SERVICING AGREEMENT by and between STEWARD REALTY TRUST, INC. and STEWARD SERVICING LLC
Exhibit 6.1
by and between
XXXXXXX REALTY TRUST, INC.
and
XXXXXXX SERVICING LLC
TABLE OF CONTENTS
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THIS AGREEMENT dated and effective as of June 20, 2017, between XXXXXXX REALTY TRUST, INC., a Maryland corporation, with its principal office located at 00 Xxxxxx Xxxxx, Xxx Xxxx, XX 00000 (“Purchaser”) and XXXXXXX SERVICING LLC, a New York limited liability company, with its principal office located at 00 Xxxxxx Xxxxx, Xxx Xxxx, XX 00000 (“Servicer”).
For purposes of this Agreement:
(a) “Business Day” shall mean any day that the banks in New York are open for business to the public except a Saturday, Sunday or Federal holiday.
(b) “Custodial Account” shall mean the account or accounts created and maintained pursuant to Section 4(a) of this Agreement. Each such account shall be an Eligible Account.
(c) “Customary Servicing Procedures” shall mean the procedures, including collection procedures, and care that Servicer customarily would employ and exercise in servicing and administering mortgage loans for its own account in accordance with accepted mortgage servicing practices of prudent lending institutions, giving due consideration to Purchaser’s reliance on Servicer.
(d) “Determination Date” shall mean the fifteenth (15th) day of each month (if this is not a Business Day, then the last Business Day preceding such day).
(e) “Eligible Account” shall mean an account or accounts (i) maintained with a depository institution the short term debt obligations of which are rated by Standard & Poor’s in one of its two (2) highest rating categories at the time of any deposit therein, (ii) the deposits of which are insured up to the maximum permitted by the FDIC.
(f) “Escrow Payments” shall mean the amounts constituting ground rents, taxes, assessments, water and sewer charges, fire and hazard insurance premiums, title insurance premiums, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to any Mortgage Loan or this Agreement.
(g) “Mortgage” shall mean the mortgage, mortgage deed, deed of trust or other instrument creating a first lien on a first priority ownership interest in an estate in fee simple in real property securing a Mortgage Note, including any assignment agreements or modifications relating thereto.
(h) “Mortgage Loans” shall mean those mortgage loans for which the Purchaser requests that the Servicer service such Mortgage Loans.
(i) “Mortgage Note” shall mean the note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
(j) “Mortgaged Property” shall mean the real property and improvements thereon securing a Mortgage Note pursuant to the related Mortgage. “Mortgagor” shall mean the obligor on a Mortgage Note or a person who has executed a Mortgage.
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(k) “Title Insurance Policy” shall mean with respect to any Mortgaged Property, the title insurance policy (including all endorsements thereto) issued with respect to such Mortgaged Property, if any, or any replacement policy.
(l) “Records” shall mean, but not be limited to, work files, individual account books, documents, files, correspondence, computer records and disks, related information or data of any kind relating to the servicing and any other documents that Purchaser requests that Servicer retain for Servicer to perform its obligations hereunder. The term shall further include such records that are created by Purchaser or Servicer during the term of this Agreement that relate to the servicing of the Mortgage Loans.
(m) “Related Escrow Accounts” means any mortgage escrow accounts maintained by Servicer prior to the date hereof and authorized by Purchaser to be maintained pursuant to the terms of this Agreement, which accounts shall be maintained in accordance with all federal, state and local laws, rules and regulations.
(n) “Remittance Date” shall mean the fifteenth (15th) day of each month (if this is not a Business Day, then the last Business Day preceding such day).
(o) “Servicing Advances” shall mean all customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Servicer in the performance of its servicing obligations hereunder, including but not limited to, the cost of (i) the preservation, restoration and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of the Mortgaged Property if the Mortgaged Property is acquired in satisfaction of the Mortgage Loan, and (iv) the payment of amounts required to be escrowed by the Mortgagor with the Mortgagee pursuant to any Mortgage Loan for the payment of ground rents, insurance premiums and other such payments.
(p) “Transfer Date” shall mean the date upon which Servicer transfers the servicing of the Mortgage Loans to a third party in accordance with Purchaser’s instructions and the terms of this Agreement.
The term of this Agreement shall commence as of the date of this Agreement and shall terminate pursuant to Section 10 of this Agreement. To the extent practicable, the servicing of all Mortgage Loans made prior to the date hereof shall conform to the terms of this Agreement. Notwithstanding anything to the contrary herein, the term of this Agreement may be extended if agreed to in writing by the parties.
SECTION 3. RELATIONSHIP OF PURCHASER AND SERVICER.
(a) Servicer as Independent Contractor. Except as may otherwise be specifically provided herein, in performing its duties and obligations hereunder, Servicer is an independent contractor and not an agent of Purchaser.
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SECTION 4. SERVICING ACTIVITIES.
During the term of this Agreement:
(a) Collection of Payments. Servicer shall on behalf of Purchaser diligently collect all payments due from Mortgagors to Purchaser under the Mortgage Loans as they become due, including but not limited to (i) principal, (ii) interest, (iii) advances for fire and hazard insurance premiums, title insurance premiums, payments with regard to prior liens, taxes, legal fees, foreclosure costs, and other miscellaneous advances, (iv) late charges, (v) extension fees, and (vi) bad check charges, such efforts to include but not be limited to the specific duties set forth herein. All such amounts received on each Mortgage Loan shall be held separate and apart from Servicer’s own funds in a Custodial Account.
(f) Reports to Purchaser. Servicer shall deliver to the Purchaser all reports relating to the Mortgage Loans that are required by Customary Servicing Procedures. Such reports shall be timely delivered and include, among other things, a detailed summary of sums expended on behalf of Purchaser. In addition, Servicer shall provide monthly reports verifying the accuracy of the amounts remitted to Purchaser, the servicing fee, the ancillary income and any reimbursements to Servicer from the Custodial Account for Servicing Advances.
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SECTION 5. RELATED ESCROW ACCOUNTS.
(a) Maintenance of Related Escrow Accounts. Any Related Escrow Accounts authorized by Purchaser shall be maintained in accordance with any and all applicable federal, state and local laws, ordinances, rules and regulations and the terms of this Agreement. For convenience of administration, the balance in the Related Escrow Accounts and any collections related to the Mortgage Loans may continue to be held in the bank account or accounts heretofore employed by Servicer, provided that the Related Escrow Accounts are Eligible Accounts.
(b) Permitted Withdrawals from the Related Escrow Account. Servicer may make withdrawals from Related Escrow Accounts only (i) to effect timely payments of taxes, assessments, water and sewer charges, title insurance policy premiums, fire and hazard insurance premiums; or other items constituting Escrow Payments for the related Mortgage Loan, (ii) to refund to any Mortgagor any funds found to be in excess of the amounts required under the terms of the related Mortgage Loan, (iii) for application to the restoration or repair of the Mortgaged Property, at the direction of Purchaser, (iv) to pay to the Mortgagor to the extent required by law, interest on the funds deposited in a Related Escrow Account, or (v) to clear and terminate the Related Escrow Account upon the termination of this Agreement.
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SECTION 6. DEFAULTED MORTGAGE LOAN
During the term of this Agreement, Servicer agrees to take the following actions as independent contractor with respect to defaulted Mortgage Loans:
(a) Collection on Defaulted Mortgage Loans. Servicer shall use Customary Servicing Procedures on defaulted Mortgage Loans in such a manner as to maximize the receipt of principal and interest by Purchaser.
(c) Consultation with Purchaser. Servicer will consult with Purchaser to determine in whose name foreclosure or similar proceedings should be instituted.
Maintenance of Fire and Hazard Insurance. Servicer shall cause to be maintained for each Mortgage Loan all insurance required by Customary Servicing Procedures including, without limitation, fire and hazard insurance with extended coverages as are customary in the area where the Mortgaged Property is located in an amount equal to the lesser of (i) the amount necessary to fully compensate for any damage or loss to the improvements which are a part of the Mortgaged Property on a replacement cost basis, or (ii) the outstanding principal balance of the Mortgage Loan, in each case in an amount as necessary to prevent the Mortgagor or Mortgagee from becoming a co-insurer, all in accordance with Customary Servicing Procedures.
Purchaser shall pay to Servicer a servicing fee of one percent (1.0%) per annum on the principal balance of each outstanding Mortgage Loan, payable monthly in lawful money of the United States of America. Such fee shall be netted out of the remittances to Purchaser in accordance with Section 4(b). In addition, Servicer may retain all ancillary income as provided in Section 4(b) of this Agreement. The following fees shall apply: (a) $100.00 per bankruptcy; (b) $150.00 per foreclosure; and (c) $25.00 per loan as a transfer and release fee. The Servicer will keep any late fees up to the time a loan goes into foreclosure.
SECTION 9. TRANSFER OF SERVICING.
Servicer shall fully cooperate with Purchaser and take any and all necessary actions to effect any transfer of servicing of the Mortgage Loans to third parties designated by Purchaser, including without limitation the following:
(a) Delivery of Notices to Mortgagors. Servicer shall deliver notices to the Mortgagors as required by law, in a format mutually agreeable to Servicer and Purchaser, advising the Mortgagors of the transfer of servicing of the Mortgage Loans.
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(1) Each party shall immediately upon discovery of the misapplied payment notify the other party hereto of such misapplication.
(2) Servicer shall assume any and all liability for any shortage resulting from a misapplied payment and reimburse Purchaser for any such shortage within thirty (30) days of the discovery of the misapplied payment.
(f) Internal Revenue Service Forms. Servicer caused to be posted online at xxxxx://xxx.xxxxxxxxx.xxx, on or before the date required by law all Internal Revenue Service (“IRS”) forms, including without limitation form numbers 1099, 1099A or 1098, to all persons or entities entitled to receive such forms for the period from the inception of loan servicing until the Transfer Date, and shall ensure that such persons and entities have access to such portal and create a valid account thereon. Servicer shall provide copies of such forms to Purchaser upon Purchaser’s request. Further, Servicer shall indemnify Purchaser for any and all costs, damages and penalties incurred by Purchaser for Servicer’s failure to comply with any IRS filing requirements. Purchaser shall make any such IRS filings for the period after the Transfer Date.
(g) The transfer of the servicing shall comply with and conform to all applicable federal, state and local laws, rules and regulations.
(h) Servicer shall provide transferees with a copy of each and every notice required to be provided to any party in accordance with this Section 9.
(i) Servicer is entitled to recoup all outstanding servicing advances and COF at the time of transfer.
(j) Transfer Date must occur on Determination Date or such other date mutually agreed to by the parties.
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This Agreement shall terminate at the sole discretion of Purchaser upon prior written notice by Purchaser to Servicer which notice shall set forth the Transfer Date. Upon termination of this Agreement, the following terms and conditions shall apply:
(a) Servicer, at its expense, shall promptly turn over to Purchaser or Purchaser’s designee, at a location specified by Purchaser all the Records.
(b) Servicer shall pay over to Purchaser any collections it receives on the Mortgage Loans after termination of this Agreement promptly after receipt thereof.
(c) All remaining escrow, principal and interest and foreclosure balances due at the termination of this Agreement to Purchaser shall be paid by Servicer. All deficit escrow, principal and interest and foreclosure balances due to Servicer at the termination of this Agreement shall be paid by Purchaser.
(d) The Related Escrow Accounts shall forthwith be transferred to Purchaser or a bank to be designated by Purchaser.
(e) Purchaser’s right to indemnification as described in Section 11 hereof shall survive the termination of this Agreement.
Servicer shall indemnify and hold harmless Purchaser from any claims, losses, penalties, fines, forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses (“Losses”) that Purchaser may sustain in any way related to the failure of Servicer to perform its duties and service the Mortgage Loans in material compliance with the terms of this Agreement. Purchaser shall indemnify and hold harmless Servicer from any Losses that Servicer may sustain in any way related to Purchaser’s servicing of a Mortgage Loan after the Transfer Date, unless any such Loss is in any way caused by Servicer’s failure to service the Mortgage Loans in accordance with the terms of this Agreement.
(b) Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with the laws of New York.
If to Purchaser:
Xxxxxxx Realty Trust, Inc.
000 Xxxx Xxx X #00000
Xxx Xxxx, XX 00000
Attention: President
Email Address: xxxx@xxxxxxxxx.xxx
with a copy to:
Xxxxxxx Realty Trust, Inc.
000 Xxxx Xxx X #00000
Xxx Xxxx, XX 00000
Attention: General Counsel
Email Address: xxxxx@xxxxxxxxx.xxx
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If to Servicer:
Xxxxxxx Servicing LLC
000 Xxxx Xxx X #00000
Xxx Xxxx, XX 00000
Attention: President
Email Address: xxxxxxxxx@xxxxxxxxx.xxx
with a copy to:
Xxxxxxx Servicing LLC
000 Xxxx Xxx X #00000
Xxx Xxxx, XX 00000
Attention: General Counsel
Email Address: xxxxx@xxxxxxxxx.xxx
The above addresses may be changed by written notice given as above provided.
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Attest: | XXXXXXX SERVICING LLC | |||
/s/ | By: | /s/ | ||
Name: Xxxx X. Xxxxx | Name: Xxxxxx X. Xxxxxx | |||
Title: Secretary | Title: President | |||
Attest: | XXXXXXX REALTY TRUST, INC. | |||
/s/ | By: | /s/ | ||
Name: Xxxx X. Xxxxx | Name: Xxxxxx X. Xxxxxx | |||
Title: Secretary | Title: President & CEO |
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