EXHIBIT 10.7
Amendment Agreement
This Amendment Agreement is entered into as of August 1, 2001 among First
Union National Bank of Delaware ("Lender"), The Education Resources Institute
("XXXX"), SunTech, Inc. (the "Servicer") and Collegiate Funding Services, L.L.C.
("CFS"), collectively the "Parties".
WHEREAS, the Lender, XXXX, Servicer and CFS are Parties to various
agreements to promote and operate CFS' Real World Private Consolidation Loan
Program ("RWPCL Program") including the Private Consolidation Loan Origination
Responsibility Agreement dated as of June 12, 2001, the Guaranty Agreement dated
January 27, 1997, as amended, and the Master Origination and Servicing Agreement
dated January 18, 2001, as amended (the "Agreements") which provide for the
marketing, funding, insuring and servicing of consolidation of private education
loans; and
WHEREAS, the Agreements each include as an exhibit or attach, or refer to,
certain Underwriting, Origination, and Servicing Guidelines for the Real World
Private Consolidation Loan Program adopted as of June 12, 2001 (the
"Regulations"); and
WHEREAS, the Parties desire to amend the Agreements and/or the Regulations
as they may apply to the Agreements for the mutual benefit of the Parties, all
as hereinafter set forth in greater detail.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by each party, the Parties agree as follow.
1. On page 4 of the Regulations, the last bullet "United States
citizenship...." Is hereby amended to read in its entirety:
"United States citizenship or permanent residency - required for either
the Borrower or the Co-Borrower."
2. On page 5 of the Regulations, part "A. Citizenship" is hereby
amended to read in its entirety:
"The Borrower or the Co-Borrower must be a U.S. citizen or a permanent
resident of the United States. This U.S. citizen requirement will be
deemed satisfied if the `Yes' box is marked by the Borrower or, if
applicable, the Co-Borrower in item 4. or 20., respectively, of the
Private Consolidation Loan Application and Promissory Note. No further
verification is needed. If the Borrower or the Co-Borrower IS a Permanent
Resident, then the Originator must verify Permanent Residency status with
the Certification of U.S. Citizenship (INS form N-560 or N-561). The
Originator will forward documentation of Permanent Residency to the
Servicer along with the Borrower file."
3. The Following procedures will be followed to establish the
definitive payoff amount for each underlying loan sought to be included in the
RWPC Loan in all instances in which a Payoff Request Form ("PORF") is not
obtained to support an underlying loan. When
obtained, a PORF shall supercede any and all other loan payoff/balance
documentation that may be obtained and render unnecessary the process,
procedures and requirements described below:
A. For each Application, CFS shall transmit to the Borrower a
copy of the attached "Borrower Certification of Private Loan
Balance" form ("Borrower Certification Form"). When CFS
receives a completed Borrower Certification Form it will
compare the payoff balance for each underlying loan supplied
thereon with the balance for the corresponding loan on the
Borrower's credit bureau report obtained no more than 90 days
before receipt of the Borrower Certification Form. See
attachment "A" for the approved Borrower Certification Form.
In instances where the loan reported by the Borrower is not
listed on a credit bureau, CFS must follow the documentation
requirement contained in Paragraph 3(D) below.
B. If CFS determines that the Borrower-verified balance on the
Borrower Certification Form for a particular underlying loan
is equal to or less than 105% of the balance for such loan
indicated on the credit bureau report, the Parties shall
accept the lesser of the Borrower certified balance or the
credit bureau report balance as the accurate "pay-off" amount
for such loan. The Borrower Certification Form or credit
bureau report, as applicable, shall constitute the sole proof
of the "payoff balance" required for such underlying loan. The
Borrower Certification Form and Borrower Certification of
Payoff Balance Comparison Worksheet (Attachment C) shall be
included in the Borrower File delivered by CFS to the
Servicer. The requirement to collect a Payoff Request Form
("PORF"), and include the same in the Borrower File, is waived
for underlying loans described in this paragraph 3(B). See
attachment "B" for the hardcopy documentation requirements.
C. If CFS determines that the balance on the Borrower
Certification Form for a particular underlying loan is more
than 105%, but less than or equal to 110%, of the balance for
such loan indicated on the credit bureau report, CFS shall
call the Borrower and encourage and assist the Borrower in
obtaining written loan payoff balance documentation from the
holder(s) of such loan (see Attachment "B" for the acceptable
documentation). Such written documentation shall constitute
the sole proof of the "payoff balance" required for such
underlying loan and shall, along with the Borrower
Certification Form and Borrower Certification Comparison
Worksheets, be included in the Borrower File delivered by CFS
to the Servicer. The requirement to collect a Payoff Request
Form ("PORF"), and include the same in the Borrower File, is
waived for underlying loans described in this paragraph 3(C).
D. If CFS determines that balance on the Borrower Certification
Form for a particular underlying loan is more than 110% of the
balance for such loan indicated on the credit bureau report,
or if the borrower's loan amount does not appear in the credit
bureau trade-line, CFS will only include such loans in the
Consolidation Loan if it obtains the Pay-Off Request Form(s)
from the current holder/servicer/lender, and in such event the
PORF shall constitute the sole
acceptable proof of the "payoff balance" for such affected
loan and shall, be included in the Borrower File delivered by
CFS to the Servicer.
E. In its review of the Borrower File as required under the
Master Origination and Servicing Agreement dated January 18,
2001, as amended, Servicer shall verify that the File contains
each form of document for each underlying loan as noted by CFS
on the BORROWER PAYOFF CERTIFICATION OF EDUCATION LOAN
BALANCES VERIFICATION CHECKLIST (attached hereto as Attachment
D). Servicer shall have no obligation whatsoever to
investigate or otherwise verify the accuracy of the
information contained on any Attachment D; it being understood
that Servicer's sole obligation under this paragraph is to
verify that CFS forwarded each of the documents that CFS
listed on Attachment D.
F. As long as this Section 3 is in effect, Lender and XXXX shall
accept the Borrower certification contained in the
Application/ Promissory Note and in the Borrower Certification
as acceptable certification that the loans listed for
consolidation on such documents were used for qualifying
education purposes.
G. For each RWPC Loan, the principal loan amount covered by
TERI's Guarantee shall equal the aggregate amount of the
underlying loan payoff balances (including interest/fees)
listed on the (i) Borrower Certification Form, credit bureau
report or PORF, as applicable for underlying loans described
in Section 3(B) above, (ii) Attachment B documentation or
PORF, as applicable, for underlying loans described in Section
3(C), and (iii) the PORF for underlying loans described in
Section 3(D), provided that the principal amount of such
Guarantee shall in no event exceed the principal amount of the
RWPC loan actually disbursed by the Lender.
H. When the loan payoff balance for one or more underlying loans
included in a RWPC Loan is supported by a Borrower
Certification Form and/or Attachment B documentation, such
original underlying loan(s) shall be deemed by the Parties to
be non-XXXX-guaranteed loans for purposes of calculating the
XXXX guaranty fee pursuant to "IV. Payment of Guaranty Fees to
XXXX" of the Regulations.
I. All parties agree that the Borrower Certification Form process
outlined in Sections 3(A)-(H) is subject to termination by
XXXX and Lender effective on any October 1st during the term
of the Agreement. To become effective, notice of such
termination must be given to CFS no less than thirty (30) days
prior to the desired October 1st termination date. Lender may
also terminate the Borrower Certification Form process
outlined in Sections 3(A)-(H) at anytime upon 10 days written
notice to CFS if more than two percent (2%) of Borrower Files
provided by CFS to Servicer in any particular calendar month
do not at the time of initial submission to Servicer include
the completed Borrower Certification of Payoff Balance
Comparison Worksheet, the Borrower Certification Form and, as
applicable, the alternative hardcopy documentation required
under Paragraph 3(C), or the PORF required under Paragraph
3(D), provided further that such noncompliance persists for
three (3) consecutive calendar months. Servicer's
document exceptions list provided to CFS pursuant to Section
6(D) of the Private Consolidation Loan Origination
Responsibility Agreement dated as of June 12, 2001 shall,
absent clear and convincing evidence to the contrary, be
conclusive proof of whether the PORF, or, in the absence of
such PORF as contemplated in Paragraphs 3(B) & (C), whether
the Borrower Certification of Payoff Balance Comparison
Worksheet, the Borrower Certification Form, and solely for
underlying loans described in Paragraph 3(C) the alternative
hardcopy documentation required thereunder, were contained in
the Borrower Files at time of submission to Servicer. Any
termination under this paragraph 3(I) shall terminate
application of sections 3(A) through 3(H) above on a
prospective basis only and the Parties will thereafter, with
respect to all Consolidation Loans that have not had at least
one disbursement issued prior to the effective date of
termination, revert to the PORF process originally outlined in
the Agreements.
4. CFS will supply to Lender each week a list of loan applications
(identifying borrower name, SSN, and payoff balance) with tolerances between
105.00% and 110.01% submitted for funding by CFS during the previous calendar
week. CFS will provide to Lender within 5 business days of Lender's request all
of the required loan payoff documentation for a random sample of Loans funded by
Lender in any month for no more than 50 Loans (i.e., as applicable, the copy of
the Borrower Certification Forms, the credit reports used to determine the
payoff variance percentages, the Borrower Certification Comparison of Balance
Payoff Worksheets, the PORFs, and the alternative hardcopy documentation
required under Paragraph 3(C)).
5. Except as explicitly set forth herein, nothing in this Amendment
Agreement is intended, nor shall it, release, remove, modify, alter, or amend
any obligation, duty, or responsibility of any party as set forth in the
Agreements. This Amendment Agreement may be executed in counterparts, each of
which may be a fax copy of an original but all of which, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties have set their hands hereto.
FIRST UNION NATIONAL BANK OF DELAWARE ("Lender")
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxxx
COLLEGIATE FUNDING SERVICES, LLC ("CFS")
/s/ W. Xxxxx XxXxxx
-----------------------------------
By: W. Xxxxx XxXxxx
THE EDUCATION RESOURCES INSTITUTE (XXXX)
/s/ Xxx X. Xxxxx
-----------------------------------
By: Xxx X. Xxxxx
SUNTECH, INC. ("Servicer")
/s/ Xxxxxxx Xxxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxxxx
ATTACHMENTS: Attachment "A" - Borrower Certification Form
Attachment "B" - Payoff Documentation
Attachment "C" - Borrower certification of Payoff Balance
Comparison Worksheet
Attachment "D" - Borrower Payoff Certification of Education Loan
Balances Verification Checklist
AMENDMENT AGREEMENT
Amendment to the Agreement dated as of August 1, 2001, among First Union
National Bank of Delaware ("Lender"), The Education Resources Institute
("XXXX"), Suntech, Inc (the "Servicer") and Collegiate Funding Services, L.L.C.
("CFS"), collectively the "Parties". This Amendment is made effective this 20th
day of February, 2002.
Section 3 - Paragraph B shall be amended to read as follows with respect to all
RWPCL loans not already funded as of the date of this Amendment:
If CFS determines that the Borrower-verified balance on the Borrower
Certification Form for a particular underlying loan is equal to or less than
105% of the balance for such loan indicated on the credit bureau report, the
Parties shall accept the greater of the Borrower certified balance or the credit
bureau report balance as the accurate "pay-off" amount for such loan. The
Borrower Certification Form or credit bureau report, as applicable, shall
constitute the sole proof of the "payoff balance" required for such underlying
loan. The Borrower Certification Form and Borrower Certification of Payoff
Balance Comparison Worksheet (Attachment C) shall be included in the Borrower
File delivered by CFS to the Servicer. The requirement to collect a Payoff
Request Form ("PORF"), and include the same in the Borrower File, is waived for
underlying loans described in this paragraph 3(B). See attachment "B" for the
hardcopy documentation requirements.
FIRST UNION NATIONAL BANK OF DELAWARE
/s/ Xxxxxxx Xxxxxxx
-----------------------------------
By: Xxxxxxx Xxxxxxx
Date: 7-15-02
COLLEGIATE FUNDING SERVICES, LLC
/s/ W. Xxxxx XxXxxx
-----------------------------------
By: W. Xxxxx XxXxxx
Dated: 7/10/02
THE EDUCATION RESOURCES INSTITUTE (XXXX)
/s/ Xxxxxx Xxxxxx
-----------------------------------
By: Xxxxxx Xxxxxx
Dated: 7/10/02
SUNTECH, INC.
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
By: Xxxxxxx X. Xxxxxxxx
Dated: 7/15/02
