Exhibit 10.93
WHOLE LOAN SALE AGREEMENT
This WHOLE LOAN SALE AGREEMENT made as of this 24 day of February, 1999, by and
between E-Loan, Inc, a California corporation, having its principal place of
business at 0000 Xxxxxx Xxxx Xxxxxx, XX 00000 ("Seller") and Principal
Residential Mortgage, Inc., an Iowa corporation with its principal place of
business in Des Moines, Iowa ("Principal Residential").
R E C I T A L S :
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WHEREAS, Seller is engaged in the business of originating residential first
mortgage loans.
WHEREAS, Seller desires to sell such loans from time-to-time to Principal
Residential and Principal Residential, as part of its mortgage banking business,
is willing to purchase such loans from Seller, subject to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the recitals and the mutual promises
contained herein, and for other good and valuable consideration, receipt of
which is hereby acknowledged, Seller and Principal Residential agree as follows:
1. DEFINITIONS. Whenever used herein, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
1.1. AGREEMENT: This Whole Loan Sale Agreement, including all exhibits
and schedules hereto, and all amendments hereof and supplements
hereto.
1.2. APPRAISED VALUE: With respect to any Loan, the value of the
related Mortgaged Property based upon the appraisal made for the
originator at the time of the origination of such Loan or the sale
price of such Mortgaged Property if the proceeds of such Loan were
used to purchase such Mortgaged Property, whichever is less.
1.3. ARM LOAN: An adjustable rate mortgage loan.
1.4. ASSIGNMENT OF MORTGAGE: An assignment of a Mortgage, notice of
transfer, or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is located to evidence the sale of the Loan to the
assignee named therein.
1.5. COMMITMENT: A binding agreement between Seller and Principal
Residential, as described in paragraph 5 hereof, for the sale and
purchase of specifically identified Loans.
Exhibit 10.93
1.6. CONVENTIONAL LOAN: Any Loan meeting the requirements of paragraph
3.1 hereof.
1.7. DELIVERY DATE: As defined in paragraph 12.
1.8. FHA: Federal Housing Administration.
1.9. FHLMC: The Federal Home Loan Mortgage Corporation or any
successor.
1.10. FNMA: The Federal National Mortgage Association or any successor.
1.11. FUNDING DATE: With respect to any Loan(s) as to which a Commitment
has been entered into, the date on which ownership thereof is
transferred to Principal Residential and the Purchase Price is
paid to Seller.
1.12. GNMA: Government National Mortgage Association or any successor.
1.13. GOVERNMENT LOAN: Any Loan meeting the requirements of Paragraph
3.2 hereof.
1.14. HUD: United States Department of Housing and Urban Development.
1.15. LOAN: Any residential first mortgage loan that is subject to the
terms of this Agreement, including the servicing rights to such
Loan. Collectively such mortgage loans are referred to as Loans.
1.16. LOAN-TO-VALUE RATIO: With respect to any Loan, the original
principal balance of such Loan divided by the Appraised Value of
such Loan.
1.17. MONTHLY PAYMENT: The scheduled monthly payment of principal and
interest on a Loan which is payable by a Mortgagor from time to
time under the related Mortgage Note.
1.18. MORTGAGE: The mortgage, mortgage deed, deed of trust, or other
instrument creating a first lien on or first priority ownership
interest in an estate in fee simple (or, under limited
circumstances and subject to certain conditions set forth in the
Principal Seller' Guide, a leasehold estate) in real property
securing a Mortgage Note, including any assumption agreements,
riders or modifications relating thereto.
1.19. MORTGAGE INTEREST RATE: As to each Loan, the annual rate set forth
in the Mortgage Note at which interest accrues on such Loan, net
of the premium payable with respect to the Private Mortgage
Insurance Policy applicable to such Loan, if any, as set forth in
the Commitment relating thereto.
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Exhibit 10.93
1.20. MORTGAGE NOTE: As to each Loan, the note or other evidence of the
indebtedness of the Mortgagor thereunder, which Note is secured by
a Mortgage.
1.21. MORTGAGED PROPERTY: The property securing a Mortgage Note pursuant
to the related Mortgage.
1.22. MORTGAGOR: The obligor on a Mortgage Note.
1.23. PAR: Shall mean, with reference to pricing of a Loan -for purposes
of repurchase by Seller under paragraph 19, the Unpaid Principal
Balance of a Loan.
1.24. PRIVATE MORTGAGE INSURANCE POLICY: The policy of private mortgage
guaranty insurance (including all endorsements thereto) issued
with respect to a Loan, if any, or any replacement policy.
1.25. PRIVATE MORTGAGE INSURER: The named insurer under any Private
Mortgage Insurance Policy.
1.26. PRINCIPAL SELLER' GUIDE: The manual referred to in paragraph 4
which is provided to Seller and which sets forth additional
requirements regarding the Loans and Principal Residential's
purchase thereof.
1.27. PURCHASE PRICE: For any Loan, the Purchase Price shall be
expressed as a percentage of the Unpaid Principal Balance of such
Loan.
1.28. UNPAID PRINCIPAL BALANCE: As to each Loan as of any date of
determination, the outstanding principal balance of such Loan as
of that date.
1.29. VA: The United States Department of Veterans Affairs (formerly
known as the Veterans' Administration).
2. SALE AND PURCHASE OF LOANS. During the term of this Agreement, Seller
shall offer to sell Loans to Principal Residential and Principal
Residential may agree to purchase said Loans from Seller, in accordance
with the terms and subject to the conditions of this Agreement
(including the applicable Commitment and the Principal Seller' Guide)
and in reliance upon the representations and warranties set forth
herein. In particular, this Agreement shall apply to the following
designated categories of Loans:
(INSTRUCTION: Check and - initial each category of Loans covered by this
Agreement.)
_X_ Conventional Loans. Seller: __________________ Principal Residential:
_______________________
_NA_ Government Loans. Seller: _NA_ Principal Residential: _NA_
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Exhibit 10.93
3. LOAN REQUIREMENTS.
3.1. Conventional Loans. Each of the Conventional Loans offered by
Seller pursuant to this Agreement shall satisfy and conform to
each of the following requirements (in addition to all other
applicable requirements set forth in this Agreement):
a. Each Loan shall be closed and fully secured by a Mortgage
on a structure which is a one-to-four family, owner
occupied primary dwelling unit and must be eligible for
inclusion in FNMA pools of mortgage-backed securities.
Loans for purposes of constructing properties will not be
accepted. HUD/FHA, VA and Farmers Home Administration loans
will not be accepted under this Conventional Loan Category.
b. Each Loan shall bear interest as specified in the
Commitment. Each Loan shall also comply with all
requirements of the applicable loan program, which programs
are described in the Principal Seller Guide and subject to
change or withdrawal at the sole discretion of Principal
Residential.
c. Each Loan shall be originated by Seller, not by a
correspondent of Seller or by any other person or entity.
For purposes of this subparagraph 3.1.c, the word
"originated" shall include all of the following steps: (i)
Seller obtaining a loan application from a borrower; (ii)
Seller doing all of the processing of the Loan package; and
(iii) the Loan being closed in the name of Seller.
d. Each Loan purchased will have an Unpaid Principal Balance
as of the Funding Date in an amount which falls within the
minimum and maximum (if any) loan amount specified for the
applicable loan program or category in the Principal
Seller' Guide, as amended from time to time.
e. Loans on mobile homes are not acceptable for purchase.
f. Each Loan must satisfy the standard underwriting
requirements of Principal Residential and is subject to
underwriting and written approval by Principal Residential
prior to Seller's closing the Loan with the borrower.
Seller shall be responsible for the proper closing of each
Loan. Seller shall be charged and agrees to pay the fee
charged, by Principal Residential for any underwriting
services provided by Principal Residential hereunder.
g. Appraisers and the prudent appraisal practices which "they
must follow shall be in compliance with FNMA guidelines as
specified in the FNMA Seller' Guide. Seller warrants that
said appraisers meet
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Exhibit 10.93
such guidelines as well as all required federal, state and
other applicable licensing laws.
h. A Private Mortgage Insurance Policy will be required on all
Loans having greater than an 80% Loan-to-Value Ratio and
from time to time on certain other Loans as determined in
Principal Residential's sole discretion. Acceptable Private
Mortgage Insurers are set forth in the Principal Seller
Guide.
i. Where the Mortgaged Property for any Loan is community
property, such a Loan will be eligible for purchase
hereunder if, and only if, the husband and wife have, as
Mortgagors, each mortgaged their respective undivided
interest in said Mortgaged Property.
3.2. Government Loans. Each of the Government Loans offered by Seller
pursuant to this Agreement shall satisfy and conform to each of
the following requirements (in addition to all other applicable
requirements set forth in this Agreement):
a. Each Loan shall be closed and fully secured by a Mortgage
insured by HUD/FHA under the appropriate section(s) of the
National Housing Act as specified in the Principal Seller'
Guide from time to time or guaranteed by the VA. Each such
Loan must be eligible for inclusion in pools of
mortgage-backed securities fully guaranteed by GNMA. No
HUD/FHA Co-Insurance loans will be purchased. Loans for
purposes of constructing properties will not b6 accepted.
Loans with respect to which the Mortgagor has or will
obtain supplemental financing or other financial assistance
from the seller of the Mortgaged Property will not be
eligible for purchase without specific prior written
approval from Principal Residential. HUD/FHA and VA
temporary buydowns are acceptable for purchase.
b. Each Loan shall bear interest as specified in the
Commitment and shall be identified as to type: either
HUD/FHA (including reference to applicable section of the
National Housing Act) or VA.
c. Each Loan shall be originated by Seller, not by a
correspondent of Seller or by any other person or entity.
For purposes of this subparagraph 3.2.c, the word
"originated" shall include all of the following steps: (a)
Seller obtaining a loan application from a borrower, (b)
Seller doing all of the processing of the Loan package; (c)
Seller underwriting the application and Loan package for
Loan approval; and (d) the Loan being closed in the name of
Seller.
d. Each Loan purchased will have an Unpaid Principal Balance
as of the Funding Date in an amount which falls within the
minimum and
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Exhibit 10.93
maximum (if any) loan amount specified for the applicable
loan program or category in the Principal Seller' Guide, as
amended from time to time.
e. Loans on condominiums are not acceptable for purchase
unless insured by FHA under Section 234c of the National
Housing Act and in a HUD/FHA approved condominium project.
f. VA Loans must have a combined loan guaranty and/or cash
down payment equal to 25 percent coverage and be acceptable
for GNMA pools. Seller shall be responsible for the proper
closing of each Loan.
g. Loans for mobile homes are not acceptable for purchase.
4. PRINCIPAL SELLER GUIDE. Each Loan must comply with all applicable
provisions of the Principal Seller' Guide as it now exists and as it may
from time to time be amended at Principal's sole discretion, which
provisions are incorporated herein and made a part of this Agreement by
this reference thereto. Seller acknowledges receipt of a copy of the
Principal Seller' Guide. It is acknowledged and agreed that the
provisions of the Principal Seller' Guide and this Agreement are intended
to be given equal weight in their application to any Loan purchase
transaction entered into pursuant to this Agreement. Notwithstanding the
foregoing, in the event of an irreconcilable conflict between the
provisions of this Agreement and the Principal Seller' Guide, the
provisions of this Agreement shall be deemed controlling, provided,
however, that all reasonable effort will be made to apply and interpret
the provisions of such documents in such manner as to avoid conflict
between the same.
5. COMMITMENT AND PRICING AT ANY TIME DURING THE TERM OF THIS AGREEMENT, THE
PARTIES MAY ENTER INTO AN ORAL COMMITMENT FOR THE SALE AND PURCHASE OF
SPECIFICALLY IDENTIFIED LOANS. As part of such Commitment, the parties
will agree to a Purchase Price and certain other material terms
applicable to the Loan(s) to be sold thereunder. The Purchase Price shall
apply only to Loans bearing the specified rate of interest and complying
with the other terms as set forth in the Commitment and this Agreement.
The Commitment is binding between Seller and Principal Residential and,
provided that such Loan(s) are in fact closed (as between the Seller as
lender and the respective borrowers), shall constitute and require a
mandatory delivery by Seller to Principal Residential of the specific
Loans covered thereby.
6. CONFIRMATION OF COMMITMENT. On or prior to the first Monday (if said
Monday is a holiday, then the first business day thereafter) following
the date on which the parties make an oral Commitment for the sale and
purchase of said Loan or Loans, Principal Residential shall send Seller a
written confirmation setting forth the material terms of the oral
Commitment and incorporating this Agreement by reference. The
confirmation shall conform substantially to the confirmation form
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Exhibit 10.93
examples included as a part of the Principal Seller' Guide. Should the
written confirmation sent by Principal Residential contain any terms
which Seller believes are in error, based upon the oral Commitment
pertaining thereto, Seller shall immediately (but in no event later than
two days after its receipt of such written confirmation) contact
Principal Residential relative thereto. Any agreed upon correction shall
be set forth in a corrected confirmation from Principal Residential which
shall set forth the material terms, as corrected, of the oral Commitment
and shall supersede the initial confirmation as to such corrected terms.
Should Seller and Principal Residential fail to agree as to any alleged
discrepancies in the initial confirmation as raised by Seller, Principal
Residential may, at its option, treat the Commitment as having been
breached by Seller and shall be under no option to proceed with the
purchase of such Loan(s). The failure of Seller to advise Principal
Residential of any alleged errors or discrepancies in the initial
confirmation within two days following its receipt thereof (or within one
day of its receipt of any corrected confirmation) shall constitute
Sellers acceptance of all of the terms set forth in such confirmation and
its agreement to sell the specifically identified Loans on the terms set
forth therein.
7. ESCROW ACCOUNT. Unless otherwise agreed to by Principal Residential, tax
and insurance escrows will be required for all Loans purchased pursuant
to this Agreement. For any Loan as to which the escrow requirement is
waived by Principal Residential, the Purchase Price shall be subject to
downward adjustment as determined in the sole discretion of Principal
Residential.
8. PROPERTY TAX PAYMENTS. For any Loan which is subject to this Agreement,
it shall be Seller's responsibility to see that property taxes which are
due and payable prior to the Delivery Date are paid in full. Seller shall
prepare and forward to Principal Residential a list showing the next tax
payment due dates for each Loan. Tax receipts are to be promptly
forwarded by Seller upon receipt to Principal Residential. All new bills
received shall be promptly forwarded by Seller to Principal Residential
to permit the payment thereof prior to the applicable penalty date.
9. HAZARD INSURANCE PAYMENTS. It shall be Seller's responsibility to see
that all hazard insurance premiums for the Loans which are due and
payable prior to the Delivery Date are paid in full. Any future bills
will be promptly forwarded to Principal Residential.
10. NO "CREDIT LIFE". The monthly escrow deposit for any Loan purchased
hereunder will not include any amounts collected to pay premiums for
disability, accident and health, credit life, or other term insurance for
the borrowers. Seller shall see that any such insurance is either
terminated or that arrangements are made so that the borrowers pay
directly to the insurer any such insurance premiums becoming due and
payable on or after the Delivery Date, thereby insuring that Principal
Residential shall have no responsibility for any such insurance or
premium payments. Seller agrees to indemnify and hold Principal
Residential
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Exhibit 10.93
and any subsequent assignee harmless from and against any loss or damage,
including attorney fees and costs, resulting from any action alleging
coverage under any such insurance.
11. LOCATION OF MORTGAGED PROPERTIES/SPECIAL CONDITIONS. For a Loan to be
eligible for purchase under this Agreement, the related Mortgaged
Property for such Loan must be located in the areas as specified on
Exhibit A (attached hereto). Any special conditions or requirements
relating to the location of the Mortgaged Property or otherwise
applicable to the Loans offered by Seller pursuant to this Agreement
shall be set forth on the aforementioned Exhibit A and are hereby agreed
to by Seller and Principal Residential.
12. DELIVERY DATE. The Delivery Date for any particular Loan shall be the
date on which the applicable Schedule 11 loan documents as specified in
the Principal Seller' Guide are received by Principal Residential prior
to funding. All normal activity (receipts and disbursements) for the Loan
will continue up to the Delivery Date. As of the Delivery Date the
accounting records for the Loans to be purchased will be "frozen" with no
further activity to be posted to the accounts as of the Delivery Date.
13. SERVICING. All Loans covered by this Agreement will be sold with
servicing released to Principal Residential.
14. LITIGATION AND BANKRUPTCY STATUS OF LOANS. No Loan will be the subject of
any foreclosure action or be directly or indirectly involved in pending
or threatened litigation (including but not limited to arbitration or
governmental investigations, claims or proceedings of any nature) or be
subject to a claim for attorneys' fees or other expenses in connection
therewith, nor shall any Loan or the borrowers thereunder be directly or
indirectly involved in bankruptcy or receivership proceedings, Whether
voluntary or involuntary and whether or not commenced or threatened.
15. DELINQUENT PAYMENTS. As of the Delivery Date, no Loan will have past due
payments of any kind or nature. Seller may not advance funds to bring any
Loan current.
16. COLLECTING AND FORWARDING PAYMENTS. Seller shall promptly forward to
Principal Residential any Monthly Payments for any Loan purchased
hereunder (and/or correspondence) received by Seller on or after the
Delivery Date.
17. DOCUMENTATION AND DOCUMENTATION DELIVERY ASSURANCE.
17.1. Seller will provide all Loan documents as required under the
Principal Seller' Guide for each Loan to be purchased by Principal
Residential. All such documents shall be subject to approval by
Principal Residential. Such documents will be identified on
schedules attached to and made a part of the Principal Seller'
Guide. The general categories of such Loan documents are as
follows: (a) Schedule I - documents required for
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Exhibit 10.93
underwriting; (b) Schedule 11 - documents needed prior to funding;
and (c) Schedule III - documents needed within a specified period
after the funding date. It is understood and agreed that time is
of the essence under this Agreement.
17.2. Seller will be responsible for all shipping charges and/or fees
incurred in delivering such documents to Principal Residential.
Seller hereby agrees to work diligently to timely deliver to
Principal Residential all of the Loan documents specified on
Schedule 1, Schedule 11 and Schedule III within the applicable
time period specified in the Principal Seller Guide, along with
any additional information and/or documentation which Principal
Residential's examination of those items indicates may be
reasonably necessary. If all of the applicable Schedule I and II
documentation for any Loan is not received by Principal
Residential within the time period specified in the Principal
Seller Guide for delivery of such documents, then (a) Principal
Residential shall not be obligated to purchase said Loan(s) and
(b) Principal Residential, in its sole discretion, may notify
Seller of its election not to purchase any other Loans under this
Agreement (whether or not there are outstanding Commitments) and
upon giving such notice, Principal Residential shall have no
further obligations hereunder. If all of the applicable Schedule
III documentation for any Loan(s) is not received by Principal
Residential Within the time period specified in the Principal
Seller' Guide for delivery of such documents, Principal
Residential, in its sole discretion, may: (1) require Seller to
repurchase such Loan at the price specified in paragraph 19; (2)
give notice to Seller of its election not to purchase any other
Loan(s) under this Agreement (whether or not there are any
outstanding Commitments) and after such notice, Principal
Residential shall be relieved of all further obligations
hereunder; and/or (3) charge Seller and Seller shall pay Principal
Residential $50.00 per month for each Loan with respect to which
Seller fails to timely deliver such documentation. Such charge, at
the sole discretion of' Principal Residential, shall be deducted
from future fundings or collected directly from Seller, in which
case Seller shall be obligated to pay Principal Residential such
amount within five business days after receiving a request for
direct payment.
18. CORPORATE APPROVAL. Seller and Principal Residential will each provide
certificates of incumbency indicating that the persons executing this
Agreement are authorized to act on behalf of Seller and Principal
Residential, respectively. Seller will provide documentation evidencing
the authority of the person(s) endorsing the Mortgage Notes and/or
signing the Assignments of Mortgage with respect to any Loans purchased
by Principal Residential pursuant to this Agreement.
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Exhibit 10.93
19. REPURCHASE BY SELLER.
19.1. With respect to any Loan purchased by Principal Residential
hereunder, if: (a) any document provided in connection therewith
is found by Principal Residential to be inaccurate or defective in
any material respect, (b) Seller fails to timely deliver any
documents required by this Agreement, (c) any representation,
Warranty or certification made by Seller hereunder shall be
inaccurate in any material respect, (d) such Loan shall be found
to have not met the requirements of this Agreement or (e) with
respect to Government Loans only, a borrower shall fail to pay
each of the first three monthly payments within the month each
such payment is due and a decision to foreclose such Loan is made
by Principal Residential within one year of the due date of the
first principal and interest payment on such Loan as a result of
any default by borrower, then Principal Residential may give
Seller notice setting forth the nature of the defect or
inaccuracy, and Seller shall promptly notify Principal Residential
in writing of its election to either (i) cure such defect or
inaccuracy within 30 days of Sellers receipt of such notice from
Principal Residential, if curable, or (ii) repurchase any affected
Loan, whether or not it has been included in a FNMA or FHLMC pool
or, in the case of Government Loans, a GNMA pool, within 15 days
of Sellers receipt of such notice from Principal Residential, with
servicing released to Seller. If Seller shall fail to cure any
such defect or inaccuracy to the satisfaction of Principal
Residential within such 30 day period, then Seller shall
repurchase the related Loan within 15 days thereafter, with
servicing released to Seller. The repurchase price for any such
Loan shall be an amount equal to the greater of PAR or the
Purchase Price paid by Principal Residential for the Loan,
together with any funds paid for release of servicing rights.
Seller shall not have the right to advance funds for or on behalf
of a borrower for any delinquent payment or to otherwise make
funds available to any borrower to avoid or cure a default by the
borrower with respect to any Loan covered by this Agreement. The
repurchase price shall be reduced by the amount of the individual
escrow balances as of the repurchase date for any Loans being
repurchased by Seller, which escrow balances will not be
transferred to Seller but instead will be retained by Principal
Residential.
19.2. In addition to the repurchase price specified in paragraph 19.1
above, Seller shall pay Principal Residential: (a) accrued
interest on every Loan repurchased in an amount equal to the
amount of interest which Principal Residential is required to
remit to the investor from which Principal Residential must
repurchase said Loan or, in the event that said Loan has not been
sold to an investor at the time of repurchase by Seller, accrued
interest through the date of said repurchase, plus (b) any
unreimbursed servicing advances made by Principal Residential on
such Loan along with any other expenses incurred by Principal
Residential in connection with said repurchase.
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Exhibit 10.93
19.3. Payment of all recording fees and costs related to the repurchase
of a Loan shall be the responsibility of Seller.
19.4. In the event that Seller sells Principal Residential a Loan for
which the Mortgage Property is community property, with such
Mortgage being a lien on only an undivided interest on said
community property, Seller, at Principal Residential's option,
shall be required to repurchase said Loan.
20. TAX PAYING SERVICE. Seller shall be responsible for payment on the
Funding Date of the cost of the tax paying service for the Loan(s). In
accordance with the settlement procedure set forth in paragraph 22
hereof, Principal Residential will deduct the fee for such taxpaying
service from the Purchase Price for the Loans which it is purchasing,
21. COMMISSIONS AND FEES. Principal Residential will not be liable for any
commissions or fees in connection with the purchase of any Loans
hereunder. Seller will be responsible for recording the Assignments of
Mortgage and for payment of all recording fees in connection therewith.
22. FUNDING. The net amount of the settlement on the Funding Date for a Loan
purchased hereunder shall be a sum computed as follows:
a. The product of the Purchase Price times the Unpaid
Principal Balance of the Loan as of the Funding Date;
b. Plus accrued interest on the Loan, calculated as follows:
the Unpaid Principal Balance as of the Funding Date times
the Mortgage Interest Rate, for the actual number of days
from the last paid monthly installment date (or from the
date of closing of such Loan if no monthly installments
have yet come due) to the funding date, using a 365-day
basis;
c. Plus any servicing released premium that may be due Seller
for the Loan as determined pursuant to the Servicing
Released Premium Schedule issued by Principal Residential
from time to time;
d. Reduced by the total amount of the individual escrow
balances held by Seller with respect to such Loan as of the
Funding Date; and
e. Reduced by the fee for the tax paying service and any other
fees designated by Principal Residential to be paid by
Seller pursuant to this Agreement.
Upon satisfaction of all conditions and requirements for the
purchase of a Loan hereunder, the net settlement amount, as
calculated above, shall be paid by Principal Residential to Xxxxxx
by wire transfer of immediately available funds to such bank
account as Seller shall from time to time direct.
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Exhibit 10.93
23. REMEDIES-, ATTORNEYS' FEES. Should either party breach this Agreement,
the other party shall be entitled to pursue all remedies, legal and
equitable, including seeking money damages attributable to the breach,
and if available, specific performance. Such remedies are in addition to,
and not in limitation of, the rights and remedies granted under this
Agreement. The prevailing party shall be entitled to recover reasonable
attorneys fees and costs from the other party.
24. REPRESENTATIONS AND WARRANTIES OF PRINCIPAL RESIDENTIAL. Principal
Residential represents and warrants to Seller that as of the date hereof:
24.1. Principal Residential is an Iowa corporation, duly organized,
validly existing and in good standing under the laws of the state
of Iowa.
24.2. Principal Residential has the power and authority to carry on its
business as and where it is now conducted, and to perform its
undertakings as set forth in this Agreement.
24.3. The person(s) executing and delivering this Agreement on behalf of
Principal Residential has (have) been authorized to do so by its
Board of Directors. This Agreement is a valid and binding
obligation of Principal Residential, enforceable in accordance
with its terms, except as limited by bankruptcy, reorganization
and insolvency laws, and by other laws and equitable doctrines
affecting creditors' rights generally.
24.4. Neither the execution and delivery of this Agreement nor
compliance with this Agreement will violate any statute,
regulation, decree, order or judgment of any governmental
authority or court, or conflict with or result in a breach of any
material agreement or instrument to which Principal Residential is
a party or by which it is bound, or constitute a default under any
such agreement or instrument.
24.5. There is no suit, action, or legal, administrative, arbitration,
or other proceeding or governmental investigation pending or, to
the knowledge of Principal Residential, threatened against it
which might materially adversely affect the ability of Principal
Residential to perform its obligations under this Agreement. In
addition, Principal Residential holds all material licenses,
certificates, and permits from all governmental authorities
necessary to enable it to conduct its business.
25. REPRESENTATIONS AND WARRANTIES OF SELLER.
25.1. Seller represents and warrants to Principal Residential that as of
the date hereof:
a. Seller is a corporation, duly organized, validly existing,
and in good standing under the laws of the state of its
incorporation.
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Exhibit 10.93
b. Seller has the corporate power and authority to carry on
its business as and where it is now conducted, and to
perform its undertakings as set forth herein.
c. The person(s) executing and delivering this Agreement on
behalf of Seller has (have) been authorized to do so by its
Board of Directors. This Agreement is a valid and binding
obligation of Seller, enforceable in accordance with its
terms except as limited by bankruptcy, reorganization and
insolvency laws and by other laws and equitable doctrines
affecting creditor's rights generally.
d. Neither the execution and delivery of this Agreement nor
compliance with this Agreement will violate any statute,
regulation, decree, order or judgment of any governmental
authority or court, or conflict with or result in a breach
of any material agreement or instrument to which Seller is
a party or by which it is bound, or constitute a default
under any such agreement or instrument.
e. There is no suit, action, or legal, administrative,
arbitration, or other proceeding or governmental
investigation pending or, to the knowledge of Seller,
threatened against it which might materially adversely
affect the ability of Seller to perform its obligations
under this Agreement. In addition, Seller holds all
material licenses, certificates, and permits from all
governmental authorities necessary to enable Seller to
conduct its business. Further, that Seller does not and
will not employ any person or otherwise retain the services
of a person or entity in connection with any Loan to be
sold hereunder, who or which is under investigation by or
has been prohibited from participating in transactions or
doing business with any federal or state agency or
quasi-governmental agency or enterprise which regularly
buys or sells residential mortgage loans on the secondary
market.
25.2. Seller represents and warrants as to each Loan offered under this
Agreement that as of the Funding Date for such Loan:
a. the Mortgage and the Mortgage Note have been duly executed
by the Mortgagor and each is the legal, valid and binding
obligation of the Mortgagor, enforceable in accordance with
its terms. The Mortgage has been duly acknowledged and
recorded, is valid, and the entire amount advanced is a
first lien on the Mortgaged Property, subject only to (i)
encumbrances, easements and restrictions of record noted in
the Mortgagee Title Insurance Policy or, for Iowa loans (if
any), as noted in the title opinion of counsel, and (ii)
liens for real estate taxes not yet due and payable. The
Mortgage and the Mortgage Note are not subject to any right
of rescission, set-off, counterclaim or defense, including,
without
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Exhibit 10.93
limitation, the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been
asserted with respect thereto.
b. The full principal amount of the Loan has been advanced to
the Mortgagor, either by payment direct to Mortgagor or by
payment made on Mortgagor's request or approval; the Unpaid
Principal Balance is as stated; all costs, fees and
expenses incurred in making and closing the Loan and
recording the Mortgage have been paid; no part of the
Mortgaged Property has been released from the lien of the
Mortgage; and the terms of the Loan have in no way been
changed or modified, except as disclosed in writing to
Principal Residential.
c. With respect to each Conventional Loan, each such Loan is
eligible for inclusion in a FNMA or FHLMC pool of mortgage
backed securities. With respect to each Government Loan,
each such Loan will be fully guaranteed by the VA or
insured by HUD/FHA and eligible for inclusion in a GNMA
pool of mortgage-backed securities.
d. Seller is the sole owner of the Mortgage and has authority
to sell, transfer, and assign the same on the terms set
forth in this Agreement, and, except in connection with
interim financing which will be paid in full on the Funding
Date out of the proceeds of the sale of the Loan to
Principal Residential, there has been no assignment or
hypothecation of the Loans by Seller. The transfer to
Principal Residential is free and clear of claims or
encumbrances of any type. Seller will provide documentation
acceptable to Principal Residential evidencing the release
of any assignment or hypothecation. Seller agrees to do all
acts necessary to perfect title to each Loan sold pursuant
to this Agreement to Principal Residential.
e. As to each Mortgage, there is a Mortgagee Title Insurance
Policy acceptable to Principal Residential or, for loans on
real property located in Iowa, if any, a title opinion of
counsel acceptable to Principal Residential and based on an
abstract of title which has been continued through the
closing of the Loan and the recording of the Mortgage. In
addition, for Conventional Loans located in Iowa, the title
opinion of counsel shall be accompanied by a Certificate of
Title" issued by the Iowa Housing Finance Authority.
f. The Mortgaged Property is located in the United States.
g. Any and all requirements of federal, state or local law,
rule or regulation applicable to such Loan have been
complied with
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Exhibit 10.93
including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit
protection, equal credit opportunity, and disclosure laws,
and the Seller shall deliver to Principal Residential such
evidence of compliance with all such requirements as
Principal Residential may require from time to time. The
sale of such Loan to Principal Residential will not cause
the violation of any such laws. Without limiting the
foregoing, Seller acknowledges and agrees that it is
responsible for delivering to borrower all applicable Equal
Credit Opportunity Act notices required in connection with
the Loan.
h. The Loans do not have any disability, accident and health,
credit life, or other term insurance premium to be paid
from their respective escrow account.
i. With regard to any Conventional Loan on which a Private
Mortgage Insurance Policy is required by FNMA, (i) the
Private Mortgage Insurer has issued its Mortgage Insurance
Certificate, (ii) any and all payments due on the mortgage
insurance premium have been paid to the Private Mortgage
Insurer, (iii) that nothing has been done or omitted, the
effect of which act or omission would be to invalidate the
contract of insurance with the Private Mortgage Insurer and
(iv) all Loans comply with the rules and regulation of the
Private Mortgage Insurer. The Mortgagor is obligated to
maintain such insurance by paying all premiums and charges
in connection therewith.
j. With regard to any HUD/FHA insured Government Loan, that
the Federal Housing Commissioner has issued or will issue a
Mortgage Insurance Certificate, that any payment due on the
mortgage insurance premium has been paid to the Federal
Housing Commissioner, and that nothing has been done or
omitted, the effect of which act or omission would be to
invalidate the contract of insurance with HUD/FHA and that
all HUD/FHA Loans comply with the rules and regulations and
other requirements of HUD/FHA, including, without
limitation, the form of the loan documents used for the
note and mortgage.
k. With regard to any VA guaranteed Government Loan, that the
VA has issued or will issue its Loan Guaranty Certificate
of full guarantee, and that nothing has been done or
omitted, the effect of which act or omissions would be to
invalidate the guaranty by the VA, and that all fees due
the VA, as may be applicable, have been paid to the VA, and
that all such VA Loans comply with the rules and
regulations and other requirements of the VA.
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Exhibit 10.93
l. Pursuant to the terms of the Mortgage, all building or
other improvements upon the Mortgaged Property are insured
by an insurer acceptable to Principal Residential against
loss by fire, hazards or extended coverage and such other
hazards as are customary in the area where the Mortgaged
Property is located in an amount which is at least equal to
the lesser of 100% of the replacement value of the
improvements or the Unpaid Principal Balance of the Loan.
Said fire, hazard or extended coverage policy must be
issued by an insurer having a Best's Insurance Guide rating
of B-VI or better. If, upon origination of the Loan, the
Mortgaged Property was in an area identified by the Federal
Emergency Management Agency as having special flood
hazards, a flood insurance policy meeting the requirements
of the current guidelines of the Federal Flood Insurance
Administration is in effect in an amount representing
coverage which is at least equal to the lesser of (i) the
minimum amount requirement, under the terms of coverage, to
compensate for any damage or loss on a replacement costs
basis (or for the Unpaid Principal Balance if replacement
cost coverage is not available for the type of building
insured); or (ii) the maximum insurance available under the
applicable National Flood Insurance Administration program.
Seller has completed and delivered to Principal Residential
a Flood Insurance Certification and MSA and Census Tract
Number form (in the format specified by the Principal
Sellers' Guide) for each Loan sold hereunder.
m. The form of the Mortgage Note and Mortgage (and any riders
or supplements thereto) comply with all applicable state
laws and do not omit any of the provisions appropriate to
allow for the timely and practical realization of rights in
the security under applicable state law. In the case of a
Loan with a fixed interest rate, and except to the extent
limited by applicable law, the Mortgage contains an
enforceable provision for the acceleration of the payment
of the Unpaid Principal Balance of the Loan in the event
that the Mortgaged Property is sold or transferred without
the prior written consent of the Mortgagee thereunder.
n. Seller is not aware of anything that would cause the value
of the Mortgaged Property for any Loan to be significantly
diminished; for example, without limitation, information
about toxic substances or environmental hazards affecting
the property. Without limiting the foregoing, Seller
further represents that with respect to the Mortgaged
Property for any Loan sold to Principal Residential
hereunder, there are no toxic or hazardous substances
stored or located on such Mortgaged Property or, to
Seller's best knowledge, on any property adjacent to the
Mortgaged Property, nor has any toxic or hazardous'
substance been discharged from the Mortgaged Property or
penetrated any surface or subsurface rivers or streams
-16-
Exhibit 10.93
crossing or adjoining the Mortgaged Property or the water
table or aquifer underlying the Mortgaged Property.
o. Seller has not failed to disclose in writing to Principal
Residential, prior to Principal Residential agreeing to
purchase any such Loan, any material information known to
Seller which would, if disclosed to Principal Residential,
significantly diminish the value of the Loan to Principal
Residential. Seller has no knowledge of any circumstances
or conditions with respect to the Mortgage, the Mortgaged
Property, the Mortgagor or the Mortgagor's credit standing
that can reasonably be expected to cause private
institutional investors to regard the Mortgage as an
unacceptable investment, cause the Loan to become
delinquent, or adversely affect the value or marketability
of the Mortgage.
p. With respect to each Loan, Seller has obtained an appraisal
of the Mortgaged Property made by a qualified and properly
licensed/certified appraiser, who has no interest, direct
or indirect, in the real estate or in any loan thereon, and
who does not receive compensation which is affected by the
approval or failure to approve the Loan.
q. There are no pending proceedings for the total or partial
condemnation of the Mortgaged Property, and such property
is undamaged by waste, fire, windstorm, earthquake, flood
or other casualty.
r. Seller either: (1) is not a federally-insured institution
or an affiliate or subsidiary of a federally-insured
institution, or (2) is a federally-insured institution or
an affiliate or subsidiary of a federally-insured
institution and, if it is, then (a) the sale to Purchaser
of the Mortgage Loans pursuant to this Agreement has been
either (i) specifically approved by the Board of Directors
of the Seller and such approval is reflected in the minutes
of the meeting of such Board of Directors or (ii) approved
by an officer of the Seller who was duly authorized by the
Board of Directors to enter into such types of transactions
and such authorization is reflected in the minutes of the
Board of Directors' meetings, and (b) this Agreement
constitutes the "Written agreement" governing the Seller's
sale to Purchaser of the Mortgage Loans, and Seller shall
continuously maintain all components of such "written
agreement" as an official record of the Seller.
s. The Loan was originated by a savings and loan association,
a savings bank, a commercial bank or similar banking
institution which is supervised and examined by a Federal
or State banking authority or by a mortgagee approved by
the Secretary of Housing
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Exhibit 10.93
and Urban Development pursuant to Sections 203 and 211 of
the National Housing Act.
26. INDEMNIFICATION. In addition to any other remedies available to Principal
Residential hereunder, Seller agrees to indemnify and hold Principal
Residential and any subsequent assignee harmless from and against any and
all claims, losses, damages, fines, penalties, forfeitures, legal fees,
judgments, and any other costs, fees and expenses resulting from or
relating to (a) a breach by Seller of any representation, warranty or
obligation contained in or made pursuant to this Agreement, or any
agreement between Seller and Principal Residential relating to this
Agreement, or any failure to disclose any matter that makes such
representation or warranty misleading or inaccurate, or any inaccuracy in
information furnished by Seller, (b) a breach of any representation,
warranty or obligation made by Principal Residential or any indemnitee in
reliance upon any such representation, warranty or obligation, failure to
disclose, or inaccuracy in information furnished by Seller, (c) the
purchase of a Loan hereunder that does not meet the requirements of this
Agreement, (d) any breach by Seller of this Agreement, (e) any material
defect existing as of the Funding Date (including defects subsequently
discovered) in any Loan relating to the origination of such Loan which
causes imposition of any liability, cost or expense to Principal
Residential due to any act or omission of Seller or (f) any other action
taken by Seller in connection with the Loan or communication by Seller
with the borrower thereunder (unless such action or communication was
consented to in writing by Principal Residential) subsequent to the
purchase of such Loan by Principal Residential.
27. TERM. This Agreement shall continue in effect until terminated as herein
provided.
28. TERMINATION. This Agreement may be terminated as provided below.
a. This Agreement may be terminated by Principal Residential
for any of the following reasons:
(i) If Seller shall become insolvent or make an
assignment for the benefit of creditors or apply for
or consent to the appointment of a receiver, trustee
or liquidator for all or a substantial part of its
assets or if insolvency, reorganization or
liquidation or other proceedings for relief under
any bankruptcy law or any law for the relief of
debtors shall be instituted by or against Seller;
(ii) If a representation or warranty made by Seller shall
be inaccurate in any material respect;
(iii) In the event Seller is merged with or substantially
all of its assets are acquired by another entity; or
-18-
Exhibit 10.93
(iv) Upon the breach by Seller of any material provision
of this Agreement.
Termination of this Agreement pursuant to this paragraph
28.a shall be effective immediately upon notice of
termination being given by Principal Residential.
b. This Agreement may be terminated by Seller for any of the
following reasons:
(i) If Principal Residential shall become insolvent or
make an assignment for the benefit of creditors or
apply for or consent to the appointment of a
receiver, trustee or liquidator for all or a
substantial part of its assets or if insolvency,
reorganization or liquidation or other proceedings
for relief under any bankruptcy law or any law for
the relief of debtors shall be instituted by or
against Principal Residential;
(ii) If a representation or warranty made by Principal
Residential shall be inaccurate in any material
respect;
(iii) Upon the breach by Principal Residential of any
material provision of this Agreement.
Termination of this Agreement pursuant to this paragraph
28.b shall be effective immediately upon notice of
termination given by Seller.
c. In any event, and without cause, termination of this
Agreement shall occur on written notice given by either
party to the other party thirty days prior to the
termination date specified by the notice.
Upon a termination of this Agreement pursuant to either paragraph
28.a. or 28.b., the parties shall have no further obligations to
sell or purchase Loans pursuant to this Agreement including, but
not limited to, Loans which are the subject of Commitments entered
into prior to such notice of termination. Upon the termination of
this Agreement pursuant to paragraph 28.c,, the parties shall have
no further obligations to sell or purchase additional Loans
pursuant to the Agreement, provided, however, that unless
prohibited by applicable state or federal law or regulations, the
parties shall complete any sale/purchase transaction for which a
Commitment has been made prior to the time of termination
(provided further, however, that notwithstanding anything herein
to the contrary, Principal Residential shall not be required to
complete a Loan purchase transaction if the Seller has failed to
timely deliver the applicable Schedule 1, 11 and III Loan
documents within the time frames required under this Agreement).
The representations and warranties of Seller, the repurchase
obligations and indemnification and hold harmless obligations of
Seller, and all other unfulfilled obligations of Seller as to any
Loan sold
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Exhibit 10.93
under this Agreement, shall apply with respect to each Loan,
whether or not the Loan is hereafter sold by Principal
Residential, and shall survive any termination of this Agreement,
any purchase or transfer of any interest in any or all Loans, the
liquidation of such Loans, the termination of Principal
Residential's servicing rights with respect to such Loans, and the
termination or expiration of any agreement between Principal
Residential and a third party investor.
29. FINANCIALS; LICENSES. Seller shall annually furnish to Principal
Residential, within 90 days after the end of Seller's fiscal year,
audited financial statements including, but not limited to, a balance
sheet and statement of profit and loss. Such financial statements shall
be prepared by an independent certified public accountant in accordance
with generally accepted accounting principles consistently applied. In
addition, within 90 days after the end of Seller's fiscal year, Seller
shall annually furnish to Principal Residential copies of all current
and/or renewed licenses, certificates and permits necessary to permit
Seller to carry on its business as it is now being conducted and as it
may then be conducted.
30. AUDITS. The Seller shall permit Principal Residential to perform a
quality control review on any Loan Principal Residential has committed to
purchase. In addition, at Principal Residential's option, Seller shall
permit Principal Residential to examine said Loan files during normal
business hours at Seller's principal place of business or such other
location where the files are normally 'Maintained, regardless if the Loan
is in the application, processing or closing phase.
31. MISCELLANEOUS.
a. The captions assigned to provisions of this Agreement are
for convenience only and shall be disregarded in construing
this Agreement.
b. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity of any other
provision, and all other provisions shall remain in full
force and effect and this Agreement shall be construed as
if any such invalid or unenforceable provision had never
been contained herein.
c. Any forbearance by a party to this Agreement in exercising
any right or remedy under this Agreement or otherwise
afforded by applicable law shall not be a waiver of or
preclude the exercise of that or any other right or remedy.
d. No party shall be deemed the drafter of this Agreement, and
no provision of this Agreement shall be construed against
any party to this Agreement on the grounds that such party
is the drafter.
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Exhibit 10.93
e. Seller shall not assign its rights or delegate its
obligations under this Agreement without the prior written
consent of Principal Residential.
f. This Agreement is not intended to and shall not create a
partnership or joint venture between the parties, and no
party to this Agreement shall have the power or authority
to bind the other party except as explicitly provided in
this Agreement.
g. The parties hereto understand that telephone conversations
involving transactions based on this Agreement may be
recorded.
h. Any notice required or desired to be given hereunder shall
be in writing and deemed given Men personally delivered or
deposited in the United States mail, postage prepaid, sent
certified or registered, or sent by courier service such as
Federal Express or Airborne, addressed as follows:
If to Principal Residential to: Principal Residential Mortgages, Inc
000 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000-0000
Attn: Correspondent Lending Department
If to Seller to:
---------------------------------------
---------------------------------------
---------------------------------------
Attn:
----------------------------------
or to such other address or person as hereafter designated in
writing by the applicable party in the manner provided in this
paragraph for the giving of notices.
i. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Iowa (without
giving effect to principles of conflicts of laws) and shall
be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
j. This Agreement (including, but not limited to, the
Principal Sellers' Guide) and all exhibits and schedules
hereto, constitute the entire Agreement between the parties
hereto pertaining to the subject matters hereof and
supersede all negotiations, preliminary agreements and all
prior or contemporaneous discussions and understandings of
the parties hereto in connection with the subject matters
hereof. All exhibits and schedules are incorporated into
the Agreement as if set forth in their entirety and
constitute a part hereof.
-21-
Exhibit 10.93
k. No amendment, change, or modification of any of the terms,
provisions or conditions of this Agreement shall be
effective unless made in writing and signed by the parties
or by their duly authorized agents provided, however, that
Principal Residential expressly reserves the right to amend
or otherwise change the Principal Sellers' Guide (at any
time and from time to time) as in its sole discretion it
deems necessary or advisable, and that any such amendments
or changes shall not require the written consent or
concurrence of Seller and will be in full force and effect
immediately upon issuance thereof by Principal Residential.
Waiver of any provision of this Agreement shall not be
deemed a waiver of future compliance therewith and such
provisions shall remain in full force and effect.
l. Seller shall, without further consideration, from time to
time following the sale of a Loan to Principal Residential
deliver to Principal Residential all correspondence, checks
(properly endorsed), payments and other information or
documents received by Seller with respect to any such Loan,
and at Principal Residential's request shall from time to
time after the sale of a Loan, without further
consideration, execute and deliver such documents,
certificates and instruments of sale, conveyance and
assignment and take such other action as Principal
Residential may reasonably request to perfect and/or defend
Principal Residential's title and interest in such Loan.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PRINCIPAL RESIDENTIAL MORTGAGE, INC.
(SEAL) By: /s/ XXXXXX X. XXXX
----------------------------------------
Xxxxxx X. Xxxx - VP & Sec, Corrl Lending
(SEAL) E-LOAN, INC.
If no corporate seal, By: /s/ XXXXXX X. XXXXXXX
----------------------------------------
please so specify) Xxxxxx X. Xxxxxxx
1-93; rev. 1-94;
rev. 5-94; rev. 6-94;
rev. 10-94
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