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Exhibit 10.31
CONVENTIONAL WHOLESALE
MORTGAGE PURCHASE
Colonial Mortgage Company AGREEMENT
CONVENTIONAL WHOLESALE MORTGAGE PURCHASE AGREEMENT
Effective Sept. 1, 1998, COLONIAL MORTGAGE COMPANY (hereinafter referred to as
CMC), and E. Loan, Inc, (hereinafter referred to as CORRESPONDENT), agree to the
following:
CORRESPONDENT warrants that it is a duly organized and validly existing entity
for the primary purpose of originating, for fee Income, single family
residential mortgages for sale to various Secondary Market Lenders for marketing
gains and that it is in good standing under applicable laws, licensing
requirements (if any), and regulations of the United States and of the State of
California.
CORRESPONDENT and CMC have the requisite corporate authority and capacity to
enter Into this LOAN CORRESPONDENT AGREEMENT (hereinafter referred to as
AGREEMENT). CORRESPONDENT's and CMC's compliance with terms and conditions of
this Agreement will not violate any provisions of CORRESPONDENT's or CMC's
articles of Incorporation or by-laws, any Instrument relating to the conduct of
its business, or any other agreement to which either may be a party.
CORRESPONDENT intends, from time to time, to offer for sale to CMC conventional
mortgage loans that it has originated, and for which it has obtained appraisal
and credit documentation.
All loans submitted to CMC must be originated and processed by the
CORRESPONDENT. No third party loans will be accepted.
CMC warrants that it is a duly organized and validly existing entity which, as
part of its normal business operation, purchases loans from various
Correspondents for the purpose of sale into the Secondary Market and servicing
of said loans, and it is in good standing under the applicable laws and
regulations of the United States and of the State of Alabama.
CORRESPONDENT and CMC are acting as Independent contractors and neither party
shall be deemed an agent, employee, partner, joint venturer, franchised or other
associate of the other party. CORRESPONDENT and CMC each understand and agree
that neither party is authorized to make any agreements or commitments on behalf
of the other party.
Until this AGREEMENT is canceled by either CMC or CORRESPONDENT, CMC will make
available to CORRESPONDENT FHA/VA loan programs at terms and interest rates
subject to change by CMC from time to time.
The following are the terms and conditions under which CMC will register,
underwrite, and purchase eligible loan applications offered by CORRESPONDENT:
1. From time to time, CMC will publish a list of types of loans it will
accept, including interest rates, loan limits, terms, loan-to-value
ratios, and discount points (CMC's required net yield) and fees. Loan
registrations and approvals will be issued to CORRESPONDENT in
accordance with CMC's current lending policies and procedures.
Registration and approval will be issued in writing covering only the
particular loan or loans submitted by CORRESPONDENT for approval.
2. CORRESPONDENT warrants that any loan it submits to CMC for approval
will be in compliance with all applicable federal, state, and local
statutes, ordinances, and regulations, including, but not limited to,
the Rent Estate Procedures
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Act, the Equal Credit Opportunity Act, the Tenth in Lending Act, the
Fair Credit Reporting Act, the Flood Disaster Protection Act (National
Flood Insurance Program), and with regulations issued pursuant thereto.
CMC will also comply with the inforementioned federal, state, and local
statutes, ordinances, and regulations. It is understood that
CORRESPONDENT will be responsible for providing loan applicants with
timely and correct GOOD FAITH ESTIMATES OF SETTLEMENT CHARGES, AND
SETTLEMENT COST BOOKLETS, TRUTH IN LENDING DISCLOSURE STATEMENTS,
SERVICING TRANSFER DISCLOSURE STATEMENTS (AT APPLICATION), ADJUSTABLE
RATE MORTGAGE DISCLOSURES, CONSUMER HANDBOOKS ON ADJUSTABLE RATE
MORTGAGES, AND ANY DISCLOSURES REQUIRED BY STATE LAW.
3. CORRESPONDENT understands CMC intends to sell closed loans to Investors
and into the Secondary Market. CORRESPONDENT warrants that in
submitting loan applications to CMC it is in full compliance with all
pertinent requirements and warranties of the investor, or
Mortgage-Based Security (MBS) program, to which CMC Intends to sell the
loan(s), in accordance with program guidelines supplied by CMC. CMC
agrees to provide CORRESPONDENT access to pertinent program guidelines
for Its various loan programs as they are provided to CMC. However, It
is the responsibility of the CORRESPONDENT to insure full compliance
with the said requirements and guidelines. CORRESPONDENT understands
that some loans must be approved by CMC's Investor prior to loan
closing, and the decision of the Investor is final.
4. CORRESPONDENT agrees to Indemnify and hold CMC harmless for any act or
omission, whether international or unintentional during the origination
process by CORRESPONDENT or any agent of CORRESPONDENT.
5. CMC will purchase approved loans that close in the CORRESPONDENT's
name. CORRESPONDENT will immediately endorse the Mortgage Note to CMC,
"without recourse" and execute an Assignment of the Security Instrument
to CMC.
6. CORRESPONDENT agrees that the responsibility for reporting all amounts
considered to be points to be reported on Federal Form 1098 (as
described in Internal Revenue code Section 605011(6)(z)(c) shall rest
solely with CMC. CORRESPONDENT further agrees to execute a separate
Designation Agreement with CMC which sets forth the responsibility for
reporting points.
7. CORRESPONDENT shall use real estate appraisers and closing agents
approved by CMC. CMC shall provide CORRESPONDENT with printed listings,
from time to time, of appraisers and closing agents that are acceptable
to CMC. CMC reserves the right to refuse credit reports from certain
credit reporting agencies. CORRESPONDENT shall be notified in writing
of any such unacceptable agencies. In the event that CORRESPONDENT
shall submit an appraisal or credit report from a person or entity not
acceptable to CMC. CMC, at its sole discretion, may reject or accept
the loan package.
8. CORRESPONDENT authorizes CMC to obtain a personal and/or business
credit report with respect to CORRESPONDENT upon mutual execution of
this AGREEMENT.
9. CORRESPONDENT agrees to release to CMC all interest in the servicing
rights for loans closed under this AGREEMENT. CORRESPONDENT further
acknowledges that any value attributed to such servicing rights shall
be incorporated in the interest rate and discount points (CMC's net
yield) quoted to CORRESPONDENT. It is further agreed that for any
loan(s) that closes in the name of CORRESPONDENT which produces a net
yield greater than CMC's required net yield, the yield differential
(secondary marketing/service release fee) shall accrue to CORRESPONDENT
as discount on the HUD-1 and shall be disbursed to CORRESPONDENT at
loan closing. In the event the yield differential is greater than
discount collected at closing the additional amount due CORRESPONDENT
shall be paid as a secondary market/service release fee. CMC shall
remit to CORRESPONDENT any amount due within five (5) working days of
receipt of mortgage documents in CMC's designated office.
CORRESPONDENT agrees that for any loan(s) which CMC does not receive a
discount at closing in an amount necessary to produce its required
yield the amount due CMC shall be paid as a secondary marketing fee.
The CORRESPONDENT shall remit the amount due CMC with the loan closing
documents.
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10. At CORRESPONDENT's request, CMC will review and approve the Title
Binder/Commitment and Survey prior to loan closing. If CORRESPONDENT
elects to assume responsibility for these documents, CORRESPONDENT will
be held fully liable for any damages that may arise and could be asked
to repurchase the loan as described in Section 11 of this AGREEMENT.
11. CORRESPONDENT agrees that upon request, it will immediately purchase at
the current outstanding loan balance, any closed loan that is not in
compliance with: the above-mentioned statutes, ordinances or
regulations (see paragraph 2 above) and/or any and all covenants and
warranties contained elsewhere in this AGREEMENT. Further, the
CORRESPONDENT shall purchase any closed loan that is the subject of any
misrepresentation or fraudulent.
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documentation. In the event that CORRESPONDENT does not immediately
comply with CMC's request for purchase, CMC shall have no further
obligation to CORRESPONDENT to fund any other loans that may have been
submitted by CORRESPONDENT, whether or not approved by CMC. Further,
CORRESPONDENT shall be responsible for may and a loss, cost or other
damages Incurred by CMC, Including CMC's attorney's fees, with respect
to the CORRESPONDENT failure to comply with the requirements of this
paragraph.
12. CORRESPONDENT understands that all loans submitted to CMC pursuant to
this AGREEMENT will be underwritten accordance with investor
requirements. CMC will approve to decline loan applications in
accordance with its current underwriting policies. CMC, and/or the
private investor, at its sole discretion, shall make underwriting
determinations, and its decision is final.
13. CORRESPONDENT understands that CMC routinely conducts quality control
audits to reverify credit documentation and appraisals submitted by
Correspondents. CORRESPONDENT understands such audits may be conducted
prior to loan being closed. CMC may conduct an on-site audit at the
CORRESPONDENT's place of business and CORRESPONDENT agrees to fully
cooperate therewith.
14. CORRESPONDENT will provide to CMC a Transfer of Property and Servicing
Rights letter, in the format provided by CMC, on each loan to be
purchased by CMC under this AGREEMENT.
15. This AGREEMENT to sell or purchase loans may be canceled, with or
without cause, by either CMC or CORRESPONDENT. Cancellation shall be
effective Immediately upon issuance of written notice.
16. This AGREEMENT is non-transferable.
17. CMC reserves the right to amend or change the terms of this AGREEMENT
with written notification to CORRESPONDENT, and said amendments and/or
changes will be effective immediately upon CMC's written notification
with respect to all loans including those submitted to and approved by
CMC.
18. CORRESPONDENT acknowledges and agrees that the CORRESPONDENT POLICY AND
PROCEDURES MANUAL provided CORRESPONDENT by CMC is an addendum to and
part of this AGREEMENT. CORRESPONDENT agrees to adhere to the policies
and procedures as stated in the MANUAL, and with any future changes or
amendments that may occur.
19. INDEMNIFICATION: Without limiting any of CMC's rights continued in this
AGREEMENT, CORRESPONDENT shall Indemnify, defend, and hold CMC, its
successors and assigns, and its officers, agents, and employees
harmless against any claim, action, liability, cost or expense,
Including judgments, court costs and attorneys fees related to any
breach any warranty, representation, or covenant continued in the
AGREEMENT or set forth in any program offered pursuant this AGREEMENT.
This Indemnification shall survive the terms of this AGREEMENT for all
loans purchased until the sooner of: a) written release by CMC and any
successor or assign; b) payoff of the loan; or c) the lapse of any
applicable statute of limitations.
20. All aforementioned warranties, conditions, representations and
indemnifications shall survive the delivery and purchase of any
mortgage loan(s) offered for sale under the AGREEMENT and shall insure
to the benefit of all future successors and assigns of CMC; any
cancellation of this AGREEMENT, and/or any change in management or
ownership in CMC or CORRESPONDENT.
CORRESPONDENT understands and accepts the terms of this AGREEMENT, as evidenced
by the signature of its duly authorized corporate officer.
FOR E-Loan, Inc FOR COLONIAL MORTGAGE COMPANY
BY /s/ ▇. ▇▇▇▇▇▇▇▇▇ BY /s/ Signature Illegible
TITLE President TITLE /s/ Signature Illegible
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DATE 9/1/98 DATE 9/10/98
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ADDENDUM
This Addendum made and entered into this 1 day of September, 1998, by
Colonial Mortgage Company, an Alabama Corporation, hereinafter referred to as
("Colonial") and E-Loan Inc, hereinafter referred to as ("Correspondent").
WITNESSETH
1. This Addendum is hereby incorporated into the Loan Correspondent
Agreement between the above referenced parties dated 9/1/98 as if the same was
set forth therein. In the event there is a conflict in the terms of this
Addendum and the terms of the Loan Correspondent Agreement, the terms and
conditions of this Addendum shall control and be given priority.
2. The parties to this Addendum agree that certain loan programs
offered by Colonial require that the loans be closed in the name of Colonial.
Should that be the case, the terms and conditions of this Addendum shall control
as to those items of the Loan Correspondent Agreement relating to the closing of
a loan in the Correspondents name. However, each party agrees that all of the
other representations, warranties and requirements of the Loan Correspondent
Agreement will remain in full force and effect.
3. As is contemplated in the Loan Correspondent Agreement, the specific
conditions of any loan program must be followed both by the Correspondent and
Colonial and will be controlling for that particular loan.
In Witness Whereof, this Addendum was executed on the day and year
above first written.
Colonial Mortgage Company
By: /s/ Signature Illegible
Its: /s/ Signature Illegible
Correspondent
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
Its: President
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COLONIAL MORTGAGE COMPANY
DESIGNATION AGREEMENT
This agreement is in accordance with Internal Revenue Service Revenue Procedure
92-11, for purposes of making information returns for points, as described in
Internal Revenue Code Section 6050H(b)(2)(C). Under the terms of this agreement,
the lender of record Identified below shall not report to any borrower on
Federal Form 1098 any points paid In connection with mortgage loans purchased by
Colonial Mortgage Company. The responsibility for reporting all amounts
considered to be points, for purposes of Federal Form 1098, rests solely with
the designee, Colonial Mortgage Company, for mortgage loans that it purchases.
The lender of record represents to the designee that he did not, as a part of
any overall mortgage transaction, lend to any borrower any of the amounts
indicated on a settlement statement that would otherwise be treated as paid
directly by the borrower, for the purpose of allowing these amounts to be
treated as paid directly by the borrower. The lender of record makes this
representation for any and all loans purchased by Colonial Mortgage Company. The
lender of record understands that the must retain a copy of this agreement for
four years following the close of the calendar year in which the last loan
covered under this agreement is purchased by Colonial Mortgage Company.
LENDER OF RECORD DESIGNEE
COLONIAL MORTGAGE COMPANY
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇▇▇▇▇ /s/ Signature Illegible
Signature Signature
President President
Title Title
9/1/98 3/23/92
Date Date
CMC APPROVAL NUMBER: __________________