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EXHIBIT 10.1
LOAN SALE AGREEMENT
This LOAN SALE AGREEMENT dated as of October 1, 1997 (the
"Agreement"), is made and entered into by and between IMC SECURITIES, INC., as
purchaser (together with its successors and assigns, being referred to herein
as the "Depositor") and IMC MORTGAGE COMPANY, as seller (together with its
successors and assigns, being referred to herein as the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller is engaged in the business of originating,
purchasing and servicing home equity loans secured by first lien mortgages and
deeds of trust on residential property;
WHEREAS, the Seller desires to sell to the Depositor and the
Depositor desires to purchase from the Seller on a whole loan basis the Initial
Home Equity Loans and all monies due and to become due thereunder after October
1, 1997;
WHEREAS, the Depositor intends to transfer the Initial Home Equity
Loans to IMC Home Equity Loan Owner Trust 1997-6 (the "Trust") in order to
facilitate the issuance by the Trust of a series of asset backed notes (the
"Notes");
NOW, THEREFORE, in consideration of these premises and of the
mutual agreements herein set forth, the Depositor and the Seller each agree as
follows:
SECTION 1. Representations and Warranties.
The Seller hereby represents, warrants and covenants to the
Depositor that as of the Closing Date:
(i) The information with respect to each Initial
Home Equity Loan and Subsequent Home Equity Loan set forth in
the related Schedule of Home Equity Loans is true and
correct as of the Cut-Off Date (or in the case of the
Subsequent Home Equity Loans, as of the related Subsequent
Transfer Date);
(ii) All the original or certified documentation
set forth in Section 2.05 of the Sale and Servicing Agreement,
dated as of October 1, 1997 (the "Sale and Servicing
Agreement"), by and between the Seller, the Servicer, the
Depositor, the Trust, as Issuer and The Chase Manhattan Bank,
as Indenture Trustee (including all material documents related
thereto) with respect to each Initial Home Equity Loan has been
or will be delivered to the Custodian (on behalf of the
Depositor) on the Closing Date (or in the case of the
Subsequent Home Equity Loans, as of the related Subsequent
Transfer Date); or as otherwise provided in Section 2.05 of the
Sale and Servicing Agreement;
(iii) Each Home Equity Loan being transferred to the
Depositor is secured by a Mortgage;
(iv) Each Property is improved by a single
(one-to-four) family residential dwelling (except for 2.85% of
the Initial Home Equity Loans in the amount of 16,209,343.59),
that are condominiums, planned unit developments, townhouses,
manufactured housing or multifamily residential, provided that
no more than 0.16% of the Properties are secured by
manufactured homes, each of which is considered to be real
property under the applicable local law;
(v) As of the Cut-Off Date, no Initial Home Equity
Loan has a Loan-to-Value Ratio in excess of 90%, except for 60
Initial Home Equity Loans in the amount of $6,669,599 that had
a Loan-to-Value Ratio not greater than 100%;
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(vi) Each Home Equity Loan is being serviced by the
Servicer in accordance with the terms of the Sale and Servicing
Agreement;
(vii) The Mortgage Note related to each Initial Home
Equity Loan bears a current Coupon Rate of at least 5.70% per
annum;
(viii) Each Mortgage Note with respect to the Initial
Home Equity Loans will provide for a schedule of substantially
level and equal Monthly Payments which are sufficient to
amortize fully the principal balance of such Mortgage Note on
or before its maturity date, except for 26 Initial Home Equity
Loans in the amount of $2,557,528.60 representing 0.45% of the
aggregate Loan Balance of the Initial Home Equity Loans as of
the Cut-Off Date, which may provide for a "balloon" payment due
at the end of the 5th, 7th, 10th or 15th year;
(ix) As of the Closing Date (with respect to the
Initial Home Equity Loans) and any Subsequent Transfer Date
(with respect to the Subsequent Home Equity Loans), each
Mortgage is a valid and subsisting first lien of record (or is
in the process of being recorded) on the Property as noted on
Schedule I to the Sale and Servicing Agreement, subject in all
cases to the exceptions to title set forth in the title
insurance policy or attorney's opinion of title, with respect
to the related Home Equity 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
such Mortgage;
(x) Immediately prior to the transfer and
assignment of the Home Equity Loans by the Seller to
the Depositor herein contemplated, the Seller held good and
indefeasible title to, and was the sole owner of, each Home
Equity Loan (including the related Mortgage Note) conveyed by
the Seller subject to no liens, charges, mortgages,
encumbrances or rights of others except as set forth in clause
(ix) or other liens which will be released simultaneously with
such transfer and assignment; and immediately upon the transfer
and assignment herein contemplated, the Depositor will hold
good and indefeasible title to, and be the sole owner of, each
Home Equity Loan subject to no liens, charges, mortgages,
encumbrances or rights of others except as set forth in
paragraph (ix) or other liens which will be released
simultaneously with such transfer and assignment and except for
the lien of the Indenture;
(xi) As of the opening of business on the Cut-Off
Date, no Initial Home Equity Loan is 30 days or more Delinquent
except that there are 260 Initial Home Equity Loans with an
outstanding aggregate Loan Balance of $21,260,480.96 that are
30 or more days Delinquent but not more than 59 days
Delinquent, and there are 71 Initial Home Equity Loans with an
outstanding aggregate Loan Balance of $6,394,398.09 that are 60
or more days Delinquent but not more than 89 days Delinquent;
(xii) There is no delinquent tax or assessment
lien on any Property, and each Property is free of substantial
damage and is in good repair;
(xiii) There is no valid and enforceable offset,
defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the related Mortgagor to pay the
unpaid principal of or interest on such Mortgage Note;
(xiv) There is no mechanics' lien or claim for work,
labor or material affecting any Property which is or may be a
lien prior to, or equal with, the lien of the related Mortgage
except those which are insured against by any title insurance
policy referred to in paragraph (xvi) below;
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(xv) Each Home Equity 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 (as amended by the Xxxxxx
Community Development and Regulatory Improvement Act of 1994)
and other consumer protection laws, usury, equal credit
opportunity, disclosure and recording laws;
(xvi) With respect to each Home Equity Loan either
(a) an attorney's opinion of title has been obtained but no
lender's title insurance policy has been obtained, or (b) a
lender's title insurance policy, issued in standard American
Land Title Association form by a title insurance company
authorized to transact business in the state in which the
related Property is situated, in an amount at least equal to
the original balance of such Initial Home Equity Loan, insuring
the mortgagee's interest under the related Home Equity Loan as
the holder of a valid first mortgage 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 (ix) above, was effective on the date of the
origination of such Home Equity Loan, and, as of the Closing
Date, such policy is valid and thereafter such policy shall
continue in full force and effect (provided that an attorney's
opinion of title without a lender's title insurance policy has
been obtained with respect to no more than 2% of the Original
Aggregate Loan Balance);
(xvii) The improvements upon each Property are
covered by a valid and existing hazard insurance policy
with a carrier generally acceptable to the Servicer that
provides for fire and extended coverage representing coverage
not less than the least of (A) the outstanding principal
balance of the related Home Equity Loan (together, in the case
of a Second Mortgage Loan, with the outstanding principal
balance of the Senior Lien), (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis or
(C) the full insurable value of the Property;
(xviii) If any 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 Flood Insurance Administration is in
effect with respect to such Property with a carrier generally
acceptable to the Servicer in an amount representing coverage
not less than the least of (A) the outstanding principal
balance of the related Home Equity Loan, (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;
(xix) Each Mortgage and Mortgage Note are the legal,
valid and binding obligation of the maker 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 each Home
Equity Loan had full legal capacity to execute all documents
relating to such Home Equity Loan and convey the estate therein
purported to be conveyed;
(xx) The Seller has caused and will cause to be
performed any and all acts required to be performed to preserve
the rights and remedies of the Indenture Trustee in any
Insurance Policies applicable to any Home Equity Loans
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 in favor of the Depositor;
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(xxi) As of the Closing Date, no more than 0.32% of
the aggregate Loan Balance of the Initial Home Equity Loans
will be secured by Properties located within any single zip
code area;
(xxii) Each original Mortgage was recorded or is in
the process of being recorded, and all subsequent assignments
of the original Mortgage have been delivered for recordation or
have been recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as
against creditors of or purchasers from the Seller (or, subject
to Section 2.05 of the Sale and Servicing Agreement, are in the
process of being recorded); each Mortgage and assignment of
Mortgage is in recordable form and is acceptable for recording
under the laws of the jurisdiction in which the property
securing such Mortgage is located;
(xxiii) The terms of each Mortgage Note and each
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 Owners
and the Note Insurer and which has been delivered to the
Depositor. The substance of any such alteration or modification
is reflected on the related Schedule of Home Equity Loans;
(xxiv) The proceeds of each Home Equity Loan have
been fully disbursed, and there is no obligation on the
part of the mortgagee to make future advances thereunder. 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 Home
Equity Loans were paid;
(xxv) The related Mortgage Note is not and has not
been secured by any collateral, pledged account or other
security except the lien of the corresponding Mortgage;
(xxvi) No Home Equity Loan has a shared appreciation
feature, or other contingent interest feature;
(xxvii) Each Property is located in the state
identified in the respective Schedule of Home Equity Loans and
consists of one or more parcels of real property with a
residential dwelling erected thereon;
(xxviii) Each Mortgage contains a provision for the
acceleration of the payment of the unpaid principal balance of
the related Home Equity Loan in the event the related Property
is sold without the prior consent of the mortgagee thereunder;
(xxix) Any advances made after the date of
origination of a Home Equity Loan but prior to the Cut-Off
Date with respect to the Initial Home Equity Loans (or
the relevant Subsequent Transfer Date with respect to the
Subsequent Home Equity Loans) 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 single repayment term reflected on the
Schedule of Home Equity Loans. The consolidated principal
amount does not exceed the original principal amount of the
related Home Equity Loan. No Mortgage Note permits or obligates
the Servicer to make future advances to the related Mortgagor
at the option of the Mortgagor;
(xxx) There is no proceeding pending or threatened
for the total or partial condemnation of any Property,
nor is such a proceeding currently occurring, and each Property
is undamaged by waste, fire, water, flood, earthquake or earth
movement;
(xxxi) All of the improvements which were included
for the purposes of determining the Appraised Value of
any Property lie wholly within the boundaries and building
restriction lines
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of such Property, and no improvements on adjoining properties
encroach upon such Property, and are stated in the title
insurance policy and affirmatively insured;
(xxxii) No improvement located on or being part of any
Property is in violation of any applicable zoning law or
regulation. All inspections, licenses and certificates required
to be made or issued with respect to all occupied portions of
each 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 Property is lawfully
occupied under the applicable law;
(xxxiii) With respect to each Mortgage constituting a
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 Mortgage, and no fees or expenses
are or will become payable by the Depositor to the trustee
under the deed of trust, except in connection with a trustee's
sale after default by the related Mortgagor;
(xxxiv) Each Mortgage contains customary and
enforceable provisions which render the rights and remedies of
the holder thereof adequate for the realization against the
related Property of the benefits of the security, including (A)
in the case of a Mortgage designated as a deed of trust, by
trustee's sale and (B) otherwise by judicial foreclosure. There
is no homestead or other exemption other than any applicable
Mortgagor redemption rights available to the related Mortgagor
which would materially interfere with the right to sell the
related Property at a trustee's sale or the right to foreclose
the related Mortgage;
(xxxv) Other than with respect to the Delinquencies
noted in item (xi) hereof, there is no default, breach,
violation or event of acceleration existing under any Mortgage
or the related Mortgage Note and no event which, with the
passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation
or event of acceleration; and neither the Servicer nor the
Seller has waived any default, breach, violation or event of
acceleration;
(xxxvi) No instrument of release or waiver has been
executed in connection with any Home Equity Loan, and no
Mortgagor has been released, in whole or in part, except in
connection with an assumption agreement which has been approved
by the primary mortgage guaranty insurer, if any, and which has
been delivered to the Depositor;
(xxxvii) Reserved;
(xxxviii) Each Home Equity Loan was underwritten in
accordance with the credit underwriting guidelines of the
Seller as set forth in the Seller's Policies and Procedures
Manual, as in effect on the date hereof and such Manual
conforms in all material respects to the description thereof
set forth in the Prospectus Supplement;
(xxxix) Each Home Equity Loan was originated based
upon a full appraisal, which included an interior inspection of
the subject property;
(xl) The Home Equity Loans were not selected for
sale to the Depositor by the Seller on any basis intended to
adversely affect the Depositor;
(xli) No more than 6.92% of the aggregate Loan
Balance of the Initial Home Equity Loans are secured by
Properties that are non-owner occupied Properties (i.e.,
investor-owned and vacation);
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(xlii) The Seller has no actual knowledge that there
exist any hazardous substances, hazard 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 Property;
(xliii) The Seller was properly licensed or otherwise
authorized, to the extent required by applicable law, to
originate or purchase each Home Equity Loan; and the
consummation of the transactions herein contemplated including,
without limitation, the ownership of the Home Equity Loans by
the Seller will not violate such laws;
(xliv) With respect to each Property subject to a
ground lease (i) the current ground lessor has been identified
and all ground rents which have previously become due and owing
have been paid; (ii) the ground lease term extends, or is
automatically renewable, for at least five years beyond the
maturity date of the related Home Equity Loan; (iii) the ground
lease has been duly executed and recorded; (iv) the amount of
the ground rent and any increases therein are clearly
identified in the lease and are for predetermined amounts at
predetermined times; (v) the ground rent payment is included in
the borrower's monthly payment as an expense item in
determining the qualification of the borrower for such Home
Equity Loan; (vi) the Depositor has the right to cure defaults
on the ground lease; and (vii) the terms and conditions of the
leasehold do not prevent the free and absolute marketability of
the Property. As of the Cut-Off Date, the Loan Balance of the
Initial Home Equity Loans with related Properties subject to
ground leases does not exceed 1% of the Original Aggregate Loan
Balance;
(xlv) Reserved;
(xlvi) No Home Equity Loan is subject to a
temporary rate reduction pursuant to a buydown program;
(xlvii) No more than 20.29% of the aggregate Loan
Balance of the Initial Home Equity Loans was originated under
the Seller's non-income verification program;
(xlviii) The Coupon Rate on each Home Equity Loan is
calculated on the basis of a year of 360 days with twelve
30-day months;
(xlix) Reserved;
(l) Neither the operation of any of the terms of each
Mortgage Note and each Mortgage nor the exercise of any right
thereunder will render either the Mortgage Note or the Mortgage
unenforceable, in whole or in part, nor subject it to any right
of rescission, set-off, counterclaim or defense, including,
without limitation, the defense of usury;
(li) Any adjustment to the Coupon Rate on a Home
Equity Loan has been legal, proper and in accordance with the
terms of the related Mortgage Note;
(lii) No Home Equity Loan is subject to negative
amortization; and
(liii) As of the Cut-Off Date, the FTC holder
regulation provided in 16 C.F.R. Part 433 applies to none of
the Home Equity Loans.
SECTION 2. Purchase and Delivery.
In consideration for the sale and transfer of the Initial Home
Equity Loans to the Depositor by the Seller, and upon transfer of such Initial
Home Equity Loans to the Depositor or the Depositor's designee from the Seller
on the date hereof with respect to the Initial Home Equity Loans, the Depositor
shall pay
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or cause to be paid to the Seller good and valuable consideration, (the
"Purchase Price") including (without limitation) (a) the net proceeds of the
sale of the Notes and (b) certain residual classes of securities subordinate to
the Notes. The transfer of funds from the Depositor to the Seller for the
Purchase Price for all Initial Home Equity Loans purchased shall be made by
wire transfer of immediately available funds to the bank account designated by
the Seller.
On the date hereof with respect to the Initial Home Equity Loans,
the Seller shall transfer, assign and convey to the Depositor all of the
Seller's right, title and interest in and to each Initial Home Equity Loan and
the related File, free and clear of any adverse claims, rights or interests
therein. The Seller shall, or shall cause its agent to, deliver to the
Depositor or the Depositor's designee the related File.
SECTION 3. Sale Treatment.
It is the express intent of the parties hereto that the conveyance
of the Initial Home Equity Loans by the Seller to the Depositor, as
contemplated by this Agreement be and be treated as an absolute transfer and
conveyance of all of the Seller's right, title, ownership and other interest in
the Initial Home Equity Loans. In the event that, notwithstanding the intent of
the parties, the Initial Home Equity Loans are held by a court to be the
property of the Seller, then (i) this Agreement shall be deemed to be a
security agreement within the meaning of Articles 8 and 9 of the applicable
Uniform Commercial Code; (ii) the transfer of the Initial Home Equity Loans
provided for herein shall be deemed to be a grant by the Seller to the
Depositor of a security interest (and/or an assignment of any security interest
that the Seller may hold) in all of the Seller's right, title, ownership and
other interest in and to the Initial Home Equity Loans and all amounts payable
to the holders of the Initial Home Equity Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, to the extent
the Depositor would otherwise be entitled to own such Initial Home Equity Loans
and proceeds thereof; (iii) the possession by the Depositor or the Custodian on
behalf of the Indenture Trustee of the Mortgage Note and such other items of
property as constitute instruments, money, negotiable documents or chattel
paper shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 (or comparable
provision) of the applicable Uniform Commercial Code; and (iv) notifications to
persons holding such property, and acknowledgments, receipts or confirmations
from persons holding such property, shall be deemed notifications to, or
acknowledgments, receipts or confirmations from, financial intermediaries,
bailees or agents (as applicable) of the Depositor for the purpose of
perfecting such security interest under applicable law. Any assignment of the
interest of the Depositor pursuant to any provision hereof or pursuant to the
Sale and Servicing Agreement shall also be deemed to be an assignment of any
security interest created hereby. The Seller and the Depositor shall, to the
extent consistent with this Agreement, take such actions as may be reasonably
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Initial Home Equity Loans, such security interest would be
deemed to be a perfected first priority security interest under applicable law
and will be maintained as such throughout the term of the Sale and Servicing
Agreement.
SECTION 4. Binding Effect.
This Loan Sale Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Depositor and the Seller.
SECTION 5. Governing Law.
This Loan Sale Agreement shall be governed by and construed under
the laws of the State of New York, without regard to the conflict of laws
provisions thereof.
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SECTION 6. Capitalized Terms.
Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement.
SECTION 7. Counterparts.
This Loan Sale Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same Agreement.
SECTION 8. Third-Party Beneficiary.
The Seller and the Depositor each agree that Financial Security
Assurance Inc. and The Chase Manhattan Bank, as Indenture Trustee, shall be
deemed to be third-party beneficiaries of this Loan Sale Agreement as if they
were each a party hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Loan Sale
Agreement as of the 1st day of October, 1997.
IMC Mortgage Company, as Seller
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: President
IMC SECURITIES, INC., as Depositor
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: President
