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Exhibit 10.34
CORRESPONDENT
MORTGAGE SERVICES AGREEMENT
This Mortgage Services Agreement ("Agreement") is made as of the 20th
day of May, 1998 by and between PHH MORTGAGE SERVICES CORPORATION, a New Jersey
corporation having an office at 6000 Atrium Way, Mt. Laurel, New Jersey ??54
("PHH"), and E-Loan (the "Correspondent"), a California corporation having an
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, PHH is an experienced provider, on a nationwide basis, of
residential mortgage services and products to its clients and customers,
including financial institutions;
WHEREAS, Correspondent desires to engage PHH to provide certain
government and conventional residential mortgage services and products to
Correspondent and its customers as described in and in accordance with the terms
specified in this Agreement.
NOW, THEREFORE, in consideration of mutual promises hereinafter set
forth, the parties hereto agree as follows:
PROCEDURES
Eligible Loans. As of the loan closing date, Correspondent shall ensure
that all loans are in full compliance with the Federal National
Mortgage Association Conventional Selling Contract Supplement, the
Federal Home Loan Mortgage Corporation Sellers Guide, the Government
National Mortgage Association Seller/Servicing Guide and the Veterans
Administration Guidelines, as may be applicable or comply with those
modifications that PHH may authorize in writing from time to time.
Interest Rates and Program Terms. The Correspondent shall originate
loans that bear interest in accordance with the price quoted by PHH and
have origination terms, fees and other program features that conform
fully to PHH guidelines. PHH shall close all loans in accordance with
the program options, interest rates and fees provided in the PHH
pricing policy, as well as current price change notices in effect on
the registration date. Any change in the pricing policy shall be
provided by PHH immediately to Correspondent and shall be considered to
be effective upon telephone notification. PHH shall verify all such
changes in writing.
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Loan Origination Procedures. Correspondent shall originate, register
and process all loans in conformance with the procedures and policies
described in the PHH Operations Bulletin, which is incorporated herein
by reference. Correspondent shall submit the documents required in the
Operations Bulletin to PHH for underwriting. PHH shall accept or reject
all loans within forty-eight (48) hours of receipt of a complete
underwriting submission package using the underwriting guidelines
described in the Operations Bulletin and shall close all acceptable
loans in accordance with its normal procedures. Such guidelines may be
amended from time to time by PHH. PHH shall notify Correspondent in
writing of any such changes.
Title and Lien Requirements. Correspondent shall ensure that each loan
is securable by a first mortgage or deed of trust creating a valid
first lien and shall be insurable by an ALTA title policy acceptable to
PHH.
PMI Insurance. On conventional loans with a loan-to-value ratio in
excess of 80%, either Correspondent or PHH shall order private mortgage
insurance and obtain approval that is acceptable to PHH. The private
mortgage insurance required on mortgage programs for relocation buyers
shall be ordered by PHH. Written approval from the private mortgage
insurance company must be received by PHH prior to PHH closing the
loan.
A. Correspondent shall submit an additional copy of the appraisal
and application (Form 1003) for all PMI and Pool Insurance
loans.
Prior Approval. Any loan utilizing a program which requires prior
approval by an investor must receive that approval prior to closing.
PHH will submit such loan for any investor approval.
I. Documentation. Correspondent agrees, within a reasonable time, to
execute, transmit and/or obtain any and all documentation over which
they can be reasonably expected to have control and which PHH, FNMA,
FHLMC or GNMA may deem necessary to properly complete the sale of any
loan; and/or to perfect a first lien. All required documentation shall
be delivered to PHH within thirty (30) days of the closing date or
Correspondent shall, at PHH's option, be required to repurchase the
loan upon demand in accordance with the provisions of this Agreement.
The right to process loans under this Agreement is contingent upon
FNMA, FHLMC and/or GNMA approving Correspondent should such approval be
required by any agency at the time of signing this Agreement or at any
time subsequent.
II. Quality Control. At any time PHH shall have the right to conduct
quality control audits to verify all documentation submitted by
Correspondent including full documentation of loans closed as "no
income" loans. Correspondent agrees to cooperate fully with these
audits including the procurement or verification of any requested
information and with the verification of any audit findings.
Correspondent acknowledges that the findings of these audits could lead
to a request for repurchase of loans or termination of this Agreement
in the event of the discovery of improper documentation, documentation
which does not support the information supplied with the loan
submission, or breach of any warranty contained herein.
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Failure to comply with this Section is a default under this Agreement and PHH,
upon such default, may terminate this Agreement and is entitled to request the
repurchase of any improper loans and any damages suffered as a result of such
breach.
Correspondent Warranty.
A. Correspondent hereby warrants the following to PHH with respect to all loans
submitted under this Agreement:
1. That the mortgagor understands the mortgage will not be
subordinated, in whole or in part, and the mortgaged premises
will not be released from the lien of the mortgage, in whole
or in part until the debt is paid in full;
2. That the property will be subject to a valid, subsisting and
enforceable first lien, and there shall be no simultaneous
secondary financing unless prior approved by PHH;
3. That any assistance necessary to conform with any and all
requirements as to completion of any on-site or off-site
improvements and as to disbursement of any escrow funds will
be performed in a timely manner;
4. That as of the date of warranty correspondent has no knowledge
of damage to the mortgaged premises that would adversely
affect the value thereof;
5. That the mortgage loan was processed by Correspondent in
compliance with all applicable federal, state and local laws
in existence at the time of closing, including but not limited
to: Regulation Z (Truth-in-Lending Act); Fair Credit Reporting
Act; Flood Disaster Protection Act of 1973; Regulation X (Real
Estate Settlement Procedures Act of 1974) (RESPA), as amended,
and Regulation B (Equal Credit Opportunity Act), as amended.
6. All documents submitted to PHH are genuine, true and proper.
All other representations are true and correct and meet the
requirements and specifications of this Agreement.
7. Correspondent further makes all FNMA, FHLMC and GNMA
warranties and representations, as may be applicable, required
at the time of closing of the loans.
All of the aforementioned warranties shall survive and inure to the benefit of
any person, partnership, firm or entity to which PHH may assign or sell any such
loans under this Agreement. In the event of a breach of warranty as described in
this paragraph or failure to deliver the required documentation described in
Paragraph VII, Correspondent agrees to immediately repurchase said loan upon
demand by PHH and shall indemnify and hold PHH harmless from all claims,
liabilities, losses, damages, expenses and lawsuits (including attorney's fees),
in connection therewith.
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Compensation for Correspondent's Services.
Upon receipt of the documents required in Paragraph VII, including
clearance of any approval conditions, PHH shall close the loan. PHH
shall compensate Correspondent at the closing table (unless PHH, in its
sole discretion, notifies Correspondent from the mortgage rate or fees
Correspondent charges the applicant which differ from the that
compensation will be paid after conditions are cleared) based upon the
difference between the mortgage interest rate and/or fees charged the
mortgage and that charged by PHH, less $225 which represents a PHH
underwriting fee. The total Broker compensation paid to the
Correspondent (excluding any closing fees) from the customer, PHH or
Seller, shall not exceed 325 basis points of the original principal
balance of each loan.
Rate Locks. All Loans brokered under this Agreement shall be on a Best
Efforts Basis, unless specifically negotiated otherwise. Best Efforts
delivery shall mean a mandatory delivery of Loans registered with PHH
if the Loan closes. All locked Loans which are not declined by PHH
shall be delivered to PHH. Correspondent shall not broker the Loan to
any other lender and shall not assist in closing the loan with any
other lender. The Best Efforts Delivery Policy will be closely
monitored by the Quality Control Department at PHH. In the event
Correspondent brokers any locked Loan to a lender other than PHH,
Correspondent shall be subject to a pair off fee.
I. Cancellations: In the event the Correspondent requests a loan file
returned from PHH after PHH has underwritten and approved the loan, the
Correspondent will be charged an underwriting fee of $225.
II. Disclaimer. PHH makes no representation or warranty to Correspondent or
its members regarding the effect that this Agreement and the
consummation of the transaction contemplated hereby may have upon their
Foreign, Federal, State or local tax liabilities.
V. Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired.
V. Servicing. PHH shall own the servicing rights of all loans closed under
this Agreement and is entitled to all escrow fees, buydown funds and
rights thereof. Any escrow or buydown fees shall be submitted to PHH
via separate check(s). The check(s) shall be made payable to "PHH
Mortgage Services Corporation", and shall be submitted with the final
closed loan package.
VI. Assignability.
A. Subject to Section VI(B), neither Correspondent nor PHH may
assign its rights or obligations hereunder without the prior
written consent of the other party and any attempted
assignment without such consent shall be void.
B. Notwithstanding the provisions of VI(A), PHH may assign this
Agreement and/or delegate its responsibilities hereunder to
any majority-owned subsidiary without obtaining the consent of
Correspondent.
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VII. Indemnification.
A. Correspondent agrees to defend, indemnify and hold harmless
PHH, its successors, assigns, stockholders, officers,
directors, employees, agents, attorneys, affiliates and
subsidiaries from and against any and all liabilities, damages
or expenses whatsoever, including, without limitation,
attorney's fees, resulting, directly or indirectly, from any
actual or threatened claim or demand arising, directly or
indirectly, under, from or out of or in connection with (i)
any failure by Correspondent to perform its obligations under
this Agreement, (ii) Correspondent's negligence or willful
misconduct in the performance of its obligations under this
Agreement, or (iii) Correspondent's failure to comply fully
with any and all federal, state and local laws, rules and
regulations governing the origination of mortgage loans.
B. PHH agrees to defend, indemnify and hold harmless
Correspondent, its successors, assigns, stockholders,
officers, directors, employees, agents, attorneys, affiliates
and subsidiaries from and against any and all liabilities,
damages or expenses whatsoever, including, without limitation
attorney's fees, resulting, directly or indirectly, from any
actual or threatened claim or demand arising, directly or
indirectly, under, from or out of or in connection with (i)
any failure by PHH to perform its obligations under this
Agreement, (ii) PHH's negligence or willful misconduct in the
performance of its obligations under this Agreement, or (iii)
PHH's failure to comply fully with any and all federal, state
and local laws, rules and regulations governing the
processing, underwriting, closing or servicing of mortgage
loans.
VIII. Compliance with Laws. Correspondent hereby agrees to comply fully with
all Federal, State and local laws governing the origination and
processing of mortgage loans. Correspondent further agrees to indemnify
and hold PHH harmless from any and all claims or damages arising out of
Correspondent's failure to comply with such laws.
IX. Fair Lending Compliance.
A. Correspondent agrees with and fully supports the Fair Lending
laws including: the Equal Credit Opportunity Act, Fair Housing
Act and the Home Mortgage Disclosure Act. To that end,
Correspondent agrees to implement procedures to ensure that
all customers are reviewed on the basis of their
qualifications as a borrower regardless of any non-merit
factors (i.e., race, religion or gender). Upon request, PHH
agrees to provide its own procedures which it utilizes in
fulfilling its fair lending goals. In addition, in the spirit
of promoting fair lending, the Correspondent agrees to make
their best efforts to maintain an employment staff that
reflects the racial, cultural and gender makeup of its local
area.
B. In furtherance of its fair lending commitment, PHH and
Correspondent also agree to use their best efforts to utilize
minority and women owned businesses when selecting vendors and
outside services.
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X. Termination.
A. This Agreement shall terminate upon the occurrence of any one
of the following events:
(1) In the event either party is required to discontinue
its performance of this Agreement because of an order
of any appropriate state or federal Court or
regulatory body to do so.
(2) To the extent permitted by applicable law, upon the
filing by a party of any action under any
reorganization, insolvency or moratorium law, or upon
the appointment of any receiver, trustee or
conservator to take possession of the properties of
such party.
(3) In the event PHH commits any breach of its terms,
conditions, representations or warranties under this
Agreement, and such breach is not cured within thirty
(30) days of PHH's receipt of written notice of such
breach.
(4) In the event Correspondent commits any breach of its
terms, conditions, representations or warranties
under this Agreement, and such breach is not cured
within thirty (30) days of Correspondent's receipt of
written notice of the breach.
(5) In the event of fraud on the part of Correspondent in
performing its duties hereunder, immediately upon
receipt by Correspondent of notice of termination.
(6) Upon thirty (30) days written notice by either party
to the other.
B. Notwithstanding the termination of this Agreement, the
obligation of PHH to pay Correspondent any outstanding fees
and the indemnification provisions under Section XVII
hereunder shall survive such termination and continue in full
force and effect until fully performed or satisfied.
XI. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly submitted
when received by the respective party at the address set forth above,
or at such other address as that party may specify to the other by
written notice.
XII. Non-Solicitation. The Correspondent agrees, for a period of 270
calendar days from the date of closing of a Loan, that Correspondent
shall be prohibited from refinancing such Loan. A refinancing shall
have occurred if the Loan closes within such 270 day period. In the
event Correspondent refinances any Loans closed within such 270
calendar days, Correspondent shall pay PHH a penalty in the amount of
the compensation paid to Correspondent on the original loan closing.
Provided, however, in the event a customer contracts Correspondent for
refinance and Correspondent improves the customer's current interest
rate by at least 1/2% or an equivalent benefit in points paid by the
customer. Correspondent shall contact PHH's Pricing Department for
approval to refinance such Loan. If such approval is granted, no
penalty shall be assessed.
XIII. Complete Agreement. This letter sets forth the complete terms of the
Agreement between PHH and Correspondent. No terms or conditions of the
Agreement may be waived or modified unless in writing by each party
hereto.
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IV. Force Majeure. Neither party shall be deemed to be in violation of this
Agreement if such party is prevented from performing its obligations
hereunder for any reason beyond its reasonable control, including,
without limitation, Acts of God or any public enemy, elements, floods
or strikes.
V. Governing Laws. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of New Jersey without
reference to conflict of law provisions thereof.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed the and year first above written.
E-Loan, Inc PHH MORTGAGE SERVICES CORPORATION
CORRESPONDENT'S LICENSE NAME
▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ Signature Illegible
Title: President Title: Vice President
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