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EXHIBIT 10.58
FLOOD COMPLIANCE SERVICE AGREEMENT
THIS AGREEMENT is entered into effective April 1, 1996 between SMS Geotrac, a
Delaware Corporation located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ("Company") and
ReliaStar Mortgage Corporation, an Iowa corporation located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Client").
WHEREAS, Client desires a Flood Compliance program for compliance with
regulations passed pursuant to the 1973 Flood Disaster Protection Act ("Act") as
amended to determine whether improved real estate securing a loan from Client to
a borrower is or is not in a Federal Emergency Management Agency (FEMA) defined
Special Flood Hazard Area ("Flood Area"), and other National Flood Insurance
Program (NFIP) information, as whereas Company is in the business of supplying
such information;
WHEREAS, Company has agreed to provide to Client a flood compliance program
which complies in all material respects with the Act as it exists now and is
amended in the future.
NOW THEREFORE, for mutual consideration, the parties do hereby agree as follows:
A. Geotrac NFIP Compliance Packet(SM)
In consideration of Company's fee schedule attached hereto as Addendum "A" and
pursuant to the terms of this Agreement, Client will submit mortgage or trust
deed loan origination applications to Company for the purpose of making Flood
Determinations and certain other NFIP Compliance work as defined in this
contract, commencing April 1, 1996. Company will provide to Client on each
application a Geotrac NFIP Compliance Packet containing the following
information:
1. Current-In-Force NFIP Community Status Information
Company will supply Current-In-Force NFIP Community Status Information
consisting of NFIP Community Number, Program or Suspension/Sanction Date, and
NFIP Program Status (Emergency, Regular, Non-Participating,
Suspended/Sanctioned).
2. Detailed FEMA Flood Zone Code
Company will supply the detailed FEMA Flood Zone Code of the location of the
structure(s) securing the loan. Company will use Client supplied location
information and location information it derives to locate structures. In those
cases where neither Client nor Company has sufficient information to locate the
structure, Company will gather information on-site at its expense. While the
Company assumes no responsibility for incorrect or incomplete location
information supplied by Client, Company will make its best effort to assure
location information is correct and complete.
3. Current-In-Force NFIP Flood Map Panel
Company will identify the Current-In-Force NFIP Flood Map Panel consisting of
the full eleven digit FEMA map number and panel date.
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4. Requirement for and Availability of NFIP Flood Insurance
Company will indicate the requirement for and the availability of NFIP Flood
Insurance.
5. Secondary Market/Government Program Loan Restrictions
Company will designate loans which do not qualify for secondary market resale
or Government program lending based on NFIP Community Status and NFIP Flood
Zone problems.
6. Borrower Notification Forms
On each Geotrac NFIP Compliance Packet Company will supply to Client a
completed borrower notification form which complies with all applicable federal
regulations.
▇. ▇▇▇▇▇ Risk Assessment in Non-Participating Non-Mapped Communities
Company will prepare an appendix attached to the standard Geotrac NFIP
Compliance Packet containing a flood risk assessment in NFIP non-participating
non-mapped communities.
C. Life-of-Loan(R)
1) GeoLife-of-Loans is a tracking service designed to detect changes in:
o FEMA NFIP Flood Map
o FEMA NFIP Community Status
Once changes are detected, reprocessing the loan for Client is done at no
charge.
Company will track both NFIP Community Status and FEMA Flood Map changes for
the lifetime the loan is on Client's servicing system. Lists (hard copy or
electronic) of loans affected will be generated monthly. From the supplied
lists Client will inform Company of loans still active. Client may choose to
electronically inform company of changes in the servicing portfolio proactively.
Company will reprocess active loans that are affected by new FEMA NFIP mapping
and/or revised FEMA NFIP Community Status. For those loans affected by new
FEMA NFIP mapping and/or FEMA NFIP Community Status changes Company will
reprocess the loan by generating a new Flood Determination (for new mapping)
and/or by notifying Client of the need to require changed flood insurance
amounts (for changes in Community Status), at no charge.
GeoLife-of-Loan service is available for transfer at no additional charge
should Client sell or transfer the loan or servicing. Client is obligated to
inform Company of the sale or transfer of loans and if GeoLife-of-Loan service
is to transfer with the loan, on a monthly basis. Client shall supply Company
a listing of affected loans, identified by loan
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number or another mutually agreeable item, in machine readable form in a
mutually agreeable format on a media acceptable to both parties.
Geotrac NFIP Compliance Packets will be produced free of charge on Client
recaptured refinances where the original loan is covered by GeoLife-of-Loan
service. It is Client's obligation to inform Company that a refinance is
covered by GeoLife-of-Loan service and to supply either a copy of the original
Geotrac NFIP Compliance Packet or it's identifying number (Geo Number).
Client will place GeoLife-of-Loan service on new mortgage and trust deed loan
originations where the original determination was done by Geotrac or by one of
the mutually approved flood determination companies. This mutually acceptable
list is outlined in a letter of approval from company to client attached as
"Addendum C".
2) Foreign Flood Certification Data, Life-of-Loan Registration Process
For those loans in existing portfolios, that have the data elements required
for life-of-loan tracking derived from a source, at inception, other than
Company, Company will use the existing data elements of life-of-loan track. Fee
to be found in Addendum "A" as Foreign Flood Certification. However, Company in
no way indemnifies or guarantees these data elements. However, Company
guarantees the accurate tracking of the elements provided as provided in
Addendum "B".
For those loan originations processed with a foreign flood certification (data
from a provider other than Company) that have the data elements required for
life-of-loan tracking, Company will use the foreign data elements to track
life-of-loan. However, Company in no way indemnifies or guarantees these data
elements. However, Company guarantees the accurate tracking of the elements
provided.
In either case (portfolio or loan origination) where Company determines that
the foreign data elements are incomplete or inaccurate, Company will place
these loans on an exception report. As agreed, Company and Client will work in
good faith to resolve the exceptions before the loans are tracked for
life-of-loan.
For mortgage or trust deed loans Company will track both NFIP Community Status
and FEMA Flood Map changes on a daily basis for the lifetime of the loan on
Client's servicing system. Lists (hard copy or electronic) of loans affected
will be generated monthly. From the supplied lists Client will inform Company
of loans still active and Company will generate new Flood Determinations or
other reports as needed. If NFIP Community Status changes affect the required
flood insurance amount of a loan, Company will notify Client of the need to
require changed amounts.
GeoLife-of-Loan service is available for transfer at no additional charge
should Client sell or transfer the loan or servicing. Client is obligated to
inform Company of the sale or transfer and if GeoLife-of-Loans service is to
transfer with the loan(s). In addition, Client shall supply Company a listing
of affected loans, identified by loan number or another mutually agreeable
item, in machine readable form in a mutually agreeable format on a media
acceptable to both parties.
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Geotrac NFIP Compliance Packets will be produced free of charge on Client
recaptured refinances where the original loan is covered by GeoLife-of-Loan
service. It is Client's obligation to inform Company that a refinance is
covered by GeoLife-of-Loan service and to supply either a copy of the original
Geotrac NFIP Compliance Packet(TM) or its identifying number (GeoNumber).
D. Transmissions of Information
Client will transmit requests to Company electronically, fax or via Geotrac's
PC based on-line system GeoCompass one or more times a day. It is Client's
obligation to supply, at a minimum: loan/application identification number.
borrower name; location - State, County, City/Place, valid street address, and
5 digit zip code. Valid street addresses are defined as those found in the
quarterly update of the USPS Zip+ 4 data base, and do not include P.O. Box or
Rural Route and box. In those instances where Client does not supply a valid
address, Company will place the order on hold, and inform Client's ordering
location of the invalid address. It is Client's obligation to supply to
Company, as soon as possible, the completed or corrected address information.
Orders placed on hold will be reactivated the day valid address information is
supplied. All turn time and other parameters will be calculated based on the
date valid address information is supplied.
Company will transmit key data elements back to Client electronically or Fax.
The full Geotrac NFIP Compliance Packet can be faxed to Client. Average turn
around shall be 24 hours from receipt of the order, excluding weekends and
holidays. Notice shall be given to Client for delays greater than 24 hours.
Both parties recognize that it is not in Client's best interest to emphasize
speed of turn around over accuracy of flood certifications. Each party agrees
to work in good faith to meet the data and turn around needs of the other.
E. Portfolio Audit
Client will supply Company with a computer tape in a mutually agreeable format
of its existing mortgage portfolio. Company will register and track existing
mortgage portfolio from information provided by Client. It would be Client's
obligation to supply, at a minimum: loan/application identification number;
date of origination; borrower name; location (State, County, City/Place, full
street address, 5 digit zip code) and flood zone if available. In addition,
Client would supply site surveys, legal descriptions and other location
information when requested by Company and where Client has this information.
Cost reflected in Addendum "A" as Portfolio Registration and Portfolio
tracking. Company will perform a Risk-Based Cluster Analysis(R) audit. This
audit process will provide a statistical risk study of client's existing
portfolio.
After receiving Risk-Based Cluster Analysis, the client and company may
exercise the option to proceed with researching those higher risk loans.
Mutually agreed upon higher risk loans would be researched through Company's
loan origination process over a period of time to be determined by Company and
Client at the cost set forth in Addendum "A", under title "High Risk/Non
Compliant Loans".
Should the existing mortgage portfolio loans be affected by new mapping or
community status information rendering them non-compliant, Client may chose to
have these loans
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re-determined by the company. The cost of redetermination is set forth in
Addendum "A" under title "High Risk/Non Compliant Loans".
If a portfolio loan loaded for portfolio lite tracking is transferred, client
may choose to have a full audit completed and transferred to the new servicer
at a cost addressed in "Addendum A" as Portfolio Lite Recertification ($8.00).
F. Client Service
It is recognized that it is Client's obligation to service its customers'
needs. However, Company will assist by providing the following services;
1. National 800 service for use by Client or Client's customers.
2. Letter of Map Amendment (LOMA)/Letter of Map Revision (LOMR) assistance to
Client or Client's customers. Company will supply the necessary forms and
directions and assist the borrower and or client in filing the application
and tracking the progress to a completion of the LOMA or LOMR process.
3. Company will assist Client's customers in finding an agent to write flood
insurance.
4. Advise the Client's customers or Client on ways to lower the flood premium
within the context of investor/lender parameters and regulator requirements.
5. Company will supply free re-checks on disputed determinations.
6. Company will provide Client with educational seminars on NFIP Compliance and
will answer Client's NFIP Compliance questions semiannually at client's
request at a mutually agreeable location.
7. Company will assist Client's customers in procuring elevation certificates.
8. Company will, in general, replace the lender flood determination customer
service function.
G. Use of Services
Client agrees that during the term hereof it will recommend the services of
Company as one of the selected companies for the purpose of providing Flood
Compliance and Flood Determinations for mortgage or trusteed loan origination
applications.
H. Cost of Services
Services to be provided by Company and the cost for services hereunder are
described in Addendum "A."
I. Term
This Agreement shall have an initial term of (2) years, commencing on the date
of this Agreement. The term shall be automatically renewed thereafter for
successive one (1) year periods, unless either party shall provide to the other
no less than thirty (30) days written notice of the intention to terminate this
Agreement as of the end of the said initial or extended term.
J. Termination
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Either party may terminate this Agreement for non-performance or upon voluntary
or involuntary bankruptcy proceedings by the other party. In the event of the
failure of performance by either party hereunder, the non-performing party
shall have a period of thirty (30) days from the date of receiving written
notice from the other party to cure any such breach. If such breach is not
cured within 30 days the other party may terminate this contract within 10 days
written notice to the non-performing company.
K. Confidential Information
Company acknowledges that it may gain access to certain information regarding
Borrowers of Client. Company agrees that this information shall not be
disclosed or made available to any third person or entity, except as necessary
for Company to perform its obligations under this Agreement, without the
specific authorization of Client. Company agrees that when information is
disclosed to a third party, Company will provide written notice to Client of
this disclosure within 10 days of said disclosure.
Client acknowledges that it may gain access to certain information regarding
business practices, technology and pricing of Company. Client agrees that this
information shall not be disclosed or made available to any third person or
entity, except as necessary for Client to perform its obligations under this
Agreement or for auditing or regulatory purposes without the specific
authorization of Company.
L. Use of Information
Information supplied by Company to Client is to be used by Client for Client's
compliance with the Flood Disaster Protection Act of 1973 as amended within the
context of the NFIP and/or for HMDA/CRA compliance and for no purposes other
than internal reports, studies and training.
M. Systems Used in Services
Client has been advised that the computer software used or employed by Company
in making and/or printing Geotrac NFIP Compliance Packets hereunder, and in
tracking the loan portfolio of Client for the Life of Loan service referred to
above if included within this Agreement (collectively referred to as the
"Systems") are and shall remain at all times the sole property of Company and
constitute material and confidential trade secrets of Company. This includes,
without limitation, its source codes, screens, documentation and any
improvements or modifications of the Systems. Client agrees for itself and its
employees to protect the confidentiality of the Systems.
N. Indemnification
Flood Zone Determinations made by Company represent a good faith interpretation
of Federal Flood Insurance Rate Maps, or Federal Flood Hazard Boundary Maps,
and information from government and private sources along with the lender.
Although Company does not guarantee the accuracy of these outside information
sources, it does assume responsibility for the completeness and timeliness of
this information.
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Company will indemnify Client for all damages which result from Company's
failure to provide services which insure Client's compliance with the Act.
Company shall hold Client safe and harmless from and against any and all loss
and expense arising from claims or actions by any customer of Client based upon
the negligence of Company in interpreting the above referenced Federal Flood
Maps and its failure to correctly identify and report to Client that a
particular insurable structure securing a loan by Client is within (false flood
negative) or outside (false flood positive) a Federally defined NFIP Special
Flood Hazard Area; provided however, that such liability shall in no event
exceed the actual loss and expenses to client less any insurance or recovery
from another source.
This indemnification provision is only applicable to claims made by Client or
customers of Client against Client, resulting from damage to Client or
customer's improved real property caused by flooding as defined by the NFIP
(false flood negative) or customer or client payment of unnecessary NFIP flood
insurance premiums (false flood positive), provided Client supplies verbal
notice as soon as is practicable and written notice within 30 days of Client's
first becoming aware of such claims, and further provided the Company has full
and fair opportunity to participate in any adjusting, settlement negotiation
and litigation.
Company agrees to maintain adequate liability, errors and omissions, or other
type of insurance policy that provides coverage aims arising out of the
performance of the service under this agreement by Company, its employees or
agents, and Company, shall provide Client a certificate evidencing such
insurance coverage. Company agrees to provide Client with audited financial
statements and updated Errors and Omissions declarations page.
O. Arbitration
Any controversy or claim arising out of or related to the contract or the
breach thereof, shall be settled in Ohio by binding arbitration in accordance
with the Arbitration Rules of the American Arbitration Association then
prevailing, and judgment upon the award rendered by the arbitration arbitrators
may be entered in any court having jurisdiction thereof.
P. Independent Contractor
Company shall perform services under this Agreement as an independent
contractor and not as the agent or employee of Client. Company shall not be
authorized to act on behalf of Client except as provided herein or as otherwise
specifically directed by Client.
Q. Entire Agreement
This Agreement constitutes the entire understanding between the parties with
respect to the subject matter of this Agreement. This Agreement may only be
modified by a written document executed by both parties.
R. Severability
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If any term or provision of this Agreement is held by a court of competent
jurisdiction to be unenforceable or void, such term or provision shall be
severed from the remaining provisions and such remaining provisions shall
remain in full force and effect.
S. NOTICES
Any notice or other communication to be given under the terms of this Agreement,
shall be in writing and shall be delivered in person, or mailed by certified
mail, return receipt requested, postage prepaid, addressed as follows:
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If to Company: SMS Geotrac
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Client: ReliaStar Mortgage Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
T. Waiver
Waiver by one party of the performance of any covenant, condition or obligation
of another party shall not invalidate this Agreement, nor shall such waiver be
considered to be a waiver by such party of any other covenant, condition or
obligation contained in this Agreement.
U. Attorney's Fees
In the event any party to this Agreement institutes an action or other
proceeding to enforce any rights arising under this Agreement, the party
prevailing in any such action or other proceeding shall be paid all reasonable
costs and attorney's fees by the other party.
V. Time is of the Essence
Time is of the essence in performance under this Agreement.
W. Governing Law
This Agreement is made pursuant to and shall be construed and governed by the
laws of the State of Ohio.
X. Headings
The subject headings of this Agreement are included for the purposes of
convenience only and shall not effect the construction or interpretation of any
of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
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Company: SMS Geotrac
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Title Asst. to the President Date 1/24/97
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Client: ReliaStar Mortgage Corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Title Senior Vice President Date 12/30/96
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ADDENDUM "A"
SERVICES Client Selections
Initial
Geotrac NFIP Compliance Packet $15.00/ea. ____________
Foreign Flood Certification $8.00/ea. ____________
Geo Life-of-Loan $4.50/additional ea. ____________
Risk Based Cluster Analysis audit flat fee of $500 ____________
Portfolio Lite Registration and Tracking $1500.00 ____________
Portfolio Lite Recertification $8.00/ea. ____________
OPTIONAL SERVICES ORDERED ON INDIVIDUAL DETERMINATIONS
High Risk/Non Compliant Loans $10.00/additional ea. ____________
Determination in Non-Mapped Communities $10.00/additional ea. ____________
Priority Rush Service (Same day service) $5.00/additional ea. ____________
▇▇
▇▇▇▇▇▇▇▇ "▇"
Required information of Client for acceptance by Company of Foreign Flood
Certification to be placed under Company GeoLife-of-Loan Foreign Flood
Certification.
Account Number; Type of Life of Loan; Borrower Name; Property Type; loan
identifier; loan amount; collateral location address; NFIP Community number,
NFIP Map Panel number; Guarantor Provided Flood Zone; Guarantor Provided Flood
Certification Number; Guarantor Provided Jurisdictional Community Number.
Guarantor Provided Map Panel and Revision; Guarantor Number
Company accepts liability for accuracy ONLY after reprocessing should occur.
GeoLife-of-Loans will be generated when loans are affected by FEMA mapping
changes. Company will report to Client loans affected by NFIP Community Status
changes, however, Guarantor remains the original Foreign Flood Certification
Company. Company will inform Client of changes requiring and changes relieving
insurance placement.
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ADDENDUM "C"
The following is a listing of mutually approved companies providing flood
certifications:
American Flood Research, Inc.
1-800-995-8667
National Flood Information Services, Inc.
1-800-833-6347
GE Capital Flood Services
▇-▇▇▇-▇▇▇-▇▇▇▇
Transamerica Flood Services
▇-▇▇▇-▇▇▇-▇▇▇▇
The above mentioned companies will be reviewed at least annually, if not more.