Amended and Restated
Mortgage Loan Repurchase Agreement
This Amended and Restated Mortgage Loan Repurchase Agreement is
effective this 2nd day of April, 2002, by and between by and between Horizon
Bank and Northeast Mortgage Corporation and subsidiary Northeast Mortgage LLC.
("Mortgage Company"). This Agreement amends, restates and supersedes that
certain Mortgage Loan Repurchase Agreement executed by the Parties effective the
14th day of May 2001.
Each of the parties represents that it is duly organized, validly
existing, and in good standing according to laws governing its organization.
Each of the parties represents that it has the necessary power and authority to
enter into this Agreement.
This Agreement evidences the terms upon which Mortgage Company agrees,
from time to time, to sell, assign and transfer its interest in certain mortgage
loans to Horizon Bank against the transfer of funds to Mortgage Company by
Horizon Bank and the simultaneous Agreement by Horizon Bank to resell, reassign
and transfer back to Mortgage Company said interest in said mortgage loans at a
date certain or on demand against the receipt of funds from, or on behalf of
Mortgage Company.
1. DEFINITIONS. The Parties agree that throughout this Agreement and all other
documents and agreements executed in connection with this transaction, the
following terms will have the following meanings (terms defined in the singular
to have the same meaning when used in the plural and vice-versa).
"Agreement" shall mean this Amended and Restated Mortgage Loan
Repurchase Agreement, as amended, supplemented, or modified
from time to time.
"A-Rated Loan" shall mean a Mortgage Loan rated by ▇▇▇▇▇▇▇ Mac
or ▇▇▇▇▇▇ Mae as having a Borrower with a high quality or "A"
credit rating.
"Borrower" shall mean the Person borrowing money from Mortgage
Company in connection with any Loan Transaction who owes
performance under the Note, Mortgage, and the other Loan
Documents evidencing such Loan Transaction.
"Business Day" shall mean any weekday on which Horizon Bank is
open for general business.
"Horizon Bank" shall mean Horizon Bank, with an office located
at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
"End Investor" shall mean the Person who purchases a
Repurchased Loan from Mortgage Company or a Loan directly from
Horizon Bank for the purpose of holding such Loan for the
duration of the term of the Note evidencing such Loan.
"▇▇▇▇▇▇ ▇▇▇" shall mean ▇▇▇▇▇▇ Mae, a quasi-governmental
purchaser of mortgage loans in the Secondary Market.
"FHA" shall mean the Federal Housing Administration, an agency
of the United States of America providing mortgage insurance.
"▇▇▇▇▇▇▇ Mac" shall mean ▇▇▇▇▇▇▇ Mac, a quasi-governmental
purchaser of mortgage loans in the Secondary Market.
"Government Insured Loan" shall mean a Loan that has been
insured under a loan insurance program authorized and
administered by or through an agency of the United States
Government.
"Government Guaranteed Loan" shall mean a Loan the payment of
which, either in whole or in part, has been guaranteed under a
loan guaranty program authorized and administered by or
through an agency of the United States Government.
"Lien" shall mean any mortgage, deed of trust, pledge,
security interest, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or
preference, priority or other security agreement or
preferential arrangement, charge or encumbrance of any kind or
nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect
as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law
of any jurisdiction to evidence any of the foregoing.
"Loan" shall mean a Mortgage Loan purchased by Horizon Bank
from Mortgage Company under the provisions of section 2 of
this Agreement, including the Note, the Mortgage securing the
mortgage note, and all other Loan Documents relating to the
mortgage loan being purchased, and any and all rights incident
to any of the aforementioned.
"Loan Documents" shall mean with respect to any Loan
Transaction, the Note, the Mortgage securing the Note, the
assignment of the Note and Mortgage to Horizon Bank, and those
documents required to be submitted by Mortgage Company to
Horizon Bank pursuant to the provisions of section 2.02(e) of
this Agreement.
"Loan Transaction" shall mean the process of lending by
Mortgage Company to a Borrower in connection with a Loan,
including funding of the Loan and the execution and/or
delivery of all necessary Loan Documents and other actions
required to close the Loan.
"Mortgage" shall mean the mortgage, trust deed, deed of trust,
or other document executed by Borrower in connection with a
Loan Transaction which creates a Lien on the Mortgaged
Property securing the Loan. Unless otherwise specified, any
reference in this Agreement to a Mortgage shall be deemed to
mean either a first or second position lien on real estate, as
depicted in the Loan Documents.
"Mortgage Company" shall mean Northeast Mortgage Corporation
and Subsidiary Northeast Mortgage LLC, a _Connecticut
corporation, with its principal offices located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
"Mortgage Loan" shall mean a mortgage loan submitted by
Mortgage Company to Horizon Bank for purchase which loan has
been made by Mortgage Company to a Borrower in the ordinary
course of Mortgage Company's business either to finance a
Borrower's purchase of a one-to-four family dwelling; or (2)
to allow a Borrower to refinance existing mortgage
indebtedness outstanding with respect to a one-to-four family
dwelling; or (3) to provide equity line or loan consolidation
financing to a Borrower.
"Mortgaged Property" shall mean the real estate, improvements
located thereon, and all other interests incidental thereto
described in a Mortgage.
"Note" shall mean the promissory note executed by the Borrower
in connection with a Loan Transaction to evidence the Loan
made by Mortgage Company to Borrower, all rights and interests
under said promissory note, and any renewal, extension,
modification, replacement or refinancing thereof.
"Parties" shall mean collectively, Horizon Bank and Mortgage
Company, their respective successors and assigns.
"Person" means any individual, limited liability company,
partnership, corporation, business trust, joint stock company,
trust, unincorporated associations, joint venture,
governmental authority, quasi-governmental entity or other
entity of whatever nature.
"Prime Rate" shall mean the floating, daily variable rate of
interest defined as the "Prime Rate" as published from time to
time under the Money Rates section in The Wall Street Journal
and defined therein as the base rate on corporate loans posted
by at least 75% of the nation's 30 largest banks. If more than
one Prime Rate is quoted therein, or a range of rates is
published, then the Prime Lending Rate shall be the highest
rate published. The interest rate will change each time that,
as of the date that, and to the extent that the Prime Rate
changes. Interest will be computed on the basis of the actual
number of days elapsed over a year consisting of 360 days.
"Repurchase Period" shall have the meaning ascribed to such
term in section 3 of this Agreement.
"Repurchased Loan" shall mean a Loan repurchased by Mortgage
Company from Horizon Bank pursuant to the provisions of
section 3 of this Agreement.
"Secondary Mortgage Market" shall mean the buying and selling
of mortgage loans by the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the
Government National Mortgage Association, or other Horizon
Bank approved non-government investors for the purpose of
holding such loan for the duration of the term of the note
evidencing such loan.
"Sub-Prime Rated Loan" shall mean an other than A-Rated Loan
or a loan secured by a second mortgage held by Horizon Bank,
whether or not Horizon Bank also holds a first mortgage.
"VA" shall mean the Veterans Administration, an agency of the
United States of America providing mortgage insurance.
2. TERMS OF PURCHASE
The following conditions must be satisfied by Mortgage Company with
respect to each Mortgage Loan prior to the sale of each Mortgage Loan to Horizon
Bank. Any commitment by Horizon Bank to purchase a specific Mortgage Loan from
Mortgage Company shall be subject to satisfaction of the conditions herein
stated and the satisfaction by Mortgage Company of all its other
representations, warranties, agreements and covenants under this Agreement.
Mortgage Company agrees that Horizon Bank has no obligation by reason of this
Agreement to purchase from and accept the assignment and transfer from Mortgage
Company of any of its Mortgage Loans, and the purchase of a particular Mortgage
Loan by Horizon Bank on one occasion shall not imply or create an obligation on
the part of Horizon Bank to purchase any other Mortgage Loans or Mortgage Loans
aggregating any amount. Rather, the purchase of Mortgage Loans by Horizon Bank
shall be on a case-by-case basis solely within Horizon Bank's discretion.
2.01 Restrictions on Loans Subject to Purchase by Horizon Bank.
Notwithstanding any term or provision to the contrary
contained in this Agreement, the Parties agree that unless
specifically allowed as checked and initialed below, the only
Loans which will be subject to purchase by Horizon Bank under
this Agreement shall be Loans secured by first Mortgages for
sale to an End Investor, not part of a bulk sale transaction.
Not
Type of Loan Subject to Purchase Allowed Allowed Initials
Loan Secured by Second Mortgages X [ ] ________
Loans Comprising Part of
Bulk Sale to End Investor X [ ] _________
2.02 Conditions That Must be Satisfied Before Horizon Bank Will
Consider Purchasing any Mortgage Loan:
(a) Origination. Mortgage Company or its agents will have
originated the Mortgage Loan.
(b) Closing. The Mortgage Company or its agents will have
processed and closed the Mortgage Loan through an
independent title or escrow company acceptable to
Horizon Bank.
(c) Term. The term of each Mortgage Loan shall not be
less than 180 months nor more than 360 months unless
the Mortgage Loan is being submitted for purchase
under a specific program which allows for varying
terms.
(d) Purchase Price. Mortgage Loans purchased by Horizon
Bank pursuant to terms of this Agreement shall be
purchased at par or a lesser amount as agreed by the
Parties.
(e) Documentation Requirement. The following listed
documentation, if applicable, must be submitted by
Mortgage Company and received by Horizon Bank prior
to its purchase of such Mortgage Loan. In addition to
the listed information, if requested by Horizon Bank,
Mortgage Company will send Horizon Bank a complete
document package for each purchased Loan within two
(2) business days following receipt of such request.
1) A-Rated Loans: The following documentation must be
provided to Horizon Bank in connection with its
purchase of an A-Rated Loan:
* Prepared Overnight Mail/Airbill Ticket for
to End Transmittal of Note Investor
* Original & Certified Copy of Note
* Original Assignment to Horizon Bank in
Recordable Form
* Copy of End Investor Commitment or D.E.
Underwriting Approval or Desktop
Underwriting Approval
* Copy of Application (1003)
* Copy of Loan Analysis (1008)
2) Sub-Prime Rated Loans: The following documentation
must be provided to Horizon Bank in connection with
its purchase of a Sub Prime Rated Loan:
* Prepared Overnight Mail/Airbill Ticket for
Transmittal of Note to End
Investor
* Original & Certified Copy of Note
* Original Assignment to Horizon Bank in
Recordable Form
* Copy of End Investor Commitment (Flow basis
loan)
* Copy of Underwriting Approval (Bulk basis
loan)
* Certified Copy of Mortgage (1st and last
page)
* Copy of HUD Settlement Statement
* Copy of First Lien Letter or Preliminary
Title Policy
* Copy of Application (1003)
* Copy of Credit Report
* Copy of Loan Analysis (1008)
* Evidence of PMI (if applicable)
* Copy of Appraisal (1st and 2nd page)
* Copy of Hazard Insurance
2.03 Eligible Mortgage Loans. Only Mortgage Loans which are secured
by Mortgages placed on existing one-to-four family dwellings
originated, processed and closed by Mortgage Company and/or
its agents will be considered for purchase by Horizon Bank
pursuant to the terms of this Agreement.
2.04 Underwriting Standards.
(a) Non-government insured or guaranteed Mortgage Loans
must conform to the underwriting guidelines
promulgated by the End Investor identified by the
Mortgage Company to purchase the Mortgage Loan being
considered for purchase by Horizon Bank, whether such
guidelines are published in the End Investor's
Sellers' and Servicers' Guides, or otherwise.
(b) FHA or VA Mortgage Loans will have been submitted to,
and approved by, the appropriate agency prior to
presentation to Horizon Bank for purchase.
Underwriting approval by a government approved
underwriter employed by Mortgage Company shall
satisfy this standard.
(c) Mortgage Guaranty Insurance shall be in place or
guaranteed by the FHA or the VA, as applicable, on
all Government Guaranteed Loans. Such insurance or
guarantee shall be evidenced by a Mortgage Insurance
Certificate issued by FHA or a Loan Guaranty
Certificate issued by VA and must be received by
Horizon Bank within 120 days of its purchase of the
Loan. Non-government insured or guaranteed Loans with
a loan-to-value ratio in excess of 80% and not
otherwise approved in writing by Horizon Bank shall
have private mortgage insurance with full term
coverage underwritten by a private mortgage insurance
company acceptable to Horizon Bank. Proof of such
mortgage insurance coverage must be provided to
Horizon Bank at the time of its purchase of the Loan.
2.05 Limitations on Loan Purchases. At no time shall the aggregate
value of the Loans purchased from Mortgage Company and held by
Horizon Bank which remain subject to repurchase by Mortgage
Company exceed the sum of $25,000,000.00.
3. TERMS OF REPURCHASE
Mortgage Company shall have the right to repurchase from Horizon Bank
each and every Loan purchased from Mortgage Company by Horizon Bank pursuant to
the terms of this Agreement on or before the sooner of either of the following
deadlines (the "Repurchase Period"): 1) On or prior to the time the Loan is
purchased in the Secondary Mortgage Market per the terms of the End Investor's
commitment, or 2) no later than ninety (90) days following Horizon Bank's
purchase of the Loan. Horizon Bank, at its sole discretion, may grant additional
time to Mortgage Company to repurchase any Loan it previously sold to the bank.
Mortgage Company agrees that any Loans it elects not to repurchase within the
Repurchase Period shall be placed by Mortgage Company with an End Investor and
the purchase to such End Investor shall be completed within the Repurchase
Period.
3.01 Repurchase Price. Mortgage Company will pay an amount equal to
that which Horizon Bank paid Mortgage Company for the Loan
being repurchased by Mortgage Company plus a price
differential that consists of an interest charge, the
calculation of which is described below in section 3.02, and a
fifty dollar ($50.00) processing fee.
3.02 Interest Rate and Method of Interest Calculation. Horizon Bank
will be compensated for its purchase of Loans pursuant to the
terms of this Agreement by collecting an interest charge from
Mortgage Company. The interest charge under this Agreement
applicable to the purchase Loans will vary depending on the
type of Loan and on the length of time that Horizon Bank holds
the Loan in its portfolio pending repurchase by Mortgage
Company.
1) Interest Rate applicable to A-Rated Loans: The following
interest rate structure will apply to A-Rated Loans (only
boxes checked are applicable):
X Prime Rate minus one-quarter (-.25%) percent
for the first thirty (30) days that an
A-Rated Loan remains unpurchased from
Horizon Bank.
X Prime Rate plus zero (0%) percent from day
thirty-one (31) to day sixty (60) that an
A-Rated Loan remains unpurchased from
Horizon Bank.
X Prime Rate plus one (1.00%) percent from day
sixty-one (61) to day ninety (90) that an
A-Rated Loan remains unpurchased from
Horizon Bank.
X Prime Rate plus three (3.00%) percent from
day ninety-one (91) to the date of
repurchase from Horizon Bank of an A-Rated
Loan.
2) Interest Rate applicable to Sub-Prime Rated Loans. The
following interest rate structure will apply to Sub-Prime
Rated Loans (only boxes checked are applicable):
X Prime Rate plus Two (2.00%) percent for the
first ninety (90) days that a Sub-Prime
Rated Loan remains unpurchased from Horizon
Bank.
[ ] Prime Rate plus (____%) percent from day
__________ (____) to the date of repurchase
from Horizon Bank of a Sub-Prime Rated Loan.
[ ] Prime Rate plus (____%) percent for the
first __________ (____) days that a
Sub-Prime Rated Loan remains unpurchased
from Horizon Bank.
X Prime Rate plus Three (3.00%) percent from
day ninety-one (91) to the date of
repurchase from Horizon Bank of a Sub-Prime
Rated Loan.
3) Method of Interest Calculation. The designated interest
rate will be charged on the actual purchase amount for the
actual number of days elapsed. When the Loan purchase date and
the subsequent date of repurchase are the same date, one (1)
day of interest will be due. Elapsed days on existing Loans
will include the day the Loan was purchased by Horizon Bank
through the day immediately prior to the date of repurchase by
Mortgage Company, with a minimum of one (1) day of interest
being due.
4) Interest Rate Change. Horizon Bank reserves the right from
time to time during the term of this Agreement to increase or
decrease, at its election, the interest rate applicable to
either A-Rated Loans or Sub-Prime Rated Loans by giving
Mortgage Company five (5) days written notice of such interest
rate change. The Parties agree that for the purposes of this
paragraph 3.02 (4), facsimile notice to Mortgage Company shall
be deemed sufficient notwithstanding any other provision in
this Agreement to the contrary. Facsimile notice may be given
by Horizon Bank to Mortgage Company at the following number: ,
or to such other number as Mortgage Company may identify to
Horizon Bank in writing from time to time. The adjusted
interest rate shall automatically become effective on the
sixth (6th) calendar day following the date such written
notice is sent to Mortgage Company ("Effective Date") but
shall only apply to Loans (either A-Rated or Sub-Prime,
depending on which type of Loan the interest rate change was
applicable) purchased by Horizon Bank on or after the
Effective Date. Such modified interest rate shall remain in
effect until further notice is given by Horizon Bank to
Mortgage Company consistent with this section 3.02 (4).
3.03 Method of Interest and Fee Collection by Horizon Bank. Horizon
Bank will ordinarily collect the interest and fees due on each
Loan at the time of repurchase by Mortgage Company or at the
time of sale to the End Investor. However, Horizon Bank, at
its sole discretion, may demand and collect from Mortgage
Company interest calculated as provided in Section 3.02 above
and any principal pay downs received by Mortgage Company on
any Loan previously sold to Horizon Bank but not yet
repurchased by Mortgage Company or sold to an End Investor. A
monthly invoice will be forwarded to Mortgage Company and will
be due and payable by the fifteenth day of the month the
invoice was forwarded to Mortgage Company.
3.04 Effective Date of Repurchase. Mortgage Company shall have the
right to repurchase the Loans it previously sold to Horizon
Bank pursuant to the terms of this Agreement with immediately
available funds delivered to Horizon Bank's office at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ City, Indiana, or to a designated
depository of Horizon Bank via wire transfer (made and
confirmed) prior to 3:00 P.M. prevailing Chicago time. Funds
received after that time shall be deemed to have been received
by Horizon Bank on the next following Business Day. Actual
repurchase dates will be determined accordingly.
3.05 Note Interest. Upon repurchase of a Loan by Mortgage Company
from Horizon Bank and upon the payment to Horizon Bank by
Mortgage Company of the interest set forth in paragraph 3.02
above, Horizon Bank agrees to credit to Mortgage Company an
amount equal to any earned interest on the Note associated
with such Loan that may have been included in the funds
received by Horizon Bank from or on behalf of Mortgage Company
to effect such specific Loan repurchase.
3.06 Loan Put Rights. The Parties hereto agree that Horizon Bank
shall have the right to require Mortgage Company to repurchase
at any time any Loan purchased from Mortgage Company by giving
written repurchase notification to Mortgage Company. Mortgage
Company shall repurchase any such Loan within 48 hours from
date of notification.
3.07 Real Estate Put Rights. The Parties hereto agree that at any
time Horizon Bank shall have the right to require Mortgage
Company to purchase from Horizon Bank, at no financial loss to
Horizon Bank, any Mortgaged Property, the title to which is
obtained by Horizon Bank from either a deed-in-lieu of
foreclosure or Mortgage foreclosure action relative to any
Loan previously purchased by Horizon Bank from Mortgage
Company by giving written notification to Mortgage Company.
Mortgage Company shall purchase such Mortgaged Property within
48 hours from date of notification.
3.08 Revolving Repurchase Obligation. Notwithstanding anything
contained herein to the contrary, the obligation of Mortgage
Company to repurchase pursuant to the foregoing paragraphs
(3.06) and (3.07) shall be limited to a maximum amount of
$25,000,000.00 at any given time, however, there shall be no
aggregate limitation. In other words, the obligation to
repurchase shall revolve and continue until all obligations of
Mortgage Company to Horizon Bank have been satisfied.
3.09 Delivery to Secondary Mortgage Market. Mortgage Company and
Horizon Bank hereby agree that Mortgage Company shall cause
the delivery of each Loan to the Secondary Mortgage Market
within twenty (20) days from date of purchase by Horizon Bank
from Mortgage Company.
4. GENERAL REPRESENTATIONS, WARRANTIES, AND AGREEMENTS
4.01 Mortgage Company's Ownership of Loans Sold and Compliance with
Applicable Law.
(a) Mortgage Company's Ownership. Mortgage Company
represents and warrants to Horizon Bank, as to each
Loan sold to Horizon Bank under this Agreement, that
Mortgage Company is the sole owner of the Loan; that
Mortgage Company has the authority to sell, transfer
and assign the Loan on the terms herein set forth;
and that there has been no assignment, sale or
hypothecation of the Loan by Mortgage Company to any
other party and that the Loan is transferred to
Horizon Bank free and clear of any Lien or other
interests of any other party.
(b) Compliance with Applicable Law. Mortgage Company
further represents and warrants to Horizon Bank, as
to each Loan sold to Horizon Bank under this
Agreement, that all applicable federal and state
laws, rules and regulations, as from time to time
promulgated and amended, have been complied with,
including but not by way of limitation: applicable
usury, interest rate and closing cost limitations;
all applicable state and federal laws and regulations
that apply to real estate loans and home loans
(whether or not Mortgage Company is subject to such
laws and regulations), all applicable state and
Federal laws and regulations governing lending,
including the Real Estate Settlement Procedures Act,
the Equal Credit Opportunity Act, the Flood Disaster
Protection Act, the Truth in Lending Act of 1968, and
all applicable regulations issued pursuant thereto.
(c) Insurance and Trustees. Mortgage Company further
represents and warrants to Horizon Bank, as to each
Loan sold to Horizon Bank under this Agreement, that
all conditions for insurance or guaranty as required
by the National Housing Act of 1934, as amended, and
the rules and regulations thereunder, or as required
by the Servicemen's Readjustment Act of 1944, as
amended, and the rules and regulations thereunder, or
by any mortgage insurance company insuring the loan,
have been satisfied, and said insurance or guaranty
is valid and enforceable.
(d) Fidelity and Mortgagees E & O Coverage. Mortgage
Company represents and warrants to Horizon Bank that
it has Fidelity and Mortgagees Errors & Omissions
Insurance coverage in effect and that Horizon Bank
has been named at the loss payee. Horizon Bank
reserves the right to require minimum coverage
amounts. The insurance carrier must be acceptable to
Horizon Bank. The insurance policy cannot be canceled
without 30 days prior written notice to Horizon Bank.
4.02 Other Warranties and Representations of Mortgage Company.
Mortgage Company further represents and warrants to Horizon
Bank, as to each Loan sold to Horizon Bank under this
Agreement:
(a) That the applicable Loan Documents have been duly
executed by the Borrower, and that the applicable
Loan Documents have been duly acknowledged and
recorded with the appropriate public officers as may
be necessary to perfect the security interest in the
Mortgaged Property securing the Loan;
(b) That the Borrower has duly executed appropriate
documents indicating that the Borrower has received
all disclosures required by applicable laws and
regulations and that the Borrower has executed a
compliance agreement whereby the Borrower agrees to
sign any additional documents that are necessary so
as to fully and correctly document the loan file as
required by all applicable Secondary Mortgage Market
standards;
(c) That the full original principal amount less
applicable fees of the Loan has been advanced to the
Borrower; that the unpaid principal balance of the
Loan is as stated; that costs, fees, and expenses in
making, closing and recording the Loan have been
paid; that no part of the Mortgaged Property has been
released from the Mortgage securing such Loan; and
that the Loan is not in default;
(d) That each Loan which Mortgage Company represents to
be insured by a private mortgage insurance company or
which Mortgage Company represents to be a Government
Insured Loan or Government Guaranteed Loan, is so
insured or guaranteed;
(e) That the assignment of the Loan from Mortgage Company
to Horizon Bank is valid and legally sufficient and
will be timely recorded with the appropriate public
officers at Mortgage Company's expense;
(f) That the improvements to the Mortgaged Property are
insured by hazard insurance policies issued by a
company that is acceptable to Horizon Bank and that
such policies: (I) are in an amount at least equal to
the outstanding principal of the Loan, or the full
insurable value of the improvements, whichever is
less, (ii) are of a type substantially in the form or
at least as protective of the Mortgagee as the fire
and extended coverage contained in the "New York"
loss mortgage clause (also known as "standard") which
provides that the mortgagee's hazard insurance is not
invalidated by acts of the Borrower, and (iii)
contain suitable provisions for payment on all
present and future loans on the Mortgaged Property in
order of precedence;
(g) That all payments required to be made, as of the date
of purchase by Horizon Bank from Mortgage Company,
under the terms of the Loan have been made;
(h) That all parties to the Loan have capacity to execute
the same;
(i) That the Mortgage securing the Loan is a valid,
subsisting and enforceable Lien on the Mortgaged
Property whose priority is established according to
the terms of the Loan requirements and applicable
Loan Documents; that the Loan (and related Loan
Documents) is genuine and in all respects is what it
purports to be; and that the Mortgaged Property is
free and clear of all Liens having priority over the
Mortgage securing the Loan except as otherwise
specifically approved by Horizon Bank except for
liens for real estate taxes and special assessments
not yet due and payable;
(j) That there are no unpaid taxes, ground rents, water
charges, sewer rents, assessments (including any
assessments payable in future installments) or other
outstanding charges affecting the Mortgaged Property
securing the Loan, other than taxes adequately
provided for in an escrow account;
(k) That the terms of the Loan have not been waived,
altered or modified in any respect, except by
instruments of record described by the title
insurance policy accompanying the Loan; that the Loan
is fully enforceable against the Borrower according
to its stated terms; and that there are no setoffs,
counterclaims, recoupments or defenses to the
obligations of the Borrower to pay the principal and
interest as stated to remain unpaid;
(l) That the Loan has not been satisfied or subordinated,
in whole or in part, and the Mortgage securing
payment of the Loan has not been released, in whole
or in part;
(m) That with regard to an FHA Government Insured Loan,
the Federal Housing Commissioner has or will issue
his Mortgage Insurance Certificate and that the
insurance premium has been paid to the Federal
Housing Commissioner, and that nothing has been done
or omitted, the effect of which act or omission would
be to invalidate the contract of insurance with the
FHA, and that all FHA insured Loans comply with the
regulations of the FHA;
(n) That with regard to a VA Government Guaranteed Loan,
the Department of Veteran's Affairs has or will issue
its Loan Guaranty Certificate for "full guarantee"
and that nothing has been done or omitted, the effect
of which act or omission would be to invalidate the
guaranty by the Department of Veteran's Affairs and
that all VA Guaranteed Loans comply with the
regulations of the Department of Veteran's Affairs;
(o) That the Mortgaged Property is free and clear of all
mechanics' and materialmen's liens or other such
Liens, and no rights are outstanding that under law
could give rise to any such Lien;
(p) That all of the improvements which are included for
the purpose of determining the appraised value of the
Mortgaged Property lie wholly within the boundaries
and building restriction lines of such property, and
no improvements on adjoining properties encroach upon
the Mortgaged Property and that the improvements have
been completed in full compliance with the rules and
regulations of any governmental department or agency
having jurisdiction thereof, and further, that such
compliance will be maintained throughout Horizon
Bank's ownership thereof.
(q) That there is no proceeding pending for the total or
partial condemnation of the Mortgaged Property and
said property is undamaged by fire, windstorm or
flood, waste, tornado or any other cause;
(r) That Mortgage Company asserts it has no knowledge of
any circumstances or conditions with respect to the
Loan, the Mortgaged Property, the Borrower or the
Borrower's credit standing that can be reasonably
expected to cause private or institutional End
Investors to regard the Loan as an unacceptable
investment, cause the Loan to become delinquent, or
adversely affect the value or marketability of the
Loan;
(s) That all Persons or entities which have had any
interest in the Loan, whether as a mortgagee,
assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such
interest, were): (I) corporations organized under the
laws of the state wherein the Mortgaged Property is
located, or (ii) corporations qualified to do
business in such state, or (iii) corporations not
"doing business" in such state pursuant to laws in
such state requiring the qualification of foreign
corporations doing business in the state;
(t) That the Loan Documentation contains customary and
enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the
benefits of the security, including: (I) in the case
of a Mortgage designated as deed of trust, by
trustee's sale, and (ii) otherwise by judicial
foreclosure; and that there is no homestead or other
exemption available to the Borrower that would
interfere with such right to sell at a trustee's sale
or right to foreclose;
(u) That each Loan is covered by an American Land Title
Association ("ALTA") mortgage title insurance policy
or other generally acceptable form or policy or
insurance acceptable to the ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ Mac,
and the Government National Mortgage Association
("GNMA"), issued by a title insurer acceptable to the
▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac, and the GNMA, and qualified
to do business in the jurisdiction where the
Mortgaged Property is located, insuring Mortgage
Company, its successors and assigns, as to the
applicable priority of the Lien of the Mortgage
securing the Loan in the original principal amount of
the Loan; that Mortgage Company is the named insured
and the sole insured of such mortgage title insurance
policy; that the assignment to Horizon Bank of
Mortgage Company's interest in such mortgage title
insurance policy does not require the consent of or
notification to the insurer; that such mortgage title
insurance policy is in full force and effect and will
be in full force and effect upon the consummation of
the transactions contemplated by this Agreement; that
no claims have been made under such mortgage
insurance title policy; and that no prior holder of
the Loan, including Mortgage Company, has done, by
act or omission, anything which would impair the
coverage of such mortgage title insurance policy; and
that Mortgage Company is unaware of any facts that
would constitute a defense to payment of any claim by
the title insurer under such mortgage title insurance
policy;
(v) That if the Mortgaged Property is in an area
identified in the Federal Register by any United
States government agency, including the Federal
Emergency Management Agency, as having special flood
hazards (and such flood insurance has been made
available), a flood insurance policy meeting the
requirements of the current guidelines of the Federal
Insurance Administration is in effect with a
generally acceptable insurance carrier, in an amount
representing coverage not less than the lesser of:
(I) the outstanding principal balance of the Loan,
(ii) the full insurance value, or (iii) the maximum
amount of insurance which is available under the
Flood Disaster Protection Act of 1973. Mortgage
Company shall maintain in its possession, available
for Horizon Bank's inspection, and will deliver to
Horizon Bank, documentation as to the method used in
determining the applicability of the provisions of
the Flood Disaster Protection Act of 1973, as the
same may be amended, to the Mortgaged Property; that
all such insurance policies contain a standard
mortgagee clause naming Mortgage Company, its
successors and assigns, as mortgagee and that all
premiums due thereon have been paid; that the terms
of each Loan obligate the Borrower thereunder to
maintain all such insurance at the Borrower's cost
and expense, and on the Borrower's failure to do so,
authorizes the holder to obtain such insurance at the
Borrower's cost and expense, and to obtain
reimbursement therefor from the Borrower;
(w) That all terms, conditions and covenants in this
Agreement or any Loan Agreement between Horizon Bank
and Mortgage Company pursuant to which the Loan has
been purchased have been and will be fully complied
with by Mortgage Company; and that all
representations and warranties of Mortgage Company in
this Agreement and any other Agreement between the
Parties with respect to the Loan are true and correct
and have not and will not be breached, and that
Mortgage Company will promptly notify Horizon Bank if
it becomes aware of such representations or
warranties becoming untrue, incorrect or breached in
the future;
(x) That each Loan has been made and closed in strict
accordance with any commitment issued by Mortgage
Company to the Borrower;
(y) That Mortgage Company has underwritten each Loan to
the specifications of a specified Horizon Bank
approved End Investor, including government agencies
to whom the Loan has either been pre-sold or is
committed to be sold to under the terms of a forward
sale/purchase arrangement entered into between
Mortgage Company and an End Investor that has been
approved and accepted by Horizon Bank and that no
financial loss will result to Horizon Bank due to the
resale of Loans ultimately sold to any such End
Investor by Mortgage Company.
4.03 Mortgage Company's Duties.
(a) Perfection of Title. Mortgage Company shall take all
action necessary to perfect title to any Loans sold
to Horizon Bank under this Agreement.
(b) Delivery of Documentation. Mortgage Company shall
deliver to Horizon Bank, with respect to each Loan
sold to Horizon Bank under this Agreement, all Loan
Documents and shall execute and deliver to Horizon
Bank any other documents necessary to sell, assign
and transfer the Loans to Horizon Bank. Upon Horizon
Bank's demand, Mortgage Company shall further deliver
to Horizon Bank, with respect to each Loan sold to
Horizon Bank under this Agreement, evidence that
Mortgage Company has complied with each of Mortgage
Company's representations, warranties, and covenants
under this Agreement, including, without limitation,
evidence that Mortgage Company has complied with all
applicable federal and state laws, rules and
regulations with respect to the Loan and Mortgage
Company's extension of credit to the Borrower. All
such documents must be acceptable to Horizon Bank and
its legal counsel as to form and execution.
(c) Quality Control Program. Mortgage Company asserts
that it has implemented, and will continue to
maintain, a Loan Quality Control Program that
complies with regular Secondary Mortgage Marketing
standards such as those promulgated by ▇▇▇▇▇▇▇ Mac
with regard to conforming, non-government insured or
guaranteed loans and, in the case of non-conforming
A-Rated and all Sub-Prime Rated Loans the Secondary
Mortgage Market Standards promulgated by recognized
Horizon Bank approved non-government End Investors.
Mortgage Company hereby grants Horizon Bank or its
designee the right to review, at Mortgage Company's
expense, its Quality Control policies and procedures
during regular business hours with specific
permission to Horizon Bank or its designee to review
any Loan file where Mortgage Company previously had
sold the Loan to Horizon Bank.
5. LOAN SERVICING BY MORTGAGE COMPANY
Mortgage Company shall remain responsible for servicing all Loans sold
to Horizon Bank pursuant to paragraph 2 of this Agreement. So long as Horizon
Bank remains the owner of a Loan, all payments made by a Borrower with respect
to a Loan shall be deposited by Mortgage Company in a separate escrow account in
the name of Mortgage Company as trustee for Horizon Bank, and held in trust for
Horizon Bank subject to the provisions of this paragraph 5. If requested in
writing by Horizon Bank, Mortgage Company shall pay to Horizon Bank all monies
held in trust and to be received in trust by Mortgage Company, as and when
received by Mortgage Company, with respect to any Loan owned by Horizon Bank for
which such request is made. Receipt by Mortgage Company of a request from
Horizon Bank to pay to Horizon Bank funds held in trust with respect to a Loan
owned by Horizon Bank shall trigger the requirement by Mortgage Company to
immediately record with the proper recording or filing authority the assignment
of mortgage or trust deed securing such Loan. The Parties agree that for the
purposes of this paragraph 5, facsimile notice shall be deemed sufficient
notwithstanding any other provision in this Agreement to the contrary. Any
monies paid to Horizon Bank pursuant to this paragraph 5 with respect to a Loan
owned by Horizon Bank shall, if repurchased by Mortgage Company, be credited
against the repurchase price of such Loan. In furtherance of its obligations to
continue to service the Loans, Mortgage Company, at its cost, shall at all times
exercise due care for and on behalf of Horizon Bank and in connection therewith
shall comply with the following and perform such services as are customarily
rendered and provided by servicers of loans of the same type as the Loans,
including, by way of example and not by way of limitation, the following:
5.01 Collect Payments. Use its best efforts to collect all payments
due on a timely basis under the terms of the Loans as they
become due and use its best efforts to obtain full and
complete compliance with all of the terms of the Loan
Documents for the Loans;
5.02 Funds Held in Trust. Segregate all funds received by Mortgage
Company attributable to the Loans and deposit them, in trust,
on behalf of Horizon Bank, as the owner of the Loans, in an
account or accounts at the offices of such financial
institution or institutions as Horizon Bank may agree upon,
which account or accounts shall be insured by the Federal
Deposit Insurance Corporation, and withdraw funds from such
account or accounts only as may be necessary to comply with
the terms and conditions of this Agreement and for no other
purpose whatsoever;
5.03 Remit Funds to Horizon Bank. Remit to Horizon Bank on or
before the 10th day of each month Horizon Bank's pro rata
share of all amounts received by Mortgage Company with respect
to the Loans as of the end of the immediately preceding month,
consisting of Horizon Bank's pro rata share of all principal
payments on the Loans plus Horizon Bank's Yield.
5.04 Record Keeping. Maintain complete and accurate records with
respect to each and every Loan, such records to be kept and
maintained in accordance with generally accepted accounting
principles which shall accurately record all receipts and
disbursements attributable to each Loan and such other matters
as Horizon Bank may request from time to time. If requested by
Horizon Bank, Mortgage Company shall furnish to Horizon Bank a
statement setting forth, with respect to each Loan for which
Mortgage Company has received payments from the Borrower, the
remaining unpaid principal balance thereof, the amount of any
accrued interest then due and payable, the payment date of the
last monthly payment received and the amount thereof, the then
remaining payoff amount, and such other information as Horizon
Bank may request from time to time;
5.05 Access to Records. Provide Horizon Bank, its agents or
representatives, access to all books and records maintained by
Mortgage Company with respect to a Loan with respect to which
Mortgage Company is receiving payments from a Borrower, for
purposes of inspection at any time and from time to time
during regular business hours and upon 24 hours advance
telephonic or other form of notice;
5.06 Collection in the Event of Default. Use its best efforts to
collect any and all monthly payments of any Loans which are in
default and, if appropriate, cause the commencement of such
legal actions or proceedings as may be necessary to cause the
collection of same, or the commencement of a foreclosure
action on the property securing each Loan;
5.07 Prior Consent to Action. Discuss with, and obtain the prior
consent of, Horizon Bank before the institution or taking of
any extraordinary action or proceeding or the incurring of any
extraordinary expense in connection with protecting the rights
or remedies of Mortgage Company or Horizon Bank with respect
to any Loan;
5.08 Marking Files. Have each file for a Loan appropriately marked
to show the ownership interest of Horizon Bank in and to same;
6. NO WAIVER
All of Mortgage Company's representations and warranties under this
Agreement, all of the conditions to purchase of any Loan, and all of Mortgage
Company's other agreements under this Agreement: (I) shall survive the issuance
of any commitment to purchase a Loan by Horizon Bank, the delivery of any Loan
and the termination of this Agreement for any reason; (ii) shall not be deemed
altered or waived by any endorsement or assignment that conflicts with such
representations, warranties, conditions or agreements; and (iii) shall inure to
the benefit of all successors, transferees and assignees of such Loans. Such
representations, warranties, conditions or agreements shall not be considered
waived if Horizon Bank purchases any Loan or issues any commitment to purchase
any Loan with knowledge that any representations, warranties, conditions or
agreements with respect to the Loan have been breached or are untrue. This
Agreement cannot be modified, except by agreement in writing executed by
authorized officers of both Parties.
7. TERMINATION OF AGREEMENT
This Agreement may be terminated by either Party at any time upon 120
days written notice to the other Party. All Loans previously purchased (prior to
written notice from Horizon Bank to Mortgage Company) from Mortgage Company and
assigned to Horizon Bank will be resold to Mortgage Company under provisions of
section 3 of this Agreement. If such repurchase is not effected by Mortgage
Company then Horizon Bank will exercise its Loan Put Rights or Real Estate Put
Rights which are also spelled out in section 3, paragraphs 3.06 and 3.07 of this
Agreement. Any Loan that has not been purchased from Mortgage Company by Horizon
Bank for which Mortgage Company has, at the time of receipt of Horizon Bank's
written notice of intent to terminate this Agreement, a firm take-out commitment
from a Horizon Bank approved End Investor may be submitted to Horizon Bank,
prior to closing, for its review and purchase commitment which will not be
unreasonably withheld if such Loan(s) are determined by Horizon Bank to meet all
applicable Secondary Mortgage Market standards.
8. DEFAULT PROVISIONS
The Parties agree that a Default shall occur under this Agreement with
the happening of any one or more of the following:
a) Failure of the Mortgage Company to repurchase any Loan
required to be repurchased under the terms of this Agreement.
b) Non-payment by the Mortgage Company of any payment required
to be made under this Agreement or under any obligations referred to in
this Agreement, or under any instrument executed pursuant hereto, or
under any obligation which existed prior to the execution of this
Agreement but is required to be paid pursuant to the terms of this
Agreement, when the same shall be due, whether by acceleration or
otherwise.
c) Mortgage Company or any Guarantor of Mortgage Company's
obligations under this Agreement becomes insolvent or unable to pay
debts as they mature or makes an assignment for the benefit of
creditors or any proceeding is instituted by or against the Mortgage
Company or Guarantor alleging that the Mortgage Company or such
Guarantor is insolvent or unable to pay debts as they mature.
d) Entry of default against the Mortgage Company not
discharged within 30 days thereof.
e) When Horizon Bank, in good faith, deems itself insecure
with respect to any obligations or indebtedness of the Mortgage Company
to Horizon Bank.
f) Failure of the Mortgage Company to comply with any
affirmative covenant, representation or warranty agreed to be kept and
performed by the Mortgage Company under the terms of this Agreement, or
under the terms of any of the documents executed by the Mortgage
Company in connection with the loan transactions contemplated by this
Agreement.
g) Any material adverse change occurring in either the
financial condition, operation, properties, business or management
structure of the Mortgage Company or any Guarantor, or the happening of
any event affecting either the Mortgage Company or any Guarantor,
which, in the opinion of Horizon Bank, has or will materially impair
the ability of the Mortgage Company or any Guarantor to comply with all
the terms and conditions of the documents evidencing this transaction,
including repurchase of the Loans in accordance with the terms of this
Agreement.
h) Death of any of any person who is a Guarantor of Mortgage
Company's obligations under this Agreement.
i) Any act defined as an event of default either elsewhere in
this Agreement or in any of the loan documents executed in connection
herewith.
j) Any statement, representation or warranty at any time
furnished Horizon Bank is untrue in any material respect as of the date
made.
Whenever there is a default under this Agreement, at Horizon Bank's election,
Mortgage Company shall immediately repurchase any and all Loans purchased by
Horizon Bank from Mortgage Company for the amount specified in Paragraph 3
(Terms of Repurchase) of this Agreement, and Mortgage Company shall further pay
to Horizon Bank all other indebtedness and obligations of Mortgage Company to
Horizon Bank (however acquired or evidenced) and without relief from valuation
and appraisement laws, (all of which are expressly waived by Mortgage Company).
Failure at any time to exercise any of the aforesaid options or any other rights
of Horizon Bank hereunder shall not constitute a waiver thereof, nor shall it be
a bar to exercise of any of the aforesaid options or rights at a later date.
9. MISCELLANEOUS PROVISIONS
9.01 Indemnification by Mortgage Company. Mortgage Company hereby
agrees to indemnify and hold Horizon Bank harmless from any
claims, damages, judgments, costs, including attorney fees,
incurred by Horizon Bank as a result of Mortgage Company's
breach of any provision of this Agreement. In the event that
Horizon Bank institutes any action, suit or other proceeding
to remedy, prevent or obtain relief from Mortgage Company's
breach of this agreement, Horizon Bank shall recover all
attorneys' fees incurred in each and every such action, suit
or other proceedings, including any and all appeals or
petition therefore.
9.02 Appointment of Trustees. It is agreed by Horizon Bank and
Mortgage Company that the appointment of any trustees under
any trust deeds or deeds of trust shall by subject to the
approval of Horizon Bank.
9.03 Financial Information. Mortgage Company shall furnish to
Horizon Bank for as long as this Agreement is in effect, as
soon as available, and in any event within ninety (90) days
after the end of each fiscal year of Mortgage Company, audited
financial statements of Mortgage Company consisting of a
balance sheet as of the end of such fiscal year, together with
related statements of income or loss and changes in financial
position of Mortgage Company for such fiscal year, prepared by
independent certified public accountants in accordance with
generally accepted accounting principles. In addition,
Mortgage Company shall also provide Horizon Bank, from time to
time, upon request and within thirty (30) days of such
request, any other financial reports or statements reasonably
required by Horizon Bank. Mortgage Company shall promptly
advise Horizon Bank of any change in Mortgage Company's
ownership, senior management, or any material adverse change
in Mortgage Company's financial condition.
9.04 Wire Transfer Fee. Mortgage Company will be charged a $35.00
(thirty-five dollar) fee for each outgoing wire transfer it
requests be effected by Horizon Bank on its behalf on at least
24 hours prior written notice. Mortgage Company will be
charged a $100.00 (one hundred dollar) fee for each outgoing
wire transfer it requests be effected by Horizon Bank on same
day written notice.
9.05 Mortgage Company Acting as Independent Contractor. It is
stipulated and agreed by the Parties that in selling Loans to
and repurchasing Loans from Horizon Bank, and at all other
times while Mortgage Company performs under or pursuant to
this Agreement, it is acting as an independent contractor and
not as an agent, employee, partner or other representative of
Horizon Bank. Mortgage Company agrees that it will not hold
itself out to third parties as being either an agent,
employee, partner or other representative of Horizon Bank.
9.06 Notices. All notices referred to in this Agreement must be in
writing and shall be deemed duly given to and received by a
party when delivered, if delivered personally or by a private
express delivery service, or when mailed, if mailed by
first-class United States mail, postage prepaid, addressed to
the party at the address indicated in the Definition section
(section 1) of this Agreement or such other address as the
Party shall have given written notice of to the other Party.
9.07 Effect of Article and Section Headings. The article and
section headings herein are for convenience only and shall not
affect the construction of this Agreement.
9.08 Document Contains Entire Agreement. This document contains the
entire Agreement between the Parties hereto and cannot be
modified in any respect except by an Agreement in writing. If
in the past the Parties have executed a similar Mortgage Loan
Repurchase Agreement, this Agreement shall replace and
supersede such earlier executed agreement in all respects.
9.09 Applicable Law and Venue. This Agreement and all other
documents executed in connection herewith shall be governed by
and interpreted in accordance with the substantive laws of the
State of Indiana notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive
rules of law of another jurisdiction to apply. Mortgage
Company hereby consents to the exclusive jurisdiction of any
state or federal court situated in or whose boundaries include
▇▇▇▇▇▇▇ County, Indiana, and waives any objection based on
forum non conveniens with regard to any actions claims,
disputes, or proceedings relating to this Agreement, or any
transactions arising therefrom, or enforcement and/or
interpretation of any of the foregoing. Nothing herein shall
affect Horizon Bank's rights to serve process in any manner
permitted by law or limit Horizon Bank's right to bring
proceedings against Mortgage Company in the competent courts
of any other jurisdictions.
9.10 Severable Provisions. The provisions of this Agreement are
severable, and if any one or more provisions may be determined
to be judicially unenforceable, in whole or in part, the
remaining provisions, to the extent enforceable, shall
nevertheless be binding and enforceable upon the Parties
hereto.
9.11 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, MORTGAGE
COMPANY AND HORIZON BANK HEREBY JOINTLY AND SEVERALLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT. MORTGAGE COMPANY AND HORIZON BANK
EACH REPRESENT TO THE OTHER THAT THIS WAIVER IS KNOWINGLY,
WILLING, AND VOLUNTARILY GIVEN.
9.12 This agreement and the documents executed by the parties from
time to time pursuant hereto, constitute the entire agreement
between the parties with respect to the transactions
contemplated by this agreement. This agreement may only be
amended in writing signed by the parties hereto.
IN WITNESS WHEREOF, each Party has caused this Agreement to be signed
in its corporate name on its behalf by its proper official, duly authorized, and
attested by its secretary on the day and year first set forth above.
HORIZON BANK Northeast Mortgage Corporation
and Subsidiary Northeast Mortgage
LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
BY:___________________________ BY:__________________________
ITS: Sr. Vice President ITS:__________________________
--------------------------------
ATTEST:______________________ ATTEST:_____________________
Witness Witness
Revised 5/00