MASTER AGREEMENT ML02783 First Term

/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇

/s/ ▇▇▇▇ ▇▇▇▇▇

▇▇▇▇ ▇▇▇▇▇

V.P. HOMESTREET BANK

3/19/2010

VAR 1

VAR 2

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VAR 12

VAR 13

Title (Version):

Qualification of Loans with Non-Occupant Co-Borrowers (05/2010)

Description:

Lender may sell Mortgages in which a non-occupying co-borrower’s income was considered as acceptable qualifying income without requiring that the occupant-borrower also qualify based solely on the occupant borrower’s income, subject to the following:

ELIGIBILITY REQUIREMENTS

Eligibility: General

•

Mortgages must meet the following eligibility requirements:

•

Standard per Selling Guide except as provided below.

Maximum

LTV/CLTV/HCLT (%)

80/80/80

Minimum Representative FICO Credit Score

720

Loan Purpose

•

Purchase

•

LCOR

Occupancy/Number of Units

•

Primary Residence

•

1-unit

Mortgage Products/Features (including Amortization Type and Term)

•

Fully-amortizing (FA) Mortgages:

•

FA-FRMs: Standard per Selling Guide, with terms up to 30 years.

•

FA-ARMs: Standard per Selling Guide, with terms up to 30 years.

•

See eligible FA-ARM plans in the “ARM Plan Numbers” section below.

ARM Plan Numbers

•

30-Year FA-ARMs (fully amortizing):

•

7/1 ARMs: Plans 750, 751

•

10/1 ARMs: Plans 1423,1437

UNDERWRITING/DOCUMENTATION

Required Underwriting Method

Manual underwriting (see Conditions below)

Manual Underwriting: Conditions

Per Selling Guide, except as modified by this Variance.

Total Debt-to-Income (“DTI”) Ratio(s)

Maximum: 43% combined, for all borrowers.

Non-Occupant Co-Borrower

•

Income allowed for qualification

•

Must be a member of borrower’s immediate family.

DELIVERY REQUIREMENTS

Combining with Other Variances

Lender may combine Variance Mortgages with other variances as long as the most conservative underwriting and eligibility

Title (Version):

HomePath and HomePath Renovation Mortgages (02/2011)

Description:

Lender may sell Mortgages originated under ▇▇▇▇▇▇ Mae’s HomePath (“HomePath Mortgages”) and HomePath Initiative secured by properties that require moderate renovation (“HomePath Renovation Mortgages”). HomePath Renovation Mortgages are not HomeStyle^® Renovation mortgages. The only HomeStyle Renovation requirements that apply to HomePath Renovation Mortgages are those relating to the actual renovation process, as described in the “HomeStyle Renovation Requirements: Limitation of Applicability” section below. All eligibility, underwriting, mortgage origination, delivery and pricing requirements applicable to HomePath and HomePath Renovation Mortgages are per this Variance.

HomePath and HomePath Renovation Mortgages are subject to the following terms and conditions:

ELIGIBILITY REQUIREMENTS

Eligibility: General

•

Mortgages must meet the following eligibility requirements:

•

Standard per Desktop Underwriter (“DU”) except as provided below.

Maximum

LTV/CLTV/HCLTV (%)

•

Maximum LTV/CLTV/HCLTV for Mortgages with interest-only features (“IO”) is per Selling Guide.

•

Maximum LTV/CLTV/HCLTV for fully amortizing Mortgages (“non-IO”) is per Selling Guide, except as follows:

•

90/90/90 for 1-unit investment properties.

•

80/80/80 for 2-unit investment properties.

•

75/75/75 for 2-4 unit investment properties where the borrower owns 5-10 financed properties as described in the “Eligibility Matrix” on the ▇▇▇▇▇▇▇▇▇▇.▇▇▇ website.

* Max CLTV is 105% if the mortgage is part of a Community Seconds transaction.

•

All high balance Mortgages (including 1-4 unit investment properties) are subject to minimum credit score and maximum LTV/CLTV/HCLTV requirements per Selling Guide.

•

MCM mortgages are not eligible.

Loan Purpose

Purchase only.

Mortgage

Products/Features

(including Amortization

•

All standard FRM and ARM products per Selling Guide are eligible.

Type and Term)

•

Unless otherwise provided in this Variance, products must meet the standard eligibility requirements for the specific mortgage type, property type or feature per Selling Guide, for example:

•

IO features

•

Cooperative share loans

•

Manufactured housing

•

High-balance Mortgages

Eligible ARM Plan Numbers

Per Selling Guide, as applicable to the standard eligibility requirements for the specific mortgage type.

Minimum FICO

•

Per Selling Guide, except as follows:

•

660 for non-IO Mortgages with LTVs over 80% (except for high-balance Mortgages); and

•

720 for all IO Mortgages.

•

Per Selling Guide for high-balance Mortgages

Mortgaged Property

•

Mortgages must be secured by properties that are acquired from ▇▇▇▇▇▇ Mae and designated by ▇▇▇▇▇▇ ▇▇▇ on the ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ website as eligible for HomePath financing.

•

Lender must document the file with appropriate pages printed from ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ showing that the property was eligible for HomePath financing.

Subordinate Financing

Permitted per Selling Guide.

UNDERWRITING/DOCUMENTATION

Required Underwriting Method

DU. See additional provisions in the “Desktop Underwriter” section below.

Interested Party Contributions (“IPC”)

•

Maximum IPC:

•

Notwithstanding the Selling Guide requirements, for principal residences with LTVs (or CLTVs if applicable) greater than 90%: 6.00% of the Contract Sales Price (see “Determination of Property Value” section below).

•

Investment properties and second homes: standard per Selling Guide.

PROPERTY VALUATION/APPRAISAL REQUIREMENTS

Required Appraisal Type

•

No appraisal is required. If an appraisal is obtained by Lender or any party other than the borrower, as expressly provided below, then the mortgage is ineligible for HomePath financing.

•

Notwithstanding the Selling Guide, Lender is not required to represent and warrant the value or the condition of the property.

•

If the borrower, at its option, chooses to obtain an appraisal, then:

•

The borrower must order the appraisal from an appraiser selected by the borrower (and not one recommended by Lender), and the appraisal must be paid for by the borrower outside of the loan transaction.

•

Lender must not request a copy of the appraisal, but if one is provided by the borrower then it must be included in the loan file with a note that the appraisal was ordered by the borrower outside of the loan transaction and was not reviewed or approved by Lender.

•

The property value shown on the appraisal will not impact the LTV calculation for purposes of this Variance.

•

Lender must inform the borrower that the purpose of the borrower-ordered appraisal and its contents are for the use and information of the borrower only, and will not be considered for purposes of the loan transaction.

Determination of Property Value

Property value for purposes of loan delivery and for determining LTV/CLTV/HCLTV is the sales price of the property as evidenced by the sales contract between ▇▇▇▇▇▇ Mae and the buyer/borrower (“Contract Sales Price”).

MORTGAGE INSURANCE/CREDIT ENHANCEMENT

Mortgage Insurance Coverage (“MI”)

MI is not required, provided that at delivery Mortgages with LTVs over 80% will be subject to the applicable LLPAs per Attachment 1.

DESKTOP UNDERWRITER

Required Recommendation Levels

•

Any of the following:

•

Approve

•

EA-I

•

Requires an “Eligible” recommendation. “Ineligible” recommendations are permitted if only reason for ineligibility is:

•

LTV greater than 85% for non-IO Mortgages secured by 1- unit investment properties; or

•

LTV greater than 75% for non-IO Mortgages secured by 2- unit investment properties.

Documentation Levels

Must use documentation levels issued by DU, except for the level of fieldwork recommendation.

DU Messaging

•

Lender may disregard the following DU messages, provided that the Mortgage complies with all requirements of this Variance:

•

Any message relating to the 1-unit investment property

•

Any message relating to the 2-unit investment property receiving an “Ineligible” recommendation due to an LTV/CLTV/HCLTV greater than 75%, per “Required Recommendation Levels” section above;

•

Any message relating to amount of MI required;

•

Any message that says the maximum allowable IPC has been exceeded on a principal residence with LTV or CLTV over 90%;

•

Any message related to the level of fieldwork recommendation; and

•

Any message that says the property value estimate appears to have an excessive rate of appreciation based on analysis on a recent sale.

Limited Waiver of Representations and Warranties

Mortgages receiving an “Approve” or “EA” recommendation are eligible for the limited waiver of underwriting representations and warranties provided the Mortgage complies with all applicable terms of the limited waiver per the Selling Guide and this Variance.

DU Submission Instructions

HomePath Mortgages must not be submitted to DU as MyCommunityMortgages.

PROJECT APPROVAL AND REQUIREMENTS

Project Eligibility

Lender is not required to warrant that the condominium, cooperative or PUD project meets ▇▇▇▇▇▇ Mae’s project eligibility criteria.

Project Type Code

•

Lender must utilize the following Project Type Codes at the time of delivery for all HomePath Mortgages secured by a property in a condominium project, cooperative project, or planned unit development where no project review is performed:

•

V - for properties in a condominium project,

•

2 - for properties in a cooperative project, and

•

E - for properties in a planned unit development.

•

As a reminder, a Project Type Code of G would be used at the time of delivery for all Mortgages secured by a property that is not located in a condominium project, cooperative project, or planned unit development.

Insurance

Lender must confirm that the project has adequate hazard, flood, and liability coverage in place and verify the existence of fidelity insurance coverage.

ADDITIONAL REQUIREMENTS

Refinance of HomePath

HomePath Mortgages originated in accordance with these

requirements are not eligible for refinance under ▇▇▇▇▇▇ Mae’s Refi Plus™.

ORIGINATION CHANNEL REQUIREMENTS

Eligible Channel(s)

All

PRICING

MBS

•

Base guaranty fee is per MBS Contract for applicable mortgage product (“Base Pricing”).

•

See applicable LLPAs in “Loan-Level Price Adjustment(s)” section below.

Whole Loans

•

Current pricing will be provided at time Mortgages are committed for sale (“Base Pricing”).

•

See applicable LLPAs in “Loan-Level Price Adjustment(s)” section below.

Loan-Level Price Adjustment(s) (“LLPA”)

•

In addition to applicable Base Pricing, HomePath Mortgages are subject to the following LLPAs:

•

•

LLPAs per Attachment 1: and

All LLPAs per the Selling Guide per the “Loan-Level Price Adjustment (LLPA) Matrix and Adverse Market Delivery Charge (AMDC) Information” on ▇▇▇▇▇▇▇▇▇▇.▇▇▇ with the exception of investment property (see Attachment 1 for LLPAs assessed on investment properties).

Pricing Changes

▇▇▇▇▇▇ ▇▇▇ reserves the right to change any pricing related to HomePath Mortgages with 60 days prior notice to Lender.

DELIVERY REQUIREMENTS

Special Feature Code(s) (“SFC”): Specific to Variance Mortgages

057- for all HomePath Mortgages

Special Feature Code(s) (“SFC”): Other Instructions

•

All standard per Selling Guide, including:

•

118 (for first Mortgages originated in conjunction with Community Seconds transactions); and

•

062 (Expanded Approval Mortgages) - for all HomePath Mortgages that receive an EA-I recommendation from DU.

Mortgage Insurance (MI) Code

MI Code 98 for Mortgages over 80% LTV.

Execution Options

Both whole loan and MBS executions are available.

Whole Loan Deliveries

Lender must use eCommitting™.

Combining with Other Variances

Lender may NOT combine HomePath Mortgages with other variances.

Housing Goals Data

•

Lender is required to report all applicable Housing Goals data. If no appraisal is obtained, then Lender should use the information from the property description on ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇.

•

For investment properties occupied by renters, Lender must report the current rental income at delivery, even if the rental income was not used to qualify the borrower.

•

If the property is vacant and rental data is unavailable, Lender must deliver the loans as “missing” for the relevant housing goals fields, and subsequently contact their Account Team to submit a Housing Goals Data Waiver Request for the missing fields.

Selling Representations and Warranties

Lender makes all selling representations and warranties per the Selling Guide, as modified by this Variance.

Effective Date for Sale of Variance Mortgages

This Variance will be effective for whole loans purchased on or after February 1, 2011 and for loans delivered into MBS pools with issue dates on or after February 1, 2011.

ELIGIBILITY REQUIREMENTS

Maximum LTV/CLTV/HCLTV (%)

•

Maximum LTV/CLTV/HCLTV are the same as applicable to HomeStyle Renovation mortgages, except:

•

97/97/97 for 1 -unit principal residence.*

•

85/85/85 for 1-unit investment properties

•

75/75/75 for 2-4 unit investment properties

*Max CLTV is 105% if the mortgage is part of a Community Seconds transaction.

Property Types

•

When the security property is a unit in a condominium (or cooperative) project, the project must be one for which the proposed renovation work is permissible under the bylaws of the owners’ association (or cooperative corporation) or one for which the owners’ association (or cooperative corporation) has given written approval for the renovation work. The renovation work for a condominium or cooperative unit must be limited to the interior of the unit (including the installation of fire walls in the attic).

•

Manufactured homes are ineligible.

Mortgage Products/Features

•

Eligible:

•

All standard fully amortizing FRMs and 30-year ARM

•

Ineligible:

•

Mortgages with interest-only features

•

Mortgages with original terms over 30 years

•

ARMs with initial fixed rate periods less than 3 years

Eligible ARM Plan Numbers

Per Selling Guide (fully amortizing 30-year ARMs with initial fixed rate periods of at least 3 years), as applicable to the standard eligibility requirements for the specific mortgage type.

Mortgaged Property

•

Mortgages must be secured by properties that are acquired from ▇▇▇▇▇▇ Mae and designated by ▇▇▇▇▇▇ ▇▇▇ on ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ website as eligible for HomePath Renovation financing.

•

Lender must document the file with appropriate pages printed from ▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ showing that the property was eligible for HomePath Renovation financing.

UNDERWRITING/DOCUMENTATION

Interested Party Contributions(“IPC”)

•

Maximum IPC:

•

Notwithstanding the Selling Guide requirements, for principal residences with LTV (or CLTV if applicable) greater than 90%: 6.00% of the Contract Sales Price (see “Determination of Property Value” section below).

ADDITIONAL BORROWER ELIGIBILITY

Eligible Borrower: Renovation

Borrower must be an individual (for-profit or non-profit investors and local government agencies are not eligible borrowers).

PROPERTY VALUATION/APPRAISAL REQUIREMENTS

Required Appraisal Type

Lender must obtain an “as-completed” full appraisal.

Determination of Property Value

•

Property value for purposes of loan delivery and for determining LTV/CLTV/HCLTV shall be the lesser of:

•

the “as completed” appraised value; or

•

the sum of the sales price of the property as evidenced by the sales contract between ▇▇▇▇▇▇ Mae and the buyer/borrower (“Contract Sales Price”) and the total renovation costs (which include the renovation costs and all allowable fees and charges).

RENOVATION REQUIREMENTS

HomeStyle Renovation Requirements: Limitation

•

Lender is responsible for managing and monitoring the completion of the renovation work. All requirements

•

Completion Date. The renovations must be completed within 6 months of the closing date.

•

Total Cost. The total renovation costs may not exceed the lesser of 35% of the “as completed” appraised value or $35,000.00.

•

No Recourse. If the HomePath Renovation Mortgage becomes delinquent during the renovation period, there is no automatic recourse to Lender as there is for HomeStyle Renovation mortgages, and Lender is not required to code the HomePath Renovation Mortgage with SFC “001.” However all of Lender’s standard selling representations and warranties apply to HomePath Renovation Mortgages.

•

Mortgage Payments During Renovation Period. Lender may not escrow for any mortgage payments that may come due during the renovation period.

•

Multiple Contractors. Borrower may use more than one contractor, provided that all HomeStyle Renovation requirements related to the contractor apply to each contractor.

•

Contingency Reserve. Contingency reserve per HomeStyle Renovation requirements is mandatory for

•

all Mortgages with LTVs of 95% or more, and

•

all Mortgages secured by 2-4 unit properties, regardless of LTV.

•

Do-it-yourself Projects. “Do-it-yourself” borrower projects are allowed per standard HomeStyle Renovation guidelines, except the maximum LTV/CLTV is 75%.

•

Verification of Completion. Lender must provide ▇▇▇▇▇▇ Mae with verification of completion of the renovation upon request of ▇▇▇▇▇▇ ▇▇▇.

•

No Modification of Loan Amount. The Mortgage may not be modified to change the balance based on change orders or increases to the construction contract.

•

SFCs. Lender should NOT use HomeStyle Renovation SFC “215” (see applicable SFCs in “Special Feature Code(s) (“SFC”): Specific to Variance Mortgages” section below).

DESKTOP UNDERWRITER

Required

Recommendation Levels

•

Any of the following:

•

Approve

•

EA-I

•

Requires “Eligible” recommendation. “Ineligible” recommendations are permitted if the only reason for ineligibility is one of the following:

•

LTV/CLTV/HCLTV greater than 95% for a 1-unit principal residence.

•

LTV greater than 75% for a 1-unit investment property, provided the LTV complies with the maximum LTV stated above. (CLTV and HCLTV for 1-unit investment properties currently at 85% for HomeStyle Renovation in DU.)

Documentation Levels

Must use documentation levels issued by DU.

DU Data Entry Requirements

•

For all transactions other than 2-4 unit investment properties, the renovation costs must be entered in Line b of Section VII (Details of Transaction) on the loan application.

•

For 2-4 unit investment properties, Lender should not enter the renovation costs on Line b or DU will issue an Out of Scope recommendation. For these transactions, the sum of the sales price and the renovation costs must be entered in Line a.

DU Messaging

•

Lender may disregard the following DU messages, provided that the Mortgage complies with all requirements of this Variance:

•

Message requiring Lender to verify the cost of improvements does not exceed 50% of the as-completed appraised value (see the “HomeStyle Renovation Requirements: Limitation of Applicability” section above);

•

Any message relating to amount of MI required; and

•

Any message that says the maximum allowable IPC has been exceeded on a principal residence with LTV over 90%.

LOAN AND LEGAL DOCUMENTATION

Legal Documents: Renovation

•

Lender must use the following (“HomePath Documents”):

•

HomePath Maximum Mortgage Worksheet

•

HomePath Renovation Loan Agreement

•

HomeStyle Completion Certificate (Form 1036) - Lender must add “HomePath Renovation” in the “Other” category in the Loan products box of Form 1036

•

Appraisal Update and/or Completion Report (Form I004D)

•

In addition to the mandatory HomePath Documents listed above, Lender at its option may use other model HomeStyle documents (e.g., Lien Waiver, Contractor Profile Report, Change Order Request) provided that the types of transactions and the types of lenders making the HomePath Renovation Mortgage may be subject to a variety of laws and regulations, so it may be necessary to modify this document for use by

ADDITIONAL LENDER REQUIREMENTS

HomeStyle Approval

Lender must be approved to sell HomeStyle Mortgages to ▇▇▇▇▇▇ Mae.

ADDITIONAL REQUIREMENTS

Servicing Transfers: Renovation

Lender cannot transfer servicing of HomePath Renovation Mortgages until the renovation is complete.

DELIVERY REQUIREMENTS

Special Feature Code(s) (“SFC”): Specific to Variance Mortgages

058 - for all HomePath Renovation Mortgages

Special Feature Code(s) (“SFC”): Other Instructions

•

All standard per Selling Guide, including:

•

118 (for first Mortgages originated in conjunction with Community Seconds transactions); or

•

062 (Expanded Approval Mortgages) - for all HomePath Renovation Mortgages that receive an EA-I recommendation from DU.

DELIVERY REQUIREMENTS

• “215”

• “001”

Note: Once renovation has been completed, Lender must contact its ▇▇▇▇▇▇ ▇▇▇ Customer Account Team to remove SFC “001.”

UNDERWRITING/DOCUMENTATION

VOLUME LIMITS

SR 1 Lender Scheduled/Scheduled Remittances (04/10)

REMITTANCE OBLIGATIONS

•    The Servicing Guide provides that ▇▇▇▇▇▇ ▇▇▇ will draft scheduled/scheduled principal and interest payments on the 18^th of each calendar month (or the preceding business day if the 18th is not a business day).

•    Lender may elect to remit scheduled/scheduled remittances by wire transfer up to two business days prior to the business on which ▇▇▇▇▇▇ Mae will draft funds from the applicable account through the Automated Drafting System.

•    Lender shall notify ▇▇▇▇▇▇ ▇▇▇ in advance of the amount of each such wire transfer remittance.

•    If ▇▇▇▇▇▇ Mae receives such notice, and the wire transfer to ▇▇▇▇▇▇ ▇▇▇ is completed by 10:00 a.m. ET on the business day prior to the 18^th, ▇▇▇▇▇▇ Mae will reduce the automated draft amount to reflect the remittances received via such wire transfer.

•    As examples:

•    if the 18^th of the month falls on a Sunday (and the Thursday and Friday prior are both business days), the last business day on which the Lender may wire funds pursuant to this Special Requirement is Thursday the 16^th.

•    If the 18^th falls on a Monday (and that date and the Thursday and Friday prior are all business days), the last business day on which the Lender may wire funds pursuant to this Special Requirement is Friday the 15^th.

The Guaranty Fee adjustment for the MBS Express or RPM remittance cycle, if applicable, may be changed by ▇▇▇▇▇▇ Mae from time to time and will be effective 60 days after notice to Lender.

Only FRMS and IO FRMS must be delivered under this MBS Contract. All other Mortgage products are ineligible.

Lender: HomeStreet Bank

[***] Basis Point (30yr, 40yr ARM)

[***] Basis Points (30yr “IO” ARM)

The Guaranty Fee adjustment for the MBS Express or RPM remittance cycle, if applicable, may be changed by ▇▇▇▇▇▇ ▇▇▇ from time to time and will be effective 60 days after notice to Lender.

Only ARMS and IO ARMS must be delivered under this MBS Contract. All other Mortgage products are ineligible.

Amended term:

Instructions:

Amend the agreement amount and expiration date for the Master Agreement.

In your Master Agreement, replace the following titled sections:

•        EXHIBIT 1 TO MASTER AGREEMENT ML02783.

Instructions:

•        Replace the VAR/TOC (Table of Contents) with the enclosed VAR/TOC (Table of Contents).

•        Replace the following VAR[s] with the enclosed VAR[s] in the “Variances” section of your Master Agreement:

•      VAR 12 - HomePath and HomePath Renovation Mortgages.

Instructions:

•        Insert the following VAR[s] into the “Variances” section of your Master Agreement:

•      VAR 13 - HomeStyle Renovation Mortgages (04/2010).

Instructions:

•        Remove the following VAR[s] from the “Variances” section of your Master Agreement:

•      VAR 1 - HomeStyle Renovation Mortgages;

•      VAR 3 - Energy Efficient Mortgages (EXPIRING);

•      VAR 7 - HomeStyle Renovation Escrow (03/10);

•      VAR 8 - ▇▇▇▇▇▇▇ Young University Residential Leasehold Estates in Hawaii (03/10); and

•      VAR 11 - HomePath and HomePath Renovation Mortgages (EXPIRING).

Replace Pool Purchase Contract[s] in your Master Agreement as follows:

•        Fixed-Rate - L01030 in the Fixed-Rate section of your Master Agreement.

•        Adjustable-Rate - L01028 in the Adjustable-Rate section of your Master Agreement.

/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇ ▇▇▇▇▇▇

Director/Assistant Vice President

/s/ ▇▇▇▇ ▇▇▇▇▇

▇▇▇▇ ▇▇▇▇▇

Vice President

3/28/2011