Capital Financial Corp.
Page 1
April 1, 2005
Xx. Xxxxxxx X. Xxxxxxxxx
President
Capital Financial Corp.
0000 Xxxxx 00 Xxxx
Xxxxxxxxxx, XX 00000
Re: Mortgage Loan Warehousing Agreement of even date herewith.
Dear Xx. Xxxxxxxxx:
I am happy to inform you that your application for a warehouse line
of credit has been extended for administrative reasons.
This Commitment Letter constitutes the Commitment Letter referred to
in and is a supplement to the above referenced Mortgage Loan
Warehousing Agreement (the Agreement) and will confirm certain of
the terms and conditions of the lending arrangements between CAPITAL
FINANCIAL CORP. (the Company) and INDEPENDENCE COMMUNITY BANK,
(the Lender). Capitalized terms are used herein with the same
meaning as in the Agreement.
Effective Date: April 1, 2005
Credit Limit: $4,000,000.00
(reduced from $7,000,000.00)
Second Mortgage Loan
Sublimit: Up to $500,000.00 of the Credit Limit to be
made available for the funding of pre-committed
second mortgage loans (including HELOCS)
(reduced from $1,000,000.00)
Sub-Prime Mortgage Loan
Sublimit: Up to $250,000.00 of the Credit Limit to be made
available for the funding of pre-committed
sub-prime mortgage loans (including 1st or 2nd
mortgage loans with FICOs less than 620).
(reduced from $750,000.00)
Maturity Date: June 30, 2005
Capital Financial Corp.
Page 2
Interest Rate
Conforming Loans: Prime rate + 3/4% with a floor rate
of 4.75%
Interest Rate
Second Mortgage Loan
Sublimit: Prime rate + 1% with a floor rate of 5%
Interest Rate
Sub-Prime Mortgage Loan
Sublimit: Prime rate + 1&1/2% with a floor rate
of 5.5%
Permissible
Warehouse Period: Ninety (90) days
Guarantor: Xxxxxxx X. Xxxxxxxxx
Required Fees: Non-Use fee: In the event the average
outstanding monthly loan balance is less
than 25% of the Credit Limit, a fee of
.25% per annum will be due and payable
monthly in arrears on up to $1,000,000.00
of the monthly average unused portion of
the Credit Limit. (Minimum amount
reduced from $1,750,000.00)
Package fee of $30 per loan warehoused if
funded by bank check or $50 per loan if
funded by wire transfer, due and payable
monthly in arrears.
Aged Loan Fee of $150 per loan upon the
date when such loan exceeds the
Permissible Warehouse Period and $200
every ninety (90) days thereafter that
such mortgage Loan advances remains
outstanding.
Minimum Permitted
Adjusted Net Worth: $250,000.00 (reduced from
$550,000.00)
Minimum Permitted
Tangible Net Worth: $250,000.00 (reduced from
$550,000.00)
Maximum Permitted
Debt to Adjusted
Net Worth Ratio: 20:1
Capital Financial Corp.
Page 3
Types of Eligible
Collateral: Any Residential Mortgage Loan which is an
Eligible Mortgage Loan, which is not in excess
of $650,000.00 (loans greater than $650,000.00
require Lenders prior approval) which is
insured by the FHA, guaranteed by the VA or
which is a conventional mortgage loan which
conforms in all respects (unless otherwise
approved in writing by Lender) with applicable
requirements of FNMA or FHLMC, other than the
fact that is a jumbo loan, and which conforms
in all respects to the applicable requirements
of the investment banker or financial
institution providing the Take-Out Commitment
and such loan is secured by a first or second
priority perfected lien on the subject Property
and the CLTV does not exceed 100%. Any
Eligible Mortgage Loan with a FICO score less
than 620 will be deemed by Xxxxxx to be a Sub-
Prime mortgage loan.
Acceptable
Jurisdictions: New Jersey, Connecticut and/or any state in
which the company is properly licensed or
exempt from licensing provided that the Company
has furnished to Lender evidence that Company
is duly licensed or exempt from licensing in
such jurisdiction.
Collateral Value of
Borrowing Base
Conforming Loans: In the case of Eligible Collateral consisting
of a Residential Mortgage Loan held for
assembly into a package for inclusion in a pool
underlying a Mortgage-Backed Security subject
to a Take-Out Commitment, or to be submitted to
FNMA or FHLMC or other financial institution or
investment banker for purchase under one or
more Take-Out Commitments, the lesser of 99% of
the Take-Out Commitment thereof, but not in any
case to exceed 99% of the unpaid principal
amount of such Residential Mortgage Loan.
Collateral Value of
Borrowing Base
Second Mortgage In the case of Eligible Collateral consisting
of a second mortgage loan to be submitted to a
financial institution or investment banker for
purchase under one or more Take-Out
Commitments, the lesser of 98% of the Take-Out
Commitment thereof, but not in any case to
exceed 98% of the unpaid principal amount of
such Residential Mortgage Loan.
Capital Financial Corp.
Page 4
Collateral Value of
Borrowing Base
Sub Prime Mortgage In the case of Eligible Collateral consisting
of a Sub Prime (loans under 620 FICO score),
mortgage loan to be submitted to a financial
institution or investment banker for purchase
under one or more Take-Out Commitments, the
lesser of 95% of the Take-Out Commitment
thereof, but not in any case to exceed 95% of
the unpaid principal amount of such Residential
Mortgage Loan.
Additional
Acceptable
Investors: Those investors as may from time to time be
accepted by Xxxxxx in its sole discretion.
Funding Account: Demand deposit account with Lender to be
established.
Contact Office: Independence Community Bank
Mortgage Warehouse Funding
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Statement Date: December 31, 2004
Interim Date: March 31, 2005
Address for Purpose
of Notice: Capital Financial Corp.
0000 Xxxxx 00 Xxxx
Xxxxxxxxxx, XX 00000
Additional
Conditions/
Covenants: 1. Company agrees to allow Xxxxxx to mutually
exchange lists of loans warehoused and
other information with Companys other
existing or future warehouse lenders.
2. Company agrees to cooperate in the execution
of an Intercreditor Agreement with existing or
future warehouse lenders, if so requested by
Xxxxxx.
3. Company agrees to not enter into any warehouse
agreements without the express written
permission of ICB.
Capital Financial Corp.
Page 5
If the above meets with your approval, please so indicate by executing
and returning to Lender the enclosed copy of this Commitment Letter,
the Agreement, the Security Agreement, Revolving Promissory Note, and
other Loan Documents. If this Commitment Letter and attendant items
have not been executed and returned to Lender by April 4, 2005, the
Commitment shall expire.
Very truly yours,
INDEPENDENCE COMMUNITY BANK
By:_/s/Xxxxx X. Xxxx______________
Xxxxx X. Xxxx
Vice President
AGREED TO AND ACCEPTED this
___1st___ day of ___April___, 2005
CAPITAL FINANCIAL CORP.
A New Jersey Corporation
By:_/s/ Xxxxxxx X. Xxxxxxxxx______
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
Guarantors Acknowledgement:
__/s/_Xxxxxxx X. Xxxxxxxxx___ __April 1, 2005__
Xxxxxxx X. Xxxxxxxxx Date
