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MORTGAGE LOAN PURCHASE AND SALE AGREEMENT
Dated as of July 1, 1996
by and between
NATIONSCAPITAL MORTGAGE CORPORATION,
as the Seller
and
FIRST ALLIANCE MORTGAGE COMPANY,
as the Purchaser
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TABLE OF CONTENTS
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Page
Section 1. Definitions.................................................1
Section 2. Purchase and Sale of Mortgage Loans.........................4
Section 3. Interest Calculations.......................................5
Section 4. Reserved....................................................5
Section 5. Representations, Warranties and Covenants Regarding
the Seller and the Purchaser................................5
Section 6. Representations and Warranties of the Seller Regarding
the Mortgage Loans..........................................8
Section 7. Remedies...................................................14
Section 8. Term of Agreement..........................................14
Section 9. Authorized Representatives.................................15
Section 10. Notices....................................................15
Section 11. Governing Law..............................................15
Section 12. Assignment.................................................15
Section 13. Counterparts...............................................15
Section 14. Amendment..................................................16
Section 15. Severability of Provisions.................................16
Section 16. No Agency: No Partnership or Joint Venture.................16
Section 17. Further Assurances.........................................16
Section 18. Maintenance of Records.....................................16
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THIS MORTGAGE LOAN PURCHASE AND SALE AGREEMENT, dated as of July 1,
1996, is made between FIRST ALLIANCE MORTGAGE COMPANY, a California
corporation (the "Purchaser") and NATIONSCAPITAL MORTGAGE CORPORATION, a
California corporation (the "Seller").
A. The Seller is an originator of mortgage loans which it desires,
from time to time, to sell to the Purchaser;
B. The Purchaser may, from time to time, purchase such mortgage loans
from the Seller;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the parties agree as follows:
Section 1. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article.
AGREEMENT: This Mortgage Loan Purchase and Sale Agreement as it
may be amended from time to time, including the exhibits and supplements
hereto.
CODE: The Internal Revenue Code of 1986, as amended, and any
successor statute.
COUPON RATE: The rate of interest borne by each Note.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
FIRST MORTGAGE LOAN: A Mortgage Loan which constitutes a first
priority mortgage lien with respect to any Mortgaged Property.
FNMA: The Federal National Mortgage Association, a federally-
chartered and privately-owned corporation existing under the Federal
National Mortgage Association Charter Act, as amended, or any successor
thereof.
LOAN BALANCE: With respect to each Mortgage Loan, the outstanding
principal balance thereof on the related Transfer Date.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a first, second or third lien on an estate in fee simple in real
property, in accordance with applicable law, securing a Note.
MORTGAGE FILE: The file containing those Mortgage Loan Documents
pertaining to a particular Mortgage Loan.
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MORTGAGE LOAN DOCUMENTS: With respect to each Mortgage Loan, the
following documents:
(a) The original Mortgage Note, endorsed "Pay to the order of
First Alliance Mortgage Company without recourse" and signed, by
manual signature of a person authorized to do so, in the name and
on behalf of the Seller.
(b) The original of any guaranty executed in connection with the
Mortgage Note, if any;
(c) Either: (i) the original Mortgage, with evidence of recording
thereon or, if the original has been transmitted for recording,
(ii) a copy of the Mortgage certified as a true copy by the Seller
or by the closing attorney, or by an officer of the title insurer
or agent of the title insurer which issued the related title
insurance policy or commitment therefor, until such time as the
original is returned by the public recording officer, at which
time the original Mortgage with evidence of recording thereon
shall be forwarded to Purchaser or, in those instances where the
original recorded Mortgage has been lost, (iii) a copy of the
Mortgage certified by the public recording officer;
(d) The original Assignment of Mortgage from the Seller to the
Purchaser without recourse provided that, if the related Mortgage
has not at the date of such Assignment of Mortgage been returned
from the applicable public recording office, such Assignment of
Mortgage may exclude the information to be provided by the
recording office;
(e) The original policy of title insurance or a certified copy thereof
certified by the Seller or, if such policy has not yet been
delivered by the insurer, the commitment or binder to issue same;
(f) Either: (i) originals of all intervening assignments, if any,
showing a complete chain of assignment from the originator of such
Mortgage Loan to the Seller including any recorded warehousing
assignments, with evidence of recording thereon or, if the
original intervening assignments have not yet been returned from
the recording office, (ii) a copy of the originals of such
intervening assignments together with a certificate of the Seller
or the closing attorney or an officer of the title insurer which
issued the related title insurance policy, or commitment therefor,
or its duly authorized agent certifying that the copy is a true
copy of the original of such intervening assignment which shall be
held until such time as the original is returned from the public
recording office and thereupon promptly forwarded to Purchaser or,
in those instances where the original recorded intervening
assignment has been lost, (iii) a copy of the intervening
assignment certified by the public recording office;
(g) Originals of all assumption, modification and substitution
agreements, if any; and
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(h) The original power of attorney, if any, or a copy thereof
certified by an authorized officer of the Seller, for any document
described above.
MORTGAGE LOANS: The Mortgage Loans identified in the Schedule of
Loans Delivered as from time to time are subject to this Agreement.
MORTGAGED PROPERTY: The residential real property subject to a
Mortgage which secures the Mortgage Loan.
MORTGAGOR OR BORROWER: The obligor under a Mortgage Loan.
NOTE: The original note or bond or other evidence of indebtedness
evidencing the indebtedness of the Borrower/Mortgagor under a Mortgage Loan.
PERSON: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof
PURCHASE PRICE: With respect to any Mortgage Loan, a price equal
to the product of (x) the outstanding principal balance of the Mortgage Loan
as of the related Transfer Date and (y) the Purchase Price Percentage for
such Mortgage Loans.
PURCHASE PRICE PERCENTAGE: With respect to any Mortgage Loan, the
percentage set out on the related Schedule of Mortgage Loans Delivered.
REPURCHASE PRICE: With respect to any Mortgage Loan, a price
equal to the product of (x) the then outstanding principal balance of the
Mortgage Loan and (y) the Purchase Price Percentage for such Mortgage Loans
actually paid by the Purchaser to the Seller upon the purchase thereof.
QUALIFIED MORTGAGE: The meaning set forth from time to time in
the definition thereof at Section 860G(a)(3) of the Code (or any successor
statute thereto).
SCHEDULE OF LOANS DELIVERED: The Mortgage Loans set forth on a
schedule in the form of Exhibit A hereto that the Purchaser has offered to
purchase from the Seller and including the Purchase Price Percentage
therefor.
SECOND MORTGAGE LOAN: A Mortgage Loan which constitutes a second
priority mortgage lien with respect to the related Mortgaged Property.
SENIOR LIEN: With respect to any Second Mortgage Loan, the
mortgage loan relating to the corresponding Mortgaged Property having a
first priority lien.
SERVICER: First Alliance Mortgage Company, a California
corporation, and its permitted successors and assigns.
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SERVICING RIGHTS: With respect to each Mortgage Loan, any and all
of the following: (a) all rights to service the Mortgage Loans; (b) any
payments or monies payable or received for servicing the Mortgage Loans; (c)
any late fees, assumption fees, penalties or similar payments with respect
to the Mortgage Loans; (d) all agreements or documents creating, defining or
evidencing any such Servicing Rights and all rights of the Seller
thereunder, including, but not limited to any clean-up calls and termination
options; (e) escrow payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected with respect thereto; (f)
all accounts and other rights to payment related to any of the property
described in this paragraph; (g) possession and use of any and all servicing
files pertaining to the Mortgage Loans or pertaining to the past, present or
prospective servicing of the Mortgage Loans; and (h) all rights, powers and
privileges incident to any of the foregoing.
TRANSFER DATE: The date of the funding or payment of Purchase
Price by the Purchaser for Mortgage Loans purchased pursuant to this
Agreement. Each settlement shall be held at the offices of the Purchaser,
00000 Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000.
UNDERWRITING GUIDELINES/PURCHASING GUIDELINES: Exhibit "B"
attached hereto and made a part hereof as may from time to time be amended
by the Purchaser.
Section 2. PURCHASE AND SALE OF MORTGAGE LOANS.
(a) On or before the business day immediately preceding each Transfer
Date, the Seller shall deliver to the Purchaser or to a custodian designated
by the Purchaser the following for each Mortgage Loan purchased as the
Purchaser may direct:
(i) Those Mortgage Loans, including the Servicing Rights thereto,
described by the Purchaser on each Schedule of Loans Delivered which
are purchased by the Purchaser pursuant to this Agreement;
(ii) The agreed upon priority liens and/or mortgages on Mortgaged
Property;
(iii) The Note(s) and the Mortgage(s) endorsed by an authorized
officer of the Seller to the Purchaser together with an individual
assignment to the Purchaser (certified copy of the assignment submitted
for recording) and originals of all intervening assignments, if any, of
the Seller's beneficial interest in the Mortgage, showing a complete
chain of title from origination to the Seller, including warehousing
assignment, if any, with evidence of recording thereon.
(iv) Any and all documents, instruments, collateral agreements,
and assignments and endorsements for all documents, instruments and
collateral agreements, referred to in the Notes and/or Mortgages or
related thereto, including, without limitation, insurance policies
(private mortgage insurance, if applicable; flood insurance, if
applicable; hazard insurance; title insurance; and other applicable
insurance policies) covering the Mortgaged Property or relating to the
Notes and all files, books, papers, ledger cards, reports and records
including, without limitation, loan applications, borrower financial
statements, separate assignments of rents, if any, credit reports and
appraisals, relating to the Mortgage Loans (the "Related Assets"). In
all cases, the Related Assets shall be the original documents.
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(v) The list of Mortgage Loan Documents, including all writings
evidencing the Mortgage Loan(s) purchased by the Purchaser. In all
cases, these documents shall be the original documents.
(vi) In the event that the Seller cannot deliver to the Purchaser
a duly recorded assignment of Mortgage or any other document required
to be recorded under this Agreement on the Transfer Date solely because
of a delay caused by the public recording office, when such document(s)
has/have been delivered for recordation the Seller shall deliver to the
Purchaser a certified copy of each such document(s) with a statement
thereon signed by an officer of the Seller or an officer of a title
insurer acceptable to the Purchaser certifying each to be a true and
correct copy of document(s) delivered to the appropriate public
recording official for recordation. The Seller shall deliver to the
Purchaser such recorded document(s) with evidence of recording
indicated thereon no later than 15 days after the Seller receives such
document, but in any event, no later than 90 days from the Transfer
Date.
(vii) A full copy file of the original Mortgage Loan Documents.
(b) On each Transfer Date hereunder, the Seller shall sell, assign,
transfer, convey and deliver to the Purchaser, or to a custodian designated
by the Purchaser all of its rights, title and interest in and to the
Mortgage Loans, assets and documents as more fully enumerated and set forth
in Section 2(a)(i) through (vii) inclusive, which is incorporated herein by
reference.
(c) The Purchase Price for the Mortgage Loans paid on the Transfer
Date by wire transfer to the Seller's bank, or such title insurer's offices
and/or public escrow offices as to which the Purchaser and the Seller shall
agree.
Section 3. INTEREST CALCULATIONS. All calculations of interest
hereunder, including, without limitation, calculations of interest at the
Coupon Rate, which are made in respect of the Loan Balance of a Mortgage
Loan shall be made on the basis of a 360-day year comprised of twelve 30-day
months.
Section 4. RESERVED.
Section 5. REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING THE
SELLER AND THE PURCHASER.
(a) The Seller hereby represents and warrants to the Purchaser and its
successors and assigns that, as of each Transfer Date and as of the date of
this Agreement and at all times while this Agreement is in full force and
effect:
(i) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California, and is
in good standing as a foreign corporation in each jurisdiction in which
the nature of its business or the properties owned
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or leased by it make such qualification necessary. The Seller has all
requisite organizational power and authority to own and operate its
properties, to carry out its business as presently conducted and as
proposed to be conducted, and to enter into and discharge its
obligations under this Agreement.
(ii) The execution and delivery of this Agreement by the Seller
and its performance and compliance with the terms of this Agreement
(including any other instruments of transfer to be delivered pursuant
to this Agreement) have been duly and validly authorized by all
necessary action on the part of the Seller and will not violate the
Seller's Articles of Incorporation or Bylaws or constitute a default
(or an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in a breach of any provision of,
or result in the imposition of any lien on any assets of the Seller
pursuant to the provision of any mortgage, indenture, contract,
agreement or other instrument or undertaking to which the Seller is a
party or by which the Seller or any of Seller's assets is or are bound,
or violate any statute or any order, rule or regulation of any court,
governmental agency or body or other tribunal having jurisdiction over
the Seller or any of its properties.
(iii) This Agreement, assuming due authorization, execution and
delivery by the Purchaser, constitutes a valid, legal and binding
obligation of the Seller, enforceable against it in accordance with the
terms hereof, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general
principles of equity (whether considered in a proceeding or action in
equity or at law).
(iv) The Seller is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which might have consequences
that would materially and adversely affect the condition (financial or
other) or operations of the Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(v) Except as disclosed in writing to the Purchaser there is no
action, suit, proceeding or investigation pending or, to the best of
Seller's knowledge, threatened against the Seller which, either in any
one instance or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Seller or in any material impairment of the right or
ability of the Seller to carry on its business substantially as now
conducted or in any material liability on the part of the Seller or
which would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken in connection with
the obligations of the Seller contemplated herein or which would be
likely to impair the ability of the Seller to perform under the terms
of this Agreement or to collect on the Mortgage Loans.
(vi) Neither this Agreement nor any written statement made or
report or other document issued or delivered, or to be issued or
delivered, by the Seller pursuant to this Agreement or in connection
with the transactions contemplated hereby, contains any untrue
statement of a fact or omits to state any fact necessary to make such
certificate, statement, report or other document not misleading.
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(vii) Upon the receipt of each Mortgage Loan and other items of
the Mortgage File, including the Note and Mortgage by the Purchaser,
the Purchaser will have good, valid and marketable title to such
Mortgage Loan free and clear of any lien (other than liens which will
be simultaneously released).
(viii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or agency
(other than any such actions, approvals, etc. under any state
securities laws, real estate syndication or "Blue Sky" statutes, as to
which the Seller makes no such representation or warranty) that are
necessary or advisable in connection with the origination and sale of
the Mortgage Loans and the execution and delivery by the Seller of this
Agreement, have been duly taken, given or obtained, as the case may be,
are in full force and effect on the date hereof, are not subject to any
pending proceedings or appeals (administrative, judicial or otherwise),
either the time within which any appeal therefrom may be taken or
review thereof may be obtained has expired or no review thereof may be
obtained or appeal therefrom taken and are adequate to authorize the
consummation of the transactions contemplated by this Agreement on the
part of the Seller and the performance by the Seller of its obligations
under this Agreement.
(ix) The origination practices used by the Seller with respect to
the Mortgage Loans have been and are, in all respects, legal, proper,
prudent and customary in the mortgage loan lending business.
(x) The transactions contemplated by this Agreement are in the
ordinary course of business of the Seller.
(xi) The Seller received fair consideration and reasonably
equivalent value in exchange for the sale of the interests in the
Mortgage Loans.
(xii) The Seller did not transfer or sell any interest in any
Mortgage Loan with any intent to hinder, delay or defraud any of its
respective creditors.
(xiii) The Seller is solvent and will not be rendered insolvent
as a result of the sale of the Mortgage Loans to the Purchaser.
The representations and warranties set forth in this paragraph (a) shall
survive the sale and assignment by the Seller of the Mortgage Loans to the
Purchaser and by the Purchaser to any third party. Upon discovery of a
breach of any of the foregoing representations and warranties which
materially and adversely affects the interests of the Purchaser, the
Purchaser shall give prompt written notice to the Seller within 30 days of
its receipt of notice of breach, the Seller shall cure such breach in all
material respects.
(b) The Purchaser hereby represents and warrants to the Seller, that,
as of the date hereof:
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(i) The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California; the execution, delivery and performance of this Agreement
(including any other instruments of transfer to be delivered pursuant
to this Agreement) by the Purchaser and the consummation of the
transactions contemplated hereby have been duly and validly authorized
by all necessary corporate action and do not violate the organization
documents of the Purchaser, contravene or violate any law or regulation
applicable to the Purchaser or contravene, violate or result in any
breach of any provision of, or constitute a default under, or result in
the imposition of any lien on any assets of the Purchaser pursuant to
the provisions of any material mortgage indenture, contract, agreement
or other instrument to which the Purchaser is a party or which purports
to be binding upon the Purchaser or any of the Purchaser's assets; this
Agreement, assuming due authorization, execution and the delivery by
the Seller, evidences the valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditor's rights generally
or the application of equitable principles in any proceeding, whether
at law or in equity;
(ii) All actions, approvals, consents, waivers, exemptions,
variances, franchises, orders, permits, authorizations, rights and
licenses required to be taken, given or obtained, as the case may be,
by or from any federal, state or other governmental authority or
agency, that are necessary in connection with the execution and
delivery by the Purchaser of this Agreement, have been duly taken,
given or obtained, as the case may be, are in full force and effect on
the date hereof, are not subject to any pending proceedings or appeals
(administrative, judicial or otherwise), either the time within which
any appeal therefrom may be taken or review thereof may be obtained has
expired or no review thereof may be obtained or appeal therefrom taken
and are adequate to authorize the consummation of the transactions
contemplated by this Agreement on the part of the Purchaser and the
performance by the Purchaser of its obligations under this Agreement;
and
(iii) Except as disclosed in writing to the Purchaser, no
litigation is pending or, to the best of the Seller's knowledge,
threatened against the Seller which litigation might have consequences
that would prohibit its entering into this Agreement or that would
materially and adversely affect the condition (financial or otherwise)
or operations of the Seller or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
The representations and warranties set forth in this paragraph (b) shall
survive the sale and assignment of the Mortgage Loans to the Purchaser.
Upon discovery of a breach of any of the foregoing representations and
warranties which materially and adversely affects the interests of the
Seller, the Seller shall give prompt written notice to the Purchaser.
Within 30 days of its receipt of notice of breach, the Purchaser shall cure
such breach in all material respects.
Section 6. REPRESENTATIONS AND WARRANTIES OF THE SELLER REGARDING THE
MORTGAGE LOANS.
(a) Set forth in paragraph (b) below is a listing of representations
and warranties which will be deemed to have been made by the Seller to the
Purchaser in connection with each Mortgage Loan.
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(b) With respect to each Mortgage Loan as of the related Transfer
Date, the Seller hereby represents, warrants and covenants to the Purchaser
as follows:
(i) Such Mortgage Loan was originated by the Seller and as of the
such Transfer Date the related Mortgage is a valid lien on the related
Mortgaged Property securing the amount owed by the Mortgagor under the
related Note subject only to (i) the lien of current real property
taxes and assessments, (ii) the lien of any related first mortgage (as
to any Mortgage Loan that is not secured by a first priority lien),
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording of such
Mortgage, such exceptions appearing of record being acceptable to
mortgage lending institutions generally in the area wherein the related
Mortgaged Property is located or specifically reflected in the
appraisal or title policy obtained in connection with the origination
of the related Mortgage Loan by the Seller and (iv) other matters to
which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by
such Mortgage.
(ii) Each Mortgaged Property consists of one- to four-family
residential real property, a condominium or townhouse located in
California, Oregon, Utah and Washington, or any other state in which
the Purchaser and the Seller are duly licensed and in which they have
agreed in writing to include on this list. No Mortgaged Property
consists solely of raw land, an apartment building having more than
four units, a cooperative apartment or a manufactured or mobile home.
(iii) Immediately prior to the sale, transfer, assignment and
conveyance by the Seller to the Purchaser, the Seller had good title to
such Mortgage Loan, free of any interest of any other Person, and the
Seller has sold, transferred, assigned and conveyed all of its right,
title and interest in and to such Mortgage Loan to the Purchaser.
(iv) The Seller was properly licensed or otherwise authorized, to
the extent required by applicable law, to originate or acquire such
Mortgage Loan. Such Mortgage Loan at the time it was made complied in
all material respects with applicable state and federal laws and
regulations, including, without limitation, the federal Truth in-
Lending Act, the Real Estate Settlement Procedure Act and other
federal, state and local consumer protection, usury, equal credit
opportunity, disclosure and recording laws. The consummation of the
transactions herein contemplated, including, without limitation, the
transfer of the Mortgage Loans to the Purchaser, will not violate any
such state or federal law or regulation.
(v) With respect to each Mortgage Loan, a lender's title
insurance policy, issued in standard California Land Title Association
form or American Land Title Association form by a title insurance
company authorized to transact business in the jurisdiction in which
the subject Mortgaged Property is located, in an amount at least equal
to the original Loan Balance of such Mortgage Loan together, in the
case of a Mortgage Loan that is not a first priority lien, with the
original principal amount of the note relating to any senior liens,
insuring the Purchaser's interest under the related Mortgage Loan as
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the holder of a valid first or second lien of record on the real
property described in the related Mortgage, as the case may be, subject
only to exceptions of the character referred to in paragraph 6(b)(i)
above, was effective on the date of the origination of such Mortgage
Loan, and, as of the related Transfer Date, such policy will be valid
and thereafter such policy shall continue in full force and effect.
(vi) The information set forth on each Schedule of Loans
Delivered is true and correct in all material respects.
(vii) The Seller has not received a notice of default on any
senior loan secured by the related Mortgaged Property which has not
been cured.
(viii) Each Note and Mortgage is in substantially the form
provided to the Purchaser on the related Transfer Date.
(ix) As of its date of origination, no Mortgage Loan had a
Combined Loan-to-Value Ratio in excess of 80%.
(x) No senior loan secured by the related Mortgaged Property
provides for negative amortization of the principal balance thereof.
Each Mortgage Loan is a closed-end Mortgage Loan, all amounts due under
the related Note have been advanced and no future advances are required
to be made.
(xi) Each original Mortgage was recorded, or is in the process of
being recorded and will be recorded no later than 75 days after the
Transfer Date, and all subsequent assignments of the original Mortgage
have been recorded, or are in the process of being recorded, in the
appropriate jurisdictions wherein such recordation is necessary to
perfect the lien thereof as against creditors of the Purchaser and the
Seller or as against creditors of the Purchaser's and the Seller's
predecessors in title.
(xii) The related Note is not and has not been secured by any
collateral, pledged account or other security except the lien of the
related Mortgage. Each senior loan on a Mortgaged Property permits the
granting of a junior lien similar to the related Mortgage Loan without
consent.
(xiii) As of the related Transfer Date, there is no mechanics'
lien or claim for work, labor or material affecting the premises
subject to the related Mortgage which is or may be a lien prior to, or
equal to, the lien of such Mortgage, except those which are insured
against by the title insurance policy referred to in (v) above.
(xiv) As of the related Transfer Date, there is no delinquent tax
or delinquent assessment lien against any Mortgaged Property. As of
the related Transfer Date, there is no valid offset, defense or
counterclaim to the related Note or Mortgage.
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(xv) As of the related Transfer Date, to the best knowledge of
the Seller, the physical property subject to the related Mortgage is
free of material damage and is in good repair.
(xvi) The sale, transfer, assignment and conveyance of such
Mortgage Loan and the Mortgage Files by the Seller to the Purchaser
pursuant to this Agreement, are not subject to the bulk transfer laws
or any similar statutory provisions in effect in any applicable
jurisdiction.
(xvii) As of the related Transfer Date, such Mortgage Loan is
being serviced by the Seller or by a subservicer appointed by the
Seller (the "Sub-Servicer").
(xviii) At the related Transfer Date, the improvements upon the
related Mortgaged Property are covered by a valid and existing hazard
insurance policy with a generally acceptable carrier that provides for
fire and extended coverage.
(xix) The related Mortgage and Note are the legal, valid and
binding obligations of the Mortgagor thereof and are enforceable in
accordance with their terms, except only as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity (whether considered in a proceeding
or action in equity or at law), and all parties to such Mortgage Loan
had full legal capacity to execute all documents relating to such
Mortgage Loan and to convey the estate therein purported to be
conveyed.
(xx) The Seller has caused to be performed any and all acts
required to be performed to preserve the rights and remedies of the
Purchaser in any insurance policies applicable to such Mortgage Loan
delivered by the Seller including, without limitation, any necessary
notifications of insurers, assignments of policies or interests
therein, and establishments of co-insured, joint loss payee and
mortgagee rights.
(xxi) The terms of the related Note and Mortgage have not been
impaired, altered or modified in any respect, except by a written
instrument which has been recorded, if necessary, to protect the
interest of the Seller or the Purchaser. The substance of any such
alteration or modification is reflected on the Schedule of Loans
Delivered.
(xxii) None of the Mortgage Loans have a shared appreciation
feature or other contingent interest feature.
(xxiii) To the best knowledge of the Seller, no improvement
located on or being part of the related Mortgaged Property is in
violation of any applicable zoning law or regulation. To the best
knowledge of the Seller, all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of
the related Mortgaged Property and, with respect to the use and
occupancy of the same, including, but not limited to, certificates of
occupancy and fire underwriting certificates, have been made or
obtained from the appropriate authorities, and such Mortgaged Property
is lawfully occupied under the applicable law.
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(xxiv) With respect to each deed of trust, a trustee, duly
qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in such deed of trust,
and no fees or expenses (except in connection with a trustee's sale
after default by the related Mortgagor) are or will become payable to
the trustee under the deed of trust.
(xxv) The related Note and Mortgage contains customary and
enforceable provisions which render the rights and remedies of the
holder thereof adequate for the realization against the related
Mortgaged Property of the benefits of the security, including by
trustee's sale. There is no homestead or other exemption available to
the related Mortgagor which would materially interfere with the right
to sell the related Mortgaged Property at a trustee's sale or the right
to foreclose the related Mortgaged Property.
(xxvi) None of the Mortgage Loans were selected from among the
Seller's assets in a manner which would cause them to be adversely
selected as to credit risk from the pool of mortgage loans owned by the
Seller.
(xxvii) The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note
or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including the defense of usury, and no such right of rescission, set-
off, counterclaim or defense has been asserted with respect thereto.
(xxviii) As of the Transfer Date, no Mortgage Loan is 30 or more
days contractually delinquent.
(xxix) If any Mortgaged Property is in an area identified in the
Federal Register by the Federal Emergency Management Agency as having
special flood hazards, a flood insurance policy in a form meeting the
requirements of the current guidelines of the Federal Insurance
Administration is in effect with respect to such Mortgaged Property
with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the outstanding principal balance of the
related Mortgage Loan (together, in the case of a Mortgage Loan that is
not a first priority lien, with the outstanding principal balance of
any liens that are prior to the related Mortgage Loan lien), (B) the
minimum amount required to compensate for damage or loss on a
replacement cost basis or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973.
(xxx) The proceeds of each Mortgage Loan have been fully
disbursed, there is no obligation on the part of the Seller to make
future advances thereunder and any and all requirements as to
completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing or recording
such Mortgage Loans were paid.
(xxxi) Each Mortgage Loan contains a provision for the
acceleration of the payment of the unpaid principal balance of the
related Mortgage Loan in the event the
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related Mortgaged Property is sold without the prior consent of the
holder of the Mortgage subject to limitations under applicable law.
(xxxii) There is no proceeding pending or threatened for the
total or partial condemnation of any Mortgaged Property, nor is such a
proceeding currently occurring, and, to the best of the Seller's
knowledge, each Mortgaged Property is undamaged by waste, fire, flood,
water, earthquake or earth movement.
(xxxiii) All of the improvements which were included for the
purposes of determining the value of any Mortgaged Property lie wholly
within the boundaries and building restriction lines of such Mortgaged
Property, and no improvements on adjoining properties encroach upon
such Mortgaged Property, and are stated in the title insurance policy
and are affirmatively insured.
(xxxiv) There is no default, breach, violation or event of
acceleration existing under any Mortgage Loan or the related Note and
no event which, after the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration; and
neither the Purchaser nor the Seller has waived any default, breach,
violation or event of acceleration.
(xxxv) No instrument of release or waiver has been executed in
connection with any Mortgage Loan, and no Mortgagor has been released,
in whole or in part, from his or her obligations thereunder.
(xxxvi) As of the Transfer Date, each Mortgage is a valid and
subsisting first or second lien on the Mortgaged Property subject in
the case of any second Mortgage only to senior liens on such Mortgaged
Property and subject in all cases to the exemptions to title set forth
in the title insurance policy with respect to the related Mortgage
Loan, which exceptions are generally acceptable to banking institutions
in connection with their regular mortgage lending activities and such
other exceptions to which similar properties are commonly subject and
which do not individually, or in the aggregate, materially and
adversely affect the benefits of the security intended to be provided
by the related Mortgage.
(xxxvii) Any advances made after the date of origination of a
Mortgage Loan but prior to the Transfer Date have been consolidated
with the outstanding principal amount secured by the related Mortgage,
and the secured principal amount, as consolidated, bears a single
interest rate and a single repayment term reflected on the Schedule of
Mortgage Loans. The consolidated principal amount does not exceed the
original principal amount of the related Mortgage Loan. No Note
permits or obligates the Seller or the Sub-Servicer to make future
advances to the related Mortgagor at the option of the Mortgagor.
(xxxviii) As of the Transfer Date, the Seller has no actual
knowledge that there exist any hazardous substances, hazardous wastes
or solid wastes, as such terms are defined in the Comprehensive
Environmental Response Compensation and Liability Act, the Resource
Conservation and Recovery Act of 1976 or other federal, state or local
environmental legislation on any Mortgaged Property.
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(xxxix) All parties to the Mortgage Note and the Mortgage had
legal capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage has been duly and properly executed by such
parties.
(xl) Each Mortgage Note provides for level monthly payments
sufficient to fully amortize the principal balance of such Mortgage
Note on its maturity date or provides for level monthly payments and a
single balloon payment of unamortized principal on its maturity date
sufficient to fully amortize the principal balance of such Mortgage
Note on such date.
(xli) No Mortgaged Property consists solely of raw land, an
apartment building having more than four units, a cooperative apartment
or a manufactured or mobile home.
(xlii) There is no homestead or other exemption available to the
related Obligor which would materially interfere with the right to sell
the related Mortgaged Property at a trustee's sale or the right to
foreclose the related Mortgaged Property.
(xliii) Each Mortgage Loan conforms to the Underwriting
Guidelines/Purchasing Guidelines.
The Representations and Warranties shall survive the transfer and assignment
of the Mortgage Loans to the Purchaser. Upon discovery by the Seller or the
Purchaser of a breach of any of the Representations and Warranties, without
regard to any limitation set forth in such Representation or Warranty
concerning the knowledge of the Seller as to the facts stated therein, which
breach, in the opinion of the Purchaser, materially and adversely affects
the interests of the Purchaser in the related Mortgage Loan or Mortgage
Loans, the party discovering such breach shall give prompt written notice to
the other party, and the Seller shall be required to take the remedial
actions set out in Section 7 hereof
Section 7. REMEDIES.
(a) Upon receipt of the notice set out in the last paragraph of
Section 6 hereof, the Seller shall repurchase each affected Mortgage Loan at
a price equal to the Repurchase Price for such Mortgage Loan.
(b) Any repurchase pursuant to this Section 7 shall be accomplished by
the Seller by wire transfer of immediately available federal funds to the
account designated by the Purchaser.
Section 8. TERM OF AGREEMENT. This Agreement shall terminate upon (i)
the final payment or other liquidation of the last Mortgage Loan required
pursuant to this Agreement or (ii) the disposition of all property acquired
upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan.
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Section 9. AUTHORIZED REPRESENTATIVES. The names of the officers of
the Seller and of the Purchaser who are authorized to give and receive
notices, requests and instructions and to deliver certificates and documents
in connection with this Agreement on behalf of the Seller and of the
Purchaser ("Authorized Representatives") are set forth on Exhibit C, along
with the specimen signature of each such officer. From time to time, the
Seller and the Purchaser may, change the information previously given, but
each party shall be entitled to rely conclusively on the last exhibit until
receipt of a superseding exhibit.
Section 10. NOTICES. All demands, notices and communications relating
to this Agreement shall be in writing and shall be deemed to have been duly
given when received by the other party or parties at the address shown
below, or such other address as may hereafter be furnished to the other
party or parties by like notice. Any such demand, notice or communication
hereunder shall be deemed to have been received on the date delivered to or
received at the premises of the addressee.
If to the Seller:
Nationscapital Mortgage Corporation
0000 X. Xxxxxxx Xxxxxx #000
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
If to the Purchaser:
First Alliance Mortgage Company
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Section 11. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, without
regard to conflict of laws rules applied in the State of California.
Section 12. ASSIGNMENT. No party to this Agreement may assign its
rights or delegate its obligations under this Agreement without the express
written consent of the other parties, except as otherwise set forth in this
Agreement.
Section 13. COUNTERPARTS. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which shall
be deemed to be an original, and together shall constitute and be one and
the same instrument.
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Section 14. AMENDMENT. This Agreement may be amended from time to
time by the Seller and the Purchaser only by a written instrument executed
by such parties.
Section 15. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.
Section 16. NO AGENCY: NO PARTNERSHIP OR JOINT VENTURE. Neither the
Seller nor the Purchaser is the agent or representative of the other, and
nothing in this Agreement shall be construed to make either the Seller nor
the Purchaser liable to any third party for services performed by it or for
debts or claims accruing to it against the other party. Nothing contained
herein nor the acts of the parties hereto shall be construed to create a
partnership or joint venture between the Purchaser and the Seller.
Section 17. FURTHER ASSURANCES. The Seller and the Purchaser agree to
cooperate reasonably and in good faith with one another in the performance
of this Agreement.
Section 18. MAINTENANCE OF RECORDS. The Seller shall continuously
keep an original executed counterpart of this Agreement in its official
records.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers all as of the day and year first
above written.
FIRST ALLIANCE MORTGAGE COMPANY,
as Purchaser
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President,
Sales and Marketing
NATIONSCAPITAL MORTGAGE CORPORATION,
as Seller
By: /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
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