DEFINITIONS 2
PURCHASE AND SALE; PAYMENTS 18
2.1 Purchase and Sale 18
2.2 Bid Date. 19
2.3 Notice to Purchaser 19
2.4 Closing Date 20
2.5 Separate Agreement As To Each Mortgage Loan Pool 22
2.6 Evaluation of Bids 22
PAYMENTS RECEIVED; ESCROW ACCOUNTS; ADJUSTMENTS 23
3.1 Payments Received by Seller After Cut-Off Date 23
3.2 Clearing of Payments. 24
3.3 Terminated Mortgage Loans; Payment in Full 25
3.4 Restoration of Escrow Accounts 27
3.5 Post-Closing Date Adjustments and Remittances 27
3.6 Payment of Real Estate Taxes After Cut-Off Date. 28
LIMITED POWER OF ATTORNEY; RETRIEVAL OF DOCUMENTS 29
4.1 Limited Power of Attorney 29
4.2 The Mortgage Loan Documents 29
4.3 Servicing Files 29
4.4 Retrieval Procedures 30
4.5 Transportation Costs; Risks of Loss 32
4.6 Missing Documents 32
TRANSFER DOCUMENTS; NOTIFICATIONS 33
5.1 The Transfer Documents 33
5.2 No Modifications 34
5.3 Mortgagor Notification 34
5.4 Taxing Authority Notification 35
5.5 Recording of Transfer Documents 36
5.6 Other Transfer Documents 36
5.7 Limited Power of Attorney to Execute Other Transfer Documents 37
5.8 Costs in Connection With Other Transfer Documents 37
5.9 Additional Limited Powers of Attorney 38
SERVICING; PAYMENT PLAN AGREEMENTS; MODIFICATIONS 39
6.1 The Limited Seller Servicing Period 39
6.2 Delivery of Servicing Tape Files and Standard Conversion Reports 41
6.3 Payment Plan Agreements; Modifications. 42
6.4 Servicing by Purchaser. 43
LITIGATION; FEES 47
7.1 Pending Legal Proceedings 47
7.2 Litigation During Limited Seller Servicing Period 48
7.3 Loan Documents in Possession of Counsel 49
REPRESENTATIONS AND WARRANTIES OF SELLER; BUY-BACK EVENTS 49
8.1 Seller's Representations and Warranties 49
8.2 Seller's Representations and Warranties Regarding Mortgage Loan Schedule Diskette 51
8.3 Disclaimer of Seller's Representations and Warranties 51
8.4 Survival of Representations and Warranties of Seller 53
8.5 Remedies for Breach of Certain Representations and Warranties by Seller 53
8.6 The Recision Remedy 55
8.7 The Adjustment Payment 56
8.8 Additional Limitations on Representations and Warranties 57
8.9 Buy-Back Events 57
REPRESENTATIONS AND WARRANTIES OF PURCHASER 59
9.1 Representations and Warranties of Purchaser 59
9.2 Representations and Warranties as of Closing Date 61
PURCHASER'S EVALUATION AND ACCEPTANCE OF RISK 62
10.1 Due Diligence; Independent Investigation 62
10.2 Excluded Documents 63
10.3 Economic Risk 63
PURCHASER'S INDEMNIFICATION; WAIVER AND RELEASE; REMEDIES
FOR PURCHASER'S DEFAULT; REMEDIES FOR SELLER'S DEFAULT 64
11.1 Purchaser's Indemnification 64
11.2 Waiver and Release 64
11.3 Remedies for Purchaser's Default; Liquidated Damages 65
11.4 Remedies for Seller's Default 65
MISCELLANEOUS 66
12.1 Damage to Mortgaged Property; Insurance 66
12.2 Notices 66
12.3 Mortgage Insurance 68
12.4 Parties; Assignment 68
12.5 Survival of Representations, Warranties and Covenants of Purchaser 70
12.6 No Third Party Beneficiaries 70
12.7 Governing Law 70
12.8 Headings 70
12.9 Counterparts 70
12.10 No Limitation on Seller's Ability to Administer and Enforce Laws 71
12.11 Expenses 71
12.12 Time of Essence; Time. 71
12.13 Entire Agreement; No Modifications; Conflict with Bid Information, Bid Package and/or Bid Diskette 71
12.14 Informational Tax Reporting. 72
Exhibit "A" - Assignment and Lost Note Affidavit
Exhibit "B" - Assignment of Mortgage and Other Collateral Loan Documents
Exhibit "C" - Limited Power of Attorney
Exhibit "D" - Mortgage Loan Schedule Diskette
Exhibit "E" - Mortgage Note Endorsement
Exhibit "F" - Mortgagor Notification
Exhibit "G" - Taxing Authority Notification
Exhibit "H" - Wire Transfer Instructions
Exhibit "I" - Copy of Bid Confirmation Letter
THIS LOAN SALE AGREEMENT made and entered into as of the _________ day of __________________________, 1996, by and between the SECRETARY OF HOUSING AND URBAN DEVELOPMENT (the "Seller" or "HUD") and _____________________________________ (the "Purchaser").
WHEREAS, at a sealed bid sale on March 20, 1996 ("Single Family Mortgage Loan Sale #2") Seller offered for sale all of its right, title and interest in the Single Family Mortgage Loans, with servicing released and without FHA Mortgage Insurance; and
WHEREAS, for purposes of sale, the Single Family Mortgage Loans were grouped into the Mortgage Loan Blocks; and
WHEREAS, each Mortgage Loan Block has an aggregate unpaid principal balance of approximately $1,000,000; and
WHEREAS, as set forth in the Bid Package, bidders may bid on the Mortgage Loan Blocks in pools containing one or more Mortgage Loan Blocks; and
WHEREAS, Purchaser wishes to purchase one or more Mortgage Loan Pools; and
WHEREAS, Purchaser is either a sophisticated investor experienced in, or in the business of, buying and selling mortgage loans similar to the Single Family Mortgage Loans; and
WHEREAS, Purchaser has inserted an "X" in the appropriate space(s) provided below indicating whether Purchaser has submitted a Bid with respect to the sale of one Mortgage Loan Pool or Bids with respect to the sale of two to ten Mortgage Loan Pools:
______ one Mortgage Loan Pool; or
______ two to ten Mortgage Loan Pools; and
WHEREAS, Purchaser has submitted one Bid Form (including the Bid Diskette), on which Purchaser has identified each Mortgage Loan Pool subject to a Bid made by Purchaser; and
WHEREAS, Purchaser and Seller acknowledge that the terms and conditions of this Agreement shall apply to each Successful Bid made by Purchaser as if a separate Agreement had been executed by the parties with respect to each such Successful Bid.
NOW, THEREFORE, in consideration of the mutual agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser agree as follows:
Whenever used in this Agreement and in the Bid Package, the following terms shall have the meanings set forth in this Article. Words in the singular shall include the plural, and words in the plural shall include the singular, unless the context otherwise requires.
1.1 Additional Limited Powers of Attorney: The additional Limited Powers of Attorney and/or additional Other Transfer Documents Limited Powers of Attorney which may be requested by Purchaser pursuant to Section 5.9 of this Agreement.
1.2 Additional Transfer Document: As defined in Section 5.6(b).
1.3 Adjustment Payment: As defined in Section 8.7.
1.4 Advances: The sum of all unreimbursed advances made by Seller prior to the Cut-Off Date for either real estate taxes or special assessments with respect to the Mortgaged Property or for the protection and/or preservation of the Mortgaged Property.
1.5 Aggregate Unpaid Principal Balance: An amount equal to the sum of the Unpaid Principal Balances of the Mortgage Loans in a Mortgage Loan Pool as of the relevant date.
1.6 Agreement: This Loan Sale Agreement including all exhibits hereto, all amendments hereof and supplements hereto.
1.7 ARM: An adjustable rate mortgage originally insured by FHA pursuant to the relevant provisions of the National Housing Act.
1.8 Asset Review File: The documents, files, data and other information relating to each Mortgage Loan (including any amendments, revisions or supplements thereto) which have been placed on a database by utilizing a document imaging process and which Purchaser may review at the Due Diligence Facility or via modem.
1.9 Assignment and Lost Note Affidavit: An assignment and lost note affidavit in the form of Exhibit "A".
1.10 Assignment of Mortgage and Other Collateral Loan Documents: An assignment of mortgage and other collateral loan documents in the form of Exhibit "B".
1.11 Award Date: March 22, 1996. If, for any reason, March 22, 1996 is not a Business Day, the Award Date shall be the next Business Day following March 22, 1996.
1.12 Best and Final Round: A supplemental bid procedure which Seller may elect, in its discretion, to conduct after the Bid Date at which Seller would offer to bidders who submit the highest bid(s) and/or bidders whose bid(s) are within five percent (5%) of the highest Bid(s) submitted, the opportunity to make a best and final Bid with respect to certain Mortgage Loan Blocks and/or Mortgage Loan Pools.
1.13 Bid: Purchaser's bid(s) for the Mortgage Loan Pool(s), as identified on the Bid Diskette submitted by Purchaser to Seller and incorporated herein by reference, which bid shall be expressed as a percentage (carried to one hundred thousandth of one percent).
1.14 Bid Confirmation Letter: A letter from Seller confirming Seller's acceptance of a Bid made by Purchaser. One Bid Confirmation Letter shall be sent by Seller covering all Successful Bids made by Purchaser. As set forth in Section 2.3 of this Agreement, if Purchaser's Bid is accepted by Seller, a copy of the Bid Confirmation Letter shall be attached to this Agreement as Exhibit "I".
1.15 Bid Date: March 20, 1996.
1.16 Bid Diskette: The diskette which, under the terms of the Bid Package, must accompany the Bid Form. Up to ten Bids may be contained on a Bid Diskette.
1.17 Bid Form: The document (including the Bid Diskette) which identifies Purchaser's Bids and contains certain information relating to Purchaser and Servicer.
1.18 Bid Information: All information made available to potential bidders in connection with Single Family Mortgage Loan Sale #2.
1.19 Bid Package: The information package, entitled "Bid Package" (including any amendments, revisions or supplements thereto), that has been made available to potential bidders by Seller in connection with Single Family Mortgage Loan Sale #2.
1.20 Bid Price: For each Mortgage Loan Pool, an amount equal to the product of (a) the applicable Bid, and (b) the Aggregate Unpaid Principal Balance of the Mortgage Loan Pool as of the Cut-off Date. For example, if the Purchaser's Bid on a Mortgage Loan Pool is 99.55555%, and the Aggregate Unpaid Principal Balance of the Mortgage Loan Pool (as of the Cut-Off Date) is $10,000,000, the Bid Price is $9,955,555.
1.21 Breach Notice: Written notice from Purchaser to Seller that Purchaser has determined that a breach of one or more of Seller's representations and/or warranties contained in Sections 8.1 and 8.2 hereof exists, specifying the Mortgage Loan(s) to which such breach is applicable and the nature of such breach, which notice shall be in form and substance reasonably acceptable to Seller.
1.22 Business Day: Any day other than a Saturday, a Sunday, a federal holiday, a day on which Seller is otherwise not conducting its business, or a day on which banking institutions in New York City, New York, are authorized or obligated by law or executive order to remain closed.
1.23 Buy-Back Event: As defined in Section 8.9(a).
1.24 Buy-Back Notice: Written notice given by one party to the other (a) stating that the party giving notice has determined that a Buy-Back Event has occurred, (b) specifying the nature of the Buy-Back Event; and (c) stating that the party giving notice desires to exercise its rights under Section 8.9 of this Agreement to rescind the sale of the relevant Mortgage Loan(s).
1.25 CD ROM Package: The package of CD ROM disks made available to bidders for purchase which contain, among other things, broker price opinions, pictures of the Mortgaged Properties, credit reports, payment histories and sample loan documents.
1.26 Closing Date: The date designated as such by Seller in the Closing Date Payment Notice, which date shall be no earlier than April 1, 1996 and no later than April 12, 1996. If, for any reason, the date designated by Seller as the Closing Date is not a Business Day, the Closing Date shall be the next Business Day following the date designated by Seller.
1.27 Closing Date Payment: The payment due to Seller on the Closing Date, as computed in accordance with Section 2.4 of this Agreement.
1.28 Closing Date Payment Notice: The written notice provided to Purchaser by Seller pursuant to Section 2.3 of this Agreement which identifies (a) Seller's computation of the Closing Date Payment; (b) the Closing Date; (c) the Mortgage Loan Documents Availability Date; (d) the Servicing Files Availability Date; (e) the Servicing Transfer Date; and (f) Seller's election under Section 5.3(a) of this Agreement.
1.29 Closing Escrow Account Balance: The balances of the Escrow Accounts relating to the Mortgage Loans as of the Cut-Off Date, as set forth in the Mortgage Loan Schedule Diskette. A Closing Escrow Account Balance may be a negative number if Seller made payments from an Escrow Account prior to collection of funds and thereafter payments deposited in the Escrow Account by Seller were returned due to insufficient funds or other failure of collection.
1.30 Closing Fee: A fee payable by Purchaser to Seller on the Closing Date in the amount of $500 for each Mortgage Loan Block purchased, up to a maximum of $50,000 per Successful Bidder.
1.31 Confidentiality Agreement: The agreement required to be executed by bidders prior to obtaining the Bid Package and re-submitted with Purchaser's Bid, pursuant to which each bidder has made certain covenants regarding non-disclosure of the contents of the Asset Review Files.
1.32 Contact Person: Mr. Ronald Hughes, 1730 M St., NW, Suite 610, Washington, D.C. 20036, (202) 496-1170, or any other individual designated by Seller as the Contact Person.
1.33 Cut-Off Date: February 29, 1996.
1.34 Deleted Mortgage Loan: As defined in Section 8.9.
1.35 Deposit: For each Mortgage Loan Pool, an amount equal to ten percent (10%) of the Bid Price. If Purchaser submits Multiple Bids, the Deposit shall be an amount equal to ten percent (10%) of the highest Bid Price.
1.36 Deposit Investment Rate: An investment rate equal to (a) the Federal Funds Rate, as published in The Wall Street Journal on the Bid Date, minus (b) one hundred basis points (1.00%).
1.37 Document Retrieval Notice: As defined in Section 4.4(a).
1.38 Due Diligence Facility: The facility located at 1730 M St., NW, Suite 610, Washington, D.C. 20036, in which the Asset Review Files or any portion may be made available for review in relation to the submission of a Bid.
1.39 Due Diligence Exception Report: The report included in the Bid Package which notes certain deficiencies in the Mortgage Loan Documents, such as absence of documents or existence of copies only.
1.40 Escrow Accounts: With respect to each Mortgage Loan, the following accounts: (a) Tax Escrow Account; (b) Unapplied Funds Account; (c) Insurance Proceeds Account; and (d) Other Proceeds Account.
1.41 Escrow Payments: With respect to each Mortgage Loan, any payment made by a Mortgagor to Seller, as mortgagee, for real estate taxes and other similar items.
1.42 Event of Termination: As defined in Section 3.3(b).
1.43 Excluded Documents: With respect to each Mortgage Loan, any correspondence, reports, information, internal analyses, attorney-client privileged documents, internal memoranda (legal or otherwise), documents, credit information, regulatory reports, and/or internal assessments of the valuation of such Mortgage Loan, the Mortgage Loan Documents and/or the Mortgaged Property or any other documents relating to a Mortgage Loan, that may be missing or excluded from the Asset Review Files.
1.44 Federal Housing Administration: An agency within the Department of Housing and Urban Development, headed by the Assistant Secretary for Housing/Federal Housing Commissioner under the supervision and direction of the Secretary of Housing and Urban Development.
1.45 FHA: The Federal Housing Administration.
1.46 FHA Approved Mortgagee: A mortgagee approved by HUD for servicing pursuant to 24 CFR § 202.18.
1.47 FHA Mortgage Insurance: All rights, benefits, entitlements and obligations of a mortgagee under a mortgage insured or co-insured by FHA in accordance with the relevant sections of the National Housing Act, and the applicable regulations promulgated thereunder.
1.48 FHA Regulations: Regulations promulgated by HUD under the National Housing Act, as codified in 24 Code of Federal Regulations.
1.49 GEM: A growing equity mortgage originally insured by FHA pursuant to the relevant provisions of the National Housing Act.
1.50 GPM: A graduated payment mortgage originally insured by FHA pursuant to the relevant provisions of the National Housing Act.
1.51 HUD: As defined in the opening paragraph of this Agreement.
1.52 HUD Service Charge: A monthly service charge payable by the Mortgagor to HUD on some of the Mortgages.
1.53 Individual Loan Price: An amount equal to the product of (a) the applicable Bid, and (b) the Unpaid Principal Balance of the subject Mortgage Loan as of the Cut-Off Date.
1.54 Insurance Proceeds Account: An account for amounts received from insurance companies to pay for repairs to the Mortgaged Property.
1.55 Limited Power of Attorney: The authorization for Purchaser to execute certain documents as attorney-in-fact for Seller, in the form attached hereto as Exhibit "C".
1.56 Limited Seller Servicing Period: As defined in Section 6.1.
1.57 Modification: Any written amendment or modification of the Mortgage Note or other Mortgage Loan Documents, which may relate to, among other things, the monthly payment, term or interest rate of the Mortgage Note.
1.58 Monthly Payment: The scheduled monthly payment of principal and interest which is payable by the Mortgagor pursuant to the terms of the related Mortgage Note, as modified by any Modification or Payment Plan Agreement. Such amount shall not include any mortgage insurance premium or service charge payable to HUD during the period when such Mortgage Loan was insured or held by HUD.
1.59 Mortgage: With respect to each Mortgage Loan, the mortgage, deed of trust or other instrument creating and evidencing a lien on the related Mortgaged Property and securing the related Mortgage Note, including all assignments thereof and all addenda, amendments, modifications and riders thereto.
1.60 Mortgage Interest Rate: For each Mortgage Loan, the rate of interest per annum payable under the related Mortgage Note, as modified by any Modification.
1.61 Mortgage Loan: (a) Until the Award Date, each Single Family Mortgage Loan included in each Mortgage Loan Pool which is the subject of a Bid made by Purchaser, with servicing released and without FHA Mortgage Insurance; and (b) on and after the Award Date, each Single Family Mortgage Loan included in a Mortgage Loan Pool as to which Purchaser is the Successful Bidder, with servicing released and without FHA Mortgage Insurance.
1.62 Mortgage Loan Block: Each grouping of Mortgage Loans made by HUD for purposes of Single Family Mortgage Loan Sale #2, based upon performance and geographic location of the Mortgaged Properties.
1.63 Mortgage Loan Documents: As defined in Section 4.2.
1.64 Mortgage Loan Documents Availability Date: April 29, 1996.
1.65 Mortgage Loan Information Diskette: The diskette, included as part of the Bid Package, which contains certain information with respect to the Mortgage Loans, and a description of data fields, diskette layout and codes.
1.66 Mortgage Loan Pool(s): (a) Until the Award Date, each pool of Mortgage Loan Blocks which is the subject of a Bid made by Purchaser; and (b) on and after the Award Date, each pool of Mortgage Loan Blocks as to which Purchaser is the Successful Bidder.
1.67 Mortgage Loan Schedule Diskette: The diskette, attached hereto as Exhibit "D", which sets forth (a) with respect to each Mortgage Loan the following information as of the Cut-Off Date: (i) the FHA case number; (ii) the Unpaid Principal Balance; (iii) the Closing Escrow Account Balances; (iv) the Mortgage Interest Rate; and (v) the Monthly Payment; and, (b) with respect to each Performing Mortgage Loan, the following additional information as of the Cut-Off Date: (i) the Principal Paid to Date; (ii) the accrued and unpaid interest; and (iii) the accrued and unpaid HUD Service Charge. If any of the Mortgage Loans are GPMs or GEMs, the Monthly Payment stated in the Mortgage Loan Schedule Diskette is the monthly payment of principal and interest as of the Cut-Off Date (as modified by any Modification), which payment may thereafter change in accordance with the terms of the Mortgage Loan Documents. If any of the Mortgage Loans are ARMs, the Mortgage Interest Rate stated in the Mortgage Loan Diskette is the rate of interest in effect as of the Cut-Off Date (as modified by any Modification), which rate may thereafter change in accordance with the terms of the Mortgage Loan Documents.
1.68 Mortgage Note: With respect to each Mortgage Loan, the original note or other evidence of indebtedness of the Mortgagor originally endorsed for insurance by HUD under the relevant sections of the National Housing Act, including all endorsements thereto, all Modifications and all Payment Plan Agreements.
1.69 Mortgage Note Endorsement: An endorsement to the Mortgage Note in the form of Exhibit "E".
1.70 Mortgaged Property: The real property and the improvements thereon that are subject to the Mortgage relating to each Mortgage Loan, and that constitute security for the repayment of the related Mortgage Note.
1.71 Mortgagor: The obligor, including its successors and assigns, on the Mortgage Note relating to each Mortgage Loan.
1.72 Mortgagor Notification: The notice of the sale of the Mortgage Loans to be given to all Mortgagors in accordance with the provisions of Section 5.3 of this Agreement.
1.73 Multiple Bid: Each Bid submitted to Seller by a Multiple Bidder.
1.74 Multiple Bidder: A bidder which has submitted Bids with respect to two or more Mortgage Loan Pools.
1.75 National Housing Act: The National Housing Act of June 27, 1934, c. 847, 48 Stat. 1246, 12 U.S.C. §1701, as amended.
1.76 Non-Complying Mortgage Loan: Any Mortgage Loan which does not comply with the representations and warranties made by Seller pursuant to Section 8.1 or 8.2 of this Agreement.
1.77 Other Proceeds Account: An account for miscellaneous amounts paid by or on behalf of a Mortgagor which have not been allocated to another account. For example, any excess Escrow Payments which are in the process of being refunded to a Mortgagor might be allocated to the Other Proceeds Account.
1.78 Other Transfer Documents: As defined in Section 5.6(c).
1.79 Other Transfer Documents Limited Power of Attorney: As defined in Section 5.7.
1.80 Payment Plan Agreements: Payment plans, whether formal or informal, written or oral, which require : (i) the payment of the Monthly Payment due under the Mortgage Note; or (ii) the Monthly Payment plus an additional amount which is within the Mortgagor's reasonable ability to pay.
1.81 Performing Mortgage Loan: Any Mortgage Loan which, as of the Cut-Off Date, has a Principal Paid to Date of March 1, 1996 or later, and has owing no more than one month's accrued interest.
1.82 Permitted Assignment: As defined in Section 12.4.
1.83 Permitted Transferee: Any Person which is an FHA Approved Mortgagee, or which has engaged an FHA approved Servicer.
1.84 Person: Any individual, corporation, partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or other entity recognized as a legal person under the jurisdiction in which it was created or does business or government or any agency or political subdivision thereof.
1.85 Principal Paid to Date: For each Mortgage Loan, the date, as determined by Seller, to which principal has been paid.
1.86 Proposed Adjustment Notice: As defined in Section 3.5.
1.87 Purchaser: As defined in the opening paragraph of this Agreement.
1.88 Purchaser's Representative: The Person responsible for retrieving the Mortgage Loan Documents and/or Servicing Files on behalf of Purchaser, as designated by Purchaser in a Document Retrieval Notice.
1.89 Qualification Statement: The agreement required to be executed by bidders prior to obtaining the Bid Package and resubmitted with the Bid, pursuant to which each bidder has made certain representations as to, among other things, its financial sophistication and experience.
1.90 Real Estate Tax Bill: Any bill for real estate taxes or special assessments with respect to a Mortgaged Property.
1.91 Recision Date: The date upon which Seller pays Purchaser the Recision Payment pursuant to 8.5(c)(ii) of this Agreement.
1.92 Recision Payment: With respect to any Recision of a sale, assignment and transfer of Non-Complying Mortgage Loans pursuant to Section 8.5(c)(ii) of this Agreement or of Deleted Mortgage Loans pursuant to Section 8.9 of this Agreement, an amount equal to: (a) the sum of (i) the Individual Loan Prices of the relevant Mortgage Loans, (ii) the amounts paid by Purchaser pursuant to Sections 2.4(a)(i)(B), (C) and (D) of this Agreement with respect to the relevant Mortgage Loans, (iii) simple interest on the amounts set forth in Section 1.92(a)(i) and (ii) at the Deposit Investment Rate for the period from the Closing Date to the Recision Date, and (iv) the sum of all reasonable, unreimbursed advances (as determined by Seller) made by Purchaser to preserve and/or protect the Mortgaged Property between the Closing Date and the Recision Date; minus (b) any and all payments, other than Escrow Payments, received by Purchaser (including without limitation payments of principal, interest, prepayments and payments pursuant to Section 3.1 of this Agreement (but not including Escrow Payments)) on account of the relevant Mortgage Loans from the Closing Date to the Recision Date.
1.93 Releasing Parties: The affiliates, officers, directors, successors and assigns of Purchaser, and all subsequent purchasers and transferees of the Mortgage Loans, and all others claiming by, through or under Purchaser or any subsequent purchasers or transferees.
1.94 Re-Offering: A supplemental bid procedure which Seller may elect to conduct after the Bid Date at which Seller would re-offer for sale to all qualified bidders who executed a Confidentiality Agreement and Qualification Statement in connection with Single Family Mortgage Loan Sale #2, such Mortgage Loan Blocks and/or Mortgage Loan Pools as Seller may determine.
1.95 Revised Transfer Documents: As defined in Section 5.6(b).
1.96 Seller: As defined in the opening paragraph of this Agreement.
1.97 Servicer: Any Person selected by Purchaser or any successor or assign of Purchaser to service the Mortgage Loans.
1.98 Servicing Files: As defined in Section 4.3.
1.99 Servicing Files Availability Date: The date designated as such by Seller in the Closing Date Payment Notice, which date shall be no earlier than May 13, 1996 and no later than May 28, 1996. If, for any reason, the date designated by Seller as the Servicing Files Availability Date is not a Business Day, the Servicing Files Availability Date shall be the next Business Day following the date designated by Seller.
1.100 Servicing Tape: As defined in Section 6.2(a).
1.101 Servicing Transfer Date: The date designated as such by Seller in the Closing Date Payment Notice, which date shall be no earlier than May 16, 1996 and no later than May 31, 1996.
1.102 Single Family Mortgage Loan Sale #2: As defined in the recitals to this Agreement.
1.103 Single Family Mortgage Loans: The loans offered for sale at Single Family Mortgage Loan Sale #2.
1.104 Standard Conversion Reports: As defined in Section 6.2(b).
1.105 Substitution Documents: As defined in Section 7.1.
1.106 Successful Bid: Each bid which is the subject of a Bid Confirmation Letter.
1.107 Successful Bidder: A bidder which has been sent a Bid Confirmation Letter with respect to a Mortgage Loan Pool.
1.108 Successful Multiple Bid: Each Multiple Bid which is the subject of a Bid Confirmation Letter from Seller.
1.109 Successful Multiple Bidder: A bidder that has been sent a Bid Confirmation Letter relating to two (2) or more of the bidder's Multiple Bids.
1.110 Tax Escrow Account: An account for amounts collected from a Mortgagor which are held by Seller for payment of real estate taxes.
1.111 Taxing Authority Notification: A notification to a taxing authority having jurisdiction over a Mortgaged Property, in the form of Exhibit "G".
1.112 Terminated Mortgage Loan: As defined in Section 3.3(b).
1.113 Transfer Documents: As defined in Section 5.1.
1.114 Transfer/Recordation Requirements: As defined in Section 5.6.
1.115 Unapplied Funds Account: An account for amounts collected from a Mortgagor which have not been applied to reduce either amounts then due or the Unpaid Principal Balance of the Mortgage Loan.
1.116 Unpaid Principal Balance: An amount equal to the unpaid principal balance(s) of the relevant Mortgage Loan(s) as of the relevant date.
1.117 Warranty Period: The period beginning on the Closing Date and ending at 5:00 p.m. on the ninetieth (90th) calendar day following the Servicing Files Availability Date.
1.118 Wire Transfer Instructions: The instructions for wire transferring to Seller the Deposit and the Closing Date Payment, as set forth in Exhibit "H".
PRIVATE 2.1 Purchase and Sale Purchase and Sale. Subject to the terms and conditions set forth in this Agreement, Seller hereby agrees to sell, assign and transfer to Purchaser, and Purchaser hereby agrees to purchase and acquire from Seller, all of Seller's right, title and interest as mortgagee in and to (a) the Mortgage Loans, with servicing released and without FHA Mortgage Insurance, and (b) all payments of any kind received by Seller with respect to each Mortgage Loan after the Cut-Off Date.
(a) During the period between 9:00 a.m. on the date prior to the Bid Date and 3:30 p.m. on the Bid Date, Purchaser shall have delivered to Seller and Seller shall have received from Purchaser, in accordance with the Wire Transfer Instructions, an amount equal to the Deposit. Seller's retention of the Deposit shall be subject to Section 2.3 and 2.6 of this Agreement. No interest shall be paid on the Deposit.
(b) During the period between 9:30 a.m. and 3:30 p.m. on the Bid Date, Purchaser shall have delivered to Seller, and Seller shall have received from Purchaser, the following in accordance with the instructions set forth in the Bid Package: (i) the Bid Form, including the Bid Diskette; (ii) two (2) completed and executed originals of this Agreement; and (iii) an executed original power of attorney for any agent or broker bidding on behalf of Purchaser. Purchaser's Bid(s) shall be set forth in the Bid Diskette. The risk of any inability to read the Bid Diskette or any error contained on the Bid Diskette shall be borne by Purchaser.
PRIVATE 2.3 Notice to Purchaser Notice to Purchaser. If Purchaser's Bid is accepted by Seller, then (a) Seller shall retain the Deposit; (b) on the Award Date Seller shall send to Purchaser: (i) a Bid Confirmation Letter (which shall be sent both by telecopier and by overnight courier); and (ii) one duplicate original Agreement executed by Seller, with a copy of the Bid Confirmation Letter attached as Exhibit "I"; and (c) at least three (3) Business Days prior to the Closing Date, Seller shall send the Closing Date Payment Notice to Purchaser (which shall be sent both by telecopier and by overnight courier). If Purchaser's Bid is not accepted by Seller, Seller shall return the Deposit to Purchaser within six (6) Business Days following the Award Date, without interest, and all of the terms and conditions of this Agreement shall automatically terminate, except that Purchaser shall remain bound by the provisions of Sections 2.6 and 11.2 of this Agreement, which shall survive such termination.
PRIVATE 2.4 Closing Date Closing Date. During the period between 9:00 a.m. and 1:00 p.m. on the Closing Date, Purchaser shall deliver the following to Seller:
in accordance with the Wire Transfer Instructions, the Closing Date Payment which shall equal:
the sum of:
(A) the aggregate of the Bid Prices for the Mortgage Loan Pools;
(B) the aggregate amount of accrued and unpaid interest on all Performing Mortgage Loans, calculated at the rate payable on each such Performing Mortgage Loan, pursuant to the terms of the Mortgage Loan Documents, for the period beginning on the last day through which interest was paid to Seller through and including the day immediately preceding the Closing Date;
(C) the aggregate amount of the accrued and unpaid HUD Service Charges on all Performing Mortgage Loans, for the period beginning on the last day through which the HUD Service Charge was paid to Seller through and including the day immediately preceding the Closing Date;
(D) the Advances; and
(E) the Closing Fee;
PRIVATE (ii) minus the sum of: minus the sum of\:
(A) the Deposit; and
(B) the aggregate amount of the Closing Escrow Account Balances with respect to the Mortgage Loans.
As set forth in Section 1.29 of this Agreement, a Closing Escrow Account Balance may be a negative number if Seller made payments from an Escrow Account prior to collection of funds and thereafter payments deposited in the Escrow Account by Seller were returned due to insufficient funds or other failure of collection. A negative Closing Escrow Account Balance would result in an increase of the Closing Date Payment;
(b) copies of the Limited Powers of Attorney in the form attached hereto as Exhibit "C", with no modifications to the form thereof (other than as necessary to complete the missing information required to be inserted in the form), in such quantity as Purchaser reasonably deems necessary, but not in excess of fifty (50) copies;
(c) three prepaid, overnight courier packages, addressed to Purchaser, to be used by Seller for the purposes hereinafter set forth;
(d) a fully completed and executed Internal Revenue Service Form W-9; and
(e) the notice providing the information required pursuant to the last paragraph of Section 5.3(d) of this Agreement, and pursuant to Sections 6.2(a) and 6.2(b) of this Agreement.
PRIVATE 2.5 Separate Agreement As To Each Mortgage Loan Pool Separate Agreement As To Each Mortgage Loan Pool. As set forth in the recitals to this Agreement, Seller and Purchaser agree that the terms and conditions of this Agreement shall apply to each Successful Bid on each Mortgage Loan Pool, as if a separate Agreement had been executed by the parties with respect to each such Mortgage Loan Pool. Notwithstanding the foregoing, if Purchaser is a Successful Multiple Bidder (a) the transactions contemplated by this Agreement shall be completed as to all Mortgage Loan Pools simultaneously, and (b) the failure by Purchaser to complete the purchase of any Mortgage Loan Pool shall constitute a non-curable default under all Successful Multiple Bids.
Except as otherwise set forth above, each Multiple Bid made by Purchaser is independent of each other Multiple Bid made by Purchaser, and Seller shall have the right to accept any Multiple Bid made by Purchaser without accepting any other Multiple Bid made by Purchaser.
PRIVATE 2.6 Evaluation of Bids Evaluation of Bids. Purchaser acknowledges and agrees that all evaluations and determinations made by Seller as to which bid(s) Seller shall accept and reject shall be in Seller's sole and absolute discretion, shall be binding upon Purchaser and shall not be subject to challenge. Purchaser acknowledges and agrees that Seller reserves the right: (a) to reject any and all bids made in connection with Single Family Mortgage Loan Sale #2, including Purchaser's Bid, without prejudice to Seller's right to include the related Mortgage Loans in a subsequent sale or auction; (b) to conduct a Re-Offering or Re-Offerings, but such Re-Offering(s) shall not be construed as a rejection of any Bid made by Purchaser or preclude Seller from thereafter accepting any Bid made by Purchaser; and, (c) to conduct a Best and Final Round or Rounds, but such Best and Final Round(s) shall not be construed as a rejection of any Bid made by Purchaser or preclude Seller from thereafter accepting any Bid made by Purchaser. In the event of a Re-Offering, Seller shall set forth, in a revised bid document, applicable revisions to this Agreement including but not limited to revisions to pertinent dates.
PRIVATE PAYMENTS RECEIVED; ESCROW ACCOUNTS; ADJUSTMENTS PAYMENTS RECEIVED; ESCROW ACCOUNTS; ADJUSTMENTS
PRIVATE 3.1 Payments Received by Seller After Cut-Off Date Payments Received by Seller After Cut-Off Date. If Seller receives any credits, payments or other consideration distributed or paid by or on behalf of a Mortgagor, prior to or on the Cut-Off Date (including, without limitation, any credits to the Unpaid Principal Balance of a Mortgage Loan due to the collection of insurance or condemnation proceeds), Seller shall be entitled to accept and retain such payments or other consideration and Purchaser shall not be entitled to any payment or credit. If Seller receives any payments by or on behalf of any Mortgagor with respect to the Mortgage Loans after the Cut-Off Date (including, without limitation, any credits to the Unpaid Principal Balance of a Mortgage Loan due to the collection of insurance or condemnation proceeds), Seller shall deposit such payments in a holding account and remit to Purchaser, from such account, the amounts received, without interest thereon, on a regular basis, promptly after receipt of such payments by Seller (but in no event prior to the Closing Date). Payment shall be made by check, wire transfer or such other reasonable means selected by Seller. At Seller's election, such payments may be made by endorsement of payments tendered to Seller in the form as follows: "Pay to the order of [name of Purchaser] without recourse and without representations or warranties of any type, kind, character or nature, express or implied." Seller's obligations under this Section shall be subject to Purchaser having fully performed its obligations under this Agreement.
PRIVATE 3.2 Clearing of Payments. Clearing of Payments.
(a) In the event that before the Closing Date, Seller receives a returned check for a payment (with respect to a Mortgage Loan ) that was made prior to the Cut-Off Date, and the amount of said payment was included in the calculation of the Closing Date Payment, Seller may elect to adjust the Closing Date Payment prior to or on the Closing Date.
(b) In the event that after the Closing Date Seller receives a returned check for a payment (with respect to a Mortgage Loan) made prior to the Closing Date and the amount of said payment was included in the calculation of the Closing Date Payment, Seller may elect to recalculate the Closing Date Payment and collect any underpayment from Purchaser. Seller shall have a period of ninety (90) days after the Closing Date to notify Purchaser in writing of the amount to be collected and Purchaser shall pay promptly, but not later than ten (10) Business Days following receipt of such notice, to Seller the amount to be collected by certified check or wire transfer if so directed by Seller and identify the Mortgage Loan and "Single Family Mortgage Loan Sale #2."
(c) If Seller has deposited payments received from any Mortgagor after the Cut-Off Date and issues a check or payment therefor to Purchaser pursuant to Section 3.1 of this Agreement, Purchaser shall bear the risk that any such payment so deposited by Seller may be returned due to insufficient funds or any other failure of collection. Seller shall have a period of ninety (90) days after the date Seller delivers to Purchaser payments made by or on behalf of any Mortgagor to notify Purchaser in writing that any such payments were returned due to insufficient funds or any other failure of collection and specifying the amount thereof, whereupon Purchaser shall pay promptly, but not later than ten (10) Business Days following receipt of such notice, to Seller the amount of such payment by certified check, or by wire transfer if so directed by Seller and identify the Mortgage Loan and "Single Family Mortgage Loan Sale #2."
3.3 Terminated Mortgage Loans; Payment in Full Terminated Mortgage Loans; Payment in Full.
In the event that any Mortgage Loan Pool shall include a Terminated Mortgage Loan, then (i) this Agreement shall terminate solely as it relates to the Terminated Mortgage Loan, and neither party shall have any further liability to the other with respect to the Terminated Mortgage Loan; (ii) Seller shall retain any payments received with respect to the Terminated Mortgage Loan and/or title to the Mortgaged Property, as the case may be; (iii) the Closing Date Payment shall be reduced by the Individual Loan Price relating to the Terminated Mortgage Loan [and corresponding adjustments shall be made in the amounts set forth in Sections 2.4(a)(i)(B), (C) and (D), and 2.4(a)(ii)(B)]; and (iv) the parties shall remain bound by all terms and conditions of this Agreement with respect to each other Mortgage Loan that is the subject of this Agreement.
(b) The term Terminated Mortgage Loan shall mean (i) any Single Family Mortgage Loan which is withdrawn from Single Family Mortgage Loan Sale #2 by Seller after the Cut-Off Date and before the Bid Date, and (ii) any Single Family Mortgage Loan as to which an Event of Termination shall have occurred at any time prior to the Closing Date. The term Event of Termination shall mean the occurrence of any of the following: (i) title to the Mortgaged Property relating to any Mortgage Loan is transferred to Seller by foreclosure sale or other judicial or non-judicial remedy; (ii) title to the Mortgaged Property relating to any Mortgage Loan is transferred to Seller by deed in lieu of foreclosure or other judicial or non-judicial sale; or (iii) Seller receives a payment of less than the entire Unpaid Principal Balance of a Mortgage Loan in full satisfaction of the Mortgagor's obligation under the Mortgage Loan, pursuant to a settlement agreed upon by Seller.
(c) The payment in full of the entire Unpaid Principal Balance and all other amounts outstanding with respect to a Mortgage Loan shall not constitute an Event of Termination. In the event of any such payment in full (i) Seller shall deliver such payment to Purchaser in accordance with the provisions of Section 3.1 of this Agreement; (ii) Seller shall have no obligation to deliver the Mortgage Loan Documents or Servicing Files with respect to such Mortgage Loan; (iii) all other rights and obligations of the parties under this Agreement with respect to any Mortgage Loan which has been paid in full shall terminate, except that there shall be no reduction in the Closing Date Payment or any other payment required to be made by Purchaser under this Agreement; and (iv) the parties shall remain bound by all terms and conditions of this Agreement with respect to each other Mortgage Loan that is the subject of this Agreement. Seller's obligations under Section 3.3(c)(i) of this Agreement shall be subject to Purchaser's having fully performed its obligations under this Agreement.
PRIVATE 3.4 Restoration of Escrow Accounts Restoration of Escrow Accounts. Within ten (10) Business Days following the Closing Date, Purchaser shall establish, as provided in the Mortgage Loan Documents, and fund escrow accounts in an amount equal to the Closing Escrow Account Balances relating to each Mortgage Loan, plus any additional amounts relating to the Escrow Accounts that have been paid to Purchaser pursuant to Section 3.1 of this Agreement.
PRIVATE 3.5 Post-Closing Date Adjustments and Remittances Post-Closing Date Adjustments and Remittances. If, within ninety (90) days after the Servicing Files Availability Date, either Seller or Purchaser determines that the Closing Date Payment was computed incorrectly, the party making such determination shall, within the same ninety (90) day period, give notice (a "Proposed Adjustment Notice") to the other party. The Proposed Adjustment Notice shall include a reasonably detailed description of the purported error in the computation of the Closing Date Payment. If the parties agree upon any proposed adjustment, Seller shall remit to Purchaser any overpayment of the Closing Date Payment, or Purchaser shall remit to Seller any underpayment of the Closing Date Payment, as applicable. If neither Seller nor Purchaser gives a Proposed Adjustment Notice within the above-referenced ninety (90) day period, the parties shall be deemed to have waived their rights to contest the amount of the Closing Date Payment.
PRIVATE 3.6 Payment of Real Estate Taxes After Cut-Off Date. Payment of Real Estate Taxes After Cut-Off Date.
If, prior to the Closing Date, Seller receives a Real Estate Tax Bill which is due on or before May 31, 1996, Seller shall use reasonable efforts to pay the same. Seller shall also use reasonable efforts to forward to Purchaser any Real Estate Tax Bill received prior to the Closing Date which is due on or after June 1, 1996. Notwithstanding the foregoing, Seller may, at its election, pay any Real Estate Tax Bill which it receives prior to the Closing Date regardless of the date by which payment is due.
To the extent that Seller pays any Real Estate Tax Bill pursuant to Section 3.6(a) of this Agreement, Purchaser shall reimburse Seller for the amount thereof within ten (10) Business Days after Purchaser is billed therefor. The provisions of Section 6.1 of this Agreement shall govern with respect to Real Estate Tax Bills received by Purchaser following the Closing Date.
Nothing in this Agreement shall constitute or be construed as a representation or warranty that real estate taxes or special assessments with respect to any Mortgaged Property are current or that the outstanding Real Estate Tax Bills with respect to any Mortgaged Property have been paid. Seller has no responsibility for any unpaid or overdue taxes or for any interest, late fees, penalties or other charges which may be imposed in connection therewith.
PRIVATE LIMITED POWER OF ATTORNEY; RETRIEVAL OF DOCUMENTS LIMITED POWER OF ATTORNEY; RETRIEVAL OF DOCUMENTS
PRIVATE 4.1 Limited Power of Attorney Limited Power of Attorney. On the Mortgage Loan Documents Availability Date, Seller shall send the Limited Powers of Attorney to Purchaser by overnight courier in the packages provided to Seller pursuant to Section 2.4(c) of this Agreement.
PRIVATE 4.2 The Mortgage Loan Documents The Mortgage Loan Documents. On the Mortgage Loan Documents Availability Date, Purchaser shall retrieve (or cause to be retrieved) from the Due Diligence Facility the following documents (collectively, the "Mortgage Loan Documents"), to the extent in Seller's possession:
the original Mortgage Note or Lost Note Affidavit and Assignment;
the Mortgage (including any assignments thereof); and
the mortgagee title insurance policy issued in connection with the origination of the Mortgage.
The Mortgage Loan Documents shall be retrieved in accordance with the procedures set forth in Section 4.4 of this Agreement.
PRIVATE 4.3 Servicing Files Servicing Files. On the Servicing Files Availability Date, Purchaser shall retrieve (or cause to be retrieved) from the Due Diligence Facility the Servicing Files, to the extent in Seller's possession. The Servicing Files, with respect to each Mortgage Loan, shall include correspondence, memoranda, litigation documents and any written Payment Plan Agreements, to the extent in Seller's possession.
Not less than five (5) Business Days prior to retrieving the Mortgage Loan Documents, and also not less than five (5) Business Days prior to retrieving the Servicing Files, Purchaser shall deliver to the Contact Person a notice (the "Document Retrieval Notice") setting forth the following: (i) the time that Purchaser intends to retrieve the Mortgage Loan Documents or Servicing Files, as applicable, which in both cases shall be between 9:00 a.m. and 5:00 p.m.; and (ii) the identity of the Purchaser's Representative. The Document Retrieval Notice shall be given both by telecopier and by overnight courier. The time selected by Purchaser for the retrieval of the Mortgage Loan Documents and Servicing Files shall be subject to the approval of Seller, which approval shall not be unreasonably withheld.
At the time of retrieval of the Mortgage Loan Documents and at the time of retrieval of the Servicing Files, Purchaser's Representative shall deliver the following:
if Purchaser's Representative is a natural person:
(A) an original driver's license, original passport, or other photo identification reasonably acceptable to Seller, which identification purports to identify such person as the Purchaser's Representative; and
(B) an original statement signed by a person purporting to sign on behalf of Purchaser, stating that: __________________________ [insert name of Purchaser's Representative] is authorized to retrieve the Mortgage Loan Documents/Servicing Files [strike inapplicable reference] relating to the Single Family Loan Sale Agreement, dated as of _______________, 1996, between HUD and _________________________ [insert name of Purchaser].
if Purchaser's Representative is other than a natural person:
(A) evidence reasonably satisfactory to Seller that the individual actually retrieving the Mortgage Loan Documents or Servicing Files is an agent or employee of Purchaser's Representative; and
(B) an original statement signed by a person purporting to sign on behalf of Purchaser, stating that : Any employee of ________________________ [insert name of Purchaser's Representative] is authorized to retrieve the Mortgage Loan Documents/Servicing Files [strike inapplicable reference] relating to the Single Family Loan Sale Agreement, dated as of _________________, 1996 between HUD and ________________________ [insert name of Purchaser].
(c) Purchaser hereby authorizes Seller to deliver the Mortgage Loan Documents and Servicing Files to any Person who complies with the provisions of Section 4.4(b) of this Agreement.
PRIVATE 4.5 Transportation Costs; Risks of Loss Transportation Costs; Risks of Loss.
Purchaser hereby releases Seller from any and all liability for any loss, claim, damage, cost or expense (including, without limitation, attorneys' fees) that may be incurred by Purchaser, or any other Person, as a result of, or in connection with, Seller allowing the Mortgage Loan Documents or Servicing Files to be retrieved in accordance with Section 4.4 of this Agreement.
All expenses in connection with transportation and delivery of the Limited Powers of Attorney, Mortgage Loan Documents and the Servicing Files shall be the sole responsibility of Purchaser. Purchaser shall bear the risk of loss with respect to the Limited Powers of Attorney and Mortgage Loan Documents from and after the Mortgage Loan Documents Availability Date. Purchaser shall bear the risk of loss with respect to the Servicing Files from and after the Servicing Files Availability Date.
PRIVATE 4.6 Missing Documents Missing Documents.
Seller shall have no obligation to deliver to Purchaser any Mortgage Loan Documents or Servicing Files which are lost, missing or otherwise not in Seller's possession. Purchaser's obligations under this Agreement shall not be affected by Seller's failure to deliver any Mortgage Loan Documents or Servicing Files which are lost, missing or otherwise not in Seller's possession.
In the event that any Mortgage Note is lost, missing or otherwise not in Seller's possession, either Seller shall provide an executed Assignment and Lost Note Affidavit to Purchaser or Purchaser shall execute the same on behalf of Seller pursuant to the Limited Power of Attorney.
Purchaser shall have the sole responsibility to obtain any of the Mortgage Loan Documents in the possession of any attorneys, collection agencies or foreclosing trustees as set forth in Section 7.3 of this Agreement.
TRANSFER DOCUMENTS; NOTIFICATIONS TRANSFER DOCUMENTS; NOTIFICATIONS
PRIVATE 5.1 The Transfer Documents The Transfer Documents. Within one hundred eighty (180) days following the Mortgage Loan Documents Availability Date, Purchaser shall, at its sole cost and expense, prepare and execute the following documents (collectively, the "Transfer Documents") for each Mortgage Loan on behalf of Seller pursuant to the Limited Powers of Attorney:
An original Mortgage Note Endorsement in the form of Exhibit "E". Pursuant to the Mortgage Note Endorsement, any reference in the Mortgage Note to FHA Mortgage Insurance shall be deemed to have been stricken and the Mortgage Note shall be deemed to have been marked with the words "FHA Insurance Terminated. Mortgage Note Endorsement From HUD Hereby Made A Part Hereof." Promptly following the Mortgage Loan Documents Availability Date, Purchaser shall strike any reference in the Mortgage Note to FHA Mortgage Insurance and mark the Mortgage Note with the words "FHA Insurance Terminated. Mortgage Note Endorsement From HUD Hereby Made A Part Hereof."
If Seller does not have in its possession the original Mortgage Note and has not delivered an Assignment and Lost Note Affidavit, Purchaser shall prepare and execute an original Assignment and Lost Note Affidavit in the form of Exhibit "A", in place of the Mortgage Note Endorsement.
An original Assignment of Mortgage and Other Collateral Loan Documents in the form of Exhibit "B".
PRIVATE 5.2 No Modifications No Modifications. Except as hereinafter set forth, Purchaser shall make no modifications to the forms of the Transfer Documents attached hereto as exhibits, other than those modifications which are necessary to complete the missing information required to be inserted therein.
PRIVATE 5.3 Mortgagor Notification Mortgagor Notification.
Notice of the sale of the Mortgage Loans shall be given to all Mortgagors in accordance with the provisions of this Section. At Seller's election, the Mortgagor Notification shall be given either by Purchaser alone or by Seller and Purchaser jointly pursuant to 24 CFR § 3500.21(d)(2)(C). Seller shall indicate in the Closing Date Payment Notice whether the Mortgagor Notification is to be given by Purchaser alone or by Purchaser and Seller jointly.
If Seller elects to have Purchaser give the Mortgagor Notification alone, Purchaser shall, at Purchaser's cost and expense, send the Mortgagor Notification to all Mortgagors by first class mail at the last known mailing address of such Mortgagors in accordance with 24 CFR §3500.21(d)(2)(B).
If Seller elects to have the Mortgagor Notification given jointly, then:
not less than fifteen (15) days prior to the Servicing Files Availability Date, Seller shall, at Seller's cost and expense, send the Mortgagor Notification to all Mortgagors by first class mail at the last known mailing address of such Mortgagors;
the Mortgagor Notification shall be in the form attached hereto as Exhibit "F;"
for purposes of giving the Mortgagor Notifications, Purchaser hereby appoints Seller its true and lawful attorney-in-fact in the name, place and stead of Purchaser to execute and mail the Mortgagor Notifications to the Mortgagors. Seller shall have the right to substitute one or more attorneys under the foregoing power of attorney to carry out the specific powers granted herein. This power of attorney shall be construed and interpreted as a limited power of attorney and does not empower or authorize Seller to do any act or execute any document on behalf of Purchaser except as described herein.
Because of the possibility that Seller may elect to provide the Mortgagor Notification jointly, Purchaser shall, in any event, provide to Seller, in a notice which shall be delivered to Seller on the Closing Date, all information required to be included in the Mortgagor Notification pursuant to 24 CFR § 3500.21(d)(3).
PRIVATE 5.4 Taxing Authority Notification Taxing Authority Notification. On or before the date which is sixty (60) days after the Servicing Files Availability Date, Purchaser shall complete and send a Taxing Authority Notification, in the form attached hereto as Exhibit "G", to every taxing authority having jurisdiction over the Mortgaged Property covered by each Mortgage. The Taxing Authority Notification shall be sent by first class mail, and all costs and expenses of preparing and mailing the same shall be the sole responsibility of Purchaser.
PRIVATE 5.5 Recording of Transfer Documents Recording of Transfer Documents. Purchaser shall, at Purchaser's cost and expense, use its best efforts to cause all applicable Transfer Documents with respect to each Mortgage Loan to be recorded or filed in the appropriate land or other records of the appropriate county or other jurisdiction within one hundred eighty (180) calendar days following the Mortgage Loan Documents Availability Date.
PRIVATE 5.6 Other Transfer Documents Other Transfer Documents. Purchaser shall insure that all of the Transfer Documents comply with the requirements of applicable state and local law and the requirements of the applicable recording or filing office (collectively, "Transfer/Recordation Requirements"). In the event that any revisions to the Transfer Documents or any additional documents are required in order to comply with the Transfer/Recordation Requirements, Purchaser shall, within one hundred eighty (180) days after the Mortgage Loan Documents Availability Date, deliver to Seller for Seller's review the following:
A transmittal letter describing in reasonable detail the applicable Transfer/Recordation Requirements which necessitate any such revision;
Each such revised Transfer Document (a "Revised Transfer Document") and/or each such additional document (an "Additional Transfer Document"); and
A blacklined copy of each form Transfer Document that has been revised by Purchaser, which blacklined copy shall reflect all revisions made thereto. If the Revised Transfer Document and/or Additional Transfer Document (collectively, "Other Transfer Documents") is, in fact, required pursuant to the applicable Transfer/Recordation Requirements and, if the Other Transfer Documents are in form and substance acceptable to Seller, Seller shall execute the Other Transfer Documents and return them to Purchaser within a reasonable period after they have been submitted to Seller.
PRIVATE 5.7 Limited Power of Attorney to Execute Other Transfer Documents Limited Power of Attorney to Execute Other Transfer Documents. In lieu of executing the Other Transfer Documents, Seller may execute a limited power of attorney in favor of Purchaser, granting Purchaser the authority to execute the Other Transfer Documents on behalf of Seller (the "Other Transfer Documents Limited Power of Attorney"). Purchaser shall deliver to Seller copies of the proposed form of the Other Transfer Documents Limited Power of Attorney, in such quantity as Purchaser reasonably determines is necessary, along with the Other Transfer Documents. The Other Transfer Documents Limited Power of Attorney shall give Purchaser the right to execute the Other Transfer Documents strictly in accordance with attached forms which have been submitted to and approved by Seller. Seller shall be under no obligation to execute any Other Transfer Documents, or to give an Other Transfer Documents Limited Power of Attorney with respect to any Other Transfer Documents which are not in form and substance acceptable to Seller.
PRIVATE 5.8 Costs in Connection With Other Transfer Documents Costs in Connection With Other Transfer Documents. Purchaser shall be responsible for all costs, fees and expenses of preparing, executing and delivering the Other Transfer Documents and the Other Transfer Documents Limited Powers of Attorney, as well as Seller's attorneys' fees in connection with the review of the foregoing. If the Transfer/Recordation Requirements require that any of the Other Transfer Documents be recorded or indexed in any filing or indexing system, Purchaser shall, within sixty (60) days after Seller returns the Other Transfer Documents, cause the same to be recorded in the land or other records of the appropriate county or other jurisdiction.
PRIVATE 5.9 Additional Limited Powers of Attorney Additional Limited Powers of Attorney. The Limited Powers of Attorney and Other Transfer Documents Limited Powers of Attorney shall initially be provided to Purchaser in the quantities set forth in Section 2.4(b) and 5.7 of this Agreement, respectively. In the event that such quantities are insufficient for purposes of satisfying the Transfer/Recordation Requirements or for purposes of completing the transactions contemplated by this Agreement, Seller shall execute such Additional Limited Powers of Attorney as may be reasonably requested by Purchaser. The foregoing is subject, however, to the following conditions:
any request for Additional Limited Powers of Attorney must be received by Seller within one hundred fifty (150) days following the Mortgage Loan Documents Delivery Date;
the Additional Limited Powers of Attorney shall comply with all requirements which are applicable to the Limited Powers of Attorney and Other Transfer Documents Limited Powers of Attorney;
the Additional Limited Powers of Attorney shall be prepared by Purchaser and submitted to Seller in the same fashion as the Limited Powers of Attorney and Other Transfer Documents Limited Powers of Attorney, and Purchaser shall provide Seller with prepaid, overnight courier packages, addressed to Purchaser to be used by Seller to return the Additional Limited Powers of Attorney to Purchaser.
PRIVATE SERVICING; PAYMENT PLAN AGREEMENTS; MODIFICATIONS SERVICING; PAYMENT PLAN AGREEMENTS; MODIFICATIONS
PRIVATE 6.1 The Limited Seller Servicing Period The Limited Seller Servicing Period. Purchaser and Seller desire that Seller provide limited servicing of the Mortgage Loans during the period between the Closing Date and the Servicing Transfer Date (the "Limited Seller Servicing Period").
During the Limited Seller Servicing Period, Seller shall:
(i) submit invoices to Mortgagors for the Monthly Payments (and any other amounts) which are due with respect to the Mortgage Loans in April and May, 1996.
(ii) deposit amounts received in a holding account and remit to Purchaser from such account all amounts received, without interest thereon, on a regular basis, promptly after receipt thereof by Seller. Payment shall be made by check, wire transfer or such other reasonable means selected by Seller. At Seller's election, such payments may be made by endorsement of payments tendered to Seller in the form as follows: "Pay to the order of [name of Purchaser] without recourse and without representations or warranties of any type, kind, character or nature, express or implied."
If Seller has deposited payments received from any Mortgagor during the Limited Seller Servicing Period and issues a check or payment therefor to Purchaser, pursuant to this Section 6.1(a), Purchaser shall bear the risk that any such payment so deposited by Seller may be returned due to insufficient funds or any other failure of collection. Seller shall have a period of ninety (90) days after the date Seller delivers to Purchaser payments made by or on behalf of any Mortgagor to notify Purchaser in writing that any such payments were returned due to insufficient funds or any other failure of collection and specifying the amount thereof, whereupon Purchaser shall pay promptly, but not later than ten (10) Business Days following receipt of such notice, to Seller the amount of such payment by certified check, or by wire transfer if so directed by Seller and identify the Mortgage Loan and "Single Family Mortgage Loan Sale #2";
(iii) have the right, at its election, to pay any Real Estate Tax Bills which it receives during the Limited Seller Servicing Period. If Seller elects to pay any Real Estate Tax Bill pursuant to this Section 6.1(a), Purchaser shall reimburse Seller for the amount thereof within ten (10) Business Days after Purchaser is billed therefor. If Seller elects not to pay any Real Estate Tax Bill, Seller shall use reasonable efforts to forward to Purchaser in a timely manner any Real Estate Tax Bills which it may receive during the Limited Seller Servicing Period; and
(iv) have the right, at its election, to enter into renewals of existing Payment Plan Agreements on behalf of Purchaser, in the event that any Mortgagor is eligible for renewal pursuant to the servicing requirements set forth in Section 6.4.
(b) Except as expressly set forth above, Purchaser shall have no obligations or responsibilities with respect to the Mortgage Loans during the Limited Seller Servicing Period. Without limiting the generality of the foregoing, Seller shall have neither the right nor the responsibility during the Limited Seller Servicing Period to modify the Mortgage Loan Documents or negotiate forbearance agreements or compromises (subject, however, to Section 6.1(a)(iv) of this Agreement).
6.2 Delivery of Servicing Tape Files and Standard Conversion Reports
During the period between April 17, 1996 and May 1, 1996, Seller shall deliver or cause to be delivered to Purchaser the Servicing Tape in one of the overnight courier envelopes to be provided to Seller pursuant to Section 2.4(c) of this Agreement. The Servicing Tape shall be in the form of a magnetic tape (either nine-track reel or tape cartridge) or CD ROM, and shall be an ASCII flat file with carriage return line feed delimited records (i.e., variable length records). Two standard deconversion file formats are available. The first contains a majority of the HUD data elements within the mortgage servicing database. The second contains all HUD data elements of the mortgage servicing database.
Seller shall provide the Servicing Tape to Purchaser in the medium (nine-track reel, tape cartridge or CD ROM) and format indicated by Purchaser in a notice delivered on the Closing Date. If Purchaser has not indicated the preferred medium and format for the Servicing Tapes, Seller may send the Servicing Tapes in such medium and format as it may elect.
During the period between April 17, 1996 and May 1, 1996, Seller shall deliver or cause to be delivered to Purchaser the Standard Conversion Reports in one of the overnight courier envelopes to be provided to Seller pursuant to Section 2.4(c) of this Agreement. The Standard Conversion Reports shall be in the form of either paper or microfiche (as indicated by Purchaser in a notice delivered on the Closing Date) and shall contain a two-year loan transaction history report and a summary trial balance report. If Purchaser does not indicate whether it wants the Standard Conversion Reports in paper or microfiche, Seller may send the Standard Conversion Reports in such form as it elects.
Seller makes no representation or warranty as to the accuracy or completeness of the information contained in the Servicing Tape or Standard Conversion Reports, and Seller shall have no liability by reason of the inaccuracy or incompleteness of the information contained in the Servicing Tape or Standard Conversion Reports, or by reason of any discrepancy between the foregoing and the information contained in the Mortgage Loan Schedule Diskette.
6.3 Payment Plan Agreements; Modifications.
(a) Purchaser acknowledges that the Mortgage Loans are or may be subject to certain Payment Plan Agreements which may or may not have been documented or executed and, accordingly, may or may not be contained in the Mortgage Loan Documents. Purchaser also acknowledges that the Mortgage Loans are or may be subject to certain Modifications which may or may not be contained in the Mortgage Loan Documents. Purchaser is purchasing the Mortgage Loans under and subject to the Payment Plan Agreements and Modifications, and Purchaser and its Permitted Transferees shall be fully bound by the Payment Plan Agreements and Modifications.
(b) Purchaser acknowledges that the Payment Plan Agreements applicable to certain Mortgage Loans are or may be eligible for renewal following the Cut-Off Date pursuant to the servicing requirements described in Section 6.4. Seller shall have the right to effectuate such renewals both prior to the Closing Date and, as set forth in Section 6.1(a)(iv) of this Agreement, during the Limited Seller Servicing Period. The foregoing shall not constitute a breach of any representation, warranty or covenant of Seller set forth in this Agreement or give Purchaser the right to exercise any right or remedy hereunder.
Except as otherwise expressly set forth in Section 6.1, from and after the Closing Date, Purchaser shall have and hereby assumes and accepts any and all responsibilities and obligations of Seller as holder and/or servicer of the Mortgage Loans arising on or after the Closing Date. Except as otherwise expressly set forth in Section 6.1, from and after the Closing Date, Seller shall have no further responsibilities or obligations with respect to any of the Mortgage Loans. The foregoing shall not be construed to affect Seller's obligation to deliver the Mortgage Loan Documents or otherwise complete the transactions contemplated by this Agreement.
Purchaser shall service the Mortgage Loans (or cause them to be serviced) in accordance with (i) applicable federal, state and local laws and regulations, (ii) prudent servicing practices such as the FNMA Servicing Guide for Single Family Mortgage Loans, and (iii) the requirements set forth in Section (c) below.
(c) In addition to the foregoing, Purchaser shall service the Mortgage Loans in accordance with the following requirements:
(i) Purchaser acknowledges that in certain cases, Payment Plan Agreements or extensions thereof, may have been made pursuant to an oral agreement between Seller and the Mortgagor. In such cases, the payment history and possibly other information in the Servicing File would evidence the existence of the Payment Plan Agreement. Purchaser shall comply with each Payment Plan Agreement, oral or written, until the term thereof expires or until there is a default under the Payment Plan Agreement.
(ii) As long as the Mortgagor under a Payment Plan Agreement makes the payments due under the Payment Plan Agreement, Purchaser shall be obligated to accept and apply such payments and to renegotiate and renew the Payment Plan Agreement for an additional period of time, except as hereinafter set forth. The renewed Payment Plan Agreement may require the payment of the Monthly Payment due under the Mortgage Note or the Monthly Payment due under the Mortgage Note plus an additional amount which is within the Mortgagor's reasonable ability to pay. A payment is within the Mortgagor's reasonable ability to pay if the Mortgagor is receiving sufficient income to support the amount due under the renewed Payment Plan Agreement and still pay basic living expenses, including but not limited to, expenses for food, utilities, medical care, work-related transportation and emergencies. If it would not reasonably be within the Mortgagor's ability to pay at least the Monthly Payment due under the Mortgage Note, Purchaser shall not be obligated to renew the Payment Plan Agreement and shall have the right to take such action as may be permitted pursuant to the terms of the Mortgage and Mortgage Note by reason of the occurrence of a default thereunder.
(iii) Subject to the provisions of Section 6.4(c)(ii), Purchaser shall be obligated to continue to renew Payment Plan Agreements upon expiration at least through and including the expiration of the original term of the Mortgage.
(iv) If there is a default under a Payment Plan Agreement, the Mortgagor thereunder shall have the right to re-instate the Payment Plan Agreement if the Mortgagor makes a lump sum payment in an amount necessary to cure the default.
(v) If there is a default under a Payment Plan Agreement which requires the Mortgagor to pay the Monthly Payment due under the Mortgage Note plus an additional amount, Purchaser agrees to renegotiate the Payment Plan Agreement if the following requirements are satisfied:
(A) the Mortgagor demonstrates a loss of income or other reasonable justification for the default;
(B) the Mortgagor demonstrates that it would be within the Mortgagor's reasonable ability to pay at least the Monthly Payment due under the Mortgage Note; and
(C) the Mortgagor makes a lump sum payment equal to the product of (1) the number of months that the Mortgagor is delinquent under the existing Payment Plan Agreement and (2) the new payment required to be made each month under the renegotiated Payment Plan Agreement.
(vi) If there is a default under a Payment Plan Agreement and the Mortgagor does not comply with the requirements of either Section 6.4(c)(iv) or (v) above, Purchaser shall have the right to terminate the Payment Plan Agreement by reason of the occurrence of the default, and to take such action as may be permitted pursuant to the terms of the Mortgage and Mortgage Note by reason of the occurrence of a default thereunder.
(vii) If a delinquency still exists at the expiration of the original term of the Mortgage, Purchaser shall be obligated to extend the term of the Mortgage up to ten years if it would be within the Mortgagor's reasonable ability to pay a monthly payment which would pay the Mortgage loan in full in a period of ten years or less.
(d) Any Servicer of any of the Mortgage Loans must be an FHA Approved Mortgagee at all times.
(e) After a Mortgage Loan is modified, for consideration, with the consent of the Mortgagor, or the Mortgage Loan is refinanced, Purchaser shall not be required to service that particular Mortgage Loan in accordance with the requirements of Sections 6.4(b), (c) and (d). Mortgage Loans that are so modified or refinanced may subsequently be transferred to any Person, without regard to whether such Person is a Permitted Transferee.
(f) If Purchaser or any Servicer does not comply with the servicing requirements set forth in this Section 6.4, Seller may exclude Purchaser or Servicer from any future asset sales or may impose administrative sanctions on the Purchaser or Servicer, as applicable.
PRIVATE 7.1 Pending Legal Proceedings Pending Legal Proceedings. With respect to any Mortgage Loan that is, as of the Closing Date, the subject of litigation, bankruptcy, foreclosure or other legal proceeding, Purchaser agrees that it shall, at its sole cost and expense, within sixty (60) days after the Servicing Files Availability Date, (a) notify the Clerk of Courts, any foreclosing trustee, all counsel of record, and any other relevant parties in each such proceeding of the transfer of the Mortgage Loan from Seller to Purchaser, (b) file pleadings to relieve Seller's counsel of record from further responsibility in such litigation (unless such counsel has agreed, with Seller's written consent, to represent Purchaser in the proceedings at Purchaser's expense), and (c) remove Seller as a party in such action and substitute Purchaser as the real party-in-interest, and change the caption thereof accordingly. If, under applicable law, Seller is required to execute any documentation in order to effectuate the foregoing ("Substitution Documents"), Purchaser shall prepare the Substitution Documents and submit them to Seller for its review and approval. If the Substitution Documents are required by law in order to accomplish the purposes of this Section and are in form and substance acceptable to Seller, Seller shall execute the Substitution Documents and return them to Purchaser within thirty (30) days following receipt thereof by Seller. The cost of mailing, preparing and filing the Substitution Documents, as well as Seller's attorneys' fees in connection with the review of the Substitution Documents, and all other costs incurred in connection with the Substitution Documents shall be the sole responsibility of Purchaser.
PRIVATE 7.2 Litigation During Limited Seller Servicing Period Litigation During Limited Seller Servicing Period. With respect to any Mortgage Loan that is the subject of litigation, bankruptcy, foreclosure or other legal proceeding during the Limited Seller Servicing Period, the parties agree as follows:
Seller shall have the right, but not the obligation, to pursue any matter in litigation to final judgment. Any costs incurred by Seller in connection with the foregoing shall be paid by Purchaser within ten (10) Business Days after Purchaser is billed therefor;
Seller shall attempt, if reasonably possible, to delay until after the Limited Seller Servicing Period the occurrence of a foreclosure sale or other judicial or non-judicial sale of any Mortgaged Property pursuant to any judgment (unless such delay would adversely affect the lien of the Mortgage or the ability thereafter to sell the Mortgaged Property pursuant to foreclosure or other judicial or non-judicial sale). In no event, however, shall Seller have any liability by reason of the occurrence of any such sale during the Limited Seller Servicing Period. In the event that the Mortgaged Property is sold during the Limited Seller Servicing Period, the provisions of Section 8.9 of this Agreement shall be applicable.
Purchaser and Seller shall, from time to time, during the Limited Seller Servicing Period, attempt to communicate with each other regarding the status of any Mortgage Loan which is the subject of litigation, bankruptcy, foreclosure or other legal proceedings.
PRIVATE 7.3 Loan Documents in Possession of Counsel Loan Documents in Possession of Counsel. Following the Servicing Files Availability Date, Purchaser shall have the sole responsibility to obtain all Mortgage Loan Documents then in the possession of any counsel or foreclosing trustee and to determine the appropriate direction and strategy for such litigation or other legal proceeding. Purchaser acknowledges that its failure to comply with the provisions of this Section may affect Purchaser's rights in any such litigation or other legal proceeding including, without limitation, any dismissal with prejudice or the running of any statute of limitations if any such action or other legal proceeding is dismissed.
REPRESENTATIONS AND WARRANTIES OF SELLER; BUY-BACK EVENTS REPRESENTATIONS AND WARRANTIES OF SELLER; BUY-BACK EVENTS
PRIVATE 8.1 Seller's Representations and Warranties Seller's Representations and Warranties. Seller hereby represents and warrants to Purchaser as of the Award Date and the Closing Date as follows:
Seller has the power and authority to execute, deliver and perform this Agreement and all of the transactions contemplated hereby. Seller has taken all actions necessary to authorize it to perform its obligations under this Agreement and to consummate the transactions contemplated to be performed by it hereunder. This Agreement and all other instruments and agreements executed and delivered by Seller in connection with the transactions contemplated hereunder have been or will be duly executed and delivered by Seller and (assuming due execution and delivery by Purchaser) constitute or will constitute, legal, valid and binding obligations of Seller, enforceable in accordance with the terms hereof and thereof. The execution, delivery and performance of this Agreement by Seller does not violate any provisions of any existing federal law or regulation applicable to Seller, or violate or contravene any judgment, injunction or decree binding upon Seller, or violate, contravene or constitute a default under any provision of any agreement, contract or other instrument binding upon Seller.
Immediately prior to the sale, assignment and transfer of each Mortgage Loan pursuant to this Agreement, Seller had title to, and was the sole owner of, such Mortgage Loan, free and clear of any ownership, security or participation interest in such Mortgage Loan in favor of any other Person, and had the full right and authority to sell, assign and transfer such Mortgage Loan to Purchaser pursuant to this Agreement.
With respect to each Mortgage Loan, the related Mortgage is a valid and enforceable first lien on the Mortgaged Property covered thereby, except for: (i) liens for real estate taxes, and municipal sewer or water charges and special assessments, if any; (ii) liens on personal property or chattels located on the Mortgaged Property which are not deemed affixed to the real property, if any; (iii) covenants, conditions and restrictions, rights of way, easements and other matters of public record; and (iv) other matters to which like properties are commonly subject which do not, individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by such Mortgage.
With respect to each Mortgage Loan, the Mortgage and Mortgage Notes constitute the valid, legal and binding obligations of the parties who executed the same, are enforceable in accordance with their terms, subject, however, to applicable bankruptcy, insolvency, reorganization and other laws affecting creditors' rights generally and to general principles of equity. In addition, certain provisions of the Mortgages and Mortgage Notes may be rendered unenforceable, ineffective, qualified or limited by applicable laws and judicial decisions, but such laws and judicial decisions do not make the Mortgages or Mortgage Notes inadequate for the practical realization of the primary benefits of the collateral intended to be given as security for the Mortgage Loans, except for the economic consequences of any judicial, administrative or other delay which may be imposed by, relate to or result from such laws and judicial decisions.
PRIVATE 8.2 Seller's Representations and Warranties Regarding Mortgage Loan Schedule Diskette Seller's Representations and Warranties Regarding Mortgage Loan Schedule Diskette. With respect to each Mortgage Loan, Seller hereby represents and warrants to Purchaser that as of the Cut-Off Date, the information set forth on the Mortgage Loan Schedule Diskette was true and correct in all material respects, subject, however, to the following:
no representation or warranty is made as to information with respect to which an exception has been taken in the Due Diligence Exception Report;
no representation or warranty is made as to the Mortgage Interest Rate payable under any ARM; and
no representation or warranty is made as to the Monthly Payment payable under any GPM or GEM.
PRIVATE 8.3 Disclaimer of Seller's Representations and Warranties Disclaimer of Seller's Representations and Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 8.1 AND 8.2 HEREOF, NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, HAVE BEEN MADE BY SELLER OR BY ANY PERSON ACTING ON SELLER'S BEHALF. PARTICULARLY, BUT WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE WITH RESPECT TO (1) THE CONDITION OF ANY MORTGAGED PROPERTY, ENVIRONMENTAL OR OTHERWISE, SUBJECT, HOWEVER, TO SECTION 8.9 OF THIS AGREEMENT; (2) THE VALUE OF ANY MORTGAGED PROPERTY; (3) THE COLLECTIBILITY OF ANY MORTGAGE LOAN; (4) THE CREDITWORTHINESS OF ANY MORTGAGOR; (5) THE EXISTENCE OR STATUS OF ANY HAZARD INSURANCE COVERAGE OR TITLE INSURANCE COVERAGE RELATING TO ANY MORTGAGED PROPERTY; (6) THE ACCURACY OR COMPLETENESS OF THE BID INFORMATION, THE BID PACKAGE, ANY ASSET REVIEW FILE, THE CD ROM PACKAGE, THE MORTGAGE LOAN INFORMATION DISKETTE, THE SERVICING TAPES OR THE STANDARD CONVERSION REPORTS; (7) THE ACCURACY OR COMPLETENESS OF ANY ENVIRONMENTAL REPORT, TITLE UPDATE, OR ANY OTHER DESCRIPTION OR REPORT RELATING TO ANY MORTGAGED PROPERTY; (8) THE ACCURACY OF THE CURRENT OR ANY PRIOR CALCULATION OF THE MORTGAGE INTEREST RATE WITH RESPECT TO ANY ARM; (9) THE ACCURACY OF THE CURRENT OR ANY PRIOR CALCULATION OF THE MONTHLY PAYMENT WITH RESPECT TO ANY GPM OR ANY GEM; OR (10) AMOUNTS OF REAL ESTATE TAXES PAID OR OUTSTANDING WITH RESPECT TO THE MORTGAGED PROPERTY. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTION 8.1 AND SECTION 8.2 OF THIS AGREEMENT, THE MORTGAGE LOANS ARE BEING SOLD "AS IS", "WHERE IS", "WITH ALL FAULTS" AND WITHOUT RECOURSE.
PRIVATE 8.4 Survival of Representations and Warranties of Seller Survival of Representations and Warranties of Seller. The representations and warranties of Seller contained in Section 8.1 of this Agreement shall survive the Closing Date and shall not be subject to the Warranty Period but shall expire upon the payment in full or the release and/or satisfaction of the related Mortgage Loan, whichever shall occur first. The representations and warranties of Seller contained in Section 8.2 of this Agreement shall expire at the end of the Warranty Period or the release and/or satisfaction of the related Mortgage Loan, whichever shall occur first.
8.5 Remedies for Breach of Certain Representations and Warranties by Seller
The obligations and liabilities of Seller to Purchaser (and Purchaser's sole remedies) with respect to the breach of any representation or warranty set forth in Sections 8.1 and 8.2 hereof shall be limited solely to the remedies provided for in this Section 8.5. In no event shall a breach of any representation or warranty set forth in Section 8.1 or 8.2 be used as evidence of, or deemed to constitute, bad faith, misconduct or fraud or give rise to any remedy other than specifically provided herein even in the event that it is shown that Seller, or any of its employees, officers or agents, knew or should have known of the existence of information which was inconsistent with any of the representations and warranties provided in Section 8.1 or 8.2.
In the event that Purchaser claims that there exists a material and substantial breach of a representation or warranty made by Seller in Section 8.1 or 8.2 hereof, Purchaser shall deliver a Breach Notice to Seller. A Breach Notice shall be effective only if delivered to Seller within the following time periods:
For breaches of one or more of the representations or warranties in Section 8.1 of this Agreement, at any time prior to the payment in full and/or satisfaction or release of the related Mortgage Loan, whichever shall occur first.
For breaches of one or more of the representations or warranties in Section 8.2 of this Agreement, at any time prior to expiration of the Warranty Period or satisfaction or release of the related Mortgage Loan, whichever shall occur first.
Within twenty (20) Business Days following receipt of a Breach Notice, Seller shall notify Purchaser either that (i) Seller has accepted the Breach Notice, or (ii) Seller does not accept the Breach Notice as giving sufficient evidence of the asserted breach. If Seller accepts the Breach Notice, Seller shall, within ninety (90) Business Days of such acceptance, take one or more of the following actions, at Seller's sole and exclusive option:
commence to diligently cure the asserted breach of warranty within a reasonable period of time; or
rescind the sale, assignment and transfer of the Non-Complying Mortgage Loans, which shall include Seller remitting to Purchaser an amount equal to the Recision Payment; or
pay the Adjustment Payment to Purchaser, in the event of a breach of the warranty set forth in Section 8.2 by reason of either (A) the Unpaid Principal Balances of any Mortgage Loans as of the Cut-Off Date being less than that which is set forth in the Mortgage Loan Schedule Diskette; or (B) the Closing Escrow Account Balances for any Mortgage Loans as of the Cut-Off Date being less than that which is set forth in the Mortgage Loan Schedule Diskette.
Even if Seller elects to rescind the sale, assignment or transfer of any Non-Complying Mortgage Loans pursuant to Section 8.5(c)(ii) of this Agreement, Seller shall not be required to effectuate such recision unless and until Purchaser has delivered to Seller evidence satisfactory to Seller that: (i) there have been no material changes to the terms or conditions of the related Mortgage Loan Documents; (ii) the Non-Complying Mortgage Loans are not subject to any lien or encumbrance created by Purchaser, its successor or assigns, and Purchaser can deliver to Seller the same right, title and interest in and to the Non-Complying Mortgage Loans as was sold, assigned and transferred to Purchaser by Seller; and (iii) Purchaser is the sole owner of the Non-Complying Mortgage Loans and has the full right and authority to sell, assign and transfer such Non-Complying Mortgage Loans.
In addition to the foregoing, in connection with the rescinding of the sale of the Non-Complying Mortgage Loans, Purchaser shall: (i) reassign to Seller all of Purchaser's right, title and interest in and to the Non-Complying Mortgage Loans including all real estate tax, insurance and other escrows held or controlled by Purchaser as mortgagee and pay such amounts to Seller; (ii) deliver to Seller the related Transfer Documents, Mortgage Loan Documents, Servicing Files and such other documents, instruments, books, records and information as are requested by Seller; (iii) execute such transfer documents as Seller requests to effectuate the reassignment of the Non-Complying Mortgage Loans; (iv) terminate, at Purchaser's sole cost, any servicing agreement regarding the Non-Complying Mortgage Loans; and (v) take such other action as may be reasonably requested by Seller. If Purchaser receives any amounts on account of the Non-Complying Mortgage Loans following the Recision Date, Purchaser shall promptly remit all such amounts to Seller.
Seller's election to rescind the sale of the Non-Complying Mortgage Loans pursuant to this Section shall not affect the sale, assignment and transfer of any other Mortgage Loans.
PRIVATE 8.7 The Adjustment Payment The Adjustment Payment. As set forth in Section 8.5(c)(iii) of this Agreement, Seller shall have the right, at its election, to cure a breach of the warranty set forth in Section 8.2 by paying the Adjustment Payment, in the event that the breach is due to the Unpaid Principal Balances of any Mortgage Loans as of the Cut-Off Date being less than that which is set forth in the Mortgage Loan Schedule Diskette, or the Closing Escrow Account Balances for any Mortgage Loan as of the Cut-Off Date being less than that which is set forth in the Mortgage Loan Schedule Diskette. In the event that the breach relates to the Unpaid Principal Balances of any Mortgage Loans, the Adjustment Payment shall equal the difference between the Individual Loan Prices paid by Purchaser and the corrected Individual Loan Prices, calculated on the basis of the corrected Unpaid Principal Balances of such Non-Complying Loans. In the event that the breach relates to the Closing Escrow Account Balances of any Mortgage Loans, the Adjustment Payment shall equal the difference between the Closing Escrow Account Balances for the Non-Complying Loans set forth in the Mortgage Loan Schedule Diskette and the corrected Closing Escrow Account Balances.
PRIVATE 8.8 Additional Limitations on Representations and Warranties Additional Limitations on Representations and Warranties.
The representations and warranties set forth in Sections 8.1 and 8.2 of this Agreement shall not be deemed breached by reason of any Mortgage Loan being uncollectible.
Nothing in this Agreement shall constitute or be construed as a representation or warranty that real estate taxes or special assessments with respect to any Mortgaged Property are current or that the outstanding Real Estate Tax Bills with respect to any Mortgaged Property have been paid. Seller has no responsibility for any unpaid or overdue taxes or for any interest, late fees, penalties or other charges which may be imposed in connection therewith.
If any of the following events shall occur ("Buy-Back Events"), either Purchaser or Seller shall have the right to rescind the sale, assignment and transfer of the related Mortgage Loan(s), which shall include Seller remitting to Purchaser an amount equal to the Recision Payment:
if the Mortgaged Property is vacant (i.e., unimproved) land, and Purchaser advises Seller of such fact within ninety (90) days following the Closing Date;
if an Event of Termination occurred prior to the Closing Date, but the relevant Mortgage Loan was not treated as a Terminated Mortgage Loan;
if, during the Limited Seller Servicing Period, title to any Mortgaged Property is transferred to Seller by foreclosure sale or other judicial or non-judicial remedy;
if, during the Limited Seller Servicing Period, Seller receives a payment of less than the entire Unpaid Principal Balance of a Mortgage Loan in full satisfaction of the Mortgagor's obligation under the Mortgage Loan pursuant to a settlement agreed upon by Seller prior to the Cut-Off Date.
Any Mortgage Loan as to which there is a recision of sale pursuant to this Section 8.9 is referred to hereinafter as a "Deleted Mortgage Loan".
If either party elects to rescind the sale, assignment or transfer of any of the relevant Mortgage Loans pursuant to this Section 8.9, Seller shall not be required to effectuate such recision until Purchaser has satisfied the requirements of Section 8.6(a) with respect to the Deleted Mortgage Loans, as if such Deleted Mortgage Loans were Non-Complying Mortgage Loans. In addition to the foregoing, Purchaser shall, in connection with such recision, comply with the requirements of Section 8.6(b) with respect to the Deleted Mortgage Loans, as if such Deleted Mortgage Loans were Non-Complying Mortgage Loans.
Either Seller's or Purchaser's election to rescind the sale of any Mortgage Loan pursuant to this Section shall not affect the sale, assignment and transfer of any other Mortgage Loans.
If either Seller or Purchaser desires to exercise its rights under this Section 8.9, it shall give a Buy-Back Notice to the other party. A Buy-Back Notice given pursuant to Section 8.9(a)(i) of this Agreement shall be effective only if delivered within ninety (90) days after the Closing Date and, in the case of Seller, if sent from the Director of Single Family Servicing Division, Office of Insured Single Family Housing. A Buy-Back Notice given pursuant to Section 8.9(a)(ii), (iii) or (iv) of this Agreement may be given at any time.
The occurrence of any event of the nature described in Section 8.9(a) of this Agreement shall not constitute a breach of any representation, warranty or covenant set forth in this Agreement. This Section sets forth the sole remedy of the parties in the event that a Buy-Back Event shall occur.
REPRESENTATIONS AND WARRANTIES OF PURCHASER REPRESENTATIONS AND WARRANTIES OF PURCHASER
PRIVATE 9.1 Representations and Warranties of Purchaser Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Seller, as of the Bid Date and the Closing Date, as follows:
If other than a natural person, Purchaser is validly existing and in good standing under the laws of the jurisdiction in which Purchaser was organized.
Purchaser is not: (i) an employee of Seller; (ii) an individual or entity that is debarred from doing business with Seller pursuant to Title 24 of the Code of Federal Regulations (CFR), Part 24; (iii) a contractor, subcontractor and/or consultant (including any agent or affiliate of the foregoing) who performed services for, or on behalf of, Seller in connection with Single Family Mortgage Loan Sale #2; or (iv) an individual who was a principal and/or employee of any entity or individual described in Subsection 9.1(b)(iii) at any time during which such entity or individual performed services for, or on behalf of, Seller in connection with Single Family Mortgage Loan Sale #2.
Purchaser has the power and authority to execute, deliver and perform this Agreement and all of the transactions contemplated hereby. Purchaser has taken all actions necessary to authorize it to perform its obligations under this Agreement and to consummate the transactions contemplated to be performed by it hereunder. This Agreement and all of the other instruments and agreements executed and delivered by Purchaser in connection with the transactions contemplated hereunder have been or will be duly executed and delivered by Purchaser and (assuming due execution and delivery by Seller) constitute or will constitute legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with the terms hereof and thereof, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity. The execution, delivery and performance of this Agreement by Purchaser does not violate any provisions of any existing federal, state or local law or regulation applicable to Purchaser, or violate or contravene any judgment, injunction or decree binding upon Purchaser, or violate, contravene or constitute a default under any provision of the organizational documents, if any, governing Purchaser, or of any agreement, contract or other instrument binding upon Purchaser.
The statements, certifications, representations and warranties made by Purchaser in the Qualification Statement are true, accurate and complete.
PRIVATE 9.2 Representations and Warranties as of Closing Date Representations and Warranties as of Closing Date. As set forth in Section 9.1, the representations and warranties contained in Section 9.1 are made as of both the Bid Date and the Closing Date. If any of the representations and warranties set forth in Section 9.1 is not true and accurate as of the Bid Date and as of the Closing Date, the same shall constitute a breach of this Agreement by Purchaser. In such case, Seller shall have the right, at its election, to terminate this Agreement and all further obligations of Seller hereunder, and in the event of such termination, the provisions of Section 11.3 of this Agreement shall be applicable.
If any of the representations and warranties set forth in Section 9.1 of this Agreement is not true and accurate as of the Closing Date, Purchaser shall so advise Seller. If Purchaser fails to so advise Seller, Purchaser shall be conclusively deemed to have re-made and re-affirmed as of the Closing Date the representations and warranties contained in Section 9.1.
PURCHASER'S EVALUATION AND ACCEPTANCE OF RISK PURCHASER'S EVALUATION AND ACCEPTANCE OF RISK
PRIVATE 10.1 Due Diligence; Independent Investigation Due Diligence; Independent Investigation. Purchaser acknowledges that it has been afforded an opportunity and invited and directed to conduct such due diligence review and analyses of the Asset Review Files and related information together with such records as are generally available to the public from local, county, state and federal authorities, record-keeping offices and courts (including, without limitation, any bankruptcy courts in which any Mortgagor may be subject to any pending bankruptcy proceedings), as Purchaser deemed necessary, proper or appropriate in order to make a complete informed decision with respect to the purchase and acquisition of the Mortgage Loans.
Purchaser has independently reviewed the Bid Package and the Mortgage Loan Information Diskette and has reviewed, or has elected not to review, the Asset Review Files and the CD ROM Package, and has made its Bid and decision to purchase the Mortgage Loans based upon its own independent evaluation of the Mortgage Loans and the terms and conditions of this Agreement. Purchaser acknowledges and agrees that, while some information concerning the Mortgage Loans was made available to Purchaser for review prior to the Bid Date, such information may have been inaccurate or incomplete. Seller shall have no liability by reason of the inaccurateness or incompleteness of such information. Purchaser has relied solely on its own investigation, and acknowledges that no employee, representative or agent of Seller has been authorized to make, and that Purchaser has not relied upon, any oral or written statements or representations by any such employee, representative or agent other than those set forth in Section 8.1 and 8.2 of this Agreement. Nothing in this Section 10.1 shall be deemed to affect Seller's representations and warranties set forth in Section 8.1 or Section 8.2 of this Agreement.
PRIVATE 10.2 Excluded Documents Excluded Documents. Purchaser understands that the Excluded Documents may be missing or may have been removed from the Asset Review Files. The Excluded Documents may include information that could affect Purchaser's perception of the value of the Mortgage Loans. The risk that such Excluded Documents might be pertinent to Purchaser's determination of the value, merits, risks, and/or hazards of or associated with, the Mortgage Loans, is accepted by Purchaser as a risk of entering into this Agreement. The parties acknowledge that the Excluded Documents are not included in the Mortgage Loan Documents or Servicing Files and are not being delivered to Purchaser, and Purchaser shall at no time ask for, seek or be provided access to any Excluded Documents.
PRIVATE 10.3 Economic Risk Economic Risk. Purchaser acknowledges that the Mortgage Loans, the Mortgage Loan Documents and the Mortgaged Property may have limited or no liquidity and Purchaser has the financial wherewithal to own the Mortgage Loans for an indefinite period of time and to bear the economic risk of a substantial loss of the amounts paid by Purchaser for the Mortgage Loans.
PURCHASER'S INDEMNIFICATION; WAIVER AND RELEASE; REMEDIES PURCHASER'S INDEMNIFICATION; WAIVER AND RELEASE; REMEDIES
PRIVATE 11.1 Purchaser's Indemnification Purchaser's Indemnification. Purchaser agrees to indemnify Seller and hold Seller harmless against any loss, damage, cost or expense (including reasonable attorneys' fees) that may be incurred by Seller on or after the Closing Date as a result of:
Purchaser's breach of any representation or warranty set forth in Section 9.1 hereof; and/or
Purchaser's failure to perform any of the obligations of Purchaser set forth in this Agreement; and/or
Seller being the mortgagee of record on any Mortgage Loan after the Closing Date.
PRIVATE 11.2 Waiver and Release Waiver and Release. Purchaser, for itself and the Releasing Parties, hereby waives and releases any right or cause of action which any of them may now or in the future have against Seller, and every Person acting on Seller's behalf, arising out of or relating to Single Family Mortgage Loan Sale #2 and/or the sale, assignment and transfer of the Mortgage Loans. In addition, Purchaser, for itself and the Releasing Parties, hereby releases Seller, and every Person acting on Seller's behalf, from any claim, demand, cause of action, judgment, loss, damage, liability, cost and expense (including attorneys' fees whether suit is instituted or not), whether known or unknown, liquidated or contingent, arising from or relating to the Mortgage Loans, the Mortgage Loan Documents, the Servicing Files, the Asset Review Files, the Mortgage Loan Information Diskette, the CD ROM Package, the Servicing Tapes, the Standard Conversion Reports, the Transfer Documents, the sale, assignment or transfer of any Mortgage Loan, or arising out of the violation of any applicable laws (including without limitation, state and federal securities laws and/or environmental laws). The foregoing waivers and releases shall not apply to any liability of Seller arising from Seller's failure to perform its obligations under this Agreement.
PRIVATE 11.3 Remedies for Purchaser's Default; Liquidated Damages Remedies for Purchaser's Default; Liquidated Damages. In the event that Purchaser shall fail to complete the purchase of the Mortgage Loans in accordance with the terms of this Agreement, this Agreement shall automatically terminate as to any and all further obligations of Seller hereunder and, upon such termination, Seller shall be entitled to retain the Deposit, as fixed, agreed and liquidated damages. The parties acknowledge and agree that the foregoing amount shall be liquidated damages and not a penalty, that actual damages resulting to Seller from Purchaser's breach of this Agreement will be difficult or impossible to measure because of the uncertainties of the market and fluctuations in the value of the Mortgage Loans, and that an amount equal to the Deposit is a reasonable estimate of what those damages would be. Upon the automatic termination of Seller's obligations under this Agreement, (a) Purchaser shall be relieved of any and all further obligations under this Agreement, except with respect to the provisions of Section 2.6 and Section 11.2 of this Agreement, which shall remain in effect, and (b) Seller shall be entitled to resell the Mortgage Loans in any manner that Seller deems appropriate, free and clear of any and all claims of Purchaser.
PRIVATE 11.4 Remedies for Seller's Default Remedies for Seller's Default. In the event that Seller shall fail to complete the sale of the Mortgage Loans, Purchaser's sole remedy shall be the return of any amounts paid by Purchaser pursuant to this Agreement. Without limiting the generality of the foregoing, Purchaser hereby waives any claim for damages (other than amounts paid by Purchaser pursuant to this Agreement) and any right to seek specific performance or other equitable relief.
PRIVATE 12.1 Damage to Mortgaged Property; Insurance Damage to Mortgaged Property; Insurance.
(a) Purchaser acknowledges that Seller has not collected escrow payments from Mortgagors for purchase of hazard insurance and that Seller does not place insurance coverage when notified of a lapse in insurance. Purchaser assumes all risks of there being no hazard insurance with respect to the Mortgaged Property. Purchaser shall obtain such insurance as Purchaser deems necessary to insure its interest herein or in any Mortgaged Property.
(b) Purchaser's obligations under this Agreement shall not be affected in any way by (i) damage to or destruction of any Mortgaged Property by fire or other casualty, whether occurring before or after the Award Date; or (ii) any condemnation or taking by eminent domain of any Mortgaged Property, whether occurring before or after the Award Date.
PRIVATE 12.2 Notices Notices. Except as otherwise indicated in this Agreement, all notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be sent (except as otherwise expressly provided herein) by hand delivery, overnight courier, registered or certified mail, return receipt requested, postage prepaid or telecopier (with the original sent within twenty-four (24) hours of such facsimile by hand-delivery, overnight courier or by registered or certified mail, return receipt requested, postage prepaid):
If to Seller, to:
Joseph McCloskey
Director, Single Family Servicing Division
Office of Insured Single Family Housing
451 Seventh Street, SW
Room 9178
Washington, DC 20410
Fax Number: (202) 708-5966
with a copy to:
Richard E. Harrington
Office of Insured Single Family Housing
451 Seventh Street, SW
Room 9178
Washington, DC 20410
Fax Number: (202) 708-5966
If to Purchaser, to:
_____________________________________
_____________________________________
_____________________________________
_____________________________________
Fax Number:__________________________
All such notices, requests, demands and other communications shall be effective upon the actual delivery thereof to the address identified pursuant to this Section (or the refusal thereof by the addressee at the address identified pursuant to this Section). Either party to this Agreement may change such party's address for purposes of this Section by sending to the other party to this Agreement written notice of the new address in the manner specified in this Section.
PRIVATE 12.3 Mortgage Insurance Mortgage Insurance. No FHA mortgage insurance is in effect with respect to any Mortgage Loan, and from and after the Closing Date no FHA mortgage insurance premium or monthly HUD Service Charge shall be payable by the Mortgagors. Notwithstanding the foregoing, any HUD Service Charges which are due and payable for the period prior to the Closing Date, and any claims for such amounts, shall belong to Purchaser, to the extent that such amounts have not been paid on or prior to the Cut-Off Date.
PRIVATE 12.4 Parties; Assignment Parties; Assignment.
Except as hereinafter set forth in this Section 12.4, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.
This Agreement shall not be assigned, in whole or in part, by Seller or Purchaser; provided, however, that Purchaser may make a Permitted Assignment of this Agreement. The term "Permitted Assignment" shall mean an assignment as to which all of the following requirements are satisfied:
the assignment shall be made only after the Servicing Transfer Date;
the assignee must be a Permitted Transferee;
Purchaser shall have delivered a complete and accurate copy of this Agreement to the assignee prior to the assignment;
the assignment shall be in writing and expressly state that the assignee assumes all of Purchaser's liabilities and obligations under this Agreement from and after the assignment;
Purchaser shall deliver a complete and accurate copy of the assignment to Seller promptly following the assignment, together with the following: (A) the name, address, telephone number and fax number of an employee of the assignee who will act as the contact person with Seller; (B) the name, address, telephone number and fax number of an employee of the assignee's servicer who will act as the contact person with Seller; and (C) evidence that the assignee is a Permitted Transferee.
Effective upon the making of a Permitted Assignment, Purchaser shall be released and relieved from any liability or obligation thereafter accruing under this Agreement with regard to the Mortgage Loans so assigned. The foregoing shall not be construed to release or relieve Purchaser from any liability or obligation arising or accruing during the period that Purchaser owned such Mortgage Loans.
Any assignment made by Purchaser which is not a Permitted Assignment shall not release or relieve Purchaser from any of its liabilities or obligations under this Agreement.
PRIVATE 12.5 Survival of Representations, Warranties and Covenants of Purchaser Survival of Representations, Warranties and Covenants of Purchaser. The representations, warranties and covenants of Purchaser set forth in this Agreement shall survive the closing of the transactions contemplated by this Agreement and continue until the repayment in full or release and/or satisfaction of all Mortgage Loans.
PRIVATE 12.6 No Third Party Beneficiaries No Third Party Beneficiaries. This Agreement does not create, and shall not be deemed to create, a relationship between either or both of the parties hereto and any third party in the nature of a third party beneficiary relationship, except that the Mortgagors shall be deemed beneficiaries of Purchaser's agreements in Section 6.3 and 6.4 of this Agreement.
PRIVATE 12.7 Governing Law Governing Law. This Agreement shall be governed by and construed in accordance with federal law and, to the extent that there is no applicable federal law, the laws of the District of Columbia. All laws or rules of construction of federal or District of Columbia law, as the case may be, shall govern the rights of parties to this Agreement, their performance hereunder and the interpretation of the provisions of this Agreement. This Agreement shall be construed fairly as to all parties regardless of which party prepared this Agreement.
PRIVATE 12.8 Headings Headings. The headings of the several articles and sections of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
PRIVATE 12.9 Counterparts Counterparts. This Agreement may be executed and delivered in any number of counterparts and such counterparts taken together shall constitute one and the same instrument.
PRIVATE 12.10 No Limitation on Seller's Ability to Administer and Enforce Laws No Limitation on Seller's Ability to Administer and Enforce Laws. Nothing in this Agreement shall in any way be construed to affect Seller's administration or enforcement of laws, regulations and policies pertaining to the Mortgage Loans, or otherwise.
PRIVATE 12.11 Expenses Expenses. Purchaser shall pay all state and local taxes assessed or imposed upon the sale of the Mortgage Loans, the execution and delivery of the Transfer Documents and the Other Transfer Documents, any recordation or filing fees, the costs of title examination, title commitment and title insurance, any transfer fees payable to any governmental agency, and any other costs or fees relating to or arising from the sale, assignment and transfer of each Mortgage Loan.
PRIVATE 12.12 Time of Essence; Time. Time of Essence; Time. Time is of the essence with respect to all of Purchaser's and Seller's obligations under this Agreement. All references in this Agreement to a specific time of day shall be deemed to refer to Eastern Standard Time or Daylight Savings Time, whichever is then applicable in Washington, D.C.
PRIVATE 12.13 Entire Agreement; No Modifications; Conflict with Bid Information, Bid Package and/or Bid Diskette Entire Agreement; No Modifications; Conflict with Bid Information, Bid Package and/or Bid Diskette. This Agreement, and the documents and instruments to be executed and delivered pursuant to this Agreement, constitute the entire agreement between the parties hereto with respect to the subject of the transactions contemplated hereby and supersede all prior agreements and understandings with respect thereto, if any. To the extent that there is any conflict, ambiguity or inconsistency between this Agreement and the Bid Information and/or the Bid Package, this Agreement shall be deemed controlling and any such conflict, ambiguity or inconsistency shall be resolved in favor of, and pursuant to the terms of, this Agreement. To the extent that there is any conflict, ambiguity or inconsistency between the information supplied by the Purchaser on the Bid Diskette, and any other information supplied by the Purchaser in connection with this Agreement, the information supplied by the Purchaser on the Bid Diskette shall be deemed controlling.
PRIVATE 12.14 Informational Tax Reporting. Informational Tax Reporting. Seller shall send to each Mortgagor a statement for the portion of the calendar year 1996 preceding the Cut-off Date, stating the amount of interest, principal and taxes (if any) paid by or on behalf of the Mortgagor during such period. From and after the Closing Date, Purchaser shall be responsible for all obligations with respect to federal and/or state tax reporting relating to or arising out of the Mortgage Loans and/or Mortgage Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in their names as of the date first above written.
SELLER:
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
By:____________________________________
Authorized Agent
PURCHASER:
_______________________________________
By: ______________________________
Name: ______________________________
Title: ______________________________
Attest: ______________________________
Name: ______________________________
Title: ______________________________
Exhibit "A" - Assignment and Lost Note Affidavit
Exhibit "B" - Assignment of Mortgage and Other Collateral Loan Documents
Exhibit "C" - Limited Power of Attorney
Exhibit "D" - Mortgage Loan Schedule Diskette
Exhibit "E" - Mortgage Note Endorsement
Exhibit "F" - Mortgagor Notification
Exhibit "G" - Taxing Authority Notification
Exhibit "H" - Wire Transfer Instructions
Exhibit "I" - Copy of Bid Confirmation Letter
Former FHA Case No. _______________
Street Address ____________________
City, State______________________
I,________________________________, acting as attorney-in-fact for the Department of Housing and Urban Development ("HUD"), on oath depose and state the following:
THE NOTE AND THE MORTGAGE SECURING THE NOTE MAY ONLY BE TRANSFERRED AND ASSIGNED TO A PERSON OR ENTITY THAT IS EITHER AN FHA-APPROVED SERVICER/MORTGAGEE OR WHO HAS ENTERED INTO A CONTRACT FOR THE SERVICING OF THE NOTE WITH AN FHA-APPROVED SERVICER/MORTGAGEE. THE NOTE AND THE MORTGAGE SECURING THE NOTE SHALL BE SERVICED IN ACCORDANCE WITH THE SERVICING REQUIREMENTS SET FORTH IN THE LOAN SALE AGREEMENT. THESE SALES AND SERVICING PROVISIONS SHALL CONTINUE TO APPLY UNLESS THE MORTGAGE IS MODIFIED, FOR CONSIDERATION, WITH THE CONSENT OF THE MORTGAGOR, REFINANCED, OR SATISFIED OF RECORD. THIS PARAGRAPH SHALL BE INCLUDED IN ALL FUTURE ENDORSEMENTS OR ASSIGNMENTS OF THE NOTE.
8. HUD has not transferred, assigned or conveyed the Note to any person or entity other than Assignee. In the event that HUD subsequently locates the Note, HUD shall provide written notice thereof to the Assignee and shall deliver and endorse the Note to the Assignee in accordance with written instructions received from the Assignee (or such other party designated in writing by the Assignee).
IN WITNESS WHEREOF, HUD has caused this Assignment and Lost Note Affidavit to be executed and delivered by its duly authorized agent as of the _____ day of _________, 1996.
WITNESS: SECRETARY OF HOUSING AND URBAN DEVELOPMENT
____________________________ By: ____________________________________
STATE OF __________________ :
:
COUNTY OF _______________ :
BEFORE ME, ____________________________, a Notary Public in and for the jurisdiction aforesaid, on this ____ day of ______________, 1996, personally appeared _____________________________, who is personally well-known to me (or sufficiently proven) to be attorney-in-fact for the Secretary of the Department of Housing and Urban Development and the person who executed the foregoing instrument by virtue of the authority vested in him/her and he/she did acknowledge the signing of the foregoing instrument to be his/her free and voluntary act and deed as attorney-in-fact for the Secretary of the Department of Housing and Urban Development, for and on behalf of the Secretary of Housing and Urban Development for the uses, purposes and consideration therein set forth.
Witness my hand and official seal this ____ day of ____________, 1996.
_________________________________
Notary Public
My Commission expires: __________________.
Former FHA Case No. _______________
Street Address ____________________
City, State______________________
The Secretary of Housing and Urban Development, solely in its capacity as mortgagee ("HUD"), pursuant to the terms of that certain Loan Sale Agreement between HUD and __________________________ [insert name of Purchaser] ("Assignee") dated as of ________ ___, 1996 (the "Loan Sale Agreement"), and in consideration of Ten Dollars ($10.00) and other good and valuable consideration paid by Assignee, hereby assigns, transfers, sets over and conveys to Assignee, its successors and assigns, the following without recourse:
The Note was endorsed by HUD to Assignee without "FHA Mortgage Insurance" (as such term is defined in the Loan Sale Agreement) and without recourse.
ANY CHANGES IN THE PAYMENT OBLIGATIONS UNDER THE NOTE BY VIRTUE OF ANY FORBEARANCE OR ASSISTANCE AGREEMENT, PAYMENT PLAN OR MODIFICATION AGREEMENT AGREED TO BY HUD, WHETHER OR NOT IN WRITING, WILL BE BINDING UPON ASSIGNEE, ITS SUCCESSORS AND ASSIGNS. THIS PARAGRAPH SHALL BE INCLUDED IN ALL FUTURE ENDORSEMENTS OR ASSIGNMENTS OF THE MORTGAGE.
THE MORTGAGE MAY ONLY BE TRANSFERRED AND ASSIGNED TO A PERSON OR ENTITY THAT IS EITHER AN FHA-APPROVED SERVICER/MORTGAGEE OR THAT HAS ENTERED INTO A CONTRACT FOR THE SERVICING OF THE MORTGAGE WITH AN FHA-APPROVED SERVICER/MORTGAGEE. THE MORTGAGE SHALL BE SERVICED IN ACCORDANCE WITH THE SERVICING REQUIREMENTS SET FORTH IN THE LOAN SALE AGREEMENT. THESE SALES AND SERVICING PROVISIONS SHALL CONTINUE TO APPLY UNLESS THE MORTGAGE IS MODIFIED, FOR CONSIDERATION, WITH THE CONSENT OF THE MORTGAGOR, REFINANCED, OR SATISFIED OF RECORD. THIS PARAGRAPH SHALL BE INCLUDED IN ALL FUTURE ENDORSEMENTS OR ASSIGNMENTS OF THE MORTGAGE.
IN WITNESS WHEREOF, HUD has caused this Assignment to be executed and delivered by its duly authorized agent as of the ____ day of ____________, 1996.
WITNESS: SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
______________________________ By: __________________________________
STATE OF ___________________ :
:
COUNTY OF ________________ :
BEFORE ME, ________________________, a Notary Public in and for the jurisdiction aforesaid, on this _______ day of _______________, 1996, personally appeared _______________________________, who is personally well-known to me (or sufficiently proven) to be attorney-in-fact for the Secretary of the Department of Housing and Urban Development and the person who executed the foregoing instrument by virtue of the authority vested in him/her and he/she did acknowledge the signing of the foregoing instrument to be his/her free and voluntary act and deed as attorney-in-fact for the Secretary of the Department of Housing and Urban Development, for and on behalf of the Secretary of Housing and Urban Development for the uses, purposes and consideration therein set forth.
Witness my hand and official seal this ____ day of _______, 1996.
____________________________________
Notary Public
My Commission expires: __________________.
THE UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (hereinafter called "HUD") hereby appoints ________________________
__________________________, severally, as its true and lawful attorneys-in-fact to act in the name, place and stead of HUD for the purposes set forth below. This limited power of attorney is given pursuant to a certain Loan Sale Agreement by and between HUD and _______________________________ dated the ___ day of ________________, 1996 to which reference is made for the definition of all capitalized terms herein. The said attorneys-in-fact, and each of them, are hereby authorized, and empowered, as follows:
This instrument is to be construed and interpreted as a limited power of attorney and does not empower or authorize the said attorneys-in-fact to do any act or execute any document on behalf of HUD not specifically described herein.
The rights, powers, and authority of the attorneys-in-fact granted in this instrument shall commence and be in full force and effect on the date hereof and such rights, powers and authority shall remain in full force and effect until 11:59 p.m., Washington, D.C. time, on November 30, 1996.
Dated: __________________ U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
_______________________________________
(Authorized Agent)
)
)
)
BEFORE ME, _____________________, a Notary Public in and for the jurisdiction aforesaid, on this ____ day of _____, 1996, personally appeared ______________________, who is personally well known to me (or sufficiently proven) to be an authorized agent of the Secretary of the Department of Housing and Urban Development and the person who executed the foregoing instrument by virtue of the authority vested in him/her and he/she did acknowledge the signing of the foregoing instrument to be his/her fee and voluntary act and deed as an authorized agent of the Secretary of the Department of Housing and Urban Development, for and on behalf of the Secretary of Housing and Urban Development for the uses, purposes and consideration therein set forth.
Witness my hand and official seal this ____ day of ______, 1996.
_________________________________
Notary Public
My Commission expires:
The Mortgage Loan Schedule Diskette, to be provided in a bid supplement on or about March 11, 1996, and the information set forth therein, is incorporated herein by reference, and made part of this Agreement.
Former FHA Case No. _______________
Street Address ____________________
City, State______________________
ENDORSEMENT OF ____________________________ [insert MORTGAGE NOTE, DEED OF TRUST NOTE OR OTHER INSTRUMENT] DATED _______________________ [insert date of Note] ("Note")
FROM: SECRETARY OF HOUSING AND URBAN DEVELOPMENT ("HUD")
Pay to the order of ___________________________________________ [insert name of Purchaser] ("Assignee"), without recourse.
HUD and the Assignee expressly acknowledge and agree that from and after the date of this Endorsement, no FHA mortgage insurance is in effect with respect to the Note and that the panel evidencing FHA Mortgage Insurance on the Note shall be deemed to be marked with an "X" across it and the Mortgage Note (including any assignments thereto and modifications thereof) to be marked with the words "FHA Insurance Terminated. Mortgage Note Endorsement From HUD Hereby Made A Part Hereof."
ANY CHANGES IN THE PAYMENT OBLIGATIONS UNDER THE NOTE BY VIRTUE OF ANY FORBEARANCE OR ASSISTANCE AGREEMENT, PAYMENT PLAN OR MODIFICATION AGREEMENT AGREED TO BY HUD, WHETHER OR NOT IN WRITING, WILL BE BINDING UPON ASSIGNEE, ITS SUCCESSORS AND ASSIGNS. THIS PARAGRAPH SHALL BE INCLUDED IN ALL FUTURE ENDORSEMENTS OR ASSIGNMENTS OF THE NOTE.
THE NOTE AND THE MORTGAGE SECURING THE NOTE MAY ONLY BE TRANSFERRED AND ASSIGNED TO A PERSON OR ENTITY THAT IS EITHER AN FHA-APPROVED SERVICER/MORTGAGEE OR WHO HAS ENTERED INTO A CONTRACT FOR THE SERVICING OF THE NOTE WITH AN FHA-APPROVED SERVICER/MORTGAGEE. THE NOTE AND THE MORTGAGE SECURING THE NOTE SHALL BE SERVICED IN ACCORDANCE WITH THE SERVICING REQUIREMENTS SET FORTH IN THE LOAN SALE AGREEMENT BETWEEN ASSIGNEE AND HUD. THESE SALES AND SERVICING PROVISIONS SHALL CONTINUE TO APPLY UNLESS THE MORTGAGE IS MODIFIED, FOR CONSIDERATION, WITH THE CONSENT OF THE MORTGAGOR, REFINANCED, OR SATISFIED OF RECORD. THIS PARAGRAPH SHALL BE INCLUDED IN ALL FUTURE ENDORSEMENTS OR ASSIGNMENTS OF THE NOTE.
IN WITNESS WHEREOF, HUD has caused this Endorsement to be executed and delivered by its duly authorized agent as of the ____ day of _____, 1996.
SECRETARY OF HOUSING AND URBAN
DEVELOPMENT
By: __________________________________
[Servicing Transfer Date]
[Mortgagor]
[Address of Mortgagor]
Former FHA Case No.:
Street Address:
City, State, Zip:
You are hereby notified that the servicing of your mortgage loan, that is, the right to collect payments from you, is being assigned, sold or transferred from the Department of Housing and Urban Development to ______________________, effective _____________________.
The assignment, sale or transfer of the servicing of the mortgage loan does not affect any term or condition of the mortgage instruments, other than terms directly related to the servicing of your loan.
Except in limited circumstances, the law requires that your present servicer send you this notice at least 15 days before the effective date of transfer, or at closing. Your new servicer must also send you this notice no later than 15 days after this effective date or at closing. In this case, all necessary information is combined in this one notice.
Your present servicer is the Department of Housing and Urban Development. If you have any questions relating to the transfer of servicing from your present servicer, call ________________________________ at ________________ between ____ a.m. and ____ p.m. on the following days ______________________. This is a [toll-free] or [collect call] number.
Your new servicer will be ________________________________________.
The business address for your new servicer is:
________________________________________________
________________________________________________
________________________________________________
________________________________________________
The [toll-free][collect call] telephone number of your new servicer is: ________________________________. If you have any questions relating to the transfer of servicing to your new servicer call ________________________________ [enter the name of an individual or department here] at ________________ at [toll free or collect call telephone number] between _____ a.m. and _____ p.m. on the following days ____________________.
The date that your present servicer will stop accepting payments from you is ________________________. The date that your new servicer will start accepting payments from you is ______________________. Send all payments due on or after that date to your new servicer.
You should also be aware of the following information, which is set out in more detail in Section 6 of the Real Estate Settlement Procedures Act (RESPA) (12 U.S.C. 2605):
During the 60-day period following the effective date of the transfer of the loan servicing, a loan payment received by your old servicer before its due date may not be treated by the new loan servicer as late, and a late fee may not be imposed on you.
Section 6 of RESPA (12 U.S.C. 2605) gives you certain consumer rights. If you send a "qualified written request" to your loan servicer concerning the servicing of your loan, your servicer must provide you with a written acknowledgment within 20 Business Days of receipt of your request. A "qualified written request" is a written correspondence, other than notice on a payment coupon or other payment medium supplied by the servicer, which includes your name and account number, and your reasons for the request. If you want to send a "qualified written request" regarding the servicing of your loan, it must be sent to this address:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________.
Not later than 60 Business Days after receiving your request, your servicer must make any appropriate corrections to your account, and must provide you with a written clarification regarding any dispute. During this 60-Business-Day period, your servicer may not provide information to a consumer reporting agency concerning any overdue payment related to such period or qualified written request. However, this does not prevent the servicer from initiating foreclosure if proper grounds exist under the mortgage documents.
A Business Day is a day on which the offices of the business entity are open to the public for carrying on substantially all of its business functions.
Section 6 of RESPA also provides for damages and costs for individuals or classes of individuals in circumstances where servicers are shown to have violated the requirements of that Section. You should seek legal advice if you believe your rights have been violated.
Present Servicer:
U.S. DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT
_________________________________
(Authorized Agent)
Future Servicer:
_________________________________
_________________________________
By:______________________________
Dear Sir or Madam:
The Secretary of Housing and Urban Development ("HUD") has sold, transferred and assigned to [Name of Purchaser]("Purchaser") a mortgage loan ("Mortgage Loan") that is secured by certain real property ("Mortgaged Property"), the legal description of which is attached hereto as Exhibit "A", for which you are the responsible taxing authority. Please be advised that, effective as of this date, HUD no longer has any interest in the Mortgage Loan and the Purchaser is responsible for the servicing of the Mortgage Loan. You therefore are hereby irrevocably and unconditionally authorized and directed to forward any tax bills relating to the Mortgaged Property to the address indicated below.
If you have any questions regarding this matter, please contact [insert contact name, telephone number and address, if applicable].
By: ________________________________
Name: ________________________________
Title: ________________________________
APPROVED:
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
By: ________________________
All Bidders are required to make an Deposit as described in the Bid Instructions.
This Deposit should be wired to the following:
R & T Number: 061008766
Bank: FHLB ATL
City/State: Atlanta, GA
To Credit: FHA Single Family Account
Account Number: 2997500
Please remember that the Federal Reference Number from this wire transfer MUST
Also, please include the attached "Return Wire Transfer Form" with your Bid. This will
help expedite the return of the Unsuccessful Bidder's Funds.