Mortgage Selling and Servicing Contract

Mortgage
Selling and
Servicing
Contract

 

 

 

 

A.
Purpose of
Contract

•     to establish the Lender as an approved seller of mortgages and participation interests to us;

 

 

•     to provide the terms and conditions of the sales;

 

 

•     to establish the Lender as an approved servicer of mortgages we have purchased or in which we have purchased a participation interest; and

 

 

•     to provide the terms and conditions of servicing.

 

B.
Consideration

 

C.
Our Guides

 

 

•     Selling;

 

 

•     Servicing; and

 

 

•     Multifamily.

 

 

 

 

 

D.
Important
Definitions

 

 

•     the evidence of title;

 

 

•     the chattel mortgage or security agreement and financing statement; and

 

 

•     all other documents, instruments and papers pertaining to the loan.

 

 

 

 

 

 

 

 

 

 

 

A.
General

 

 

•     making mortgages of the type that we will purchase entirely or purchase participation interest in under this Contract; and

 

 

•     servicing such mortgages.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•     sale or transfer of a majority interest in it;

 

 

•     merger;

 

 

•     consolidation; or

 

 

•     change in legal structure.

C.
Finances

 

 

 

 

 

D.
Access To
▇▇▇▇▇▇’s Records

 

 

 

 

▇.

What Governs
Purchases

•     our written commitment to purchase;

 

 

•     our Guides, including all amendments in effect on the day we make our written commitment; and

 

 

•     this Contract.

 

B.
What We
Purchase

 

▇. ▇▇▇▇▇▇’s
Obligation
To Purchase
▇▇▇▇▇▇ ▇▇▇ Stock

 

D. ▇▇▇▇▇▇ ▇▇▇ Has
No Obligation To
Purchase

 

 

 

 

 

 

 

•     apply to each mortgage sold to us in its entirety;

 

 

•     apply to each mortgage in which a participation interest is sold to us;

 

 

•     are made as of the date transfer is made to us;

 

 

•     continue after the purchase of the mortgage or participation interest;

 

 

•     continue after payment by us of the purchase price to the Lender; and

 

 

•     are for our benefit as well as the benefit of our successors and assigns.

 

 

 

A.
Specific
Warranties

 

 

 

 

 

•     lending the mortgage funds;

 

 

•     acquiring the mortgage;

 

 

•     holding the mortgage; or

 

 

•     transferring the mortgage in whole or to the extent of a participation interest.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•     materially modified the mortgage;

 

 

•     satisfied or cancelled the mortgage in whole or in part;

 

 

•     subordinated the mortgage in whole or in part, unless it is represented to us as a second mortgage;

 

 

•     released the property in whole or in part from the mortgage lien; or

 

 

•     signed any release, cancellation, modification or satisfaction of the mortgage.

 

 

 

 

 

 

•     taxes;

 

 

•     government assessments;

 

 

•     insurance premiums;

 

 

•     water, sewer and municipal charges;

 

 

•     leasehold payments; or

 

 

•     ground rents.

 

 

 

 

•     the date of the mortgage note; or

 

 

•     the date on which the mortgage proceeds were disbursed to

 

 

•     the date one month before the first installment of principal and interest on the mortgage is due.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

•     cause private institutional investors to regard the mortgage as an unacceptable investment;

 

 

•     cause the mortgage to become delinquent; or

 

 

•     adversely affect the mortgage’s value or marketability.

 

 

 

 

 

 

 

 

 

B.
Consequences Of
Untrue Warranties
— Repurchase

 

 

 

 

C.
Consequences Of
Untrue Warranties
— Termination
Of Contract

D.
Indemnification
For Breach Of
Warranty;
Holding Us Harmless

 

 

A.
Servicing Duties
Of The Lender

 

 

•     all mortgages it is servicing for us on the date this Contract takes effect; and

 

 

•     all other mortgages that the Lender is required to service by the terms of this Contract or any other existing or future agreement between us and the Lender.

 

 

 

 

•     the mortgage is not within any category of those that are required by our Guide to be serviced; or

 

 

•     we give the Lender written notification or consent that mortgage to be purchased by us will not be serviced by the Lender.

 

 

 

 

•     the mortgage was originated;

 

 

•     the mortgage or a participation interest in it was transferred to us; or

 

 

•     the Lender began servicing the mortgage.

 

 

 

 

 

 

 

 

 

 

 

 

•     the mortgage’s principal and interest have been paid in full;

 

 

•     the mortgage has been liquidated and the mortgaged property properly disposed of (if the Lender is required to do these things); or

 

•     the Lender’s servicing duties are terminated according to Section IX of this Contract.

 

B.
Compensation

 

 

 

C.
Ownership
Of Records

 

 

 

•     all mortgage documents;

 

 

•     tax receipts;

 

 

•     insurance policies;

 

 

•     insurance premium receipts;

 

 

•     ledger sheets;

 

 

•     payment records;

 

 

•     insurance claim files and correspondence;

 

 

•     foreclosure files and correspondence;

 

 

•     current and historical data files; and

 

 

•     all other papers and records.

 

 

 

 

 

 

 

 

 

 

 

 

 

D.
Agreement To
Indemnify And
Hold Harmless

 

 

 

 

E.
Ownership Of
Our Stock

 

 

 

 

A.
Assignment

 

 

•     this Contract under any circumstances, either voluntarily or involuntarily, by operation of law, or otherwise; or

 

 

•     its responsibility for servicing individual mortgages we own or in which we have a participation interest. (See Section VII of this Contract for required procedures governing assignments of servicing).

 

B.
Limited Value
Of Contract
To Lender

 

 

C.
Requirements
For Continuance

 

 

 

 

 

 

 

•     be acceptable to us; and

 

 

•     sign a Mortgage Selling and Servicing Contract with us.

 

 

 

 

 

 

A.
Specific
Breaches Of
Contract

 

 

 

•     failure to establish and maintain accounts for our funds or mortgagors’ funds as required by our Guides;

 

 

•     use of our or mortgagors’ funds in any manner other than that permitted by our Guides, including the Lender’s failure to deposit all mortgage funds if, when, and to the extent required by our Guides;

 

 

•     failure to remit all funds, due to us within the time periods required by our Guides;

 

 

•     failure to make or ensure, according to the provisions of each mortgage or of applicable laws or regulations, proper and timely payment of all:

 

 

—     taxes;

 

 

—     assessments;

 

 

—     leasehold payments;

 

 

—     ground rents;

 

 

—     insurance premiums (including premiums of casualty, liability and mortgage insurance and other forms of required insurance);

 

 

—     required interest on escrow funds; and

 

 

—     other required payments with respect to any mortgage (including mortgaged property) serviced;

 

 

unless the Lender is relieved of these responsibilities by the express provisions of our Guides, or by our written instructions that relate to a particular mortgage or property;

 

 

•     failure to renew or ensure renewal of any required insurance policy on any mortgage (including mortgaged property) serviced under this Contract;

 

 

•     failure to maintain adequate and accurate accounting records and mortgage servicing records for the mortgages, or to maintain proper identification of the applicable loan files and mortgage records that prove our outstanding participation interests;

 

 

•     failure to submit adequate and accurate accounting and mortgage servicing reports within the time required by our Guides; or

 

 

•     failure to take prompt and diligent action under applicable law or regulation to collect past due sums on mortgages, or to take any other diligent action described in our Guides that we reasonably require for mortgages in default.

 

 

 

 

 

 

 

•     fails to properly manage, dispose of or effect proper conveyance of title to the mortgaged property; or

 

 

•     fails to do the above in accordance with this Contract, our Guides, and any pertinent laws, regulations, or mortgage insurance policies or contracts.

 

 

 

 

 

 

•     the Lender’s insolvency;

 

 

•     adjudication of the Lender as a bankrupt;

 

 

•     appointment of a receiver for the Lender; or

 

 

•     the Lender’s execution of a general assignment for the benefit of its creditors.

 

 

 

 

•     no interest in this Contract will be considered an asset or liability of the Lender or of its successors or assigns; and

 

 

•     no interest in this Contract will pass by operation of law without our consent.

 

 

 

 

•     a sale of the majority interest in the Lender; or

 

 

•     a change in its corporate status or structure.

 

 

 

 

 

 

•     a court of competent jurisdiction finds that the Lender or any of its principal officers has committed an act of civil fraud; or

 

 

•     the Lender or any of its principal officers is convicted of any criminal act related to the Lender’s lending or mortgage selling or servicing activities or that, in our opinion, adversely affects the Lender’s reputation or our reputation or interests.

 

B.
Actions
To Correct
A Breach

 

 

 

 

A.
Termination
By Either Party
Of Mortgage
Selling
Arrangements

 

 

 

B.
Termination
By Lender Of
Mortgage
Servicing
Arrangements For
Wholly-Owned
Mortgages

 

C.
Termination
By Us Of
Servicing
Arrangements For
Wholly-Owned
Mortgages

 

 

 

 

 

 

•     The Lender’s servicing compensation consists of the servicing fee at the Applicable Servicing Rate plus any previously agreed upon excess yield that the Lender is permitted to retail on the applicable mortgage.

 

 

•     “Applicable Servicing Rate” means the rate of the servicing fee for the servicing of the mortgage, expressed as an annualized fractional percentage.

 

 

 

 

 

 

 

•     the Lender will be entitled to the proceeds of the sale of servicing and will bear all costs and expenses related to the sale and transfer of servicing;

 

 

•     the Lender will not pay us a transfer fee;

 

 

•     we will not pay the Lender a termination fee;

 

 

•     we may require the purchaser of the servicing to assume any or all warranties that were made to us in connection with the sale to us of the affected mortgages; and

 

 

•     the purchaser of the servicing will succeed to the Lender’s obligations, rights and servicing compensation, under the provisions of this Contract covering the servicing of the affected mortgages. For all of the affected mortgages that we purchased under a net-yield contract, the servicing compensation will include the specified minimum servicing fee, plus the Lender’s share of that portion of the yield which exceeds the stated net yield, as provided under the commitment contract.

 

 

 

 

 

 

 

 

 

 

 

D.
Termination
By Us Of
Servicing
Arrangements
For Mortgages
In Which We
Have A
Participation
Interest

 

 

 

 

 

 

 

 

E.
Rights Of
Termination
Not Impaired

 

 

 

 

 

 

 

A.
After The
Sale Of A
Participation
Interest

 

 

 

•     a separate assignment of each mortgage executed and delivered to us by the Lender; and

 

 

•     a promissory note separately endorsed or transferred to us.

 

 

 

 

 

•     placing legends on promissory notes;

 

 

•     endorsing promissory notes in blank and delivering them to us; and

 

 

•     executing mortgage assignments in a form acceptable to us and delivering them to us.

 

 

 

B.
Payments To Us

 

 

 

 

 

 

•     an amount sufficient for us to earn our yield on each mortgage; plus

 

 

•     any amounts due us pursuant to this section.

 

C.
Enforcement Of
Due-On-Sale
And Call Options

 

D.
Repurchase
Option

•     the Lender is required by our Guides to enforce a due-on-sale clause of a mortgage in which the Lender and we own an interest; or

 

 

•     we elect to exercise a call option provision of such a mortgage.

 

 

 

 

•     giving us notice of its intention to repurchase; and

 

 

•     paying us an amount calculated according to the provisions of our Guides.

 

E.
Note Rate Increase,
Foreclosure
Expenses And
Prepayment Charges

 

 

 

 

 

F.
Advances

 

G.
Assignment
Or Sale Of
Participation
Interests

•     our participation interest in any mortgage; and

 

•     all rights in the mortgage we own under this Contract or under any other instruments.

 

 

 

 

 

 

 

 

•     agrees to be bound by the terms of this Contract; and

 

 

•     acknowledges our rights and interests under this Contract with respect to the mortgage.

 

 

 

 

•     assume the servicing of the mortgage; or

 

 

•     transfer the servicing to a new servicer under Section IX D of this Contract.

 

 

 

 

 

 

 

 

 

 

A.
Notice Of
Termination

•     in writing;

 

 

•     delivered in person or sent by registered or certified mail, with a return receipt requested; and

 

 

•     addressed to the party to which notice is being given.

 

 

 

B.
Our Guides
And Other
Documents

•     in writing;

 

 

•     delivered in person or mailed from any post office, substation, or letter box;

 

 

•     enclosed in a postage prepaid envelope; and

 

•     addressed to the Lender to which the matter is directed.

 

C.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A.
Restriction
Of Lender

 

B.
Types Of
Mortgages
Covered