EXHIBIT 99.1
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[LOGO OMITTED] AIG United Guaranty SECOND MORTGAGE
BULK INSURANCE POLICY
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United Guaranty Residential Insurance Company of North Carolina
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230 X. Xxx Xxxxxx / 00000 Telephone 000-000-0000
P.O. Box 20327 Nationwide 000-000-0000
Greensboro, NC 27420 Facsimile 000-000-0000
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UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA, a stock
insurance company herein called the Company, in consideration of the premium
which has been paid as hereinafter specified and in reliance upon the
Insured's representations and statements made in the Policy Commitment Letter
and in any application for coverage for a loan under this Policy and in any
documents and writings, including any data transferred by electronic media
related thereto, agrees to pay to the Insured identified below benefits as
herein set forth upon Default by a Borrower on a Loan, subject to the terms
and conditions of this Policy.
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INSURED'S IDENTIFICATION NUMBER: 000-0000-000
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INSURED: Chase Bank USA, National Association, 000 Xxxxxxx Xxxxxxxxxx
Xxxx, Xxx 0, Xxxxx 0, Xxxxxx, XX, 00000, in its capacity as
co-trustee, for the benefit of the holders of the Revolving
Home Equity Loan Asset Backed Notes, Series 2006-E, and not
in its individual capacity (the "Co-Trustee") under an
Indenture, dated as of June 29, 2006, by and among CWHEQ
Revolving Home Equity Loan Trust, Series 2006-E, JPMorgan
Chase Bank, N.A., as Indenture Trustee, and the Co-Trustee.
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SECURITY:
CWHEQ Revolving Home Equity Loan Trust, Series 2006-E
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TOTAL INSURED AMOUNT: $715,570,425.00 BULK POLICY EFFECTIVE DATE
INITIAL PREMIUM: The initial monthly premium rate is 0.101%. GKA 6/22/2006
The initial premium is due 45 days following
the effective date of coverage.
SUBSEQUENT PREMIUM: The monthly renewal premium is 0.101%.
Renewal premiums are due by the 15th of
each month and are based on the
outstanding loan balances at the end of
the previous month. Renewal premiums may
be paid by wire or check.
ENDORSEMENTS EFFECTIVE DATES
LOAN LOSS PERCENTAGE: 100%
GKA 2092 6/22/2006
MAXIMUM CUMULATIVE LIABILITY PERCENTAGE: 8.50%
COVERAGE PERIOD: Not Applicable
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IN WITNESS WHEREOF, the Company has caused this Policy to be signed by its
duly authorized officers to become effective and binding on the Company when
executed by its duly authorized representative.
UNITED GUARANTY RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA
/s/ Signature
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President
/s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx X. Xxxx
Secretary
/s/ Signature
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Authorized Representative
ATTACH TO BULK INSURANCE POLICY TERMS AND CONDITIONS
INSURED'S COPY
2
AMENDATORY
ENDORSEMENT
UNITED GUARANTY
RESIDENTIAL INSURANCE COMPANY OF NORTH CAROLINA
000 X. Xxx Xxxxxx/00000
P.O. Box 20327 Greensboro, NC 27420-1367
336.373.0232
800.334.0296
FOR
SECOND MORTGAGE BULK INSURANCE POLICY
QUALIFIED; CANCELLATION OF POLICY BY THE INSURED
The above Second Mortgage Bulk Insurance Policy is hereby amended as of the
date stated on the face of this Policy as follows:
A. A new Section 1.36A (Qualified) is added reading as follows:
1.36A Qualified--Qualified means the Company
(a) maintains at least an A or equivalent rating by Standard &
Poor's or its successor so long as that company provides
ratings of insurance companies writing the kind of insurance
written by the Company and
(b) either
(i) maintains at least an A or equivalent rating by either
Xxxxx'x Investors Service or Fitch IBCA, Inc. their
successors so long as those companies provide ratings
of insurance companies writing the kind insurance
written by the Company or
(ii) maintains an excess of loss reinsurance agreement with
an insurer which maintains at least an A equivalent
rating by Standard & Poor's and by either Xxxxx'x
Investors Service or Fitch IBCA, Inc. their successors,
except that if the Company does not satisfy the
requirement of this Section 1.36A(b)(i it shall have
ninety (90) days to satisfy the requirement of Section
1.36A(b)(i).
B. Section 2.10 (Cancellation of Policy by the Insured) is deleted and a new
Section 2.10 (Cancellation of Policy by the Insured) i substituted reading as
follows:
2.10 Cancellation of Policy by the Insured --The Insured may terminate
this Policy upon thirty (30) written days' notiice to the Company if the
Company shall cease to be Qualified or if on any date the total
outstanding principal balances of Loans listed on the Schedule as of the
Effective Date of the Policy have been reduced to no more than ten
percent (10%) the total outstanding principal balances of all Loans
listed on the Schedule as of the Effective Date of the Policy. The
Company shall use diligent effort to remain Qualified. There shall be no
other right of cancellation of this Policy by the Insured. There shall
be no refund of premium on cancellation of this Policy pursuant to this
Section if the Insured chose pay premium on any basis other than a
single premium. If the Insured has paid a single premium for this Policy
and the Policy is cancelled pursuant to this Section, the Company shall
pay a refund in accordance with the applicable rate schedule if the rate
schedule provides for a refund.
NOTHING CONTAINED HEREIN SHALL BE HELD TO VARY, ALTER, WAIVE OR AMEND ANY OF
THE TERMS, CONDITIONS OR PROVISIONS OF THIS POLICY OR ANY ENDORSEMENTS THERETO
EXCEPT AS STATED ABOVE.
Title of Contents
1 Definitions ....................................................................................................1
1.1 Borrower ................................................................................................1
1.2 Certificate .............................................................................................1
1.3 Claim ...................................................................................................1
1.4 Claim Amount ............................................................................................1
1.5 Closed-end Equity Loan ..................................................................................1
1.6 Combined Loan-to-Value ..................................................................................1
1.7 Commitment ..............................................................................................1
1.8 Commitment Letter .......................................................................................1
1.9 Consummated .............................................................................................2
1.10 Court Expenses .........................................................................................2
1.11 Default ................................................................................................2
1.12 Due-on-Sale Clause .....................................................................................2
1.13 Effective Date .........................................................................................2
1.14 Eligible Note ..........................................................................................2
1.15 Environmental Impairment ...............................................................................3
1.16 First Deed of Trust ....................................................................................4
1.17 Indemnified Persons ....................................................................................4
1.18 Insured ................................................................................................4
1.19 Insured Loan Amount ....................................................................................4
1.20 Loan ...................................................................................................4
1.21 Loan File ..............................................................................................4
1.22 Loan File Documents ....................................................................................5
1.23 Loan Loss Percentage ...................................................................................5
1.24 Loan Transaction .......................................................................................6
1.25 Loss ...................................................................................................6
1.26 Maximum Cumulative Liability ...........................................................................6
1.27 Maximum Cumulative Liability Percentage ................................................................6
1.28 Open-end Equity Loan ...................................................................................6
1.29 Permitted Encumbrances .................................................................................6
1.30 Person .................................................................................................6
1.31 Physical Damage ........................................................................................6
1.32 Policy .................................................................................................7
1.33 Program Criteria .......................................................................................7
1.34 Property ...............................................................................................7
1.35 Property Value .........................................................................................7
1.36 Purchase Money Loan ....................................................................................7
1.37 Residential ............................................................................................7
1.38 Schedule ...............................................................................................7
1.39 Second Deed of Trust ...................................................................................8
1.40 Security ...............................................................................................8
1.41 Servicer ...............................................................................................8
1.42 Total Insured Amount ...................................................................................8
2 Coverage .......................................................................................................8
2.1 Obtaining Coverage ......................................................................................8
2.2 Representations of the Insured ..........................................................................8
2.3 Initial Premium .........................................................................................9
2.4 Cancellation of Policy for Non-Payment of Subsequent Premium ............................................9
2.5 Company's Remedies for Misrepresentation ................................................................9
2.6 Coverage Period .........................................................................................9
2.7 Cancellation of a Certificate by the Insured ...........................................................10
2.8 Cancellation of a Certificate by the Company ...........................................................10
2.9 Termination of Coverage ................................................................................10
2.10 Cancellation of Policy by the Insured .................................................................10
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2.11 Cancellation of Policy by Company .....................................................................11
2.12 Loan Modifications ....................................................................................11
2.13 Open End Provisions ...................................................................................11
2.14 Assumptions ...........................................................................................11
2.15 Change of Servicing ...................................................................................11
2.16 Loan Assignment .......................................................................................11
2.17 Premium Payments ......................................................................................12
2.18 Coordination of Other Insurance Benefits ..............................................................12
3 Exclusions From Coverage ......................................................................................12
3.1 Balloon Payment ........................................................................................12
3.2 Effective Date .........................................................................................12
3.3 Incomplete Construction ................................................................................12
3.4 Loan Transaction .......................................................................................12
3.5 Negligence and Fraud ...................................................................................13
3.6 Non-Approved Servicer ..................................................................................13
3.7 Physical Damage ........................................................................................13
3.8 Environmental Impairment ...............................................................................13
3.9 Combined Loan-to-Value .................................................................................13
3.10 Down Payment ..........................................................................................13
3.11 Second Deed of Trust ..................................................................................13
3.12 Breach of Conditions and Insured's Obligations ........................................................14
3.13 Defenses ..............................................................................................14
3.14 Failure to Conform to Program Criteria ................................................................14
3.15 Failure to Provide Loan File ..........................................................................14
3.16 Failure to Request Notice of Default ..................................................................14
3.17 Disbursement of Proceeds After Borrower Two (2) Months in Default .....................................14
3.18 Loan in Default Thirty Days ...........................................................................14
4 Conditions Precedent to Payment of Claim ......................................................................14
4.1 Notice of Default ......................................................................................15
4.2 Monthly Reports ........................................................................................15
4.3 Company's Option to Accelerate Filing of a Claim .......................................................15
4.4 Mitigation of Damages ..................................................................................15
4.5 Claim Information and Other Requirements ...............................................................16
5 Loss Payment Procedure ........................................................................................16
5.1 Filing of Claim ........................................................................................16
5.2 Calculation of Claim Amount ............................................................................16
5.3 Payment of Loss ........................................................................................17
5.4 Discharge of Obligation; Offset ........................................................................17
6 Additional Conditions .........................................................................................18
6.1 Proceedings of Eminent Domain ..........................................................................18
6.2 Subrogation ............................................................................................18
6.3 Notice .................................................................................................18
6.4 Reports and Examinations ...............................................................................18
6.5 Arbitration of Disputes; Suits and Actions Brought by the Insured ......................................18
6.6 Conformity to Statute; Applicable Law ..................................................................19
6.7 Parties in Interest ....................................................................................19
6.8 Agency .................................................................................................19
6.9 Electronic Media .......................................................................................19
6.10 Amendments; Waiver ....................................................................................20
6.11 Indemnification .......................................................................................20
6.12 Titles ................................................................................................20
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Terms and Conditions
1 Definitions
1.1 Borrower--Borrower means any individual legally required to repay
the debt obligation created pursuant to the Loan. The Borrower
shall include any co-xxxxxx or guarantor of the Loan.
1.2 Certificate--Certificate means the document extending the
indicated coverage to a specified Loan under this Policy.
1.3 Claim--Claim means the request, made in a form provided or
approved by the Company, to receive the benefits of this Policy.
1.4 Claim Amount--Claim Amount means the amount calculated in
accordance with Section 5.2 (Calculation of Claim Amount) of this
Policy.
1.5 Closed-end Equity Loan--Closed-end Equity Loan means a loan which
specifies the length of time for repayment of the loan amount and
for which the proceeds are disbursed at the time the loan is
Consummated or after any applicable statutory rescission period.
1.6 Combined Loan-to-Value--Combined Loan-to-Value means that ratio,
expressed as a percentage, equal to
(a) the sum of
(i) the Insured Loan Amount and
(ii) the outstanding principal balance, as of the date the
Loan was Consummated, of
(A) the loan, if any, secured by the First Deed of
Trust and
(B) the loan, if any, secured by any other mortgage,
deed of trust or other instrument constituting a
lien or encumbrance on the Property subordinate
to the First Deed of Trust
divided by
(b) the Property Value of the Property.
1.7 Commitment--Commitment means the document issued by the Company
indicating the terms and conditions under which the Company will
extend coverage pursuant to this Policy to a specified loan.
1.8 Commitment Letter--Commitment Letter means the document issued by
the Company, which committed the Company to issue this Policy on
the conditions and terms outlined in that document.
1.9 Consummated--Consummated means the date on which the Loan was
closed and all loan documents were executed.
1.10 Court Expenses--Court Expenses mean the out-of-pocket costs,
including reasonable attorneys' fees, if any, incurred by the
Insured in connection with any judicial proceeding for the purpose
of collecting monies due under the Loan, initiating and pursuing a
foreclosure action or, if applicable, for the protection of the
Insured's position as a secured party under the Second Deed of
Trust. Court Expenses include the costs of filing or serving
pleadings, conducting discovery, and enforcing
judgment, but Court Expenses exclude reimbursement for any time
spent by the Insured or the Insured's employees, officers or
agents.
1.11 Default--Default means
(a) the failure by a Borrower to pay when due a nonaccelerated
scheduled periodic payment due under the terms of the Loan
or
(b) the failure by a Borrower to pay the outstanding balance if
the Loan has been accelerated by reason of violation by the
Borrower of any Due-on-Sale Clause.
Default does not mean the violation by the Borrower of any other
term or condition of the Loan, or any instrument securing the Loan
and creating a lien or encumbrance on the Property, which is the
basis for an acceleration of maturity of the Loan and a
foreclosure action under the instrument securing the Loan and
creating a lien or encumbrance on the Property.
A Loan is deemed to be in Default for that month as of the close
of business on the installment due date for which a scheduled
monthly payment has not been made or on the date the Insured first
discovers the violation of a Due-on-Sale Clause. For example, a
Loan is "three (3) months in Default" if the monthly installments
due on January 1 through March 1 remain unpaid as of the close of
business on March 1.
1.12 Due-on-Sale Clause--Due-on-Sale Clause means a contractual
provision granting to the Insured the right to accelerate the
maturity of the Loan upon a transfer of title to or an interest in
the Property.
1.13 Effective Date--Effective Date means
(a) with respect to this Policy, 12:01 a.m. on the date
designated as such on the face of this Policy and,
(b) with respect to a Certificate, 12:01 a.m. on the date
designated as such on the Certificate and
(c) with respect to a Commitment
(i) for new Loans, 12:01 a.m. on the date the Loan was
Consummated or
(ii) for other Loans, 12:01 a.m. on the date of coverage as
indicated on the Commitment.
A new Loan is a Loan which was not Consummated as of the date the
Insured submitted an application for coverage under this Policy.
1.14 Eligible Note--Eligible Note means the written evidence of
indebtedness
(a) secured by a Second Deed of Trust and
(b) containing, where permitted by law, itself or in combination
with the Second Deed of Trust
(i) a clause providing for the acceleration of maturity at
the option of the holder, upon a Default and
(ii) a Due-on-Sale Clause and
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(iii) a clause providing that the Borrower may not take
additional advances under any loan secured by a lien
or other encumbrance with priority over any applicable
Second Deed of Trust and
(iv) a waiver of the Borrower's homestead exemption and
(v) a clause providing that any default under any lien or
other encumbrance with priority over any applicable
Second Deed of Trust and/or the loan such prior lien
or encumbrance secures is a default under the Eligible
Note and
(c) (i) for an Open-end Equity Loan
(A) under which the Borrower is obligated to repay a
Loan in monthly installments of an amount not
less than the interest due on the outstanding
balance of the Loan and
(B) under which no additional advances may be made
after a period not to exceed fifteen (15) years
from the date the Loan was Consummated and
(C) requiring amortization of the outstanding
balance of the loan on the date after which no
further advances may be made as is described in
the preceding subsection (B) over a period not
to exceed fifteen (15) years and
(D) with an amortization term of at least twelve
(12) months and
(E) which allows the Insured to obtain updated
credit and financial information periodically
after the date the Loan was Consummated and
(F) containing, where permitted by law, itself or in
combination with the Second Deed of Trust, a
clause which allows the Insured, upon written
notice to the Borrower as may be required by
law, to reduce or otherwise limit the maximum
proceeds or line of credit or suspend additional
draws available to the Borrower under the Loan
upon either (I) receipt by the Insured of an
appraisal or other evidence of value, including
market overviews and market valuation systems
and techniques, including a significant decline
in the value of the Property below the Property
Value or (II) discovery by the Insured of a
material adverse change in the Borrower's
financial condition and
(ii) for a Closed-end Equity Loan
(A) under which the Borrower is obligated to repay a
loan in positive amortizing monthly installments
of principal and interest and
(B) with an amortization term of at least twelve
(12) months.
1.15 Environmental Impairment--Environmental Impairment means
environmental contamination, including nuclear reaction,
radioactive containment, contamination by toxic waste, chemicals
or other hazardous substance or other pollution, environmental or
similar hazard (or outstanding claim of such hazard), not
previously disclosed to and approved in writing by the Company,
affecting the Property. The term Environmental Impairment does not
include radon, lead paint or asbestos.
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1.16 First Deed of Trust--First Deed of Trust means a mortgage, deed of
trust, or other instrument which
(a) constitutes or is equivalent to a first lien or encumbrance
on the Property, subject only to the Permitted Encumbrances,
and
(b) will allow the Person secured thereby, directly or by a
trustee or other Person, to foreclose on the Property (by
power-of-sale, judicially or otherwise) upon default or
under the loan secured thereby and thereby acquire title to
the Property, subject only to the Permitted Encumbrances.
1.17 Indemnified Persons--Indemnified Persons mean the Company and each
of its directors, employees, agents, successors and assigns.
1.18 Insured--Insured means
(a) the Person designated on the face of this Policy or
(b) any other Person (i) to whom this Policy has been assigned,
and (ii) of whom the Company has been notified, and (iii) to
whom approval has been granted in accordance with this
Policy, but shall not include the assignee or purchaser of
any individual Loan insured under this Policy.
1.19 Insured Loan Amount--Insured Loan Amount means that amount, with
respect to any Loan, indicated on the Schedule for such Loan,
which is the original loan amount for a Closed-end Equity Loan and
the credit limit for an Open-end Equity Loan.
1.20 Loan--Loan means
(a) a disbursement of proceeds or the opening of a line of
credit by the Insured or its predecessor in interest to or
for the benefit of a Borrower who promises to repay the
principal amount of such disbursement or any future
disbursement under the line of credit, plus interest, if
any, at a stated annual rate over time or
(b) an obligation as is described in the preceding subsection
(a), evidenced by a note which has been purchased by the
Insured or its predecessor in interest or
(c) refinancing of such an obligation as is described in the
preceding subsection (a) by the Insured with or without an
additional disbursement of proceeds or advance of credit,
which is evidenced, in any event, by an Eligible Note and
which is covered under this Policy.
1.21 Loan File--Loan File means, with respect to a Loan, copies of all
documents (including all data and information in electronic
format) created or received in connection with the origination and
closing of the Loan, including the Loan File Documents.
1.22 Loan File Documents--Loan File Documents mean
(a) the original, fully-completed Loan application, dated and
signed by the Borrower and
(b) the original credit bureau report on the Borrower obtained
by the Insured in the Loan application process and any
updated credit bureau reports on the Borrower obtained by
the Insured which reports the appropriate credit scores, if
available, and
4
(c) if applicable, the original verification of the Borrower's
income obtained by the Insured in the Loan application
process and
(d) the tax assessment, warranty deed or recorded land contract
for sale, if applicable, obtained by the Insured before or
at the time the Loan was Consummated and
(e) the original appraisal, or other evidence of the Property
Value acceptable to the Company and
(f) the original Eligible Note and
(g) the original, recorded Second Deed of Trust and
(h) the original Regulation Z disclosure statement and
(i) the documentary evidence obtained by the Insured, before or
at the time the Loan was Consummated, verifying that the
Combined Loan-to-Value did not exceed the percentage as set
forth in the Program Criteria which is applicable to the
Loan and
(j) the documentary evidence (such as cancelled checks or
settlement statement) verifying that any debts to be paid
with the Loan proceeds were paid directly by the Insured and
(k) the documentary evidence of the normal and customary title
search obtained by the Insured verifying the Loan was, or
was to be immediately after the Loan was Consummated,
secured by a mortgage, deed of trust, or other instrument
which constituted or was equivalent to a Second Deed of
Trust and
(l) for a Purchase Money Loan
(i) the original documentary evidence obtain by the
Insured, before or at the time the Loan was
Consummated, that the Borrower made the down payment
as disclosed in the Loan File and
(ii) the original, fully-completed HUD-1 Settlement
Statement, dated and signed by the Borrower and
(iii) a copy of the executed purchase contract and
(m) the original loan history record, maintained by the Insured
in its normal course of business, of payments made on the
Loan and
(n) the documentary evidence of the Insured's efforts to effect
a cure of any Default and to collect the Loan and
(o) copies of paid bills or receipts for expenses if Default or
foreclosure occurs.
1.23 Loan Loss Percentage--Loan Loss Percentage means that percentage
so identified on the face of this Policy.
1.24 Loan Transaction--Loan Transaction means that transaction between
the Insured or its predecessor in interest on the Loan and the
Borrower having the characteristics as set forth in the
Certificate.
1.25 Loss--Loss means the liability of the Company with respect to a
Loan calculated in accordance with this Policy. A Loss shall be
deemed to have occurred when a Default occurs, notwithstanding
5
that the amount of Loss is not then either presently ascertainable
or due and payable. On and after the date on which aggregate
Losses paid by the Company and not refunded as provided by Section
4.3 (Company's Option to Accelerate Filing of a Claim) and Section
5.3 (Payment of Loss) equal the Maximum Cumulative Liability, the
Company shall have no further obligation to pay a Loss with
respect to Loans insured under this Policy notwithstanding the
potential for additional premium to be due with respect to such
Loans.
1.26 Maximum Cumulative Liability--Maximum Cumulative Liability means
an amount equal to the product of
(a) the Maximum Cumulative Liability Percentage
multiplied by
(b) the Total Insured Amount.
The Maximum Cumulative Liability shall not be increased by, nor shall
the Insured otherwise receive any credit for, any recoveries by the
Company from any Borrower or any other Person in connection with any
payment made by the Company under this Policy.
1.27 Maximum Cumulative Liability Percentage--Maximum Cumulative
Liability Percentage means that percentage so identified on the
face of this Policy.
1.28 Open-end Equity Loan--Open-end Equity Loan means a loan which
constitutes an open line of credit up to a predetermined dollar
credit limit against which a borrower may draw without obtaining
prior approval for each advance of funds.
1.29 Permitted Encumbrances--Permitted Encumbrances means only the
following liens, encumbrances, covenants, conditions,
restrictions, easements and other impediments to title
(a) any lien established by public bond, assessment or tax, when
no installment, call or payment of or under such bond,
assessment or tax is delinquent and
(b) any municipal and zoning ordinances and exceptions to title
waived by the regulations of federal mortgage insurers and
guarantors with respect to mortgages on one-to-four family
residences in effect issue on the date on which the Loan was
closed and all documents were executed and
(c) any impediments which will not have a materially adverse
effect on either the transferability of the Property or the
sale thereof to a bona fide purchaser.
1.30 Person--Person means any individual, corporation, limited
liability company, partnership, association, or other entity.
1.31 Physical Damage--Physical Damage means any injury, other than
Environmental Impairment, to the Property which is tangible,
whether caused by accident or otherwise, occurring for whatever
reason, including, but not limited to, physical injury or
destruction of tangible property, defects in construction, land
subsidence, earth movement or slippage, earthquake, flood, or any
other act of God, riot, insurrection, civil strife or war that
materially adversely affects the use, marketability or value of
the Property. For purposes of this definition, "materially" means
that the total costs of restoration of the Property (including
removal of Environmental Impairment) due to such injury is equal
to or greater than One Thousand Five Hundred Dollars ($1,500). In
determining if injury to the Property is material and in
determining the Claim Amount, the Company is entitled to rely upon
all bona fide estimates for restoration work that it receives in
connection with a Claim and shall provide copies to the Insured
upon request.
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1.32 Policy--Policy means this contract of insurance and all
applications, attachments, Commitments, Certificates, amendments,
endorsements, and Schedules relating to this Policy, which are
incorporated and made a part of this Policy with respect to the
Loans to which they relate.
1.33 Program Criteria--Program Criteria means the requirements
established by the Company from time to time applicable to the
origination of a Loan (including approved mortgage loan programs,
maximum loan-to-value ratios and original principal amounts,
coverage limitations and underwriting requirements) and of which
the Company notifies the Insured, as the same may be amended from
time to time by the Company on prior written notice to the
Insured.
1.34 Property--Property means the Residential real property and all
improvements thereon, together with all easements and
appurtenances, all rights of access, all rights to use common
areas, recreational and other facilities, and all replacements or
additions thereto.
(a) which secures the Loan and
(b) which is the Borrower's principal residence, seasonal,
vacation or investment home and
(c) in which the Borrower has, or the Borrower and any other
"non-Borrower" Person who will be subordinating his interest
to the Second Deed of Trust have fee simple title.
1.35 Property Value--Property Value means
(a) the lesser of the purchase price or appraised value if the
Property has been owned less than one (1) year, or
(b) the appraised value of the Property, or other acceptable
evidence of value of the Property approved by the Company.
1.36 Purchase Money Loan--Purchase Money Loan means a Loan whose
proceeds are disbursed to the Borrower for the sole purpose of
purchasing the Property pursuant to an executed purchase contract.
1.37 Residential--Residential means a type of building or a portion
thereof which is designed for occupancy by not more than four (4)
families, or a single-family condominium, townhome, or a unit in a
planned unit development. The term Residential does not include a
presently or previously transportable structure, comprised of one
or more modules, each built on a permanent chassis, with or
without a permanent foundation also known as a manufactured or
mobile home.
1.38 Schedule--Schedule means the attached list of Loans insured under
this Policy.
1.39 Second Deed of Trust--Second Deed of Trust means a mortgage, deed
of trust, or other instrument which, to the Insured's best
knowledge (provided that, for purposes of this Section only, the
Insured's knowledge shall be limited to the actual knowledge of
its employees and not others, notwithstanding Section 2.2(a)) and
as evidenced by a normal and customary title search of the
Property (not requiring a title policy unless the Insured so
elects) conducted in connection with the Loan, constitutes or is
equivalent to a lien or encumbrance on the Property, subject only
to the First Deed of Trust and the Permitted Encumbrances, and
allows the Person secured thereby, directly or by a trustee or
other Person, to foreclose on the Property (by power-of-sale,
judicially or otherwise) upon default or under the Loan secured
thereby and thereby acquire title to the Property, subject only to
the First Deed of Trust and the Permitted Encumbrances.
1.40 Security--Security means the instrument designated as such on the
face of this Policy.
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1.41 Servicer--Servicer means that Person, if any, who has entered into
an agreement with the Insured to issue xxxxxxxx, collect and
account for payments of principal and interest from the Borrower,
and/or otherwise service the Loan for the Insured. The Company
must be notified in writing of the identity of each such Servicer
within thirty (30) days of its appointment. Each Servicer acts as
the agent of the Insured for all purposes under this Policy
including receiving any notices and performing any acts under this
Policy. The Company acknowledges that there may be more than one
Servicer of Loans.
1.42 Total Insured Amount--Total Insured Amount means the amount
designated as such on the face of this Policy.
2 Coverage
2.1 Obtaining Coverage--In order to obtain an extension of coverage
for a Loan under this Policy, the Insured shall submit an
application in a form furnished by or acceptable to the Company
and any other information required by the Program Criteria in
effect at the date of execution of the application. Coverage is
evidenced by a Commitment and Certificate which extends a
commitment for coverage pursuant to the terms and conditions
thereof and of the Policy. A Commitment may not be sold, assigned
or transferred by the Insured without the prior approval of the
Company. Should the Insured contact the Company by telephone about
any such application for coverage, to provide additional
information to the Company about a loan, the borrower, the
property or otherwise, the Insured understands and agrees that any
such telephone conversation may be electronically recorded and
retained by the Company and agrees to so advise all of its
employees.
If the Company declines to issue a Commitment and
Certificate, the Company will notify the Insured of such
declination. The Insured is responsible for notifying the
borrower of such declination in compliance with any
applicable state or federal laws or regulations, including
the Equal Credit Opportunity Act and any other similar law
or regulation.
2.2 Representations of the Insured--The Insured represents to the
Company that:
(a) The Insured agrees that statements made and matters
presented by it, the Borrower, or any other Person in any
application for this Policy and/or coverage under this
Policy, and in the appraisal, the plans and specifications,
and other exhibits and documents submitted or at any time
thereafter, and/or in any application, are the Insured's
representations, and that the Company has issued this Policy
and Commitments and/or Certificates in reliance on the
correctness and completeness thereof.
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