining to the
proposed properties land status.
18. SUBMISSION FOR FINAL APPROVAL: FAMC will be responsible for all
submission procedure and gaining final approval from the appropriate
decision maker. It should be noted that depending upon the loan
program, a file may not go through a Credit Submission process but
could move directly to a one-time Submission. The appropriate loan
program will be identified in Step 1 so that the IHA and FAMC can plan,
up front, the proper submission procedure.
19. FINAL APPROVAL: Upon issuance of the final approval by the decision
maker, FAMC shall order all closing documents (i.e. survey,
inspections) for immediate loan cjosure. FAMC may ask the [HA to assist
in scheduling the closing with the local closing agent (approved by the
IHA and FAMC) and obtaining various other closing documents.
20. INVESTOR FUNDING: FAMC shall provide the Investor with a copy of the
complete loan package and shall be consulted as to the timing of the
closing.
21. GUARANTEE PACKAGE: FAMC shall be responsible for all insurance
packaging if applicable.
22. DRAW INSPECTIONS: FAMC may request from time-to-time that the IHA
assistance in the accumulation of documentation needed to conduct draw
payments on loans for new construction or rehabilitation. At no time
will the IHA be responsible for construction or rehabilitation fund
disbursement.
COMPENSATION:
The IHA shall be compensated by FAMC for each loan closed and funded.
Compensation will be in the form of a flat fee. The fee will be paid as
follows:
A fee of $120.00 will be due to the IHA on each loan originated by the IHA
and subsequently closed and funded by FAMC. The fee shall be paid by FAMC
to the IHA on the fifteenth day of each month following the loan funding.
The cutoff date will be the last day of each month (example: for all loans
funded between March 1 and March 31, total fees would be mailed to the IHA
on April 15).
STATUS OF THE PARTIES:
This Agreement shall not be construed to constitute a joint venture,
partnership, nor other form of agreement creating a joint liability between
the parties. The IHA and FAMC hereto stipulate and agree that the parties
are independent contractors and shall be responsible and liable for the
acts and omissions of their own respective employees, agents, and
representatives.
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Notwithstanding any other provisions in this Agreement, R is the intention
of the IHA and FAMC that the employees, agents, and representatives
furnished hereunder by each party shall be the employees, agents, and
representatives of that respective party. Accordingly, at no additional
expense to either party, the IHA and FAMC shall be fully responsible for
the withholding of all state and federal employment, social security,
Medicare, and similar taxes for their own respective employees. The IHA and
FAMC, and their respective employees, agents, and representatives, hereby
agree to indemnify and hold each other harmless from any and all liability
for such taxes, as well as for any penalties, interest, or other charges or
fees which may be assessed or imposed as a result, required to be filed by
state or federal taxing authorities in connection therewith. The
obligations under this paragraph shall survive the expiration or
cancellation of this Agreement.
ASSIGNMENT OR NON-ASSIGNMENT PROVISION:
The IHA and FAMC hereby agree the services specified in this Agreement may
not be delegated or assigned without the prior written approval of both
parties hereto.
TERMINATION OR CANCELLATION CLAUSE:
This Agreement may be terminated by either party upon thirty (30) days
written notice by certified letter. In the event this Agreement is
terminated or canceled by either party, the IHA shall remain obligated to
FAMC for any outstanding fees or payments due and shall not transfer any
loans currently in process. FAMC shall remain responsible for all unpaid
fees due to the IHA prior to said termination or cancellation.
If cancellation occurs FAMC will continue as the sole loan originator for
any loan programs defined in the "Special Loan Programs" paragraph of this
agreement. FAMC will continue to originate said loans until such time as
the loan commitment is completed, IHA withdraws their participation in the
program or FAMC waives their exclusive right.
PROPRIETARY INFORMATION:
1. FAMC agrees and warrants that R will protect any confidential
information ft receives from the IHA as confidential, proprietary and
not use the confidential information for its own purpose or disclose to
any third party, either directly or indirectly, any and all business
related clients, contracts, documentation, projections, business plans,
information, funding arrangements, maps or other materials.
2. The IHA agrees and warrants that R will protect any confidential
information it receives from FAMC as confidential, proprietary and not
use the confidential information for its own purpose or disclose to any
third party, either directly or indirectly, any and all business
related clients, contracts, documentation, projections, business plans,
information, funding arrangements, maps or other materials.
3. This agreement does not apply to any information which is a matter of
public record.
MODIFICATIONS:
Modifications or changes to the terms of this Agreement shall be in writing
and signed by each of the parties hereto.
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LAWS AND REGULATIONS:
The parties' performances hereunder shall comply with all applicable laws,
ordinances, rules and regulations of any governmental agency having
jurisdiction and shall pay any fine, penalty, loss, damage, or expense
resulting from the party's failure to comply therewith. FAMC shall provide
all licenses and permits required to perform its obligations under this
Agreement.
OFFICE EXPENSES:
The IHA shall be responsible for its own office expenses (i.e., office
rent, mailing, business related telephone costs, and other reasonable
charges). The IHA shall also be responsible for all other expenses that may
be incurred in conducting a mortgage origination business (i.e, auto
expenses, meals, lodging, and transportation). FAMC shall provide photocopy
ready promotional materials, rate sheets, training and assistance in
presentations at no additional cost to the IHA.
POLICY COMPLIANCE:
The IHA agrees to comply with the rules and regulations set forth in each
of the loan programs that FAMC is currently or will be participating in the
future (see Policy and Procedure Manual). FAMC reserves the right to amend
any policies set forth in its company Policy and Procedures Manual from
time-to-time and shall notify the IHA of any such changes.
GENERAL PROVISIONS:
This Agreement contains the complete expression of the parties' agreement
with respect to the subject matter hereof, and shall bind the parties,
their successors, and assigns. This Agreement shall supersede any and all
written or oral statements, agreements, and/or representations of the
parties made prior to or contemporaneously with the execution hereof.
This Agreement shall be governed by the laws of the United States and,
where applicable, the laws of the State of Oklahoma. The parties agree
their respective performances hereunder shall be governed by an obligation
of good faith.
FIRST AMERICANS MORTGAGE CORPORATION:
/s/ Xxxxxx Xxxxxxxx 3/9/99
------------------- ------
Xxxxxx X. Xxxxxxxx, President Date
Federal Tax Identification #000000000
HOUSING AUTHORITY OF THE CHEROKEE NATION:
/s/ Xxxxx Xxxxxxxxxxx 3/9/99
--------------------- ------
Xxxxx Xxxxxxxxxxx, Executive Director Date
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