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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| | | | | |
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2026
OR | | | | | |
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____to _____
Commission File Number: 001-40003
loanDepot, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| | | | | | | | | | | | | | |
| Delaware | | 85-3948939 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
| | | | | |
6561 Irvine Center Drive, | Irvine, | California | | 92618 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (888) 337-6888
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol | | Name of each exchange on which registered |
| Class A Common Stock, $0.001 per value per share | | LDI | | The New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. | | | | | | | | | | | | | | | | | | | | |
| Large accelerated filer | ☐ | | Accelerated filer | ☒ | |
| Non-accelerated filer | ☐ | | Smaller reporting company | ☒ | |
| | | | Emerging growth company | ☐ | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 4, 2026, 231,707,950 shares of the registrant’s Class A common stock, par value $0.001 per share, were outstanding and 106,115,949 shares of the registrant’s Class B common stock, par value $0.001 per share, were outstanding. There were no shares of the registrant’s Class C common stock or Class D common stock outstanding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words “believe,” “anticipate,” “expect,” “intend,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” or “could” and the negatives of those terms. Examples of forward-looking statements include, but are not limited to: information concerning possible or assumed future results of operations; business strategies and initiatives; technology partnerships and investments, including our partnership with Figure Technology Solutions; our digital transformation; market positioning; integration of Figure and loanDepot solutions across channels and expected benefits; potential debt actions; financial covenants; financial condition and liquidity; dividend policy; interest rate expectations and changes; and borrower equity creation and resulting opportunities.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.
Important factors that could cause actual results to differ materially from our expectations are included in Part I, Item 2 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this report as well as Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on March 12, 2026.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Table of Contents
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| PART 1. FINANCIAL INFORMATION | |
| Item 1. Financial Statements | |
Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | |
Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 | |
Consolidated Statements of Equity for the three months ended March 31, 2026 and 2025 | |
Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 | |
| Notes to Consolidated Financial Statements | |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | |
| Item 4. Controls and Procedures | |
| PART II. OTHER INFORMATION | |
| Item 1. Legal Proceedings | |
| Item 1A. Risk Factors | |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |
| Item 3. Defaults Upon Senior Securities | |
| Item 4. Mine Safety Disclosures | |
| Item 5. Other Information | |
| Item 6. Exhibits | |
| Signatures | |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
loanDepot, Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| | | | | | | | | | | |
| March 31,
2026 | | December 31,
2025 |
| ASSETS | (Unaudited) | | |
| Cash and cash equivalents | $ | 277,418 | | | $ | 337,232 | |
| Restricted cash | 79,770 | | | 63,790 | |
Loans held for sale, at fair value (includes $598,437 and $606,215 pledged to creditors in securitization trusts at March 31, 2026 and December 31, 2025, respectively) | 3,266,759 | | | 3,165,542 | |
Loans held for investment, at fair value (pledged to creditors in a securitization trust) | 108,227 | | | 109,821 | |
| Derivative assets, at fair value | 70,076 | | | 42,365 | |
Servicing rights, at fair value (includes $675,905 and $661,475 pledged to creditors in securitization trusts at March 31, 2026 and December 31, 2025, respectively) | 1,691,235 | | | 1,658,223 | |
| Trading securities, at fair value | 83,722 | | | 85,640 | |
| Property and equipment, net | 63,514 | | | 61,929 | |
| Operating lease right-of-use assets | 24,592 | | | 23,877 | |
| Loans eligible for repurchase | 1,344,573 | | | 1,074,386 | |
| Investments in joint ventures | 18,101 | | | 18,251 | |
Other assets | 218,532 | | | 216,880 | |
| Total assets | $ | 7,246,519 | | | $ | 6,857,936 | |
| LIABILITIES AND EQUITY | | | |
| Warehouse and other lines of credit | $ | 3,024,131 | | | $ | 2,902,539 | |
| Accounts payable, accrued expenses and other liabilities | 374,374 | | | 349,350 | |
| Derivative liabilities, at fair value | 17,253 | | | 10,718 | |
| Liability for loans eligible for repurchase | 1,344,573 | | | 1,074,386 | |
| Operating lease liability | 34,325 | | | 34,630 | |
| Debt obligations, net | 2,114,567 | | | 2,100,303 | |
| Total liabilities | 6,909,223 | | | 6,471,926 | |
Commitments and contingencies (Note 15) | | | |
Class A common stock, $0.001 par value, 2,500,000,000 authorized, 240,689,174 and 138,376,854 issued at March 31, 2026 and December 31, 2025, respectively | 241 | | | 138 | |
Class B common stock, $0.001 par value, 2,500,000,000 authorized, 106,207,433 and none issued at March 31, 2026 and December 31, 2025, respectively | 106 | | | — | |
Class C common stock, $0.001 par value, 2,500,000,000 authorized, none and 107,515,082 issued at March 31, 2026 and December 31, 2025, respectively | — | | | 108 | |
Class D common stock, $0.001 par value, 2,500,000,000 authorized, none and 97,026,671 issued at March 31, 2026 and December 31, 2025, respectively | — | | | 97 | |
Preferred stock, $0.001 par value, 50,000,000 authorized, none issued at March 31, 2026 and December 31, 2025, respectively | — | | | — | |
Treasury stock at cost, 9,874,261 and 8,779,081 shares at March 31, 2026 and December 31, 2025, respectively | (29,706) | | | (29,635) | |
| Additional paid-in capital | 885,378 | | | 878,204 | |
Retained deficit | (651,749) | | | (614,398) | |
| Noncontrolling interest | 133,026 | | | 151,496 | |
| Total equity | 337,296 | | | 386,010 | |
| Total liabilities and equity | $ | 7,246,519 | | | $ | 6,857,936 | |
See accompanying notes to the unaudited consolidated financial statements.
1
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(Unaudited)
| | | | | | | | | | | | | | | |
| Three Months Ended
March 31, | | |
| 2026 | | 2025 | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| REVENUES: | | | | | | | |
| Interest income | $ | 39,383 | | | $ | 35,070 | | | | | |
| Interest expense | (36,679) | | | (31,762) | | | | | |
Net interest income | 2,704 | | | 3,308 | | | | | |
| | | | | | | |
| Gain on origination and sale of loans, net | 192,006 | | | 166,376 | | | | | |
| Origination income, net | 32,622 | | | 25,858 | | | | | |
| Servicing fee income | 108,749 | | | 104,278 | | | | | |
| Change in fair value of servicing rights, net | (64,359) | | | (41,103) | | | | | |
| Other income | 14,665 | | | 14,903 | | | | | |
| Total net revenues | 286,387 | | | 273,620 | | | | | |
| | | | | | | |
| EXPENSES: | | | | | | | |
| Personnel expense | 175,367 | | | 150,161 | | | | | |
| Marketing and advertising expense | 29,006 | | | 38,250 | | | | | |
| Direct origination expense | 25,088 | | | 21,954 | | | | | |
| General and administrative expense | 46,881 | | | 44,132 | | | | | |
| Occupancy expense | 4,275 | | | 4,295 | | | | | |
| Depreciation and amortization | 6,335 | | | 7,666 | | | | | |
| Servicing expense | 11,478 | | | 10,000 | | | | | |
| Other interest expense | 43,070 | | | 43,265 | | | | | |
| | | | | | | |
| Total expenses | 341,500 | | | 319,723 | | | | | |
| | | | | | | |
Loss before income taxes | (55,113) | | | (46,103) | | | | | |
| | | | | | | |
Income tax benefit | (171) | | | (5,407) | | | | | |
| | | | | | | |
Net loss | (54,942) | | | (40,696) | | | | | |
| | | | | | | |
Net loss attributable to noncontrolling interests | (17,455) | | | (18,800) | | | | | |
| | | | | | | |
Net loss attributable to loanDepot, Inc. | $ | (37,487) | | | $ | (21,896) | | | | | |
| | | | | | | |
(Loss) earnings per share: | | | | | | | |
| Basic | $ | (0.16) | | | $ | (0.11) | | | | | |
| Diluted | $ | (0.16) | | | $ | (0.11) | | | | | |
| | | | | | | |
| Weighted average shares outstanding: | | | | | | | |
| Basic | 228,962,329 | | | 200,792,570 | | | | | |
| Diluted | 228,962,329 | | | 200,792,570 | | | | | |
See accompanying notes to the unaudited consolidated financial statements.
2
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common stock outstanding | | Common stock $ | | Treasury Stock | | Additional paid-in capital | | Retained Deficit | | Non-controlling Interests | | Total Equity |
| Class A | | Class B | | Class C | | Class D | | Class A | | Class B | | Class C | | Class D | | | | | |
| Balance at December 31, 2024 | 99,093,573 | | | — | | | 131,432,929 | | | 97,026,671 | | | $ | 104 | | | $ | — | | | $ | 131 | | | $ | 97 | | | $ | (20,340) | | | $ | 843,523 | | | $ | (550,623) | | | $ | 233,719 | | | $ | 506,611 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Conversion-related deferred taxes and adjustments | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 53 | | | — | | | — | | | 53 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Net common stock issued under stock-based compensation plans | 5,678,010 | | | — | | | (5,040,808) | | | — | | | 6 | | | — | | | (5) | | | — | | | (635) | | | 8,720 | | | — | | | (8,721) | | | (635) | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | — | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | 3,503 | | | — | | | 2,213 | | | 5,716 | |
| Distributions for taxes on behalf of shareholders, net | — | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | (1,072) | | | (679) | | | (1,751) | |
Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (21,896) | | | (18,800) | | | (40,696) | |
| Balance at March 31, 2025 | 104,771,583 | | | — | | | 126,392,121 | | | 97,026,671 | | | $ | 110 | | | $ | — | | | $ | 126 | | | $ | 97 | | | $ | (20,975) | | | $ | 855,799 | | | $ | (573,591) | | | $ | 207,732 | | | $ | 469,298 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Balance at December 31, 2025 | 129,597,773 | | | — | | | 107,515,082 | | | 97,026,671 | | | $ | 138 | | | $ | — | | | $ | 108 | | | $ | 97 | | | $ | (29,635) | | | $ | 878,204 | | | $ | (614,398) | | | $ | 151,496 | | | $ | 386,010 | |
| Conversion-related deferred taxes and adjustments | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,334) | | | — | | | — | | | (1,334) | |
| Conversion pursuant to Amended and Restated Certificate of Incorporation | 97,026,671 | | | 106,207,433 | | | (106,207,433) | | | (97,026,671) | | | 97 | | | 106 | | | (106) | | | (97) | | | — | | | — | | | — | | | — | | | — | |
| Net common stock issued under stock-based compensation plans | 4,190,469 | | | — | | | (1,307,649) | | | — | | | 6 | | | — | | | (2) | | | — | | | (71) | | | 4,138 | | | — | | | (3,102) | | | 969 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Stock-based compensation | — | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | 4,370 | | | — | | | 2,023 | | | 6,393 | |
| Refund of tax distributions, net | — | | | | | — | | | — | | | — | | | | | — | | | — | | | — | | | — | | | 136 | | | 64 | | | 200 | |
Net loss | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (37,487) | | | (17,455) | | | (54,942) | |
| Balance at March 31, 2026 | 230,814,913 | | | 106,207,433 | | | — | | | — | | | $ | 241 | | | $ | 106 | | | $ | — | | | $ | — | | | $ | (29,706) | | | $ | 885,378 | | | $ | (651,749) | | | $ | 133,026 | | | $ | 337,296 | |
See accompanying notes to the unaudited consolidated financial statements.
3
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| 2026 | | 2025 |
| CASH FLOWS FROM OPERATING ACTIVITIES | | | |
Net loss | $ | (54,942) | | | $ | (40,696) | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | |
Cash used in operating activities: | | | |
| Depreciation and amortization expense | 6,335 | | | 7,666 | |
| Amortization of operating lease right-of-use asset | 2,481 | | | 2,806 | |
| Amortization of debt discount and debt issuance costs | 7,231 | | | 5,806 | |
| Gain on origination and sale of loans | (179,992) | | | (150,750) | |
| | | |
| Fair value change in trading securities | 506 | | | (1,359) | |
Provision for loss obligation on sold loans and servicing rights | 3,719 | | | 351 | |
Deferred tax benefit | (13) | | | (6,598) | |
| | | |
| Fair value change in derivative assets | (33,081) | | | 5,138 | |
| Fair value change in derivative liabilities | 6,535 | | | (11,607) | |
| | | |
| Fair value change in loans held for sale | 28,770 | | | (34,347) | |
| Fair value change in loans held for investment | (72) | | | (958) | |
| Fair value change in servicing rights | 51,882 | | | 59,803 | |
| Stock-based compensation expense | 6,393 | | | 5,716 | |
| | | |
| Originations of loans | (7,571,294) | | | (5,049,308) | |
| Proceeds from sales of loans | 7,757,461 | | | 5,255,275 | |
Proceeds from principal payments on loans held for sale | 14,544 | | | 17,352 | |
Proceeds from principal payments on loans held for investment | 1,666 | | | 3,139 | |
| Payments to investors for loan repurchases | (240,865) | | | (257,165) | |
Premiums received (paid) on derivatives | 5,370 | | | (10,510) | |
| | | |
| | | |
| | | |
| Disbursements from joint ventures | 496 | | | 466 | |
| | | |
| Other changes in operating assets and liabilities | 17,521 | | | 23,029 | |
Net cash used in operating activities | (169,349) | | | (176,751) | |
| | | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | |
| Purchase of property and equipment | (7,849) | | | (6,796) | |
| Proceeds from sale of servicing rights | 1,656 | | | 5,132 | |
| | | |
| Cash flows received on trading securities | 1,413 | | | 1,470 | |
| Investments in joint ventures | — | | | (150) | |
| | | |
Net cash used in investing activities | (4,780) | | | (344) | |
See accompanying notes to the unaudited consolidated financial statements.
4
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)
(Unaudited)
| | | | | | | | | | | |
| Three Months Ended
March 31, |
| 2026 | | 2025 |
| CASH FLOWS FROM FINANCING ACTIVITIES | | | |
| Proceeds from borrowings on warehouse and other lines of credit | $ | 7,300,654 | | | $ | 3,648,611 | |
| Repayment of borrowings on warehouse and other lines of credit | (7,179,062) | | | (3,535,291) | |
| | | |
| Proceeds from debt obligations | 27,813 | | | 340,815 | |
| Payments on debt obligations | (20,181) | | | (349,817) | |
| Payments of debt issuance costs | (14) | | | (6,007) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| Treasury stock purchased to net settle and withhold taxes on vested shares | (71) | | | (635) | |
| Exercise of stock options | 1,040 | | | — | |
Refund (payment) of shareholder tax distributions and dividends, net | 116 | | | (2,075) | |
Net cash provided by financing activities | 130,295 | | | 95,601 | |
| | | |
| Net change in cash and cash equivalents and restricted cash | (43,834) | | | (81,494) | |
| | | |
| Cash and cash equivalents and restricted cash at beginning of the period | 401,022 | | | 527,221 | |
| | | |
Cash and cash equivalents and restricted cash at end of the period | $ | 357,188 | | | $ | 445,727 | |
| | | |
| | | |
| SUPPLEMENTAL DISCLOSURES: | | | |
| Cash paid during the period for: | | | |
Interest | $ | 57,558 | | | $ | 55,559 | |
Income taxes | $ | (71) | | | $ | (178) | |
| | | |
| Supplemental disclosure of noncash investing and financing activities | | | |
| | | |
| Operating leases right-of-use assets obtained in exchange for lease liabilities | $ | 3,196 | | | $ | 5,061 | |
| | | |
| | | |
| | | |
Cash and cash equivalents and restricted cash reconciliation | | | |
| Cash and cash equivalents | $ | 277,418 | | | $ | 371,480 | |
| Restricted cash | 79,770 | | | 74,247 | |
Total cash and cash equivalents and restricted cash | $ | 357,188 | | | $ | 445,727 | |
See accompanying notes to the unaudited consolidated financial statements.
5
loanDepot, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ are in thousands, except per share amounts, or unless otherwise indicated)
(Unaudited)
NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation were included. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of loanDepot, Inc. on Form 10-K for the year ended December 31, 2025 (“2025 Form 10-K”).
Nature of Operations
loanDepot, Inc. (together with its consolidated subsidiaries, the “Company”) was incorporated in Delaware on November 6, 2020 to facilitate the initial public offering (“IPO”) of its Class A common stock and related transactions in order to carry on the business of LD Holdings Group LLC (“LD Holdings”) and its consolidated subsidiaries. loanDepot, Inc.’s common stock began trading on the New York Stock Exchange on February 11, 2021 under the ticker symbol “LDI.” loanDepot, Inc. is a holding company and its sole material asset is its equity interest in LD Holdings.
The Company engages in originating, financing, selling, and servicing residential mortgage loans, and engages in title, escrow, and settlement services for mortgage loan transactions. The Company derives income primarily from gains on the origination and sale of loans to investors, from loan servicing, and from fees charged for settlement services related to the origination and sale of loans.
Summary of Significant Accounting Policies
Our accounting policies are described below and in Note 1- Description of Business and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our 2025 Form 10-K.
Consolidation and Basis of Presentation
The Company's consolidated financial statements are prepared in accordance with GAAP as codified in the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, the unaudited consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Certain items in prior periods were reclassified to conform to the current presentation.
loanDepot, Inc. is a holding company, its sole material asset is its equity interest in LD Holdings, and through its ability to appoint the board of directors of LD Holdings, loanDepot, Inc. indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is also a holding company and has no material assets other than its equity interests in its direct subsidiaries consisting of a 99.96% ownership in loanDepot.com, LLC (“LDLLC”), the majority asset of the group, and 100% equity ownership in Artemis Management LLC (“ART”), LD Settlement Services, LLC (“LDSS”), mello Holdings, LLC (“Mello”), and mello Credit Strategies LLC (“MCS”). The financial results of LD Holdings and its subsidiaries are consolidated with loanDepot, Inc., and the consolidated net earnings or loss are allocated to noncontrolling interest to reflect the entitlement of certain members that still hold Class A holdings units in LD Holdings (“Holdco Units”) and Class C common stock of the Company, (“Continuing LLC Members”) as of the periods presented.
The accompanying consolidated financial statements include all of the assets, liabilities, and results of operations of the Company and consolidated variable interest entities (“VIEs”) in which the Company is the primary beneficiary. VIEs are entities that have a total equity investment at risk that is insufficient to permit the entity to finance its activities without additional subordinated financial support, whose equity investors at risk lack the ability to control the entity's activities, or is structured with non-substantive voting rights. The Company evaluates its associations with VIEs, both at inception and when
there is a change in circumstance that requires reconsideration, to determine if the Company is the primary beneficiary and consolidation is required. A primary beneficiary is defined as a variable interest holder that has a controlling financial interest. A controlling financial interest requires both: (a) the power to direct the activities that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or receive benefits of a VIE that could potentially be significant to the VIE. The Company has not provided financial or other support during the periods presented to any VIE that it was not previously contractually required to provide. Other entities that the Company does not consolidate, but for which it has significant influence over operating and financial policies, are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation.
The Company has evaluated subsequent events for recognition or disclosure through the date of this report and has not identified any recordable or disclosable events that were not already reported in these consolidated financial statements or notes thereto.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management has made estimates in certain areas, including determining the fair value of loans held for sale (“LHFS”), loans held for investment (“LHFI”), servicing rights, derivative assets and derivative liabilities, trading securities, awards granted under the incentive equity plan, and determining the loan loss obligation on sold loans and MSRs. Actual results could differ from those estimates.
Concentration of Risk
The Company has limited its concentration in credit risk for cash by maintaining deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to cash.
Due to the nature of the mortgage lending industry, changes in interest rates may significantly impact revenue from originating mortgages and subsequent sales of loans to investors, which are the primary source of income for the Company. The Company originates mortgage loans on property located throughout the United States, with loans originated for property located in California totaling approximately 18% of total loan originations for the three months ended March 31, 2026.
The Company sells mortgage loans to various third-party investors. Three investors accounted for 36%, 17%, and 16% of the Company’s loan sales for the three months ended March 31, 2026. No other investors accounted for more than 5% of the loan sales for the three months ended March 31, 2026.
The Company funds loans through warehouse and other lines of credit. As of March 31, 2026, 19%, 18% , and 13% of the Company's warehouse lines were payable to three separate lenders.
NOTE 2 – FAIR VALUE
The Company's consolidated financial statements include assets and liabilities that are measured based on their estimated fair values. Refer to Note 1 - Description of Business, Presentation and Summary of Significant Accounting Policies in the 2025 Form 10-K and below for information on the fair value hierarchy, valuation methodologies, and key inputs used to measure financial assets and liabilities recorded at fair value, as well as methods and assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis.
Financial Statement Items Measured at Fair Value on a Recurring Basis
The following tables presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy as of the dates indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Fair value through net income: | | | | | | | | |
| Assets: | | | | | | | | |
| Loans held for sale | | $ | — | | | $ | 3,266,759 | | | $ | — | | | $ | 3,266,759 | |
Loans held for investment | | — | | | 108,227 | | | — | | | 108,227 | |
| Trading securities | | — | | | 83,722 | | | — | | | 83,722 | |
| Derivative assets: | | | | | | | | |
| Interest rate lock commitments | | — | | | — | | | 43,607 | | | 43,607 | |
| Forward sale contracts | | — | | | 26,469 | | | — | | | 26,469 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Servicing rights | | — | | | — | | | 1,691,235 | | | 1,691,235 | |
| Total assets at fair value | | $ | — | | | $ | 3,485,177 | | | $ | 1,734,842 | | | $ | 5,220,019 | |
| Liabilities: | | | | | | | | |
| Derivative liabilities: | | | | | | | | |
| Interest rate lock commitments | | $ | — | | | $ | — | | | $ | 6,534 | | | $ | 6,534 | |
| Interest rate swap futures | | 8,490 | | | — | | | — | | | 8,490 | |
| Forward sale contracts | | — | | | 1,301 | | | — | | | 1,301 | |
| Put options on treasuries | | 928 | | | — | | | — | | | 928 | |
| | | | | | | | |
| Servicing rights | | — | | | — | | | 21,587 | | | 21,587 | |
| Total liabilities at fair value | | $ | 9,418 | | | $ | 1,301 | | | $ | 28,121 | | | $ | 38,840 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 |
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Fair value through net income: | | | | | | | | |
| Assets: | | | | | | | | |
| Loans held for sale | | $ | — | | | $ | 3,165,542 | | | $ | — | | | $ | 3,165,542 | |
Loans held for investment | | — | | | 109,821 | | | — | | | 109,821 | |
| Trading securities | | — | | | 85,640 | | | — | | | 85,640 | |
| Derivative assets: | | | | | | | | |
| Interest rate lock commitments | | — | | | — | | | 42,207 | | | 42,207 | |
| Forward sale contracts | | — | | | 158 | | | — | | | 158 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Servicing rights | | — | | | — | | | 1,658,223 | | | 1,658,223 | |
| Total assets at fair value | | $ | — | | | $ | 3,361,161 | | | $ | 1,700,430 | | | $ | 5,061,591 | |
| Liabilities: | | | | | | | | |
| Derivative liabilities: | | | | | | | | |
| Interest rate lock commitments | | $ | — | | | $ | — | | | $ | 1,870 | | | $ | 1,870 | |
| Interest rate swap futures | | 3,420 | | | — | | | — | | | 3,420 | |
| Forward sale contracts | | — | | | 3,416 | | | — | | | 3,416 | |
| Put options on treasuries | | 2,012 | | | — | | | — | | | 2,012 | |
| | | | | | | | |
| Servicing rights | | — | | | — | | | 20,517 | | | 20,517 | |
| | | | | | | | |
| Total liabilities at fair value | | $ | 5,432 | | | $ | 3,416 | | | $ | 22,387 | | | $ | 31,235 | |
The following presents the changes in the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2026 | | |
| | IRLCs, net | | Servicing
Rights, net | | | | |
| Balance at beginning of period | | $ | 40,337 | | | $ | 1,637,706 | | | | | |
| Total net gains (losses) included in: | | | | | | | | |
| Gain on origination and sale of loans, net: | | | | | | | | |
| Issuances and additions | | 118,957 | | | 87,150 | | | | | |
Fallout | | (28,278) | | | — | | | | | |
Transfers of IRLC to LHFS | | (93,943) | | | — | | | | | |
Valuation changes in servicing rights, net(1) | | — | | | (51,882) | | | | | |
| Sales | | — | | | (3,326) | | | | | |
| Balance at end of period | | $ | 37,073 | | | $ | 1,669,648 | | | | | |
(1)The change in unrealized gains or losses relating to servicing rights still held at March 31, 2026 amounted to a net loss of $11.3 million for the three months ended March 31, 2026.
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2025 | | |
| | IRLCs, net | | Servicing
Rights, net | | | | |
| Balance at beginning of period | | $ | 25,552 | | | $ | 1,615,510 | | | | | |
| Total net gains (losses) included in: | | | | | | | | |
| Gain on origination and sale of loans, net: | | | | | | | | |
| Issuances and additions | | 121,183 | | | 52,686 | | | | | |
Fallout | | (19,844) | | | — | | | | | |
| Transfers of IRLC to LHFS | | (80,920) | | | — | | | | | |
Valuation changes in servicing rights, net(1) | | — | | | (59,803) | | | | | |
| Sales | | — | | | (5,362) | | | | | |
| Balance at end of period | | $ | 45,971 | | | $ | 1,603,031 | | | | | |
(1)The change in unrealized gains or losses relating to servicing rights that were still held at March 31, 2025, amounted to a net loss of $34.9 million for the three months ended March 31, 2025.
The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring basis:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | March 31, 2026 | | December 31, 2025 |
| Unobservable Input | | Range of inputs | | Weighted Average(1) | | Range of inputs | | Weighted Average(1) |
| IRLCs | | | | | | | | | | | | |
| Pull-through rate | | 4.6% | - | 99.9% | | 77.8% | | 5.2% | - | 99.9% | | 78.3% |
| | | | | | | | | | | | |
| Servicing rights | | | | | | | | | | | | |
Discount rate(2) | | 3.8% | - | 17.8% | | 6.9% | | 3.8% | - | 17.7% | | 6.9% |
Prepayment rate | | 5.8% | - | 14.4% | | 8.7% | | 5.8% | - | 14.1% | | 8.7% |
| Cost to service (per loan) | | $72 | - | $134 | | $101 | | $73 | - | $132 | | $100 |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
(1)Weighted average inputs are based on the committed amounts for IRLCs and the UPB of the underlying loans for servicing rights.
(2)The Company estimates the fair value of MSRs using an option-adjusted spread (“OAS”) model, which projects MSR cash flows over multiple interest rate scenarios in conjunction with the Company’s prepayment model, and then discounts these cash flows at risk-adjusted rates.
Financial Statement Items Measured at Fair Value on a Nonrecurring Basis
The Company did not have any material assets or liabilities that were recorded at fair value on a nonrecurring basis as of March 31, 2026 or December 31, 2025.
Financial Statement Items Measured at Amortized Cost
The following table presents the carrying amount and estimated fair value of financial instruments included in the consolidated financial statements that are not recorded at fair value on a recurring or nonrecurring basis. The table excludes cash and cash equivalents, restricted cash, loans eligible for repurchase, warehouse and other lines of credit, and secured debt facilities as these financial instruments are highly liquid or short-term in nature and as a result, their carrying amounts approximate fair value:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 | | December 31, 2025 |
| | Carrying Amount | | Estimated Fair Value | | Carrying Amount | | Estimated Fair Value |
| Senior Notes | | $ | 811,033 | | | $ | 730,080 | | | $ | 807,053 | | | $ | 801,069 | |
| Other secured financings | | $ | 86,550 | | | $ | 86,534 | | | $ | 87,953 | | | $ | 89,034 | |
Fair value of the Company’s Senior Notes is estimated using quoted market prices and classified as Level 2 in the fair value hierarchy. Fair value of the Company’s other secured financings is estimated using quoted market prices and classified as Level 2 in the fair value hierarchy.
NOTE 3 – LOANS HELD FOR SALE, AT FAIR VALUE
The following table represents the unpaid principal balance of loans held for sale by product type of loan as of March 31, 2026 and December 31, 2025:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | March 31,
2026 | | December 31,
2025 |
| | Amount | | % | | Amount | | % |
| Conforming - fixed | | $ | 1,574,607 | | | 49 | % | | $ | 1,323,799 | | | 42 | % |
| Conforming - ARM | | 207,981 | | | 6 | | | 63,913 | | | 2 | |
| Government - fixed | | 847,683 | | | 26 | | | 1,034,485 | | | 33 | |
| Government - ARM | | 98,433 | | | 3 | | | 113,934 | | | 4 | |
| Other - residential mortgage loans | | 499,421 | | | 15 | | | 563,398 | | | 18 | |
| HELOC | | 29,849 | | | 1 | | | 27,930 | | | 1 | |
| Total | | 3,257,974 | | | 100 | % | | 3,127,459 | | | 100 | % |
| Fair value adjustment | | 8,785 | | | | | 38,083 | | | |
| Loans held for sale, at fair value | | $ | 3,266,759 | | | | | $ | 3,165,542 | | | |
A summary of the changes in the balance of loans held for sale is as follows:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Balance at beginning of period | | $ | 3,165,542 | | | $ | 2,603,735 | | | | | |
| Origination and purchase of loans | | 7,571,294 | | | 5,049,308 | | | | | |
| Sales | | (7,664,619) | | | (5,157,212) | | | | | |
| | | | | | | | |
| Repurchases | | 237,856 | | | 252,591 | | | | | |
| Principal payments | | (14,544) | | | (17,352) | | | | | |
Fair value (loss) gain | | (28,770) | | | 34,347 | | | | | |
| Balance at end of period | | $ | 3,266,759 | | | $ | 2,765,417 | | | | | |
Gain on origination and sale of loans, net is comprised of the following components:
| | | | | | | | | | | | | | | | | | |
| | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
Premium from loan sales | | $ | 39,727 | | | $ | 8,208 | | | | | |
| Servicing rights additions | | 87,150 | | | 52,686 | | | | | |
Unrealized gains (losses) from derivative assets and liabilities | | 44,449 | | | (18,474) | | | | | |
Realized (losses) gains from derivative assets and liabilities | | (16,167) | | | 9,174 | | | | | |
| Discount points, rebates and lender paid costs | | 69,282 | | | 80,681 | | | | | |
Fair value (loss) gain | | (28,770) | | | 34,347 | | | | | |
Provision for loan loss obligation for loans sold | | (3,665) | | | (246) | | | | | |
| Total gain on origination and sale of loans, net | | $ | 192,006 | | | $ | 166,376 | | | | | |
The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 | | December 31, 2025 |
| | Fair value | | UPB | | Difference | | Fair value | | UPB | | Difference |
| Current through 89 days delinquent | | $ | 3,248,988 | | | $ | 3,238,527 | | | $ | 10,461 | | | $ | 3,149,883 | | | $ | 3,109,965 | | | $ | 39,918 | |
90+ days delinquent(1) | | 17,771 | | | 19,447 | | | (1,676) | | | 15,659 | | | 17,494 | | | (1,835) | |
| Total | | $ | 3,266,759 | | | $ | 3,257,974 | | | $ | 8,785 | | | $ | 3,165,542 | | | $ | 3,127,459 | | | $ | 38,083 | |
(1) 90+ days delinquent loans are on non-accrual status.
NOTE 4 – LOANS HELD FOR INVESTMENT, AT FAIR VALUE
In April 2024, the Company executed a securitization of a pool of approximately $150.0 million of fixed-rate and adjustable-rate, performing, re-performing and non-performing residential mortgage loans that was recorded as a secured borrowing in which the loans remained on the consolidated balance sheet as loans held for investment, at fair value.
A summary of the changes in the balance of loans held for investment is as follows:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Balance at beginning of period | | $ | 109,821 | | | $ | 116,627 | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Principal payments | | (1,666) | | | (3,139) | | | | | |
| Fair value adjustment | | 72 | | | 959 | | | | | |
| Balance at end of period | | $ | 108,227 | | | $ | 114,447 | | | | | |
The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for investment.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 | | December 31, 2025 |
| | Fair value | | UPB | | Difference | | Fair value | | UPB | | Difference |
| Current through 89 days delinquent | | $ | 103,329 | | | $ | 123,924 | | | $ | (20,595) | | | $ | 103,611 | | | $ | 123,829 | | | $ | (20,219) | |
90+ days delinquent(1) | | 4,898 | | | 6,093 | | | (1,195) | | | 6,210 | | | 7,854 | | | (1,643) | |
| Total | | $ | 108,227 | | | $ | 130,017 | | | $ | (21,790) | | | $ | 109,821 | | | $ | 131,683 | | | $ | (21,862) | |
(1) 90+ days delinquent loans are on non-accrual status.
Income from loans held for investment is included in other income on the consolidated statement of operations, and includes $1.4 million of interest income and $0.1 million of fair value gain for the three months ended March 31, 2026.
NOTE 5 – SERVICING RIGHTS, AT FAIR VALUE
The outstanding principal balance of the servicing portfolio was comprised of the following:
| | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 |
Agency | | $ | 64,582,051 | | | $ | 64,301,274 | |
| Government | | 43,547,715 | | | 42,610,586 | |
Other | | 12,544,388 | | | 12,184,383 | |
| Total servicing portfolio | | $ | 120,674,154 | | | $ | 119,096,243 | |
A summary of the changes in the balance of servicing rights, net of servicing rights liability is as follows:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Balance at beginning of period | | $ | 1,637,706 | | | $ | 1,615,510 | | | | | |
Servicing rights additions | | 87,150 | | | 52,686 | | | | | |
| Sales proceeds, net | | (3,326) | | | (5,362) | | | | | |
| Changes in fair value: | | | | | | | | |
| Due to changes in valuation inputs or assumptions | | 448 | | | (23,689) | | | | | |
| Due to collection/realization of cash flows | | (51,442) | | | (36,176) | | | | | |
Realized (losses) gains on sale of servicing rights(2) | | (888) | | | 62 | | | | | |
Total changes in fair value | | (51,882) | | | (59,803) | | | | | |
Balance at end of period(2) | | $ | 1,669,648 | | | $ | 1,603,031 | | | | | |
(1) Includes realized MSR sale gain and broker fees.
(2) Servicing assets of $1.7 billion and $1.6 billion at March 31, 2026 and March 31, 2025, respectively, are presented net of servicing liabilities of $21.6 million and $18.5 million, respectively.
The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Contractual servicing fees | | $ | 87,951 | | | $ | 81,969 | | | | | |
| Late, ancillary and other fees | | 20,798 | | | 22,309 | | | | | |
| Servicing fee income | | $ | 108,749 | | | $ | 104,278 | | | | | |
The following is a summary of the components of change in fair value of servicing rights, net of hedge as reported in the Company’s consolidated statements of operations:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Changes in fair value: | | | | | | | | |
| Due to collection/realization of cash flows | | $ | (51,442) | | | $ | (36,176) | | | | | |
| | | | | | | | |
| Due to changes in valuation inputs or assumptions | | 448 | | | (23,689) | | | | | |
Realized (losses) gains on sale of servicing rights | | (888) | | | 62 | | | | | |
Net (losses) gains from derivatives hedging servicing rights | | (12,423) | | | 18,804 | | | | | |
Valuation changes in servicing rights, net of hedging gains and losses | | (12,863) | | | (4,823) | | | | | |
Other realized losses on sales of servicing rights (1) | | (54) | | | (104) | | | | | |
| Changes in fair value of servicing rights, net | | $ | (64,359) | | | $ | (41,103) | | | | | |
(1)Includes the (provision) recovery for estimated losses and broker fees on MSR sales.
The table below illustrates hypothetical changes in fair values of servicing rights, caused by assumed immediate changes to key assumptions that are used to determine fair value.
| | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 |
| Fair Value of Servicing Rights, net | | $ | 1,669,648 | | | $ | 1,637,706 | |
| Change in Fair Value from adverse changes: | | | | |
| Discount Rate: | | | | |
| Increase 1% | | (63,593) | | | (62,800) | |
| Increase 2% | | (124,432) | | | (123,283) | |
| Cost of Servicing: | | | | |
| Increase 10% | | (19,018) | | | (18,672) | |
| Increase 20% | | (38,114) | | | (37,449) | |
| Prepayment Speed: | | | | |
| Increase 10% | | (19,221) | | | (19,035) | |
| Increase 20% | | (38,012) | | | (37,705) | |
Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in servicing rights values may differ significantly from those displayed above.
NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Derivative instruments utilized by the Company primarily include interest rate lock commitments, forward sale contracts, mortgage-backed securities (“MBS”) put options, put options on treasuries, and interest rate swap futures. Derivative financial instruments are recognized as assets or liabilities and are measured at fair value. The Company accounts for derivatives as free-standing derivatives and does not designate any derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheets at fair value with changes in the fair values being reported in current period earnings. The Company does not use derivative financial instruments for purposes other than in
support of its risk management activities. Refer to Note 1- Description of Business and Summary of Significant Accounting Policies and Note 2- Fair Value for further details on derivatives in the 2025 Form 10-K.
The following summarizes the Company’s outstanding derivative instruments:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Fair Value |
| | Notional | | Balance Sheet Location | | Asset | | Liability |
| March 31, 2026: | | | | | | | | |
| Interest rate lock commitments | | $ | 2,390,676 | | | Derivative asset, at fair value | | $ | 43,607 | | | $ | — | |
| Interest rate lock commitments | | 1,123,721 | | | Derivative liabilities, at fair value | | — | | | 6,534 | |
| | | | | | | | |
| Forward sale contracts | | 2,849,075 | | | Derivative asset, at fair value | | 26,469 | | | — | |
| Forward sale contracts | | 169,420 | | | Derivative liabilities, at fair value | | — | | | 1,301 | |
| | | | | | | | |
| Put options on treasuries | | — | | | Derivative asset, at fair value | | — | | | — | |
| Put options on treasuries | | 5,850 | | | Derivative liabilities, at fair value | | — | | | 928 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Interest rate swap futures | | — | | | Derivative asset, at fair value | | — | | | — | |
| Interest rate swap futures | | 1,604 | | | Derivative liabilities, at fair value | | — | | | 8,490 | |
| | | | Total derivative financial instruments | | $ | 70,076 | | | $ | 17,253 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Fair Value |
| | Notional | | Balance Sheet Location | | Asset | | Liability |
| December 31, 2025: | | | | | | | | |
| Interest rate lock commitments | | $ | 2,010,276 | | | Derivative asset, at fair value | | $ | 42,207 | | | $ | — | |
| Interest rate lock commitments | | 481,579 | | | Derivative liabilities, at fair value | | — | | | 1,870 | |
| | | | | | | | |
| Forward sale contracts | | 388,361 | | | Derivative asset, at fair value | | 158 | | | — | |
| Forward sale contracts | | 1,839,101 | | | Derivative liabilities, at fair value | | — | | | 3,416 | |
| | | | | | | | |
| Put options on treasuries | | — | | | Derivative asset, at fair value | | — | | | — | |
| Put options on treasuries | | 8,750 | | | Derivative liabilities, at fair value | | — | | | 2,012 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Interest rate swap futures | | — | | | Derivative asset, at fair value | | — | | | — | |
| Interest rate swap futures | | 760 | | | Derivative liabilities, at fair value | | — | | | 3,420 | |
| | | | Total derivative financial instruments | | $ | 42,365 | | | $ | 10,718 | |
Because many of the Company’s current derivative agreements are not exchange-traded, the Company is exposed to credit loss in the event of nonperformance by the counterparty to the agreements. The Company controls this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of the contracts does not represent the Company’s exposure to credit loss.
The following summarizes the realized and unrealized net gains or losses on derivative financial instruments and the consolidated statements of operations line items where such gains and losses are included:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended
March 31, | | |
| Derivative instrument | | Statements of Operations Location | | 2026 | | 2025 | | | | |
| Interest rate lock commitments, net | | Gain on origination and sale of loans, net | | $ | (3,264) | | | $ | 20,419 | | | | | |
| Forward sale contracts | | Gain on origination and sale of loans, net | | 25,300 | | | (26,830) | | | | | |
| Interest rate swap futures | | Gain on origination and sale of loans, net | | 3,636 | | | (7,404) | | | | | |
| Put options | | Gain on origination and sale of loans, net | | 2,610 | | | 4,515 | | | | | |
| Forward sale contracts | | Change in fair value of servicing rights, net | | (7,561) | | | 4,704 | | | | | |
| Interest rate swap futures | | Change in fair value of servicing rights, net | | (3,728) | | | 12,635 | | | | | |
| Put options | | Change in fair value of servicing rights, net | | (1,134) | | | 1,465 | | | | | |
Total realized and unrealized gains on derivative financial instruments | | $ | 15,859 | | | $ | 9,504 | | | | | |
NOTE 7 – BALANCE SHEET NETTING
The Company has entered into agreements with counterparties, which include netting arrangements whereby the counterparties are entitled to settle their positions on a net basis. In certain circumstances, the Company is required to provide certain counterparties financial instruments and cash collateral against derivative financial instruments, warehouse and other lines of credit, or debt obligations. Cash collateral is held in margin accounts and included in restricted cash on the Company's consolidated balance sheets.
The table below represents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged. In circumstances where right of offset criteria is met, the related asset and liability are presented in a net position on the consolidated balance sheets. Warehouse and other lines of credit and secured debt obligations were secured by financial instruments and cash collateral with fair values that exceeded the liability amount recorded on the consolidated balance sheets as of March 31, 2026, and December 31, 2025, respectively. Refer to Note 9 – Warehouse and Other Lines of Credit for further details on cash collateral requirements.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Gross amounts recognized | | Gross amounts offset in consolidated balance sheet | | Net amounts presented in consolidated balance sheet | | Gross amounts not offset in consolidated balance sheet | | Net amount |
| | | | | |
| | | | | Financial instruments | | Cash collateral | |
| | | | | | |
| | | | | | |
| Assets: | | | | | | | | | | | | |
| Forward sale contracts | | $ | 33,900 | | | $ | (7,431) | | | $ | 26,469 | | | $ | — | | | $ | (20,804) | | | $ | 5,665 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Total Assets | | $ | 33,900 | | | $ | (7,431) | | | $ | 26,469 | | | $ | — | | | $ | (20,804) | | | $ | 5,665 | |
| | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | |
| Forward sale contracts | | $ | 8,732 | | | $ | (7,431) | | | $ | 1,301 | | | $ | — | | | $ | — | | | $ | 1,301 | |
| Put options on treasuries | | 928 | | | — | | | 928 | | | — | | | (928) | | | — | |
| | | | | | | | | | | | |
| Interest rate swap futures | | 8,490 | | | — | | | 8,490 | | | — | | | (8,490) | | | — | |
| Warehouse and other lines of credit | | 3,024,131 | | | — | | | 3,024,131 | | | (3,024,131) | | | — | | | — | |
Secured debt obligations (1) | | 1,315,397 | | | — | | | 1,315,397 | | | (1,315,397) | | | — | | | — | |
| Total liabilities | | $ | 4,357,678 | | | $ | (7,431) | | | $ | 4,350,247 | | | $ | (4,339,528) | | | $ | (9,418) | | | $ | 1,301 | |
(1)Secured debt obligations as of March 31, 2026 included secured credit facilities, Term Notes, and other secured financings.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 |
| | Gross amounts recognized | | Gross amounts offset in consolidated balance sheets | | Net amounts presented in consolidated balance sheets | | Gross amounts not offset in consolidated balance sheets | | Net amount |
| | | | | |
| | | | | Financial instruments | | Cash collateral | |
| | | | | | |
| | | | | | |
| Assets: | | | | | | | | | | | | |
| Forward sale contracts | | $ | 4,050 | | | $ | (3,892) | | | $ | 158 | | | $ | — | | | $ | (44) | | | $ | 114 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Total assets | | $ | 4,050 | | | $ | (3,892) | | | $ | 158 | | | $ | — | | | $ | (44) | | | $ | 114 | |
| | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | |
| Forward sale contracts | | $ | 7,308 | | | $ | (3,892) | | | $ | 3,416 | | | $ | — | | | $ | (3,419) | | | $ | (3) | |
| Put options on treasuries | | 2,012 | | | — | | | 2,012 | | | — | | | (2,012) | | | — | |
| Interest rate swap futures | | 3,420 | | | — | | | 3,420 | | | — | | | (3,420) | | | — | |
| Warehouse and other lines of credit | | 2,902,539 | | | — | | | 2,902,539 | | | (2,902,539) | | | — | | | — | |
Secured debt obligations (1) | | 1,307,765 | | | — | | | 1,307,765 | | | (1,307,765) | | | — | | | — | |
| Total liabilities | | $ | 4,223,044 | | | $ | (3,892) | | | $ | 4,219,152 | | | $ | (4,210,304) | | | $ | (8,851) | | | $ | (3) | |
(1)Secured debt obligations as of December 31, 2025 included secured credit facilities and Term Notes.
NOTE 8 – VARIABLE INTEREST ENTITIES
The Company evaluates its involvement with entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and should consolidate the VIE. The Company did not provide any non-contractual financial support to VIEs for the three months ended March 31, 2026, and year ended December 31, 2025.
Consolidated VIEs
LD Holdings
The Company is a holding company with its sole material asset being its equity interest in LD Holdings. Through the Company’s ability to appoint the board of directors of LD Holdings, the Company indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is considered a VIE and the financial results of LD Holdings and its subsidiaries are consolidated. A portion of net earnings or loss is allocated to noncontrolling interest to reflect the entitlement of the Continuing LLC Members. Refer to Note 11 – Equity for further details.
Securitization and Special Purpose Entities (“SPEs”)
The Company consolidates securitization facilities that finance mortgage loans held for sale and mortgage loans held for investment, as well as SPEs established as trusts to finance mortgage servicing rights and servicing advance receivables. Assets are transferred to a securitization or trust, which issues beneficial interests collateralized by the transferred assets, entitling the investors to specified cash flows. The Company may retain beneficial interests in the transferred assets and also holds conditional repurchase options specific to these securitizations that allow it to repurchase assets from the securitization entity. The Company’s economic exposure to loss from outstanding third-party financing is generally limited to the carrying value of the assets financed. The Company has retained risks in the securitizations including customary representations and warranties. For securitization facilities, the Company, as seller, has an option to prepay and redeem outstanding classes of issued notes after a set period of time. The Company’s exposure to these entities is primarily through its role as seller, servicer, and administrator. Servicing functions include, but are not limited to, general collection activity, preparing and furnishing statements, and loss mitigation efforts including repossession and sale of collateral.
Retained interests
In April 2024, the Company completed a transfer and securitization of a pool of performing, re-performing and non-performing residential mortgage loans. Pursuant to the credit risk retention requirements, mello Credit Strategies LLC, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing this securitization transaction. On the closing date, MCS and its wholly owned subsidiary retained a horizontal residual interest in the MMCA 2024-SD1 securitization comprised of the Class B notes and Trust Certificate. The Company determined that MCS is considered to be the primary beneficiary of the VIE as it retains all the risk and reward from the residual interest, and, therefore, the securitization trust is required to be consolidated. As of March 31, 2026, the remaining principal balance of loans transferred to the securitization trust was $130.0 million of which $6.1 million was 90 days or more past due.
The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s securitization and SPE VIEs.
| | | | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 | | |
| | | | | | |
| Assets | | | | | | |
| Loans held for sale, at fair value | | $ | 598,437 | | | $ | 606,215 | | | |
Loans held for investment, at fair value | | 108,227 | | | 109,821 | | | |
| Restricted cash | | 9,606 | | | 6,652 | | | |
| Servicing rights, at fair value | | 675,905 | | | 661,475 | | | |
Other assets | | 89,985 | | | 99,376 | | | |
| Total | | $ | 1,482,160 | | | $ | 1,483,539 | | | |
| | | | | | |
| Liabilities | | | | | | |
| Warehouse and other lines of credit | | $ | 600,000 | | | $ | 600,000 | | | |
| Debt obligations, net: | | | | | | |
MSR facilities | | 101,138 | | | 93,426 | | | |
| Servicing advance facilities | | 77,705 | | | 77,627 | | | |
Term Notes | | 545,172 | | | 544,899 | | | |
| Other secured financings | | 86,550 | | | 87,953 | | | |
| Total | | $ | 1,410,565 | | | $ | 1,403,905 | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
| | | | | | |
Non-Consolidated VIEs
The nature, purpose, and activities of non-consolidated VIEs currently encompass the Company’s investments in retained interests from securitizations and joint ventures. The table below presents a summary of the nonconsolidated VIEs for which the Company holds variable interests.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Carrying value | | Maximum
exposure to loss | | Total assets in VIEs |
| | Assets | | Liabilities | | |
| Retained interests | | $ | 83,722 | | | $ | — | | | $ | 83,722 | | | $ | 1,931,839 | |
| Investments in joint ventures | | 18,101 | | | — | | | 18,101 | | | 13,786 | |
| Total | | $ | 101,823 | | | $ | — | | | $ | 101,823 | | | |
| | | | | | | | |
| | December 31, 2025 |
| | Carrying value | | Maximum
exposure to loss | | Total assets in VIEs |
| | Assets | | Liabilities | | |
| Retained interests | | $ | 85,640 | | | $ | — | | | $ | 85,640 | | | $ | 1,959,938 | |
| Investments in joint ventures | | 18,251 | | | — | | | 18,251 | | | 14,949 | |
| Total | | $ | 103,891 | | | $ | — | | | $ | 103,891 | | | |
| | | | | | | | |
| | | | | | | | |
Retained interests
In 2022 and 2021, the Company completed the sale and securitization of non-owner occupied residential mortgage loans. Pursuant to the credit risk retention requirements, the Company, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing the securitization transactions. The retained interests represent a variable interest in the securitizations. The Company determined it was not the primary beneficiary of the VIE. The Company’s continuing involvement is limited to customary servicing obligations as servicer and servicing administrator associated with retained servicing rights and the receipt of principal and interest associated with the retained interests. The investors and the securitization trusts have no recourse to the Company’s assets; holders of the securities issued by each trust can look only to the loans owned by the trust for payment. The retained interests held by the Company are subject principally to the credit risk stemming from the underlying transferred loans. The securitization trusts used to effect these transactions are variable interest entities that the Company does not consolidate. The Company remeasures the carrying value of its retained interests at each reporting date to reflect their current fair value which is included in trading securities, at fair value on the consolidated balance sheets, with corresponding gains or losses included in other income on the consolidated statements of operations. As of March 31, 2026, the remaining principal balance of loans transferred to these securitization trusts was $1.9 billion of which $3.7 million was 90 days or more past due.
Investments in joint ventures
The Company’s joint ventures include investments with home builders, real estate brokers, and commercial real estate companies to provide loan origination services and real estate settlement services to customers referred by the Company’s joint venture partners. The Company is generally not determined to be the primary beneficiary in its joint venture VIEs because it does not have the power, through voting rights or similar rights, to direct the activities that most significantly impact the economic performance of the VIE. The Company’s pro rata share of net earnings of joint ventures was $1.2 million for the three months ended March 31, 2026, and $1.0 million for the three months ended March 31, 2025, and is included in other income in the consolidated statements of operations.
NOTE 9 – WAREHOUSE AND OTHER LINES OF CREDIT
At March 31, 2026, the Company was a party to eleven revolving lines of credit, including two loan funding facilities with GSEs, with lenders providing an aggregate $4.2 billion of warehouse and securitization facilities. The facilities are used to fund, and are secured by, residential mortgage loans held for sale. The facilities are repaid using proceeds from the sale of
loans. Interest is generally payable monthly in arrears or on the repurchase date of a loan, and outstanding principal is payable upon receipt of loan sale proceeds or on the repurchase date of a loan. Outstanding principal related to a particular loan must also be repaid after the expiration of a contractual period of time or, if applicable, upon the occurrence of certain events of default with respect to the underlying loan. Interest expense is recorded to interest expense on the consolidated statements of operations. The base interest rates on the facilities bear interest at a derivative of the secured overnight financing rate (“SOFR”), plus a margin. Some of the facilities carry additional fees charged on the total line amount, commitment fees charged on the committed portion of the line, and non-usage fees charged when monthly usage falls below a certain utilization percentage. As of March 31, 2026, the interest rate was comprised of the applicable base rate plus a spread ranging from 1.50% to 2.25%. The base interest rate for warehouse facilities is subject to increase based upon the characteristics of the underlying loans collateralizing the lines of credit, including, but not limited to product type and number of days held for sale. The warehouse lines have maturities staggered from September 2026 through February 2027. As of March 31, 2026, there was one securitization facility with an original two year term scheduled to expire in September 2026 and one securitization facility with an original three year term scheduled to expire in April 2028. Warehouse lines and other lines of credit are subject to renewal based on periodic credit review conducted by the lender.
Certain warehouse line lenders require the Company to maintain cash accounts with minimum required balances at all times. As of March 31, 2026 and December 31, 2025, the Company had posted a total of $12.9 million and $9.9 million, respectively, of restricted cash as collateral with our warehouse lenders and securitization facilities of which $3.3 million and $3.3 million, respectively, were the minimum required balances.
Under the terms of these warehouse lines, the Company is required to maintain various covenants. As of March 31, 2026, the Company was in compliance with all covenants under the warehouse lines.
Securitization Facilities
In September 2024, in connection with the termination of a securitization facility issued in 2021, the Company issued notes and a class of owner trust certificates through a securitization facility (“2024-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2024-1 Securitization Facility is secured by first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2024-1 Securitization Facility issued $300.0 million in notes that bear interest at SOFR, plus a margin. The 2024-1 Securitization Facility will terminate on the earlier of (i) the two-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, or (iii) the date of the occurrence and continuance of an event of default. In April 2026, this facility was terminated and replaced by a new securitization facility (“2026-1 Securitization Facility”) that issued $500.0 million in notes.
In April 2025, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2025-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2025-1 Securitization Facility is secured by first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2025-1 Securitization Facility issued $300.0 million in notes that bear interest at SOFR, plus a margin. The 2025-1 Securitization Facility will terminate on the earlier of (i) the three-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, or (iii) the date of the occurrence and continuance of an event of default.
The following table presents information on warehouse and securitization facilities and the outstanding balance as of March 31, 2026 and December 31, 2025:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | Outstanding Balance |
| | Committed
Amount | | Uncommitted
Amount | | Total
Facility
Amount | Expiration
Date | March 31,
2026 | | December 31,
2025 | | |
Facility 1(1) | | $ | 400,000 | | | $ | 600,000 | | | $ | 1,000,000 | | 9/22/2026 | $ | 572,479 | | | $ | 536,653 | | | |
Facility 2(1) | | 1,000 | | | 299,000 | | | 300,000 | | 10/21/2026 | 257,799 | | | 251,540 | | | |
| Facility 3 | | — | | | 225,000 | | | 225,000 | | 2/25/2027 | 204,816 | | | 73,419 | | | |
| Facility 4 | | — | | | 175,000 | | | 175,000 | | 10/27/2026 | 160,681 | | | 162,446 | | | |
Facility 5(1)(3) | | — | | | 200,000 | | | 200,000 | | N/A | 7,697 | | | — | | | |
| | | | | | | | | | | | |
| Facility 6 | | — | | | 300,000 | | | 300,000 | | 9/18/2026 | 283,364 | | | 285,854 | | | |
| | | | | | | | | | | | |
Facility 7(2)(4) | | 300,000 | | | — | | | 300,000 | | 9/25/2026 | 300,000 | | | 300,000 | | | |
Facility 8 | | 250,000 | | | 350,000 | | | 600,000 | | 11/13/2026 | 403,199 | | | 445,828 | | | |
Facility 9(1) | | — | | | 600,000 | | | 600,000 | | 10/29/2026 | 534,096 | | | 546,799 | | | |
Facility 10(2) | | 300,000 | | | — | | | 300,000 | | 4/10/2028 | 300,000 | | | 300,000 | | | |
Facility 11(1)(3) | | — | | | 150,000 | | | $ | 150,000 | | N/A | — | | | — | | | |
| Total | | $ | 1,251,000 | | | $ | 2,899,000 | | | $ | 4,150,000 | | | $ | 3,024,131 | | | $ | 2,902,539 | | | |
(1)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date.
(2)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans.
(3)This is an early funding facility with an Agency. This facility is an evergreen agreement with no stated termination or expiration date. This agreement can be terminated by either party by written notice.
(4)In April 2026, this facility was terminated and replaced by the 2026-1 Securitization Facility.
The following table presents information on borrowings under warehouse and securitization facilities:
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Maximum outstanding balance during the period | | $ | 3,024,131 | | | $ | 2,490,447 | | | | | |
| Average balance outstanding during the period | | 2,360,908 | | | 1,839,404 | | | | | |
| Collateral pledged (loans held for sale) | | 3,212,310 | | | 2,709,524 | | | | | |
| Weighted average interest rate during the period | | 5.64 | % | | 6.40 | % | | | | |
NOTE 10 – DEBT OBLIGATIONS
The following table presents the outstanding debt as of March 31, 2026 and December 31, 2025:
| | | | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 | | | | |
| Secured debt obligations, net: | | | | | | | | |
| Secured credit facilities | | | | | | | | |
| MSR facilities | | $ | 515,282 | | | $ | 503,556 | | | | | |
| Securities financing facilities | | 78,825 | | | 79,215 | | | | | |
| Servicing advance facilities | | 77,705 | | | 77,627 | | | | | |
| Total secured credit facilities | | 671,812 | | | 660,398 | | | | | |
| Term Notes | | 545,172 | | | 544,899 | | | | | |
Other secured financings | | 86,550 | | | 87,953 | | | | | |
| Total secured debt obligations, net | | 1,303,534 | | | 1,293,250 | | | | | |
| | | | | | | | |
| Other debt obligations, net: | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Senior Notes | | 811,033 | | | 807,053 | | | | | |
| | | | | | | | |
| Total debt obligations, net | | $ | 2,114,567 | | | $ | 2,100,303 | | | | | |
Certain of the Company’s secured debt obligations require us to satisfy financial covenants, including minimum levels of profitability, tangible net worth, liquidity, and maximum levels of consolidated leverage. The Company was in compliance with all such financial covenants as of March 31, 2026.
Secured Credit Facilities
Secured credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances.
MSR Facilities
In August 2017, the Company established the loanDepot GMSR Master Trust to finance its Ginnie Mae mortgage servicing rights through the issuance of variable funding and/or term notes, each of which are secured by participation certificates representing beneficial interests in the Company’s Ginnie Mae mortgage servicing rights. In January 2024, the Company secured a new facility to re-issue a variable funding note that accrues interest at SOFR plus a margin per annum, providing an aggregate $150.0 million in borrowing capacity as of March 31, 2026 (including variable funding notes secured by servicing advances, see Servicing Advance Facilities below). In January 2025, the maturity date of the variable funding notes was extended to July 2026. As of March 31, 2026, the fair value of the mortgage servicing rights collateralizing the facility was $675.9 million. As of March 31, 2026, the Company had $101.5 million in outstanding variable funding notes and $0.4 million in unamortized deferred financial costs. In May 2025, the loanDepot GMSR Master Trust issued the Series 2025-GT1 term notes in the aggregate principal amount of $200.0 million. The Series 2025-GT1 Notes are priced at a variable rate based on SOFR plus a margin per annum and are expected to mature in May 2030, or, if extended, to May 2032. The proceeds of Series 2025-GT1 Notes offering were used to prepay in full the 2018 series of term notes which had an outstanding principal balance of $200.0 million as of the date of prepayment. In July 2025, the loanDepot GMSR Master Trust issued the Series 2025-GT2 term notes in the aggregate principal amount of $150.0 million. The Series 2025-GT2 Notes are priced at a variable rate based on SOFR plus a margin per annum and are expected to mature in July 2030.
In January 2025, the Company entered into a credit facility agreement to provide for $400.0 million in borrowing capacity to replace a previous credit facility that was originally entered into in December 2021. This facility is secured by Freddie Mac mortgage servicing rights with a fair value of $488.0 million as of March 31, 2026. This facility bears interest at SOFR, plus a margin per annum and matures in January 2027. At March 31, 2026, there was $312.4 million outstanding on this facility and $0.8 million in unamortized deferred financing costs.
In May 2025, the Company amended its facility that was secured by Fannie Mae mortgage servicing rights to appoint a new administrative agent and to assign to the administrative agent 100% of the commitment under its credit agreement originally dated December 15, 2023, as amended restated and supplemented from time to time. This revolving line of credit provided for up to $300.0 million in borrowing capacity until it was terminated in November 2025. In November 2025, the Company and the loanDepot FAMSR Master Trust entered into a new facility to finance its Fannie Mae mortgage servicing rights through the issuance of term notes and variable funding notes, each of which are secured by a participation certificate representing beneficial interests in the Company’s Fannie Mae mortgage servicing rights. In November 2025, the loanDepot FAMSR Master issued up to $300.0 million of variable funding notes, the Series 2025-VF1 Notes. The Series 2025-VF1 Notes bear interest at SOFR, plus a margin per annum and mature at the end of May 2026. In December 2025, the loanDepot FAMSR Master Trust issued a series of term notes, the Series 2025-FT1 Notes, in the aggregate principal amount of $200.0 million. Upon issuance of the Series 2025-FT1 Notes, the maximum principal balance of the Series 2025-VF1 Notes was reduced to $125.0 million. The Series 2025-FT1 Notes are priced at a variable rate based on SOFR plus a margin per annum and are expected to mature in December 2030. As of March 31, 2026 this facility was secured by Fannie Mae mortgage servicing rights with a fair value of $420.3 million. At March 31, 2026, there was $103.3 million outstanding on this facility and $0.7 million in unamortized deferred financing costs.
Securities Financing Facilities
The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. The securities financing facilities have an advance rate between 50% and 85% based on classes of the securities and accrue interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities are secured by the trading securities, which represent retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of March 31, 2026, the trading securities had a fair value of $83.7 million on the consolidated balance sheets and there were $78.8 million in securities financing facilities outstanding.
Servicing Advance Facilities
In September 2020, the Company, through its indirect-wholly owned subsidiary loanDepot Agency Advance Receivables Trust (the “Advance Receivables Trust”), entered into a variable funding note facility for the financing of servicing advance receivables with respect to residential mortgage loans serviced by it on behalf of Fannie Mae and Freddie Mac. Pursuant to an indenture, the Advance Receivables Trust can issue up to $100.0 million in variable funding notes (the “2020-VF1 Notes”). The 2020-VF1 Notes accrue interest at SOFR plus a margin per annum. In September 2024, the 2020-VF1 Notes were extended to mature in September 2026 (unless earlier redeemed in accordance with their terms). At March 31, 2026, there was $31.0 million in 2020-VF1 Notes outstanding, secured by servicing advances of $32.1 million.
In November 2021, the Company, through the GMSR Trust, issued variable funding notes secured by principal and interest advance receivables and servicing advance receivables related to residential mortgage loans serviced on behalf of Ginnie Mae. These variable funding notes bear interest at SOFR plus a margin per annum. As disclosed in MSR Facilities above, the Company secured a new facility in January 2024 to issue variable funding notes and to extend their maturity to July 2026. As of March 31, 2026, there was $46.8 million outstanding on the variable funding notes, secured by servicing advances of $57.9 million.
Term Notes
In May 2025, the Company, through the GMSR Trust issued the Series 2025-GT1 Term Notes (“GT1 Term Notes”). The GT1 Term Notes mature in May 2030 or if extended pursuant to the terms of the Series 2025-GT1 Indenture Supplement, May 2032 and accrue interest at SOFR plus a margin per annum. At March 31, 2026, there were $200.0 million in GT1 Term Notes outstanding and $1.7 million of unamortized deferred financing costs. In July 2025, the Company, through the GMSR Trust issued the Series 2025-GT2 Term Notes (“GT2 Term Notes”). The GT2 Term Notes mature in July 2030 and accrue interest at SOFR plus a margin per annum. At March 31, 2026, there were $150.0 million in GT2 Term Notes outstanding and $1.2 million of unamortized deferred financing costs.
In December 2025, the Company, through the FAMSR Trust issued the Series 2025-FT1 Term Notes (“FT1 Term Notes”). The FT1 Term Notes mature in December 2030 and accrue interest at SOFR plus a margin per annum. At March 31, 2026, there were $200.0 million in FT1 Term Notes outstanding and $1.9 million of unamortized deferred financing costs.
Other Secured Financings
In April 2024, the Company executed a securitization of a pool of approximately $150.0 million fixed-rate and adjustable-rate, performing, re-performing and non-performing residential mortgage loans, whereby the loans were transferred to statutory trust MMCA 2024-SD1. The Company evaluated the sale of loans according to ASC 860 - Transfers and Servicing and determined that the transaction does not qualify for sale treatment. As a result, the securitization was recorded as a secured borrowing in which the loans remain on the consolidated balance sheet as loans held for investment, at fair value and the securitization debt is also recognized on the consolidated balance sheet in debt obligations, net. The secured financing is collateralized by and indexed to the pool of residential mortgage loans held by a VIE. As of March 31, 2026, there was $86.6 million outstanding in other secured financings, net of $4.5 million in debt discount and $0.7 million in unamortized deferred financing costs.
Senior Notes
In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50% unsecured senior notes due November 2025, (the “2025 Senior Notes”). In June 2024, the Company completed an offer to exchange any and all of the outstanding 2025 Senior Notes for newly issued Senior Secured Notes due November 2027 (the “2027 Senior Notes”). The offer was an exchange for a mixed consideration of $1,100 in cash and principal amount of 2027 Senior Notes for each $1,000 principal amount of 2025 Senior Notes tendered at or prior to the expiration date. At the time of expiration, the Company repurchased $478.0 million of 2025 Senior Notes in exchange for $340.6 million of 2027 Senior Notes and cash of $185.0 million resulting in a loss on extinguishment of debt of $5.7 million. Interest on the 2027 Senior Notes accrues at a rate of 8.750% per annum, payable semi-annually in arrears on May 1 and November 1 of each year. The Company may redeem the 2027 Senior Notes, in whole or in part, at various redemption prices. The 2027 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by certain of LD Holding’s wholly-owned restricted subsidiaries, and secured by a first priority security interest (subject to permitted liens) in (1) a securities account holding certain risk retention securities (trading securities) held by MCS, a guarantor of the 2027 Senior Notes, (2) certain unencumbered non-agency mortgage servicing rights held by LDLLC, a guarantor of the 2027 Senior Notes, with a fair value of up to $60.0 million, and (3) a securities account holding $100.6 million aggregate principal amount of LD Holding’s 6.125% 2028 Senior Notes that were previously repurchased by LD Holdings held by ART, a guarantor of the 2027 Senior Notes.
The Company evaluated the debt exchange under the guidance in ASC 470-50 Debt - Modifications and Extinguishments. As the present value of the cash flows under the 2027 Senior Notes differed by more than 10% from the present value of the remaining cash flows under the terms of the 2025 Senior Notes, it was determined that the debt was substantially different, and therefore, the transaction was accounted for as a debt extinguishment. In November 2025, the 2025 Senior Notes matured and the remaining principal balance of $19.8 million was redeemed. As of March 31, 2026 there were $340.6 million in 2027 Senior Notes outstanding, $23.6 million of unamortized debt discount and $3.3 million in unamortized deferred financing costs.
In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125% unsecured senior notes due April 2028 (the “2028 Senior Notes” and together with the 2027 Senior Notes, the "Senior Notes"). Interest on the 2028 Senior Notes accrues at a rate of 6.125% per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The Company may redeem the 2028 Senior Notes at various redemption prices. As of March 31, 2026, there were $499.4 million in 2028 Senior Notes outstanding and $2.1 million in unamortized deferred financing costs.
Interest Expense
Interest expense on all outstanding debt obligations with variable rates is paid based on SOFR, or other alternative base rate, plus a margin ranging from 0.75% - 4.25%.
NOTE 11 – EQUITY
The Company consolidates the financial results of LD Holdings and reports noncontrolling interest related to the interests held by the Continuing LLC Members. The noncontrolling interest of $133.0 million and $151.5 million as of March 31, 2026 and December 31, 2025, respectively, represented the economic interest in LD Holdings held by the Continuing LLC Members. The Continuing LLC Members have the right to exchange one Holdco Unit and one share of Class B common stock or Class C common stock, as applicable, together for cash or one share of Class A common stock at the Company’s election, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. As Continuing LLC Members convert shares, noncontrolling interest is adjusted to proportionately reduce the economic interest in LD Holdings with an offset to additional paid-in-capital on the consolidated statements of equity. The following table summarizes the ownership of LD Holdings as of March 31, 2026 and December 31, 2025.
On February 11, 2026, pursuant to the Company’s Amended and Restated Certificate of Incorporation dated February 11, 2021, each outstanding share of the Company’s Class C common stock was converted into one share of Class B common stock, and each outstanding share of Class D common stock was converted into one share of Class A common stock. All outstanding Class C and Class D shares converted automatically and without further action on the part of the Company or any holder of Class C or Class D common stock. As of February 11, 2026, immediately following the conversion, there were 228,569,593 shares of Class A common stock outstanding and 106,207,433 shares of Class B common stock outstanding. There were no shares of Class C or Class D common stock outstanding following the conversion.
| | | | | | | | | | | | | | | | | |
| March 31, 2026 | | December 31, 2025 |
| Holding Member Interests: | Holdco Units | Ownership Percentage | | Holdco Units | Ownership Percentage |
| loanDepot, Inc. | 230,814,913 | 68.49% | | 226,624,444 | 67.82% |
| Continuing LLC Members | 106,207,433 | 31.51% | | 107,515,082 | 32.18% |
| Total | 337,022,346 | 100.00% | | 334,139,526 | 100.00% |
NOTE 12 – EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share of Class A common stock and Class D common stock is computed using the two-class method by dividing net earnings (loss) allocated to common stockholders by the weighted-average number of shares of Class A common stock and Class D common stock, respectively, outstanding during the period. Diluted earnings (loss) per share of Class A common stock and Class D common stock is computed using the two-class method by dividing net earnings (loss) allocated to common stockholders by the weighted-average number of shares of Class A common stock and Class D common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. Diluted EPS was computed using the treasury stock method for Class A RSUs and non-qualified stock options, and the if-converted method for Class B and Class C common stock.
The following tables set forth the calculation of basic and diluted loss per share for Class A common stock and Class D common stock:
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| Three Months Ended | | |
| March 31, 2026 | | |
| Class A | | Class D | | Total | | | | | | |
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| | | | | | | | | | | |
| Net loss allocated to common stockholders | $ | (30,250) | | | $ | (7,237) | | | $ | (37,487) | | | | | | | |
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| Weighted average shares - basic | 184,761,290 | | | 44,201,039 | | | 228,962,329 | | | | | | | |
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Loss per share - basic | $ | (0.16) | | | $ | (0.16) | | | $ | (0.16) | | | | | | | |
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| Weighted average shares - diluted | 184,761,290 | | | 44,201,039 | | | 228,962,329 | | | | | | | |
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Loss per share - diluted | $ | (0.16) | | | $ | (0.16) | | | $ | (0.16) | | | | | | | |
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| Three Months Ended | | |
| March 31, 2025 | | |
| Class A | | Class D | | Total | | | | | | |
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Net loss allocated to common stockholders | $ | (11,316) | | | $ | (10,580) | | | $ | (21,896) | | | | | | | |
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| Weighted average shares - basic | 103,765,899 | | | 97,026,671 | | | 200,792,570 | | | | | | | |
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Loss per share - basic | $ | (0.11) | | | $ | (0.11) | | | $ | (0.11) | | | | | | | |
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| Weighted average shares - diluted | 103,765,899 | | | 97,026,671 | | | 200,792,570 | | | | | | | |
Loss per share - diluted | $ | (0.11) | | | $ | (0.11) | | | $ | (0.11) | | | | | | | |
The potential dilutive effect of the exchange of Class B common stock or Class C common stock for Class A common stock is evaluated under the if-converted method. Reallocation of net income or loss attributable to the dilutive impact of the exchange for Class A common stock was tax-effected using the combined federal and state rate (less federal benefit) of 0.3% and 26.1% for the three months ended March 31, 2026 and 2025, respectively. The potential dilutive effect of stock options and restricted stock units is evaluated under the treasury stock method. The following table summarizes the shares that were anti-dilutive and excluded from the computation of diluted earnings (loss) per share for the presented periods.
| | | | | | | | | | | | | | | |
| Three Months Ended | | |
| March 31,
2026 | | March 31,
2025 | | | | |
Class B and Class C common stock | 106,207,433 | | | 127,290,603 | | | | | |
Stock options and restricted stock units(1) | 11,228,889 | | | 9,318,547 | | | | | |
| Total | 117,436,322 | | | 136,609,150 | | | | | |
(1)Stock options and restricted stock units are weighted for the portion of the period for which they were outstanding.
NOTE 13 – INCOME TAXES
The Company’s provision for income taxes for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items, if any. The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure and changes in valuation allowance. The Company recorded an income tax benefit of $171 thousand and $5.4 million for the three months ended March 31, 2026 and 2025,
respectively. The change in income tax benefit was primarily attributable to an increase in the valuation allowance related to losses generating net operating loss carryforwards.
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The Company’s deferred tax assets are mainly comprised of net operating loss carryforwards and deferred tax liabilities relate to temporary differences in the book basis as compared to the tax basis of loanDepot, Inc.’s investment in LD Holdings, net of tax benefits from future deductions for payments made under a Tax Receivable Agreement (“TRA”) as a result of the IPO.
The Company establishes a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized based on management’s assessment of positive and negative evidence. As of March 31, 2026, the Company had a valuation allowance on the deferred tax assets mainly related to net operating losses and tax credit carryforwards that have limited carryforward periods and may expire prior to the Company being able to utilize them.
The Company recognized a TRA liability of $111.0 million and $109.1 million as of March 31, 2026 and December 31, 2025, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA as a result of the offering transaction. Refer to Note 15 - Commitments and Contingencies, for further information on the TRA liability.
NOTE 14 – RELATED PARTY TRANSACTIONS
In conjunction with its joint ventures, the Company entered into agreements to provide services to the joint ventures for which it receives and pays fees. Services for which the Company earns fees are comprised of loan processing and administrative services (legal, accounting, human resources, data processing and management information, assignment processing, post-closing, underwriting, facilities management, quality control, management consulting, risk management, promotions, public relations, advertising and compliance with credit agreements). The Company also originates eligible mortgage loans referred by its joint ventures for which the Company pays the joint ventures a broker fee.
Fees earned and costs incurred from joint ventures were as follows:
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| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Loan processing and administrative services fee income | | $ | 3,673 | | | $ | 3,569 | | | | | |
| Loan origination broker fees expense | | 16,494 | | | 17,311 | | | | | |
Net amounts payable to or receivable from joint ventures were as follows:
| | | | | | | | | | | | | | |
| | March 31,
2026 | | December 31,
2025 |
Amounts payable to joint ventures | | $ | 4,374 | | | $ | 4,926 | |
The Company has entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members. There were no payments made during the three months ended March 31, 2026 or March 31, 2025.
NOTE 15– COMMITMENTS AND CONTINGENCIES
Escrow Services
In conducting its operations, the Company, through its wholly-owned subsidiaries, LDSS and ACT, routinely hold customers' assets in escrow pending completion of real estate financing transactions. These amounts are maintained in segregated bank accounts and are offset with the related liabilities resulting in no amounts reported in the accompanying consolidated balance sheets. The balances held for the Company’s customers totaled $94.1 million and $78.2 million at March 31, 2026 and December 31, 2025, respectively.
Legal Proceedings
The Company is a defendant in, or a party to, legal actions related to matters that arise in connection with the conduct of the Company’s business. The Company operates in a highly regulated industry and is routinely subject to examinations, investigations, subpoenas, inquiries and reviews by various governmental and regulatory agencies. Based on the Company’s current understanding of pending legal and regulatory actions and proceedings, management does not believe that possible losses in excess of the amounts accrued arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, unfavorable resolutions could differ materially from management’s expectations and could materially affect the Company’s consolidated financial position, results of operations or cash flows for the period in which they are resolved.
Cybersecurity Incident
The Company is cooperating with various state regulators and attorneys general regarding ongoing investigations into the Cybersecurity Incident. While the ultimate dispositions of the investigations are not yet determinable, the Company does not believe that a loss is reasonably estimable in these matters at this time.
Employment Litigation
On September 21, 2021, a former senior operations officer filed a complaint, as subsequently amended, with the Superior Court of the State of California, County of Orange. The complaint originally named the Company, an executive officer, and a former executive officer as defendants, and alleged loan origination noncompliance and various employment-related claims, including hostile work environment and gender discrimination. The claims against the two executive officers were dismissed by the court in 2022. Plaintiff's claims regarding improper origination of loan documents, gender discrimination and several other ancillary employment claims were dismissed as a result of several pre-trial motions filed on behalf of the Company. On February 7, 2025, a unanimous jury returned a verdict in favor of the Company regarding the remaining claims in the litigation. Plaintiff filed a notice of appeal of the jury verdict on April 15, 2025. To date, including $571,000 on February 2, 2026, the court has awarded loanDepot approximately $750,000 for attorneys’ fees and other costs as sanctions against the plaintiff and her counsel for bringing frivolous claims and engaging in other inappropriate conduct. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.
Telephone Consumer Protection Act Class Actions
The Company is a defendant in multiple putative class action lawsuits alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), related to marketing and customer communications. Of these actions, Jeffrey Kearns v. loanDepot.com, LLC (“Kearns”), filed in June 2022 has been certified as a class action and is pending in the in the United States District Court for the Central District of California. The remaining actions are in various stages of litigation and have not been certified as classes. Absent class certification, the Company believes these other actions are ordinary routine litigation matters incidental to our business. Kearns seeks actual and statutory damages under the TCPA, injunctive relief, and attorneys’ fees and costs. The Company believes it has substantial defenses to the Kearns lawsuit and it continues to vigorously defend against it. The Company does not believe that a loss is reasonably estimable in Kearns at this time.
Truth in Lending Act Class Action
In July 2025, five loanDepot borrowers filed a putative class action lawsuit in the United States District Court for the District of Maryland. The lawsuit alleges that the Company violated the Truth in Lending Act (“TILA”) by requiring loan officers to transfer retail borrowers’ loans to Internal Loan Consultants in certain circumstances and reducing the compensation those loan officers received on those loans. The Company believes it has substantial defenses to this lawsuit, and it continues to vigorously defend against it. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.
Privacy Class Action
In December 2025, a putative class action lawsuit was filed in the Superior Court of California, County of Alameda, against loanDepot.com, LLC, alleging that certain cookies and other “tracking technologies” collected website activity data even if visitors declined consent using the “Cookie Preferences” tool. The lawsuit alleges violations of the California Invasion of Privacy Act (“CIPA”), breach of contract, and violation of the California Unfair Competition Law. The complaint seeks actual and statutory damages under the CIPA, equitable relief, credit monitoring for the class, and attorneys’ fees and costs. The Company believes it has substantial defenses to this lawsuit and will vigorously defend against it. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.
Commitments to Extend Credit
The Company enters into IRLCs with customers who have applied for residential mortgage loans and meet certain credit and underwriting criteria. These commitments expose the Company to market risk if interest rates change and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the customer does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor’s residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans as of March 31, 2026 and December 31, 2025 approximated $3.5 billion and $2.5 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 6 - Derivative Financial Instruments and Hedging Activities for further information on derivatives.
Loan Loss Obligation for Sold Loans
When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company establishes a loan repurchase reserve for losses associated with repurchase loan obligations if the Company breached a representation or warranty given to the loan purchaser. Additionally, the Company’s loan loss obligation for sold loans includes an estimate for losses associated with early payoffs and early payment defaults. Charge-offs associated with early payoffs, early payment defaults and losses related to representations, warranties, and other provisions are also included.
The activity related to the loan loss obligation for sold loans is as follows:
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| | Three Months Ended
March 31, | | |
| | 2026 | | 2025 | | | | |
| Balance at beginning of period | | $ | 16,116 | | | $ | 18,417 | | | | | |
Provision for loan loss obligations | | 3,665 | | | 248 | | | | | |
| Charge-offs | | (2,948) | | | (1,922) | | | | | |
| Balance at end of period | | $ | 16,833 | | | $ | 16,743 | | | | | |
Obligation for Sold MSRs
The Company recognizes sales of mortgage servicing rights as sales if title passes, if substantially all risks and rewards of ownership have irrevocably passed to the purchaser, and any protection provisions retained by the Company are minor and can be reasonably estimated. If a sale is recognized and only minor protection provisions exist, a liability for the estimated obligation associated with those provisions is recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. The Company establishes a reserve related to the reimbursement of the purchase price for any loans that are prepaid in full within 90 days of the MSR sale transaction. The obligation for sold MSRs was $0.6 million and $0.6 million as of March 31, 2026 and December 31, 2025, respectively.
TRA Liability
The Company recognized a TRA liability of $111.0 million and $109.1 million as of March 31, 2026 and December 31, 2025, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA as a result of the offering transaction. The amounts payable under the TRA will vary depending on a number of factors, such as the amount and timing of taxable income attributable to loanDepot, Inc. Refer to Note 14 - Related Party Transactions for further detail on the payments.
NOTE 16 – REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS
The Company is subject to financial eligibility requirements including minimum capital and liquidity requirements established by HUD, FHFA for Fannie Mae and Freddie Mac seller/servicers, and Ginnie Mae for single family issuers. Failure to maintain minimum capital and liquidity requirements can result in FHFA and Ginnie Mae taking various remedial actions up to and including removing the Company's ability to sell loans to, or securitize loans with, and service loans on behalf of FHFA and Ginnie Mae. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of $347.9 million as of March 31, 2026. As of March 31, 2026, the Company was in compliance with its regulatory capital and liquidity requirements.
NOTE 17 - SEGMENT REPORTING
The Company’s organizational structure is currently comprised of one operating segment. This determination is based on the organizational structure which reflects how the chief operating decision maker evaluates the performance of the business. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM evaluates the performance of the business based on the measurement of consolidated net income (loss). The CODM uses this consolidated measure to allocate resources, assess the performance of the business and for making key operating decisions such as, but not limited to, approving operating budgets and forecasts, entering into significant contracts, hiring of key management or executive personnel, making significant capital investment decisions and/or implementing company-wide strategy.
As the Company operates as one operating segment, financial data provided in the consolidated financial statements, including total net revenues of $286.4 million, consolidated net loss of $54.9 million, and total assets of $7.2 billion, represent the performance of our single reportable segment. The consolidated statements of operations reflect the same level of significant expense categories regularly provided to the CODM for decision-making purposes. General and administrative expense reported in the consolidated statements of operations includes office and equipment expense, professional fees such as legal, compliance, consulting, and expenses for audit and tax services, data processing, telecommunications, travel and entertainment and other general expenses.
For the three months ended March 31, 2026, there was no change in segmentation or measurement methods for segment reporting.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides an analysis of the Company's financial condition, cash flows, and results of operations from management's perspective and should be read in conjunction with our consolidated financial statements and the accompanying notes included under Part I. Item 1 of this report. The results of operations described below are not necessarily indicative of the results to be expected for any future periods. This discussion includes forward-looking information that involves risks and assumptions which could cause actual results or outcomes to differ materially from management’s expectations. See our cautionary language at the beginning of this report under “Special Note Regarding Forward-Looking Statements” and for a more complete discussion of the factors that could affect our future results refer to Part I, Item 1A "Risk Factors" and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K and elsewhere in our filings with the SEC. Capitalized terms used but not otherwise defined herein have the meanings set forth in our Form 10-K.
Overview
We are a customer-centric, technology-empowered residential mortgage platform. Our goal is to be the lender of choice for consumers and the employer of choice by being a company that operates on sound principles of exceptional value, ethics, and transparency. Since our inception we have significantly expanded our origination platform as well as developed an in-house servicing platform. Our primary sources of revenue are derived from the origination of conventional and government mortgage loans, servicing conventional and government mortgage loans, and providing ancillary services.
Key Factors Influencing Our Results of Operations
The residential real estate market and associated mortgage loan origination volumes are influenced by economic factors such as interest rates, housing prices, and unemployment rates. Purchase mortgage loan origination volume can be subject to seasonal trends as home sales typically rise during the spring and summer seasons and decline in the fall and winter seasons. This is somewhat offset by purchase loan originations sourced from our joint ventures which typically experience their highest level of activity during November and December as home builders focus on completing and selling homes prior to year-end. Seasonality has less of an impact on mortgage loan refinancing volumes, which are primarily driven by fluctuations in mortgage loan interest rates.
Increases in interest rates may affect affordability and the ability for potential home buyers to qualify for a mortgage loan. As interest rates increase, rate and term refinancings become less attractive to consumers. However, rising interest rates during periods of inflationary pressures can make real assets, including real estate, an attractive investment. Demand for real estate may result in ongoing support for purchase mortgages and home price appreciation creating borrower equity that could result in opportunities for cash-out refinancings, home equity lines of credit, or closed-end seconds.
Our mortgage loan refinancing volumes (and to a lesser degree, our purchase volumes), balance sheet, and results of operations are influenced by changes in interest rates and how we effectively manage the related interest rate risk. The majority of our assets are subject to interest rate risk, including LHFS, LHFI, IRLCs, trading securities, servicing rights, forward sales contracts, interest rate swap futures and put options. We refer to such forward sales contracts, interest rate swap futures and put options collectively as “Hedging Instruments.” As interest rates increase, our LHFS, LHFI and IRLCs generally decrease in value while our Hedging Instruments utilized to hedge against interest rate risk typically increase in value. Rising interest rates cause our expected mortgage loan servicing revenues to increase due to a decline in mortgage loan prepayments which extends the average life of our servicing portfolio and increases the value of our servicing rights. Conversely, as interest rates decrease, our LHFS, LHFI and IRLCs generally increase in value while our Hedging Instruments decrease in value. In a declining interest rate environment, borrowers tend to refinance their mortgage loans, which increases prepayment speeds and causes expected mortgage loan servicing revenues to decrease. This reduces the average life of our servicing portfolio and decreases the value of our servicing rights. Changes in fair value of our servicing rights are recorded as unrealized gains and losses in change in fair value of servicing rights, net, in our consolidated statements of operations.
During the first quarter of 2026, mortgage rates remained elevated partly due to geopolitical tensions stemming from the conflict in Iran and higher energy prices driving inflation concerns. The rate environment continued to negatively affect housing affordability and loan qualification of homebuyers, contributed to the “lock-in” effect of borrowers that secured lower
long-term interest rates during 2020 and 2021 giving rise to a lack of supply of homes available for sale, and decreased demand for refinancing, taken together resulting in lower demand for mortgage loans.
In April 2026 we announced our partnership with Figure Technology Solutions (“Figure”) as part of our strategy to meaningfully accelerate our digital transformation and as a component of our planned return to a market leading position. As part of the partnership, we integrated Figure’s proprietary credit and loan underwriting engine into our own proprietary mello® technology platform and point of sale system, enabling us to seamlessly offer a variety of innovative express path home loan products to our customers. Our 5x5 HomeLoan powered by Figure, which delivers approval in as little as five minutes and funding in as few as five days, brings real value to those seeking smart, seamless, and convenient solutions to their financing needs. As we integrate this platform across our channels, we expect to lower our cost of production, improve the customer experience, close more loans more quickly and advance our long-term objective of profitable market share growth.
Key Performance Indicators
We manage and assess the performance of our business by evaluating a variety of metrics. Selected key performance metrics include loan originations and sales and servicing metrics.
Loan Origination and Sales
Loan originations and sales by volume and units are a measure of how successful we are at growing sales of mortgage loan products and a metric used by management in an attempt to isolate how effectively we are performing. We believe that originations and sales are an indicator of our market penetration in mortgage loans and that this provides useful information because it allows investors to better assess the strength of our core business. Loan originations and sales include brokered loan originations not funded by us. We enter into IRLCs to originate loans, at specified interest rates, with customers who have applied for a mortgage and meet certain credit and underwriting criteria. We believe the volume of our IRLCs is another measure of our overall market share.
Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period.
Pull-through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull-through weighted rate lock volume. Pull-through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.
Servicing Metrics
Servicing metrics include the unpaid principal balance of our servicing portfolio and servicing portfolio units, which represent the number of mortgage loan customers we service. We believe that the net additions to our portfolio and number of units are indicators of the growth of our mortgage loans serviced and our servicing income, but may be offset by sales of servicing rights.
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| | Three Months Ended
March 31, | | |
| (Dollars in thousands) | | 2026 | | 2025 | | | | |
| IRLCs | | $ | 11,445,494 | | | $ | 7,637,987 | | | | | |
| IRLCs (units) | | 38,445 | | | 28,784 | | | | | |
Pull-through weighted lock volume | | $ | 8,274,191 | | | $ | 5,418,685 | | | | | |
Pull-through weighted gain on sale margin | | 2.71 | % | | 3.55 | % | | | | |
| Loan originations by purpose: | | | | | | | | |
| Purchase | | $ | 3,159,251 | | | $ | 3,063,914 | | | | | |
| Refinance | | 4,499,368 | | | 2,110,014 | | | | | |
| Total loan originations | | $ | 7,658,619 | | | $ | 5,173,928 | | | | | |
| Loan originations (units) | | 24,549 | | | 19,936 | | | | | |
| Gain on sale margin | | 2.93 | % | | 3.72 | % | | | | |
| Licensed loan officers | | 1,724 | | | 1,641 | | | | | |
Headcount | | 4,695 | | | 4,547 | | | | | |
| Loans sold: | | | | | | | | |
| Servicing retained | | $ | 5,749,016 | | | $ | 3,453,710 | | | | | |
| Servicing released | | 1,924,638 | | | 1,713,963 | | | | | |
Total loans sold(1) | | $ | 7,673,654 | | | $ | 5,167,673 | | | | | |
| Loans sold (units) | | 25,099 | | | 19,904 | | | | | |
| Servicing metrics | | | | | | | | |
| Total servicing portfolio (unpaid principal balance) | | $ | 120,674,154 | | | $ | 116,604,153 | | | | | |
| Total servicing portfolio (units) | | 455,634 | | | 424,719 | | | | | |
60+ days delinquent ($)(2) | | $ | 2,113,465 | | | $ | 1,789,276 | | | | | |
| 60+ days delinquent (%) | | 1.75 | % | | 1.53 | % | | | | |
Servicing rights at fair value, net(3) | | $ | 1,669,648 | | | $ | 1,603,031 | | | | | |
Weighted average servicing fee (4) | | 0.30 | % | | 0.30 | % | | | | |
Multiple(4) (5) | | 4.8 | | | 4.9 | | | | | |
(1)Original principal balance.
(2)The UPB of loans that are 60 or more days past due as of the dates presented, according to the contractual due date, or are in foreclosure.
(3)Amount represents the fair value of servicing rights, net of servicing liabilities, which are included in accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.
(4)Excludes Non-Agency products.
(5)Amounts represent the fair value of servicing rights, net, divided by the weighted average annualized servicing fee.
Results of Operations
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
The following table sets forth our consolidated financial statement data for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | | | | Change
$ | | Change
% |
| (Dollars in thousands) | | 2026 | | 2025 | | | | | | | | | | | |
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| REVENUES: | | | | | | | | | | | | | | | | | |
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Net interest income | | $ | 2,704 | | | $ | 3,308 | | | | | | | | | | | | $ | (604) | | | (18.3) | % |
| Gain on origination and sale of loans, net | | 192,006 | | | 166,376 | | | | | | | | | | | | 25,630 | | | 15.4 | |
| Origination income, net | | 32,622 | | | 25,858 | | | | | | | | | | | | 6,764 | | | 26.2 | |
| Servicing fee income | | 108,749 | | | 104,278 | | | | | | | | | | | | 4,471 | | | 4.3 | |
| Change in fair value of servicing rights, net | | (64,359) | | | (41,103) | | | | | | | | | | | | (23,256) | | | (56.6) | |
| Other income | | 14,665 | | | 14,903 | | | | | | | | | | | | (238) | | | (1.6) | |
| Total net revenues | | 286,387 | | | 273,620 | | | | | | | | | | | | 12,767 | | | 4.7 | |
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| EXPENSES: | | | | | | | | | | | | | | | | | |
| Personnel expense | | 175,367 | | | 150,161 | | | | | | | | | | | | 25,206 | | | 16.8 | |
| Marketing and advertising expense | | 29,006 | | | 38,250 | | | | | | | | | | | | (9,244) | | | (24.2) | |
| Direct origination expense | | 25,088 | | | 21,954 | | | | | | | | | | | | 3,134 | | | 14.3 | |
| General and administrative expense | | 46,881 | | | 44,132 | | | | | | | | | | | | 2,749 | | | 6.2 | |
| Occupancy expense | | 4,275 | | | 4,295 | | | | | | | | | | | | (20) | | | (0.5) | |
| Depreciation and amortization | | 6,335 | | | 7,666 | | | | | | | | | | | | (1,331) | | | (17.4) | |
| Servicing expense | | 11,478 | | | 10,000 | | | | | | | | | | | | 1,478 | | | 14.8 | |
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| Other interest expense | | 43,070 | | | 43,265 | | | | | | | | | | | | (195) | | | (0.5) | |
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| Total expenses | | 341,500 | | | 319,723 | | | | | | | | | | | | 21,777 | | | 6.8 | |
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Loss before income taxes | | (55,113) | | | (46,103) | | | | | | | | | | | | (9,010) | | | (19.5) | |
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Income tax benefit | | (171) | | | (5,407) | | | | | | | | | | | | 5,236 | | | 96.8 | |
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Net loss | | (54,942) | | | (40,696) | | | | | | | | | | | | (14,246) | | | (35.0) | |
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Net loss attributable to noncontrolling interests | | (17,455) | | | (18,800) | | | | | | | | | | | | 1,345 | | | 7.2 | |
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Net loss attributable to loanDepot, Inc. | | $ | (37,487) | | | $ | (21,896) | | | | | | | | | | | | $ | (15,591) | | | (71.2) | % |
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The increase in net loss of $14.2 million was primarily due to a $21.8 million increase in total expenses, offset by a $12.8 million increase in total net revenues. The increase in total expenses was primarily due an increase in personnel expense driven by an increase in headcount and an increase in commission expense consistent with the increase in funded volume. The increase in total revenues was primarily due to higher pull-through weighted lock volume, offset somewhat by lower pull-through weighted gain on sale margins, and an increase in servicing fee income, partially offset by an increased loss from change in fair value of servicing rights, net.
Revenues
Net Interest Income. Net interest income includes interest income earned on LHFS offset by interest expense incurred on amounts borrowed under warehouse lines for loan financing as well as warehouse line commitment fees. These commitment fees are amortized on a straight-line basis over the duration of the warehouse line agreement. The decrease in net interest income was due to an increase in loans financed on warehouse lines during the three months ended March 31, 2026 compared to the prior year, partially offset by improved net interest margin as the cost of funds decreased more than the yield on LHFS.
Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net, was comprised of the following components:
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| | Three Months Ended
March 31, | | Change
$ | | Change
% |
| (Dollars in thousands) | | 2026 | | 2025 | | |
Premium from loan sales | | $ | 39,727 | | | $ | 8,208 | | | $ | 31,519 | | | 384.0 | % |
| Fair value of servicing rights additions | | 87,150 | | | 52,686 | | | 34,464 | | | 65.4 | |
Fair value (losses) gains on IRLC and LHFS | | (32,034) | | | 54,766 | | | (86,800) | | | (158.5) | |
Fair value gains (losses) from Hedging Instruments | | 31,546 | | | (29,719) | | | 61,265 | | | 206.1 | |
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| Discount points, rebates and lender paid costs | | 69,282 | | | 80,681 | | | (11,399) | | | (14.1) | |
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Provision loan loss obligation for loans sold | | (3,665) | | | (246) | | | (3,419) | | | (1,389.8) | |
| Total gain on origination and sale of loans, net | | $ | 192,006 | | | $ | 166,376 | | | $ | 25,630 | | | 15.4 | % |
The $25.6 million or 15.4% increase in gain on origination and sale of loans, net was primarily driven by a 52.7% increase in pull-through weighted interest rate lock volumes, offset by a decrease in pull-through weighted gain on sale margin of 84 basis points.
Origination Income, Net. Origination income, net, reflects the fees that we earn, net of lender credits we pay, from originating loans. Origination income includes loan origination fees, processing fees, underwriting fees, and other fees collected from the borrower at the time of funding. Lender credits typically include rebates or concessions to borrowers for certain loan origination costs. The $6.8 million, or 26.2%, increase in origination income, net, was the result of origination fees from higher loan originations in our consumer direct and retail channels offset by reduced JV and HELOC origination volumes.
Servicing Fee Income. Servicing fee income reflects contractual servicing fees and ancillary and other fees (including late charges) related to the servicing of mortgage loans. The increase of $4.5 million or 4.3% reflects an increase in servicing fee collections due to a 3.1% increase in our servicing portfolio.
Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net includes (i) fair value gains or losses net of Hedging Instrument gains or losses; (ii) collection/realization of cash flows, which includes principal amortization and prepayments; and (iii) realized gains or losses on the sales of servicing rights. The decrease of $23.3 million or 56.6% reflects a $15.3 million increase in fallout and decay and an increased loss of $8.0 million in fair value, net of hedge.
Expenses
Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs. The increase of $25.2 million or 16.8% is primarily due to an $18.7 million volume-related increase in commissions and a $6.5 million increase in salaries and benefits due to an increase in headcount. As of March 31, 2026, we had 4,695 employees compared to 4,547 employees as of March 31, 2025.
Marketing and Advertising Expense. The decrease of $9.2 million or 24.2% primarily reflects a $4.1 million decrease related to brand marketing expense in the prior quarter, and a $4.5 million decrease in lead generation and direct mail spend.
Direct Origination Expense. Direct origination expense reflects the unreimbursed portion of direct out-of-pocket expenses that we incur in the loan origination process, including underwriting, appraisal, credit report, loan document and other expenses paid to non-affiliates. The $5.9 million or 30.9% increase in direct origination expense was the result of an increase in loan originations and an industry-wide increase in pricing for credit reporting fees.
Balance Sheet Highlights
March 31, 2026 Compared to December 31, 2025
The following table sets forth our consolidated balance sheets as of the dates indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in thousands) | | March 31,
2026 | | December 31,
2025 | | Change
$ | | Change
% | | |
| | (Unaudited) | | | | | | | | |
| ASSETS | | | | | | | | | | |
| Cash and cash equivalents | | $ | 277,418 | | | $ | 337,232 | | | $ | (59,814) | | | (17.7) | % | | |
| Restricted cash | | 79,770 | | | 63,790 | | | 15,980 | | | 25.1 | | | |
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| Loans held for sale, at fair value | | 3,266,759 | | | 3,165,542 | | | 101,217 | | | 3.2 | | | |
Loans held for investment, at fair value | | 108,227 | | | 109,821 | | | (1,594) | | | (1.5) | | | |
| Derivative assets, at fair value | | 70,076 | | | 42,365 | | | 27,711 | | | 65.4 | | | |
| Servicing rights, at fair value | | 1,691,235 | | | 1,658,223 | | | 33,012 | | | 2.0 | | | |
| Trading securities, at fair value | | 83,722 | | | 85,640 | | | (1,918) | | | (2.2) | | | |
| Property and equipment, net | | 63,514 | | | 61,929 | | | 1,585 | | | 2.6 | | | |
| Operating lease right-of-use assets | | 24,592 | | | 23,877 | | | 715 | | | 3.0 | | | |
| Loans eligible for repurchase | | 1,344,573 | | | 1,074,386 | | | 270,187 | | | 25.1 | | | |
| Investments in joint ventures | | 18,101 | | | 18,251 | | | (150) | | | (0.8) | | | |
Other assets | | 218,532 | | | 216,880 | | | 1,652 | | | 0.8 | | | |
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| Total assets | | $ | 7,246,519 | | | $ | 6,857,936 | | | $ | 388,583 | | | 5.7 | % | | |
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| LIABILITIES & EQUITY | | | | | | | | | | |
| Warehouse and other lines of credit | | $ | 3,024,131 | | | $ | 2,902,539 | | | $ | 121,592 | | | 4.2 | % | | |
| Accounts payable, accrued expenses and other liabilities | | 374,374 | | 349,350 | | 25,024 | | | 7.2 | | | |
| Derivative liabilities, at fair value | | 17,253 | | 10,718 | | 6,535 | | | 61.0 | | | |
| Liability for loans eligible for repurchase | | 1,344,573 | | 1,074,386 | | 270,187 | | | 25.1 | | | |
| Operating lease liability | | 34,325 | | 34,630 | | (305) | | | (0.9) | | | |
| Debt obligations, net | | 2,114,567 | | 2,100,303 | | 14,264 | | 0.7 | | | |
| Total liabilities | | 6,909,223 | | | 6,471,926 | | | 437,297 | | | 6.8 | | | |
| Total equity | | 337,296 | | | 386,010 | | | (48,714) | | | (12.6) | | | |
| Total liabilities and equity | | $ | 7,246,519 | | | $ | 6,857,936 | | | $ | 388,583 | | | 5.7 | % | | |
Cash and Cash Equivalents. The $59.8 million or 17.7% decrease in cash and cash equivalents relates to increases in restricted cash, haircuts on warehouse lines, retained servicing rights, and net losses, offset by an increase in debt obligations.
Restricted Cash. Restricted cash was $79.8 million as of March 31, 2026 compared to $63.8 million as of December 31, 2025 representing an increase of $16.0 million or 25.1%. The increase was primarily the result of increases in cash collateral associated with derivative activities and debt obligations.
Loans Held for Sale, at Fair Value. The $101.2 million or 3.2% increase reflects $7.6 billion in loan originations and $237.9 million in repurchases, partially offset by $7.7 billion in loan sales, $28.8 million in fair value losses, and $14.5 million in principal payments.
Derivative Assets, at Fair Value. The $27.7 million, or 65.4% increase reflects a $26.3 million increase in Hedging Instruments and a $1.4 million increase in IRLCs from higher notional balances and increasing rates.
Loans Eligible for Repurchase. Loans eligible for repurchase were $1.3 billion as of March 31, 2026, as compared to $1.1 billion as of December 31, 2025, representing a increase of $270.2 million or 25.1%. The increase between periods was driven by an increase in Ginnie Mae serviced loans that were 90 days or more delinquent at March 31, 2026, partially offset by repurchased loans.
Servicing Rights, at Fair Value. The $33.0 million or 2.0% increase was comprised of $87.2 million of capitalized servicing rights from servicing-retained loan sales, partially offset by $51.4 million from principal amortization and prepayments and $3.3 million reduction from sales of servicing rights.
Warehouse and Other Lines of Credit. The increase of $121.6 million, or 4.2%, is consistent with the increase in loans held for sale during the three months ended March 31, 2026.
Accounts Payable, Accrued Expenses and Other Liabilities. The increase of $25.0 million, or 7.2%, is primarily due to a $20.7 million increase in margin call payables, a $2.0 million increase in TRA liability, and a $1.9 million increase in accounts payable and other accrued liabilities.
Derivative Liabilities, at Fair Value. The increase of $6.5 million, or 61.0%, reflects a a $4.7 million increase in IRLCs and a $1.9 million increase in Hedging Instrument liabilities from higher interest rates.
Debt Obligations, net. The increase of $14.3 million, or 0.7%, primarily relates to an $11.7 million increase in MSR facilities.
Equity. Total equity was $337.3 million and $386.0 million as of March 31, 2026 and December 31, 2025, respectively. The decrease was primarily attributed to a net loss of $54.9 million, partially offset by stock-based compensation of $6.4 million and increase of $1.0 million related to the issuance of common stock through the exercise of stock options.
Liquidity and Capital Resources
Liquidity
Our liquidity reflects our ability to meet current and potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of March 31, 2026, unrestricted cash and cash equivalents were $277.4 million and committed and uncommitted available capacity under our warehouse and other lines of credit was $1.2 billion.
Our primary sources of liquidity have been as follows: (i) funds obtained from our warehouse and other lines of credit; (ii) proceeds from debt obligations; (iii) proceeds received from the sale and securitization of loans; (iv) proceeds from the sale of servicing rights; (v) loan fees from the origination of loans; (vi) servicing fees; (vii) title and escrow fees from settlement services; (viii) real estate referral fees; and (ix) interest income from LHFS.
Our primary uses of funds for liquidity have included the following: (i) funding mortgage loans; (ii) funding loan origination costs; (iii) payment of warehouse line haircuts required at loan origination; (iv) payment of interest expense on warehouse and other lines of credit; (v) payment of interest expense under debt obligations; (vi) payment of operating expenses; (vii) repayment of warehouse and other lines of credit; (viii) repayment of debt obligations; (ix) funding of servicing advances; (x) margin calls on warehouse and other lines of credit or Hedging Instruments; (xi) repurchases of loans under representation and warranty breaches; and (xii) costs relating to servicing.
At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current loan operations, originations and capital commitments for the next twelve months. However, we will continue to review our liquidity needs in light of current and anticipated mortgage market conditions and we are taking various steps to align our cost structure with current and expected mortgage origination volumes.
Financial Covenants
Our lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and profitability. As of March 31, 2026, we were in full compliance with all financial covenants. Although these financial
covenants limit the amount of indebtedness that we may incur and affect our liquidity through minimum cash reserve requirements, we believe that these covenants currently provide us with sufficient flexibility to operate our business and obtain the financing necessary to achieve that purpose.
Seller/Servicer Financial Requirements
As a seller and servicer, we are subject to minimum net worth, liquidity, and other financial requirements. Effective from September 30, 2023, minimum net worth requirements for FHFA and Ginnie Mae include a base of $2.5 million plus percentages of the seller/servicer’s residential first lien mortgage servicing UPB serviced for each agency and a percentage of other non-agencies servicing UPB. Base liquidity for the agencies depends on the remittance type and includes specific percentages of the seller/servicer's residential first lien mortgage servicing UPB for each agency, along with a percentage for other non-agencies servicing UPB. Large non-depositories require a liquidity buffer based on UPB for FHFA and Ginnie Mae. The capital ratio for FHFA and Ginnie Mae requires tangible net worth/total assets to be equal to or greater than 6% for both agencies. Effective from December 31, 2023, revised FHFA and Ginnie Mae seller-servicer minimum financial eligibility requirements include origination liquidity and third-party ratings. FHFA also requires an annual capital and liquidity plan effective March 31, 2024 and Ginnie Mae has implemented a risk-based capital requirement effective December 31, 2024. As of March 31, 2026, we were in compliance with these financial requirements.
Warehouse and Other Lines of Credit
We primarily finance mortgage loans through borrowings under our warehouse and other lines of credit. Under these facilities, we transfer specific loans to our counterparties and receive funds from them. Simultaneously, there is an agreement in place where the counterparties commit to transferring the loans back to us, either at the date the loans are sold or upon our request, and we provide the funds in return. We do not recognize these transfers as sales for accounting purposes. During the three months ended March 31, 2026, our loans remained on warehouse lines for an average of 19 days. Our warehouse facilities are generally short-term borrowings with maturities of one year and our securitization facilities have two and three year terms. We utilize both committed and uncommitted loan funding facilities and we evaluate our needs under these facilities based on forecasted volume of loan originations and sales. Our liquidity could be affected as lenders may reassess their exposure to the mortgage origination industry and potentially limit access to uncommitted mortgage warehouse financing or increase associated costs. Moreover, there may be reduced demand from investors to acquire our mortgage loans in the secondary market, further impacting our liquidity. Approximately 69% of the mortgage loans that we originated during the three months ended March 31, 2026 were sold in the secondary mortgage market either directly to Fannie Mae and Freddie Mac or securitized into MBS guaranteed by Ginnie Mae. We also sell loans to other non-Agency investors.
As of March 31, 2026, we maintained revolving lines of credit with eleven counterparties, including two loan funding facilities with GSEs, providing warehouse and securitization facilities with borrowing capacity totaling $4.2 billion of which $1.3 billion was committed. Our $4.2 billion of capacity as of March 31, 2026 was comprised of $3.9 billion with staggered maturities within one year and a $300.0 million securitization facility that matures in April 2028. As of March 31, 2026, we had $3.0 billion of borrowings outstanding and $1.2 billion of additional availability under our facilities. Warehouse and other lines of credit are further discussed in Note 9- Warehouse and Other Lines of Credit of the Notes to Consolidated Financial Statements contained in Item 1.
When we draw on our warehouse and securitization facilities we must pledge eligible loan collateral. Our warehouse line providers require us to make a capital investment, or “haircut” upon financing the loan, which is generally based on product types and the market value of the loans. The haircuts are normally recovered from sales proceeds. As of March 31, 2026, we had a total of $12.9 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which $3.3 million was the minimum requirement.
Debt Obligations
MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of March 31, 2026, our MSR facility secured by Fannie Mae had an outstanding balance of $102.6 million in MSR facilities and $198.1 million in Term Notes, secured by Fannie Mae MSRs totaling $420.3 million. As of March 31, 2026, our MSR facility secured by Freddie Mac had an outstanding balance of $311.6 million, secured by Freddie Mac MSRs totaling $488.0 million. As of March 31, 2026, our MSR facility secured by Ginnie Mae had an outstanding balance of $101.1 million in variable funding notes and $347.1 million in Term Notes, secured by Ginnie Mae MSRs totaling $675.9 million.
Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of March 31, 2026 there were outstanding securities financing facilities of $78.8 million, secured by trading securities with a fair value of $83.7 million.
Servicing advance facilities provide financing for our servicing agreements. As servicer, we are required to fulfill contractual obligations such as principal and interest payments for certain investor as well as taxes, insurance, foreclosure costs, and other necessities to preserve the serviced assets. For GSE-backed mortgages, this obligation extends up to four months, and for other government agency-backed mortgages, it may extend even longer, especially for clients under forbearance plans. The size of servicing advance balances is influenced by delinquency rates and prepayment speeds. As of March 31, 2026 the outstanding balance on our servicing advance facilities was $77.7 million secured by servicing advance receivables totaling $90.0 million.
Other secured financings as of March 31, 2026 consisted of securitization debt of $86.6 million, net of $4.5 million in discount and $0.7 million in deferred financing costs and related to the securitization of a pool of residential mortgage loans held by a VIE. Consolidated VIEs are further discussed in Note 8 - Variable Interest Entities of the Notes to Consolidated Financial Statements contained in Item 1.
Senior Notes as of March 31, 2026 consisted of secured Senior Notes totaling $313.8 million, net of $3.3 million of deferred financing costs and a discount of $23.6 million, and unsecured Senior Notes totaling $497.3 million, net of $2.1 million of deferred financing costs. Periodically, and in accordance with applicable laws, and regulations, we may take actions to reduce or repurchase our debt. These actions can include redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately-negotiated transactions. The decision on amount of debt to be reduced or repurchased depends on several factors, including market conditions, trading levels of our debt, our cash positions, compliance with debt covenants, and other relevant considerations. During the year ended December 31, 2024, we repurchased $478.0 million of 2025 Senior Notes in exchange for $340.6 million of 2027 Senior Notes and cash of $185.0 million resulting in a loss on extinguishment of debt of $5.7 million. In November 2025, the remaining principal balance of $19.8 million on the 2025 Senior Notes was redeemed. Debt obligations are further discussed in Note 10- Debt Obligations of the Notes to Consolidated Financial Statements contained in Item 1.
Dividends and Distributions
As part of our balance sheet and capital management strategies, we suspended our regular quarterly dividend effective March 31, 2022 and for the foreseeable future.
Cash dividends are subject to the discretion of our board of directors and our compliance with applicable law, and depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, including the satisfaction of our obligations under the TRA, restrictions in our debt agreements, business prospects and other factors that our board of directors may deem relevant. Our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization or agreements of our subsidiaries, including agreements governing our indebtedness. Future agreements may also limit our ability to pay dividends.
Contractual Obligations and Commitments
Our estimated contractual obligations as of March 31, 2026 are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Payments Due by Period |
| (Dollars in thousands) | | Total | | Less than 1 Year | | 1-3 years | | 3-5 Years | | More than
5 Years |
| Warehouse and other lines of credit | | $ | 3,024,131 | | | $ | 2,724,131 | | | $ | 300,000 | | | $ | — | | | $ | — | |
Debt obligations (1) | | | | | | | | | | |
| Secured credit facilities | | 673,680 | | | 673,680 | | | — | | | — | | | — | |
| Term Notes | | 550,000 | | | — | | | — | | | 550,000 | | | — | |
| Senior Notes | | 840,021 | | | — | | | 840,021 | | | — | | | — | |
Other secured financings(2) | | 91,717 | | | — | | | — | | | — | | | 91,717 | |
Long-term software license commitments | | 140,078 | | | 26,308 | | | 46,494 | | | 32,292 | | | 34,984 | |
Operating lease obligations (3) | | 48,790 | | | 15,345 | | | 20,011 | | | 10,181 | | | 3,253 | |
| Naming and promotional rights agreements | | 28,500 | | | 6,000 | | | 12,000 | | | 10,500 | | | — | |
| Total contractual obligations | | $ | 5,396,917 | | | $ | 3,445,464 | | | $ | 1,218,526 | | | $ | 602,973 | | | $ | 129,954 | |
(1) Amounts exclude deferred financing costs.
(2) The stated final maturity date is April 25, 2054. The Company, as the issuer, has the option to redeem the notes on or subsequent to the optional redemption date of April 25, 2026, but it is not required.
(3) Represents lease obligations for office space under non-cancelable operating lease agreements.
In addition to the above contractual obligations, we also have interest rate lock commitments and forward sale contracts. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon and, therefore, those commitments have been excluded from the table above. Refer to Note 6 - Derivative Financial Instruments and Hedging Activities and Note 15 - Commitments & Contingencies of the Notes to Consolidated Financial Statements contained in Item 1 for further discussion on derivatives and other contractual commitments. At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to fund our contractual obligations.
Off-Balance Sheet Arrangements
As of March 31, 2026, we were party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold MBS up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet arrangements provided by certain warehouse lenders.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with GAAP, which requires us to make judgments, estimates and assumptions that affect: (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. Our accounting policies are described in Note 1 to the consolidated financial statements included in the Company's 2025 Form 10-K. At December 31, 2025, the most critical of these significant accounting policies were policies related to the fair value of loans held for sale, servicing rights, and derivative financial instruments. As of the date of this report, there have been no significant changes to the Company's critical accounting policies or estimates.
When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.
Reconciliation of Non-GAAP Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA. We exclude from these non-GAAP financial measures the change in fair value of MSRs, gains (losses) from the sale of MSRs, and related hedging gains and losses that represent realized and unrealized adjustments resulting from changes in valuation, mostly due to changes in market interest rates, and are not indicative of the Company’s operating performance or results of operation. We have excluded expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, such as costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, and professional fees, including legal expenses, litigation settlement costs, and commission guarantees. We also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, and impairment charges to operating lease right-of-use assets, as well as certain costs associated with our restructuring efforts, as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA includes interest expense on funding facilities, which are recorded as a component of “net interest income,” as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA. Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state, and local income taxes. Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of weighted average Class B and Class C common stock to Class A common stock. These non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:
•They do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Loss, and Adjusted EBITDA do not reflect any cash requirement for such replacements or improvements; and
•They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
Because of these limitations, Adjusted Total Revenue, Adjusted Net Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA are not intended as alternatives to total revenue, net loss, net loss attributable to the Company, or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.
| | | | | | | | | | | | | | | | | | |
Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited): | | Three Months Ended | | |
| March 31, 2026 | | March 31, 2025 | | | | |
| Total net revenue | | $ | 286,387 | | | $ | 273,620 | | | | | |
Valuation changes in servicing rights, net of hedging gains and losses(1) | | 12,863 | | | 4,823 | | | | | |
| Adjusted total revenue | | $ | 299,250 | | | $ | 278,443 | | | | | |
(1)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. Refer to Note 5 - Servicing Rights, at Fair Value.
| | | | | | | | | | | | | | | | | | |
Reconciliation of Net Loss to Adjusted Net Loss (Dollars in thousands) (Unaudited): | | Three Months Ended | | |
| March 31, 2026 | | March 31, 2025 | | | | |
Net loss attributable to loanDepot, Inc. | | $ | (37,487) | | | $ | (21,896) | | | | | |
Net loss from the pro forma conversion of Class B or Class C common stock to Class A common stock(1) | | (17,455) | | | (18,800) | | | | | |
Net loss | | (54,942) | | | (40,696) | | | | | |
Adjustments to the benefit for income taxes(2) | | 54 | | | 4,901 | | | | | |
Tax-effected net loss | | (54,888) | | | (35,795) | | | | | |
Valuation changes in servicing rights, net of hedging gains and losses(3) | | 12,863 | | | 4,823 | | | | | |
| | | | | | | | |
| Stock-based compensation expense | | 6,393 | | | 5,716 | | | | | |
Restructuring charges(4) | | 708 | | | 2,121 | | | | | |
Cybersecurity incident(5) | | 121 | | | 788 | | | | | |
| | | | | | | | |
(Gain) loss on disposal of fixed assets | | (72) | | | 17 | | | | | |
| | | | | | | | |
Other impairment (recovery)(6) | | — | | | 5 | | | | | |
Tax effect of adjustments(7) | | 1,251 | | | (3,010) | | | | | |
Adjusted net loss | | $ | (33,624) | | | $ | (25,335) | | | | | |
(1)Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class B common stock and Class C common stock.
(2)loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to the benefit for income taxes reflect the income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| March 31, 2026 | | March 31, 2025 | | | | |
| Statutory U.S. federal income tax rate | | 21.00 | % | | 21.00 | % | | | | |
| State and local income taxes (net of federal benefit) | | 4.82 | | | 5.07 | | | | | |
Effect of valuation allowance and other tax adjustments | | (25.51) | | | — | | | | | |
| Effective income tax rate | | 0.31 | % | | 26.07 | % | | | | |
(3)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Refer to Note 5 - Servicing Rights, at Fair Value.
(4)Reflects employee severance expense and professional services associated with restructuring efforts.
(5)Represents expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees.
(6)Represents lease impairment on corporate and retail locations.
(7)Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items.
| | | | | | | | | | | | | | | | | | |
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited) | | Three Months Ended | | |
| March 31, 2026 | | March 31, 2025 | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Share Data: | | | | | | | | |
| Diluted weighted average shares of Class A and Class D common stock outstanding | | 228,962,329 | | | 200,792,570 | | | | | |
Assumed pro forma conversion of weighted average Class B and Class C common stock to Class A common stock(1) | | 106,207,433 | | | 127,290,603 | | | | | |
| Adjusted diluted weighted average shares outstanding | | 335,169,762 | | | 328,083,173 | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)Reflects the assumed pro forma exchange and conversion of Class B and Class C common stock.
| | | | | | | | | | | | | | | | | | |
Reconciliation of Net Loss to Adjusted EBITDA (Dollars in thousands) (Unaudited): | | Three Months Ended | | |
| March 31, 2026 | | March 31, 2025 | | | | |
Net loss | | $ | (54,942) | | | $ | (40,696) | | | | | |
Interest expense - non-funding debt(1) | | 43,070 | | | 43,265 | | | | | |
Income tax benefit | | (171) | | | (5,407) | | | | | |
| Depreciation and amortization | | 6,335 | | | 7,666 | | | | | |
Valuation changes in servicing rights, net of hedging gains and losses(2) | | 12,863 | | | 4,823 | | | | | |
| | | | | | | | |
| Stock-based compensation expense | | 6,393 | | | 5,716 | | | | | |
| | | | | | | | |
Restructuring charges(3) | | 708 | | | 2,121 | | | | | |
Cybersecurity incident(4) | | 121 | | | 788 | | | | | |
| | | | | | | | |
(Gain) loss on disposal of fixed assets | | (72) | | | 17 | | | | | |
| | | | | | | | |
Other impairment(5) | | — | | | 5 | | | | | |
Adjusted EBITDA | | $ | 14,305 | | | $ | 18,298 | | | | | |
(1)Represents other interest expense, which includes gain or loss on extinguishment of debt and amortization of debt issuance costs and debt discount, in the Company’s consolidated statements of operations.
(2)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Refer to Note 5 - Servicing Rights, at Fair Value.
(3)Reflects employee severance expense and professional services associated with restructuring efforts.
(4)Represents expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees.
(5)Represents lease impairment on corporate and retail locations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to various risks which can affect our business, results, and operations. The primary market risks to which we are exposed include interest rate risk, credit risk, prepayment risk, and inflation risk.
We manage our interest rate risk and the price risk associated with changes in interest rates pursuant to the terms of an Interest Rate Risk Management Policy which (i) quantifies our interest rate risk exposure, (ii) lists the derivatives eligible for use as Hedging Instruments and (iii) establishes risk and liquidity tolerances.
Interest Rate Risk
Our principal market exposure is to interest rate risk as our business is subject to variability in results of operations due to fluctuations in interest rates. We anticipate that interest rates will remain our primary benchmark for market risk for the foreseeable future. Changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, servicing rights and Hedging Instruments. In a declining interest rate environment, we expect higher loan origination volumes, higher loan margins, increases in the value of our LHFS and IRLCs, and decreases in the value of our Hedging Instruments and servicing rights. In a rising interest rate environment, we expect lower loan origination volumes, lower loan margins, decreases in the value of our LHFS and IRLCs, and increases in the value of our Hedging Instruments and servicing rights. The interaction between the results of operations of our various activities is a core component of our overall interest rate risk strategy.
IRLCs represent an agreement to extend credit to a potential customer, whereby the interest rate on the loan is set prior to funding. Both IRLCs and LHFS, are subject to changes in interest rates from the date of the commitment through the sale of the loan into the secondary market. Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date, or (ii) the date of sale into the secondary mortgage market. The average term for outstanding interest rate lock commitments at March 31, 2026 was 33 days; and our average holding period of the loan from funding to sale was 32 days for the three months ended March 31, 2026.
We manage the interest rate risk associated with our outstanding IRLCs, LHFS and servicing rights by entering into Hedging Instruments. Management expects these Hedging Instruments will experience changes in fair value opposite to those of the IRLCs, LHFS, and servicing rights thereby reducing earnings volatility. We take into account various factors and strategies in determining the portion of IRLCs, LHFS, and servicing rights to economically hedge. Our expectation of how many of our IRLCs will ultimately close is a key factor in determining the notional amount of Hedging Instruments used in hedging the position.
Credit Risk
We are subject to credit risk in connection with our originating, financing, selling, and servicing residential mortgage loans. Credit risk refers to the ability of each individual borrower underlying our loans, mortgage servicing rights, and trading securities, to make required interest and principal payments on the scheduled due dates. If delinquencies increase, the value of our loans, mortgage servicing rights, and trading securities may decrease and the amount of servicer advances we are required to make related to our mortgage servicing rights will increase. We believe credit risk is mitigated through stringent underwriting guidelines in our loan origination process and is primarily determined by the borrowers’ credit profiles and loan characteristics. Credit risk is influenced by general economic factors including interest rates, housing prices, and unemployment rates which could impact the borrowers’ ability to make payments on their loans.
While our contracts vary, we provide representations and warranties to purchasers and insurers of the mortgage loans sold that typically are in place for the life of the loan. In the event of a breach of these representations and warranties, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us. The representations and warranties require adherence to applicable origination and underwriting guidelines or requirements (including those of Fannie Mae, Freddie Mac, and Ginnie Mae), including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state, and local law.
We record a provision for losses relating to such representations and warranties as part of our loan sale transactions. The level of the liability for losses from representations and warranties is difficult to estimate and requires considerable management judgment. The level of loan repurchase losses is dependent on economic factors, trends in property values, investor repurchase demand strategies, and other external conditions, including interest rates, that may change over the lives of the underlying loans. We evaluate the adequacy of our liability for losses from representations and warranties based on our loss experience and our assessment of incurred losses relating to loans that we have previously sold and which remain outstanding at the balance sheet date. As our portfolio of loans sold subject to representations and warranties grows and as economic fundamentals change, such adjustments can be material. However, we believe that our current estimates adequately approximate the losses incurred on our sold loans subject to such representations and warranties.
Additionally, we are exposed to credit risk associated with our borrowers, counterparties, and other significant vendors. Our ability to operate profitably is dependent on both our access to capital to finance our assets and our ability to profitably originate, sell, and service loans. Our ability to hold loans pending sale and/or securitization depends, in part, on the availability to us of adequate financing lines of credit at suitable interest rates and favorable advance rates. In general, we manage such risk by selecting only counterparties that we believe to be financially strong, dispersing the risk among multiple counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty and entering into netting agreements with the counterparties, as appropriate. During the three months ended March 31, 2026 and 2025, we incurred no losses due to nonperformance by any of our counterparties.
Prepayment Risk
Prepayment risk is affected by interest rates (and their inherent risk) and borrowers’ actions relative to their underlying loans. To the extent that the actual prepayment speed on the loans underlying our servicing rights differs from what we projected when we initially recognized them and when we measured fair value as of the end of each reporting period, the carrying value of our investment in servicing rights will be affected. In general, an increase in prepayment expectations will decrease our estimates of the fair value of the servicing right, thereby reducing expected servicing income. We monitor the servicing portfolio to identify potential refinancings and the impact that would have on associated servicing rights.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of March 31, 2026, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we and certain of our subsidiaries are involved in various legal and regulatory matters that arise in connection with the conduct of our business. For a further discussion of our material legal proceedings, see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements included in “Item 1 Financial Statements.”
Item 1A. Risk Factors
There have been no material changes in the risk factors discussed under Part I. "Item 1A. Risk Factors" of our 2025 Form 10-K filed with the SEC on March 12, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
For the three months ended March 31, 2026, shares of the Company's Class B common stock or Class C common stock could each be converted, together with a corresponding Holdco Unit, as applicable, at any time and from time to time at the option of the holder of such share of Class B common stock or Class C common stock, as applicable, for one fully paid and non-assessable share of Class A common stock. Each share of the Company’s Class D common stock could be converted into one fully paid and non-assessable share of Class A common stock at any time at the option of the holder of such share of Class D common stock. There was no cash or other consideration paid by the holder converting such shares and, accordingly, there was no cash or other consideration received by the Company. The shares of Class A common stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act.
On January 2, 2026, we issued to stockholders 1,307,649 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.
On February 11, 2026, pursuant to the Company’s Amended and Restated Certificate of Incorporation dated February 11, 2021, we issued to stockholders 97,026,671 shares of Class A common stock upon the conversion of the same number of shares of our Class D common stock, and we issued to stockholders 106,207,433 shares of Class B common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders. All outstanding Class C and Class D shares converted automatically and without further action on the part of the Company or any holder of Class C or Class D common stock. The shares of Class A common stock and Class B common stock issued by the Company in such automatic conversions were exempt from registration pursuant to Section 3(a)(9) of the Securities Act.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the quarter ended March 31, 2026, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements (in each case, as defined in Item 408 of Regulation S-K).
CEO Employment Agreement
On May 6, 2026, Anthony Hsieh and the Company entered into an Executive Employment Agreement (the “Hsieh Agreement”), effective as of March 1, 2026, with Mr. Hsieh that provides for at-will employment for his services as Chief Executive Officer and President. The Hsieh Agreement provides for (i) an initial annual base salary of $1,000,000 (ii) a target annual bonus of 225% of his base salary for 2026 and 250% of his base salary thereafter; and (iii) reimbursement of up to $400,000 per year for expenses for business-related use of any aircraft or watercraft owned or leased by Mr. Hsieh. The Hsieh Agreement provides that he will receive at the Company’s next regularly scheduled quarterly grant date an award of 1.0 million restricted stock units (“RSUs”) that vest over three years and an award of 2.0 million performance stock units (“PSUs”) that vests upon the Company's Class A common stock achieving specified prices per share over a three year performance period, which replace the 1.5 million PSUs he was otherwise entitled to receive in 2026 under the terms of a letter agreement between Mr. Hsieh and the Company dated March 6, 2025. The Hsieh Agreement also provides that as part of the Company’s annual equity grant process for 2027 he will receive an award of 1.0 million RSUs that vest over three years and an award of 1.0 million PSUs that vests upon the Company's Class A common stock achieving specified prices per share to be determined by the Committee at the time of grant over a three year performance period. The Hsieh Agreement also subjects Mr. Hsieh to standard restrictive covenants. The Company will reimburse Mr. Hsieh for legal fees in connection with the Hsieh Agreement up to $40,000.
Pursuant to the Hsieh Agreement, Mr. Hsieh would be entitled to receive certain payments and benefits in connection with certain terminations of employment, as follows:
•In the event Mr. Hsieh is involuntarily terminated without “cause” or resigns for “good reason” not in connection with a “change in control” (each as defined in the Hsieh Agreement) (together, a “Hsieh Covered Termination”), Mr. Hsieh would be entitled to receive the earned, but unpaid portion of his annual bonus for the prior fiscal year (if applicable) and, subject to his execution and non-revocation of a release of claims, (i) a lump sum payment equal to 24 months of base salary, (ii) a pro-rata annual bonus based on the actual achievement of the performance objectives for the fiscal year in which termination occurs, (iii) the payment or reimbursement of COBRA premiums through the earlier of (A) the second anniversary of the date of termination or (B) the date Mr. Hsieh and his dependents become eligible for healthcare under another employer’s plan, (iv) acceleration of all performance-based equity awards held by Mr. Hsieh, based on actual performance measured to the date of such termination, with a 30-day post-termination window during which achievement of performance goals will still qualify and (v) extension of the exercise period for vested but unexercised options until the earlier of (A) one year following the date of such termination or (B) the expiration date of the option.
•Upon a Hsieh Covered Termination during the period beginning 3 months prior to a change in control and ending 24 months after a change in control, Mr. Hsieh would be entitled to receive the earned, but unpaid portion of his annual bonus for the prior fiscal year (if applicable) and, subject to his execution and non-revocation of a release of claims, (i) a lump sum payment equal to 3x the sum of his base salary plus target bonus, (ii) a pro-rata annual bonus based on the actual achievement of the performance objectives for the fiscal year in which termination occurs, and (iii) the payment or reimbursement of COBRA premiums through the earlier of (A) the second anniversary of the date of termination or (B) the date Mr. Hsieh and his dependents become eligible for healthcare under another employer’s plan, and (iv) full accelerated vesting of any unvested equity awards held by Mr. Hsieh, with any performance-based vesting criteria being deemed earned at the greater of target or actual performance through the date of termination. In the event Mr. Hsieh’s employment is terminated due to Mr. Hsieh’s death or disability, he would be entitled to receive the earned, but unpaid portion of his annual bonus for the prior fiscal year (if applicable) and (i) a pro-rata annual bonus based on the actual achievement of the performance objectives for the fiscal year in which termination occurs, (ii) full accelerated vesting of any unvested equity awards held by Mr. Hsieh, with any performance-based vesting criteria being deemed earned at the greater of target or actual performance through the date of termination, and (iii) extension of the exercise period for vested but unexercised options until the earlier of (A) one year following the date of such termination or (B) the expiration date of the option.
•Upon a Hsieh Covered Termination during the period beginning 3 months prior to a change in control and ending 24 months after a change in control, Mr. Hsieh would be entitled to receive the earned, but unpaid portion of his annual bonus for the prior fiscal year (if applicable) and, subject to his execution and non-revocation of a release of claims, (i) a lump sum payment equal to 3x the sum of his base salary plus target bonus, (ii) a pro-rata annual bonus based on the actual achievement of the performance objectives for the fiscal year in which termination occurs, and (iii) the payment or reimbursement of COBRA premiums through the earlier of (A) the second anniversary of the date of termination or (B) the date Mr. Hsieh and his dependents become eligible for healthcare under another employer’s plan, and (iv) full
accelerated vesting of any unvested equity awards held by Mr. Hsieh, with any performance-based vesting criteria being deemed earned at the greater of target or actual performance through the date of termination.
•In the event Mr. Hsieh’s employment is terminated due to Mr. Hsieh’s death or disability, he would be entitled to receive the earned, but unpaid portion of his annual bonus for the prior fiscal year (if applicable) and (i) a pro-rata annual bonus based on the actual achievement of the performance objectives for the fiscal year in which termination occurs, (ii) full accelerated vesting of any unvested equity awards held by Mr. Hsieh, with any performance-based vesting criteria being deemed earned at the greater of target or actual performance through the date of termination, and (iii) extension of the exercise period for vested but unexercised options until the earlier of (A) one year following the date of such termination or (B) the expiration date of the option.
The foregoing descriptions of the Hsieh Agreement is not complete and is qualified in its entirety by reference to the full text of the Hsieh Agreement, a copy of which is attached hereto as Exhibit 10.5, and is incorporated herein by reference.
Item 6. Exhibits
The following documents are filed as a part of this report: | | | | | |
| Exhibit No. | Description |
| 3.1 | |
| 3.2 | |
10.1*# | |
10.2*# | |
10.3*# | |
| 10.4*# | |
10.5#+* | |
| 31.1* | |
| 31.2* | |
| 32.1** | |
| 32.2** | |
| 101 | Inline XBRL Document |
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104.0 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* Filed herewith
** Furnished herewith
# Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K.
+ Management contract or compensatory plan or arrangement.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | |
| LOANDEPOT, INC. |
| | |
| | |
Dated: May 7, 2026 | By: | /s/ Anthony Hsieh |
| Name: | Anthony Hsieh |
| Title: | Chief Executive Officer and President |
| | |
Dated: May 7, 2026 | By: | /s/ David Hayes |
| Name: | David Hayes |
| Title: | Chief Financial Officer |
| | |
| | |
Certain confidential information contained in this document, marked by “[***]”, has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential. Certain schedules (or similar attachments) also marked by “[***]” have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
EXECUTION VERSION
Exhibit 10.1
AMENDMENT NUMBER ONE
to the
Third Amended and Restated Master Repurchase Agreement
Dated as of October 28, 2022
between
JEFFERIES FUNDING LLC and
LOANDEPOT.COM, LLC
This AMENDMENT NUMBER ONE (this “Amendment”) is made as of this 26th day of March, 2026, by and between Jefferies Funding LLC (“Buyer”) and loanDepot.com, LLC (“Seller”) to the Third Amended and Restated Master Repurchase Agreement, dated as of October 28, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), between Buyer and Seller.
WHEREAS, Buyer and Seller have agreed, subject to the terms and conditions of this Amendment, that the Agreement be amended to reflect certain agreed upon changes set forth below; and
WHEREAS, as of the date of this Amendment, Seller represents to Buyer that it is in compliance with all of the representations and warranties and all of the affirmative and negative covenants set forth in the Agreement and is not in default under the Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the mutual covenants herein contained, the parties hereto hereby agree as follows:
Section 1.Amendments. Effective as of the date hereof (the “Effective Date”), the Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto. The parties hereto further acknowledge and agree that Exhibit A constitutes the Agreement as amended and modified by the terms set forth herein.
Section 2.Fees and Expenses. The Seller agrees to pay to Buyer all fees and out of pocket expenses incurred by Buyer in connection with this Amendment, including all reasonable fees and out of pocket costs and expenses of the legal counsel Buyer incurred in connection with this Amendment, in accordance with Paragraph 23(b) of the Agreement.
Section 3.Defined Terms. Any terms capitalized but not otherwise defined herein should have the respective meanings set forth in the Agreement.
Section 4.Limited Effect. Except as amended hereby, the Agreement shall continue in full force and effect in accordance with its terms. Reference to this Amendment need not be made in the Agreement or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to, or with respect to, the Agreement, any reference in any of such items to the Agreement being sufficient to refer to the Agreement as amended hereby.
Section 5.Representations. In order to induce Buyer to execute and deliver this Amendment, Seller hereby represents to Buyer that as of the date hereof, (i) Seller is in full compliance with all of the terms and conditions of the Program Documents and remains bound by the terms thereof, and (ii) no default or Default or Event of Default has occurred and is continuing under the Program Documents.
Section 6.Governing Law. This Amendment shall be construed in accordance with the laws of the State of New York without regard to any conflicts of law provisions (except for Sections 5-1401 and 5-1402 of the New York General Obligations Law) and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by federal law.
Section 7.Counterparts. For the purpose of facilitating the execution of this Amendment, and for other purposes, this Amendment may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument The words “executed,” “signed,” “signature,” and words of like import in this Amendment or in any other certificate, agreement or document related to this transaction shall include, shall include, in addition to manually executed signature pages, images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf”, “tif” or “jpg”) and other electronic signatures (including, without limitation, any electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received, or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law, including, without limitation, any state law based on the Uniform Electronic Transactions Act or the Uniform Commercial Code.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, Buyer and Seller have caused this Amendment to be executed and delivered by their duly authorized officers as of the Effective Date.
| | | | | |
JEFFERIES FUNDING LLC, as Buyer
By: /s/ Anthony Constantine Name Anthony Constantine Title: MD | LOANDEPOT.COM, LLC, as Seller
By: /s/David Hayes Name: David Hayes Title: CFO |
Signature Page to Amendment Number One to Third Amended and Restated MRA (Jefferies/loanDepot)
LEGAL/47989305v3
EXHIBIT A
CONFORMED REPURCHASE AGREEMENT
[SEE ATTACHED]
Exhibit A
LEGAL/47989305v3
CONFORMED COPY (AMEND. 1)
MASTER REPURCHASE AGREEMENT
Dated as of October 28, 2022
Between: Jefferies Funding LLC (“BUYER”)
And loanDepot.com, LLC (“SELLER”)
1. Applicability
From time to time the parties hereto may enter into transactions in which one party (“Seller”) agrees to transfer to the other (“Buyer”) securities or other assets (“Securities”) against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Securities at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in Annex I hereto and in any other annexes identified herein or therein as applicable hereunder.
2. Definitions
(a)“Act of Insolvency”, with respect to any party, (i) the commencement by such party as debtor of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, moratorium, dissolution, delinquency or similar law, or such party seeking the appointment or election of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property, or the convening of any meeting of creditors for purposes of commencing any such case or proceeding or seeking such an appointment or election, (ii) the commencement of any such case or proceeding against such party, or another seeking such an appointment, or election, or the filing against a party of an application for a protective decree under the provisions of the Securities Investor Protection Act of 1970, which (A) is consented to or not timely contested by such party, (B) results in the entry of an order for relief, such an appointment, or election, the issuance of such a protective decree or the entry of an order having a similar effect, or (C) is not dismissed within [***], (iii) the making by such party of a general assignment for the benefit of creditors, or (iv) the admission in writing by such party of such party's inability to pay such party's debts as they become due;
(b)“Additional Purchased Securities”, Securities provided by Seller to Buyer pursuant to Paragraph 4(a) hereof;
(c)“Buyer's Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Buyer’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(d)“Buyer’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Seller’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction;
(e)“Confirmation”, the meaning specified in Paragraph 3(b) hereof;
(f)“Income”, with respect to any Security at any time, any principal thereof and all interest, dividends or other distributions thereon;
(g)“Margin Deficit”, the meaning specified in Paragraph 4(a) hereof;
(h)“Margin Excess”, the meaning specified in Paragraph 4(b) hereof;
(i)“Margin Notice Deadline”, the time agreed to by the parties in the relevant Confirmation, Annex I hereto or otherwise as the deadline for giving notice requiring same-day satisfaction of margin maintenance obligations as provided in Paragraph 4 hereof (or, in the absence of any such agreement, the deadline for such purposes established in accordance with market practice);
(j)“Market Value”, with respect to any Securities as of any date, the price for such Securities on such date obtained from a generally recognized source agreed to by the parties or the most recent closing bid quotation from such a source, plus accrued Income to the extent not included therein (other than any Income credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) as of such date (unless contrary to market practice for such Securities);
(k)“Price Differential”, with respect to any Transaction as of any date, the aggregate amount obtained by daily application of the Pricing Rate for such Transaction to the Purchase Price for such Transaction on a 360-day-per-year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Transaction and ending on (but excluding) the date of determination (reduced by any amount of such Price Differential previously paid by Seller to Buyer with respect to such Transaction);
(l)“Pricing Rate”, the per annum percentage rate for determination of the Price Differential;
(m)“Prime Rate”, the prime rate of U.S. commercial banks as published in The Wall Street Journal (or, if more than one such rate is published, the average of such rates);
(n)“Purchase Date”, the date on which Purchased Securities are to be transferred by Seller to Buyer;
(o)“Purchase Price”, (i) on the Purchase Date, the price at which Purchased Securities are transferred by Seller to Buyer, and (ii) thereafter, except where Buyer and Seller agree otherwise, such price increased by the amount of any cash transferred by Buyer to Seller pursuant to Paragraph 4(b) hereof and decreased by the amount of any cash transferred by Seller to Buyer pursuant to Paragraph 4(a) hereof or applied to reduce Seller's obligations under clause (ii) of Paragraph 5 hereof;
(p)“Purchased Securities”, the Securities transferred by Seller to Buyer in a Transaction hereunder, and any Securities substituted therefor in accordance with Paragraph 9 hereof. The term “Purchased Securities” with respect to any Transaction at any time also shall include Additional Purchased Securities delivered pursuant to Paragraph 4(a) hereof and shall exclude Securities returned pursuant to Paragraph 4(b) hereof;
(q)“Repurchase Date”, the date on which Seller is to repurchase the Purchased Securities from Buyer, including any date determined by application of the provisions of Paragraph 3(c) or 11 hereof;
(r)“Repurchase Price”, the price at which Purchased Securities are to be transferred from Buyer to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price and the Price Differential as of the date of such determination;
(s)“Seller's Margin Amount”, with respect to any Transaction as of any date, the amount obtained by application of the Seller’s Margin Percentage to the Repurchase Price for such Transaction as of such date;
(t)“Seller’s Margin Percentage”, with respect to any Transaction as of any date, a percentage (which may be equal to the Buyer’s Margin Percentage) agreed to by Buyer and Seller or, in the absence of any such agreement, the percentage obtained by dividing the Market Value of the Purchased Securities on the Purchase Date by the Purchase Price on the Purchase Date for such Transaction.
3. Initiation; Confirmation; Termination
(a)An agreement to enter into a Transaction may be made orally or in writing at the initiation of either Buyer or Seller. On the Purchase Date for the Transaction, the Purchased Securities shall be transferred to Buyer or its agent against the transfer of the Purchase Price to an account of Seller.
(b)Upon agreeing to enter into a Transaction hereunder, Buyer or Seller (or both), as shall be agreed, shall promptly deliver to the other party a written confirmation of each Transaction (a “Confirmation”). The Confirmation shall describe the Purchased Securities (including CUSIP number, if any), identify Buyer and Seller and set forth (i) the Purchase Date, (ii) the Purchase Price, (iii) the Repurchase Date, unless the Transaction is to be terminable on demand, (iv) the Pricing Rate or Repurchase Price applicable to the Transaction, and (v) any additional terms or conditions of the Transaction not inconsistent with this Agreement. The Confirmation, together with this Agreement, shall constitute conclusive evidence of the terms agreed between Buyer and Seller with respect to the Transaction to which the Confirmation relates, unless with respect to the Confirmation specific objection is made promptly after receipt thereof. In the event of any conflict between the terms of such Confirmation and this Agreement, this Agreement shall prevail.
(c)In the case of Transactions terminable upon demand, such demand shall be made by Buyer or Seller, no later than such time as is customary in accordance with market practice, by telephone or otherwise on or prior to the business day on which such termination will be effective. On the date specified in such demand, or on the date fixed for termination in the case of Transactions having a fixed term, termination of the Transaction will be effected by transfer to Seller or its agent of the Purchased Securities and any Income in respect thereof received by Buyer (and not previously credited or transferred to, or applied to the obligations of, Seller pursuant to Paragraph 5 hereof) against the transfer of the Repurchase Price to an account of Buyer.
4. Margin Maintenance
(a)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Buyer is less than the aggregate Buyer's Margin Amount for all such Transactions (a “Margin Deficit”), then Buyer may by notice to Seller require Seller in such Transactions, at Seller's option, to transfer to Buyer cash or additional Securities reasonably acceptable to Buyer (“Additional Purchased Securities”), so that the cash and aggregate Market Value of the Purchased Securities, including any such Additional Purchased Securities, will thereupon equal or exceed such aggregate Buyer's Margin Amount (decreased by the amount of any Margin Deficit as of such date arising from any Transactions in which such Buyer is acting as Seller).
(b)If at any time the aggregate Market Value of all Purchased Securities subject to all Transactions in which a particular party hereto is acting as Seller exceeds the aggregate Seller's Margin Amount for all such Transactions at such time (a “Margin Excess”), then Seller may by notice to Buyer require Buyer in such Transactions, at Buyer's option, to transfer cash or Purchased Securities to Seller, so that the aggregate Market Value of the Purchased Securities, after deduction of any such cash or any Purchased Securities so transferred, will thereupon not exceed such aggregate Seller's Margin Amount (increased by the amount of any Margin Excess as of such date arising from any Transactions in which such Seller is acting as Buyer).
(c)If any notice is given by Buyer or Seller under subparagraph (a) or (b) of this Paragraph at or before the Margin Notice Deadline on any business day, the party receiving such notice shall transfer cash or Additional Purchased Securities as provided in such subparagraph no later than the close of business in the relevant market on such day. If any such notice is given after the Margin Notice Deadline, the party receiving such notice shall transfer such cash or Securities [***].
(d)Any cash transferred pursuant to this Paragraph shall be attributed to such Transactions as shall be agreed upon by Buyer and Seller.
(e)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer or Seller (or both) under subparagraphs (a) and (b) of this Paragraph may be exercised only where a Margin Deficit or Margin Excess, as the case may be, exceeds a specified dollar amount or a specified percentage of the Repurchase Prices for such Transactions (which amount or percentage shall be agreed to by Buyer and Seller prior to entering into any such Transactions).
(f)Seller and Buyer may agree, with respect to any or all Transactions hereunder, that the respective rights of Buyer and Seller under subparagraphs (a) and (b) of this Paragraph to require the elimination of a Margin Deficit or a Margin Excess, as the case may be, may be exercised whenever such a Margin Deficit or Margin Excess exists with respect to any single Transaction hereunder (calculated without regard to any other Transaction outstanding under this Agreement).
5. Income Payments
Seller shall be entitled to receive an amount equal to all Income paid or distributed on or in respect of the Securities that is not otherwise received by Seller, to the full extent it would be so entitled if the Securities had not been sold to Buyer. Buyer shall, as the parties may agree with respect to any Transaction (or, in
the absence of any such agreement, as Buyer shall reasonably determine in its discretion), on the date such Income is paid or distributed either (i) transfer to or credit to the account of Seller such Income with respect to any Purchased Securities subject to such Transaction or (ii) with respect to Income paid in cash, apply the Income payment or payments to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (A) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Securities sufficient to eliminate such Margin Deficit, or (B) if an Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed.
6. Security Interest
Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, Seller shall be deemed to have pledged to Buyer as security for the performance by Seller of its obligations under each such Transaction, and shall be deemed to have granted to Buyer a security interest in, all of the Purchased Securities with respect to all Transactions hereunder and all Income thereon and other proceeds thereof.
7. Payment and Transfer
Unless otherwise mutually agreed, all transfers of funds hereunder shall be in immediately available funds. All Securities transferred by one party hereto to the other party (i) shall be in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as the party receiving possession may reasonably request, (ii) shall be transferred on the book-entry system of a Federal Reserve Bank, or (iii) shall be transferred by any other method mutually acceptable to Seller and Buyer.
8. Segregation of Purchased Securities
To the extent required by applicable law, all Purchased Securities in the possession of Seller shall be segregated from other securities in its possession and shall be identified as subject to this Agreement. Segregation may be accomplished by appropriate identification on the books and records of the holder, including a financial or securities intermediary or a clearing corporation. All of Seller’s interest in the Purchased Securities shall pass to Buyer on the Purchase Date and, unless otherwise agreed by Buyer and Seller, nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Securities or otherwise selling, transferring, pledging or hypothecating the Purchased Securities, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Securities to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay Income to, or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof.
| | |
Required Disclosure for Transactions in Which the Seller Retains Custody of the Purchased Securities
Seller is not permitted to substitute other securities for those subject to this Agreement and therefore must keep Buyer's securities segregated at all times, unless in this Agreement Buyer grants Seller the right to substitute other securities. If Buyer grants the right to substitute, this means that Buyer's securities will likely be commingled with Seller's own securities during the trading day. Buyer is advised that, during any trading day that Buyer's securities are commingled with Seller's securities, they [will]* [may]** be subject to liens granted by Seller to [its clearing bank]* [third parties]** and may be used by Seller for deliveries on other securities transactions. Whenever the securities are commingled, Seller's ability to resegregate substitute securities for Buyer will be subject to Seller's ability to satisfy [the clearing]* [any]** lien or to obtain substitute securities.
* Language to be used under 17 C.F.R. § 403.4(e) if Seller is a government securities broker or dealer other than a financial institution. ** Language to be used under 17 C.F.R. § 403.5(d) if Seller is a financial institution. |
9. Substitution
(a)Seller may, subject to agreement with and acceptance by Buyer, substitute other Securities for any Purchased Securities. Such substitution shall be made by transfer to Buyer of such other Securities and transfer to Seller of such Purchased Securities. After substitution, the substituted Securities shall be deemed to be Purchased Securities.
(b)In Transactions in which Seller retains custody of Purchased Securities, the parties expressly agree that Buyer shall be deemed, for purposes of subparagraph (a) of this Paragraph, to have agreed to and accepted in this Agreement substitution by Seller of other Securities for Purchased Securities; provided, however, that such other Securities shall have a Market Value at least equal to the Market Value of the Purchased Securities for which they are substituted.
10. Representations
Each of Buyer and Seller represents and warrants to the other that (i) it is duly authorized to execute and deliver this Agreement, to enter into Transactions contemplated hereunder and to perform its obligations hereunder and has taken all necessary action to authorize such execution, delivery and performance, (ii) it will engage in such Transactions as principal (or, if agreed in writing, in the form of an annex hereto or otherwise, in advance of any Transaction by the other party hereto, as agent for a disclosed principal), (iii) the person signing this Agreement on its behalf is duly authorized to do so on its behalf (or on behalf of any such disclosed principal), (iv) it has obtained all authorizations of any governmental body required in connection with this Agreement and the Transactions hereunder and such authorizations are in full force and effect and (v) the execution, delivery and performance of this Agreement and the Transactions hereunder will not violate any law, ordinance, charter, by-law or rule applicable to it or any agreement by which it is bound or by which any of its assets are affected. On the Purchase Date for any Transaction Buyer and Seller shall each be deemed to repeat all the foregoing representations made by it.
11. Events of Default
In the event that (i) Seller fails to transfer or Buyer fails to purchase Purchased Securities upon the applicable Purchase Date, (ii) Seller fails to repurchase or Buyer fails to transfer Purchased Securities upon the applicable Repurchase Date, (iii) Seller or Buyer fails to comply with Paragraph 4 hereof, (iv)
Buyer fails, after [***] notice, to comply with Paragraph 5 hereof, (v) an Act of Insolvency occurs with respect to Seller or Buyer, (vi) any representation made by Seller or Buyer shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated, or (vii) Seller or Buyer shall admit to the other its inability to, or its intention not to, perform any of its obligations hereunder (each an “Event of Default”):
(a)The nondefaulting party may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). The nondefaulting party shall (except upon the occurrence of an Act of Insolvency) give notice to the defaulting party of the exercise of such option as promptly as practicable.
(b)In all Transactions in which the defaulting party is acting as Seller, if the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, (i) the defaulting party's obligations in such Transactions to repurchase all Purchased Securities, at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Paragraph, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by the nondefaulting party and applied to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder, and (iii) the defaulting party shall immediately deliver to the nondefaulting party any Purchased Securities subject to such Transactions then in the defaulting party's possession or control.
(c)In all Transactions in which the defaulting party is acting as Buyer, upon tender by the nondefaulting party of payment of the aggregate Repurchase Prices for all such Transactions, all right, title and interest in and entitlement to all Purchased Securities subject to such Transactions shall be deemed transferred to the nondefaulting party, and the defaulting party shall deliver all such Purchased Securities to the nondefaulting party.
(d)If the nondefaulting party exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Paragraph, the nondefaulting party, without prior notice to the defaulting party, may:
(i)as to Transactions in which the defaulting party is acting as Seller, (A) immediately sell, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, any or all Purchased Securities subject to such Transactions and apply the proceeds thereof to the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder or (B) in its sole discretion elect, in lieu of selling all or a portion of such Purchased Securities, to give the defaulting party credit for such Purchased Securities in an amount equal to the price therefor on such date, obtained from a generally recognized source or the most recent closing bid quotation from such a source, against the aggregate unpaid Repurchase Prices and any other amounts owing by the defaulting party hereunder; and
(ii)as to Transactions in which the defaulting party is acting as Buyer, (A) immediately purchase, in a recognized market (or otherwise in a commercially reasonable manner) at such price or prices as the nondefaulting party may reasonably deem satisfactory, securities (“Replacement
Securities”) of the same class and amount as any Purchased Securities that are not delivered by the defaulting party to the nondefaulting party as required hereunder or (B) in its sole discretion elect, in lieu of purchasing Replacement Securities, to be deemed to have purchased Replacement Securities at the price therefor on such date, obtained from a generally recognized source or the most recent closing offer quotation from such a source.
Unless otherwise provided in Annex I, the parties acknowledge and agree that (1) the Securities subject to any Transaction hereunder are instruments traded in a recognized market, (2) in the absence of a generally recognized source for prices or bid or offer quotations for any Security, the nondefaulting party may establish the source therefor in its sole discretion and (3) all prices, bids and offers shall be determined together with accrued Income (except to the extent contrary to market practice with respect to the relevant Securities).
(e)As to Transactions in which the defaulting party is acting as Buyer, the defaulting party shall be liable to the nondefaulting party for any excess of the price paid (or deemed paid) by the nondefaulting party for Replacement Securities over the Repurchase Price for the Purchased Securities replaced thereby and for any amounts payable by the defaulting party under Paragraph 5 hereof or otherwise hereunder.
(f)For purposes of this Paragraph 11, the Repurchase Price for each Transaction hereunder in respect of which the defaulting party is acting as Buyer shall not increase above the amount of such Repurchase Price for such Transaction determined as of the date of the exercise or deemed exercise by the nondefaulting party of the option referred to in subparagraph (a) of this Paragraph.
(g)The defaulting party shall be liable to the nondefaulting party for (i) the amount of all reasonable legal or other expenses incurred by the nondefaulting party in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into replacement transactions and entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
(h)To the extent permitted by applicable law, the defaulting party shall be liable to the nondefaulting party for interest on any amounts owing by the defaulting party hereunder, from the date the defaulting party becomes liable for such amounts hereunder until such amounts are (i) paid in full by the defaulting party or (ii) satisfied in full by the exercise of the nondefaulting party’s rights hereunder. Interest on any sum payable by the defaulting party to the nondefaulting party under this Paragraph 11(h) shall be at a rate equal to the greater of the Pricing Rate for the relevant Transaction or the Prime Rate.
(i)The nondefaulting party shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
12. Single Agreement
Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a
default by it in respect of all Transactions hereunder, (ii) that each of them shall be entitled to set off claims and apply property held by them in respect of any Transaction against obligations owing to them in respect of any other Transactions hereunder and (iii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted.
13. Notices and Other Communications
Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger or otherwise to the address specified in Annex II hereto, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.
14. Entire Agreement; Severability
This Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
15. Non-assignability; Termination
(a)The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by either party without the prior written consent of the other party, and any such assignment without the prior written consent of the other party shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. This Agreement may be terminated by either party upon giving written notice to the other, except that this Agreement shall, notwithstanding such notice, remain applicable to any Transactions then outstanding.
(b)Subparagraph (a) of this Paragraph 15 shall not preclude a party from assigning, charging or otherwise dealing with all or any part of its interest in any sum payable to it under Paragraph 11 hereof.
16. Governing Law
This Agreement shall be governed by the laws of the State of New York without giving effect to the conflict of law principles thereof.
17. No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Paragraphs 4(a) or 4(b) hereof will not constitute a waiver of any right to do so at a later date.
18. Use of Employee Plan Assets
(a)If assets of an employee benefit plan subject to any provision of the Employee Retirement Income Security Act of 1974 (“ERISA”) are intended to be used by either party hereto (the “Plan Party”) in a Transaction, the Plan Party shall so notify the other party prior to the Transaction. The Plan Party shall represent in writing to the other party that the Transaction does not constitute a prohibited transaction under ERISA or is otherwise exempt therefrom, and the other party may proceed in reliance thereon but shall not be required to so proceed.
(b)Subject to the last sentence of subparagraph (a) of this Paragraph, any such Transaction shall proceed only if Seller furnishes or has furnished to Buyer its most recent available audited statement of its financial condition and its most recent subsequent unaudited statement of its financial condition.
(c)By entering into a Transaction pursuant to this Paragraph, Seller shall be deemed (i) to represent to Buyer that since the date of Seller's latest such financial statements, there has been no material adverse change in Seller's financial condition which Seller has not disclosed to Buyer, and (ii) to agree to provide Buyer with future audited and unaudited statements of its financial condition as they are issued, so long as it is a Seller in any outstanding Transaction involving a Plan Party.
19. Intent
(a)The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended (except insofar as the type of Securities subject to such Transaction or the term of such Transaction would render such definition inapplicable), and a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
(b)It is understood that either party's right to liquidate Securities delivered to it in connection with Transactions hereunder or to exercise any other remedies pursuant to Paragraph 11 hereof, is a contractual right to liquidate such Transaction as described in Sections 555 and 559 of Title 11 of the United States Code, as amended.
(c)The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
(d)It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
20. Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
(a)in the case of Transactions in which one of the parties is a broker or dealer registered with the Securities and Exchange Commission (“SEC”) under Section 15 of the Securities Exchange Act of
1934 (“1934 Act”), the Securities Investor Protection Corporation has taken the position that the provisions of the Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other party with respect to any Transaction hereunder;
(b)in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
(c)in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
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JEFFERIES FUNDING LLC
By:
Title:
Date: | LOANDEPOT.COM, LLC
By:
Title:
Date: |
Annex I
Supplemental Terms and Conditions
This Annex I forms a part of the Third Amended and Restated Master Repurchase Agreement dated as of October 28, 2022 (as amended, supplemented or otherwise modified from time to time, the “Agreement”) between Jefferies Funding LLC (“Buyer”) and loanDepot.com, LLC (“Seller”), which Agreement amends, restates and replaces that certain Second Amended and Restated Master Repurchase Agreement and Annex I between Buyer and Seller dated as of January 2, 2018 (the “Existing Agreement”). Capitalized terms used but not defined in this Annex I shall have the meanings ascribed to them in the Agreement (including all Annexes hereto).
1.Other Applicable Annexes. In addition to this Annex I and Annex II, the following Annexes shall form a part of the Agreement and shall be applicable thereunder:
None.
2.Inconsistency. In the event of any inconsistency between the terms of the Agreement and this Annex, this Annex shall govern.
3.Rule of Construction. Save for the amendments made in this Annex I, the parties agree that the text of the body of the Agreement is intended to conform with the Master Repurchase Agreement dated September 1996 promulgated by The Bond Market Association and shall be construed accordingly. The parties agree that for the purpose of the Program Documents, all references to Buyer shall mean Jefferies Funding LLC and all references to Seller shall mean loanDepot.com, LLC. Any and all references to “Purchased Securities” in the Agreement shall be deemed to refer to “Purchased Mortgage Loans”. Any and all references to “Securities” in the Agreement shall be deemed to refer to “Mortgage Loans”. Any and all references to “Additional Purchased Securities” in the Agreement shall be deemed to refer to “Additional Purchased Mortgage Loans”.
4.Definitions (Paragraph 2). Paragraph 2 of the Agreement is hereby amended to add the following definitions and, in any case where the definition already exists in Paragraph 2, the definition is deleted in Paragraph 2 its entirety and replaced with the following:
“Ability to Repay Rule” shall mean 12 CFR 1026.43(c), including all applicable official staff commentary.
“Accepted Servicing Practices” shall mean those accepted, customary and prudent mortgage servicing practices and procedures (including collection procedures) of prudent mortgage lending institutions which service mortgage loans of the same type as the Mortgage Loans in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with the applicable requirements of each Agency Program, applicable law, FHA Regulations and VA Regulations, and the applicable requirements of any private mortgage insurer so that the FHA insurance, VA Loan Guaranty Agreement or any other applicable insurance or guarantee in respect of any Mortgage Loan is not voided or reduced.
“Affiliate” shall mean, with respect to any specified entity, any other entity controlling” or “controlled by” or “under common control with such specified entity. For the purposes of this definition, “control” when used with respect to a specified entity means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise, and the terms “controlling” and “controlled” having meanings correlative to the foregoing. For the avoidance of doubt, none of the Excluded Affiliates shall be considered an Affiliate for purposes of this Agreement unless otherwise specified herein.
“Agency Audit” shall mean any Applicable Agency, FHA and HUD audits, examinations, evaluations, monitoring reviews and reports of its origination and servicing operations.
“Agency Eligible Mortgage Loan” shall mean a Mortgage Loan that is in Strict Compliance with the applicable Agency Guide and the eligibility requirements specified for the applicable Agency Program, and is eligible for sale to or securitization by FHMLC, FNMA, or GNMA.
“Agency Guide” shall mean the FHLMC Guide, the FNMA Guide or the GNMA Guide, as applicable.
“Agency Program” shall mean the FHLMC Program, the FNMA Program or the GNMA Program, as applicable.
“Agency-Required eNote Legend” shall mean the legend or paragraph required by Fannie Mae or Freddie Mac, as applicable, to be set forth in the text of an eNote, which includes the provisions set forth on Exhibit 22 to the DB Custodial Agreement, as may be amended from time to time by Fannie Mae or Freddie Mac, as applicable.
“Anti-Money Laundering Laws” shall have the meaning set forth in Paragraph 10(s).
“Applicable Agency” shall mean GNMA, FNMA or FHLMC, as applicable.
“Applicable Margin” shall have the meaning assigned thereto in the Pricing Side Letter.
“Applicable Percentage” shall have the meaning assigned thereto in the Pricing Side Letter.
“Approvals” shall mean, with respect to Seller, the approvals obtained from the Applicable Agency or HUD in designation of Seller as a GNMA-approved issuer, a GNMA-approved servicer, a FHA-approved mortgagee, a VA-approved lender, a FNMA approved Seller/Servicer or a FHLMC approved Seller/Servicer, as applicable, in good standing.
“Approved Originator” shall mean, with respect to any Eligible Mortgage Loan that (i) is a Platform HELOC, Seller originating on the Branded Origination Application in accordance with the Underwriting Guidelines, (ii) is a HELOC other than a Platform HELOC, Seller or an originator approved by Buyer in its sole discretion, and (iii) is not a HELOC, Seller or an originator approved by Buyer in its sole discretion.
“Approved Title Insurance Company” shall mean a title insurance company that has not been disapproved by Buyer in its reasonable discretion in a written notice delivered to the Seller by Buyer.
“Assignment of Mortgage” shall mean, with respect to any Mortgage, an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the
laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment of the Mortgage to Buyer.
“Authoritative Copy” shall mean, with respect to an eNote, the unique copy of such eNote that is within the Control of the Controller.
“Bankruptcy Code” shall mean Title 11 of the United States Code, as amended from time to time.
“Branded Origination Application” shall means the home equity line of credit origination software-as-a-service application licensed by Figure Lending Corp. to Seller and branded with Seller’s marks, licensed pursuant to the Master Services Agreement.
“Business Day” or “business day” shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York, or banking and savings and loan institutions in the State of New York or the City of New York are closed, or (iii) a day on which trading in securities on the New York Stock Exchange or any other major securities exchange in the United States is not conducted.
“Buyer’s Margin Percentage” shall have the meaning assigned thereto in the Pricing Side Letter.
“Change of Control” shall mean the acquisition by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules of the Securities and Exchange Commission thereunder), but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Permitted Holders or their Affiliates becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 51% or more of the equity securities of loanDepot, Inc., a Delaware corporation, entitled to vote for members of the board of directors or equivalent governing body of Seller on a fully-diluted basis.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Collection Account” shall mean the account, if any, established pursuant to Section 22(x) of this Annex at the account bank designated by Buyer into which all Income shall be deposited by Seller or Servicer, which account shall be subject to a control agreement.
“Combined Loan to Value Ratio” or “CLTV” shall mean with respect to any Mortgage Loan, the ratio of (i) the original outstanding principal amount (or, in the case of a HELOC, the current outstanding Draw amount) of the Mortgage Loan and any other loan which is secured by a lien on the related Mortgaged Property to (ii) the lesser of (a) the appraised value of the Mortgaged Property at origination of such Mortgage Loan (except (x) in the case of any FNMA PIW Loan and any FHLMC ACE Loan with respect to which the related Agency shall have waived the appraisal and the related DU/LP Underwriter value is used or (y) in the case of a Second Lien Mortgage Loan (other than a Second Lien Mortgage Loan originated under the CES Flex Program or any successor program) or a HELOC that is a First Lien Mortgage Loan, the lowest value obtained using the most senior product in the agreed upon valuation product waterfall (each such product, a “Valuation Product”)), or (b) if the Mortgaged Property was purchased within twelve (12) months of the origination of the Mortgage Loan, the purchase price of the Mortgaged Property.
“Committed Amount” shall have the meaning set forth in the Pricing Side Letter.
“Control” shall mean, with respect to an eNote, the “control” of such eNote within the meaning of UETA and/or, as applicable, E-SIGN, which is established by reference to the MERS eRegistry and any party designated therein as the Controller.
“Control Failure” shall mean, with respect to an eNote, (i) if the Controller status of the eNote shall not have been transferred to Buyer, (ii) Buyer shall otherwise not be designated as the Controller of such eNote in the MERS eRegistry (other than pursuant to a Bailee Letter), (iii) if the eVault shall have released the Authoritative Copy of an eNote in contravention of the requirements of the DB Custodial Agreement, or (iv) if the DB Custodian initiated any changes on the MERS eRegistry in contravention of the terms of the DB Custodial Agreement.
“Controller” shall mean, with respect to an eNote, the party designated in the MERS eRegistry as the “Controller”, and who in such capacity shall be deemed to be “in control” or to be the “controller” of such eNote within the meaning of UETA or E-SIGN, as applicable.
“Credit Limit” shall mean, with respect to each HELOC, the maximum amount permitted under the terms of the related Credit Line Agreement.
“Credit Line Agreement” shall mean, with respect to each HELOC, the related home equity line of credit agreement, account agreement and promissory note (if any) executed by the related Mortgagor and any amendment or modification thereof.
“Custodial Agreement” shall mean (i) the DB Custodial Agreement or (ii) the WSFS Custodial Agreement.
“Custodian” shall mean (i) DB Custodian, (ii) WSFS Custodian and (iii) such other custodian as may be acceptable to Buyer in its sole discretion, and their permitted successors and assigns.
“DART Electronic Agent” shall mean Figure Lending Corp., or any successor as electronic agent and operator of the DART System.
“DART Electronic Tracking Agreement” shall mean the Electronic Tracking Agreement, to be dated on or about March 26, 2026, by and among the DART Electronic Agent, DCM and Buyer, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“DART Escrow Agreement” shall mean that certain Escrow Agreement, dated as of March 26, 2026, by and among the DART Electronic Agent, the Buyer, Wilmington Savings Fund Society, FSB, as escrow agent, and acknowledged and agreed to by DCM, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“DART Mortgage Loan” shall mean any Mortgage Loan registered with the DART System and as to which DCM is the mortgagee of record.
“DART Procedures Manual” shall mean that certain DART Procedures Manual, which contains the DART System participation rules and procedures, in each case, as may be amended from time to time.
“DART System” shall mean the system operated by the DART Electronic Agent which operates as a registry of lien ownership and rights in the mortgage loans referenced therein.
“DB Custodial Agreement” shall mean that certain Fourth Amended and Restated Custodial and Disbursement Agreement, dated as of June 28, 2022, among Seller, Buyer, and Deutsche Bank National Trust Company, as Custodian and Disbursement Agent, as amended, restated, supplemented, or otherwise modified from time to time.
“DB Custodian” shall mean Deutsche Bank National Trust Company.
“DCM” shall mean DART Collateral Manager LLC, as the nominal mortgagee of record with respect to DART Mortgage Loans.
“Debt Yield Ratio” shall mean, with respect to any Mortgaged Property or Properties directly or indirectly securing a Mortgage Loan, the quotient (expressed as a percentage) of (i) net operating income for the trailing twelve-month period for the most recently ended fiscal quarter, divided by (ii) the total amount of indebtedness secured directly or indirectly by such Mortgaged Property or Properties that is senior to or pari passu with such Mortgage Loan.
“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Delegatee” shall mean, with respect to an eNote, the party designated in the MERS eRegistry as the “Delegatee” or “Delegatee for Transfers”, who in such capacity is authorized by the Controller to perform certain MERS eRegistry transactions on behalf of the Controller such as Transfers of Control and Transfers of Control and Location.
“Delinquency Early Buyout” shall mean the purchase of a Mortgage Loan from GNMA Security due to a delinquency.
“Disbursement Account” shall mean the account established by Buyer pursuant to which funds shall be disbursed to fund any Wet Loan.
“Disbursement Agent” shall mean (i) Deutsche Bank National Trust Company, and (ii) such other disbursement agent as may be acceptable to Buyer in its sole discretion, and their permitted successors and assigns.
“Draw” shall mean, with respect to each HELOC, an additional borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
“Draw Date” shall mean the date on which a Draw Transaction is entered into by Buyer.
“Draw Transaction” shall mean an additional funding of Purchase Price with respect to Purchased Mortgage Loans that are HELOCs, and subject to a Transaction hereunder in order to fund one or more Draws or reimburse a Servicer or Subservicer for advances made by it pursuant to the applicable servicing agreement for the purpose of funding one or more Draws thereunder.
“Draw Transaction Request” shall mean a request to enter into a Draw Transaction executed and delivered by Seller to Buyer in accordance with Section 3(j).
“DU/LP Underwriter” shall mean Fannie Mae’s Desktop Underwriter Program or Freddie Mac’s Loan Product Advisor Program, as applicable.
“Early Buyout” shall mean a Delinquency Early Buyout or a Modification Early Buyout or both, as the context may require.
“eCommerce Laws” shall mean, as applicable, E-SIGN, the UETA, any applicable state or local equivalent or similar laws and regulations, and any rules, regulations and guidelines promulgated under any of the foregoing with respect to electronic signatures, at the applicable time of determination.
“Electronic Agent” shall mean MERSCORP Holdings, Inc., or its successor in interest or assigns.
“Electronic Record” shall mean, with respect to an eMortgage Loan, the related eNote and all other documents comprising the Mortgage File electronically created and that are stored in an electronic format, if any.
“Electronic Tracking Agreement” shall mean one or more Electronic Tracking Agreements with respect to (x) the tracking of changes in the ownership, mortgage servicers and servicing rights ownership of Purchased Mortgage Loans held on the MERS System, and (y) the tracking of the Control of eNotes held on the MERS eRegistry, each in a form acceptable to Buyer, in each case, as the same may amended, restated, supplemented or otherwise modified, from time to time.
“Eligible Mortgage Loan” shall mean a First Lien Mortgage Loan or Second Lien Mortgage Loan that (i) is secured by an Eligible Property, (ii) satisfies each of the loan-level representations and warranties set forth on Schedule 1 hereto, (iii) satisfies each of the additional, applicable criteria set forth on Exhibit A to the Pricing Side Letter in the column entitled “Additional Criteria”, (iv) does not exceed the applicable sublimits set forth on Exhibit A to the Pricing Side Letter in the column entitled “Sublimits”, (v) is not delinquent (except with respect to GNMA EBOs), and (vi) is otherwise deemed by Buyer in its sole discretion to be eligible for purchase hereunder, on the related Purchase Date. Buyer shall have the right to mark the Market Value of any Mortgage Loan to zero and/or require the repurchase of such Mortgage Loan if such Mortgage Loan does not satisfy the foregoing criteria, unless Buyer and Seller otherwise agree.
“Eligible Property” shall mean a Mortgaged Property that satisfies the requirements of subsection (g) of Schedule 1 to this Agreement or such other property type acceptable to Buyer in its sole discretion.
“eMortgage Loan” shall mean a Mortgage Loan with respect to which there is an eNote and as to which some or all of the other documents comprising the related Mortgage File may be created electronically and not by traditional paper documentation with a pen and ink signature.
“eNote” shall mean, with respect to any eMortgage Loan, the electronically created and stored Note that is a Transferable Record.
“eNote Replacement Failure” shall have the meaning set forth in the DB Custodial Agreement.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” shall mean any entity or trade or business that is a member of any group of organizations described in Section 414(b), (c), (m) of (o) of the Code of which Seller is a member.
“Escrow Instruction Letter” shall mean, with respect to any Wet Loan (other than an eMortgage Loan or a Platform HELOC) that becomes subject to a Transaction before the end of the applicable Rescission period, an escrow agreement or letter, which is fully assignable to Buyer, stating that in the event of a Rescission or if for any other reason such Mortgage Loan fails to fund on a given day, the party conducting the closing is holding all funds which would have been disbursed on behalf of the Mortgagor as agent for and for the benefit of Buyer and such funds shall be redeposited in the Disbursement Account for the benefit of Buyer not later than one (1) Business Day after the date of Rescission or other failure of the Mortgage Loan to fund on a given day.
“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water charges, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any Note or Mortgage or any other document.
“E-SIGN” shall mean the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.
“eVault” shall mean an electronic repository established and maintained by the DB Custodian for delivery and storage of eNotes.
“Excluded Affiliates” shall mean, Permitted Holders[***] or any joint venture formed by Seller after the date hereof in which Seller directly or indirectly holds la 50% or less ownership interest.
“Executive Order” shall mean Executive Order 13224-- Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.
“Existing Agreement” shall have the meaning set forth in the Preamble to Annex I above.
“Expiration Date” shall have the meaning assigned thereto in the Pricing Side Letter.
“Fannie Mae” shall mean Fannie Mae, or any successor thereto.
“FHA” shall mean the Federal Housing Administration or any successor thereto.
“FHA Approved Mortgagee” shall mean a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA LEAP System” shall mean the FHA’s Lender Electronic Assessment Portal, together with any successor FHA electronic access portal.
“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.
“FHA Mortgage Insurance Contract” shall mean the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” shall mean the FHA Single Family/Federal Housing Administration (24 C.F.R. 200 to 299)/Subchapter B: Mortgage and Loan Insurance Programs Under National Housing Act and Other Authorities/Part 206: Home Equity Conversion Mortgage Insurance, as amended from time to time.
“FHLMC” or “Freddie Mac” shall mean Freddie Mac or any successor thereto.
“FHLMC ACE Loan” shall mean a FHLMC Mortgage Loan that received an appraisal waiver from FHLMC in accordance with the FHLMC Guide in effect at the time of the origination of such Mortgage Loan through Freddie Mac’s Automated Collateral Evaluation (ACE) program.
“FHLMC Guide” shall mean the Freddie Mac Sellers' and Servicers' Guide, as such Guide may hereafter from time to time be amended including modifications and variances applicable to Seller.
“FHLMC Mortgage Loan” shall mean a mortgage loan that is in Strict Compliance with the eligibility requirements specified for the applicable FHLMC Program described in the FHLMC Guide.
“FHLMC Program” shall mean the FHLMC Home Mortgage Guarantor Program or the FHLMC FHA/VA Home Mortgage Guarantor Program, as described in the FHLMC Guide.
“Figure” shall mean Figure Lending LLC.
“Figure Connect” shall mean the loan asset marketplace ecosystem established by Figure Lending Corp.
“First Lien Mortgage Loan” shall mean a Mortgage Loan that is secured by the Lien on the Mortgaged Property and is subject to no other prior Liens on such Mortgaged Property securing financing obtained by the related Mortgagor.
“FNMA” or “Fannie Mae” shall mean Fannie Mae or any successor thereto.
“FNMA Guide” shall mean the Fannie Mae MBS Selling and Servicing Guide, as such Guide may hereafter from time to time be amended including modifications and variances applicable to Seller.
“FNMA Mortgage Loan” shall mean a mortgage loan that is in Strict Compliance with the eligibility requirements specified for the applicable FNMA Program described in the FNMA Guide.
“FNMA PIW Loan” shall mean a FNMA Mortgage Loan that received an appraisal waiver from FNMA in accordance with the FNMA Guide in effect at the time of the origination of such Mortgage Loan through Fannie Mae’s Property Inspection Waiver (PIW) program.
“FNMA Program” shall mean the Fannie Mae Guaranteed Mortgage-Backed Securities Program, as described in the Fannie Mae Guide.
“GAAP” shall mean generally accepted accounting principles as in effect from time to time in the United States of America.
“GNMA” shall mean the Government National Mortgage Association or any successor thereto.
“GNMA EBO” shall mean a FHA Loan or VA Loan which is subject to an Early Buyout and is a Purchased Mortgage Loan.
“GNMA Guide” shall mean the GNMA Mortgage-Backed Securities Guide I or II, as such Guide may hereafter from time to time be amended including modifications and variances applicable to Seller.
“GNMA Mortgage Loan” shall mean a mortgage loan that is in Strict Compliance with the eligibility requirements specified for the applicable GNMA Program in the applicable GNMA Guide.
“GNMA Program” shall mean the Ginnie Mae Mortgage-Backed Securities Program, as described in the Fannie Mae Guide.
“GNMA Security” shall mean a mortgage-backed security guaranteed by GNMA pursuant to the GNMA Guide.
“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over a Person, any of its Subsidiaries or any of its properties.
“Hash Value” shall mean, with respect to an eNote, the unique, tamper-evident digital signature of such eNote that is stored with MERS.
“HELOC” shall mean a Mortgage Loan that is a home equity line of credit secured by a mortgage, deed of trust or other instrument creating a first lien or second lien on the related Mortgaged Property, which lien secures the related line of credit and which, with respect to any Platform HELOC, is located on the Platform. For the avoidance of doubt, a HELOC may be a First Lien Mortgage Loan or a Second Lien Mortgage Loan.
“HELOC Documents” shall mean, with respect to a Platform HELOC, the documents referred to in Exhibit 5 of the WSFS Custodial Agreement and any additional documents pertaining to such HELOC required to be added to the related Mortgage File pursuant to the terms of the WSFS Custodial Agreement.
“Hsieh Investors” shall mean each of [***].
“HUD” shall mean the United States Department of Housing and Urban Development or any successor thereto.
“HUD Account” shall mean the account designated as account number 1444460107 established by Seller.
“Indebtedness” shall have the meaning assigned thereto in the Pricing Side Letter.
“Insured Closing Letter” shall mean, with respect to any Wet Loan (other than an eMortgage Loan or a Platform HELOC) that becomes subject to a Transaction before the end of the applicable Rescission period, a letter of indemnification from an Approved Title Insurance Company, in any jurisdiction where insured closing letters are permitted under applicable law and regulation, addressed to Seller, which is fully assignable to Buyer, with coverage that is customarily acceptable to Persons engaged in the origination of mortgage loans identifying the Settlement Agent covered thereby, which may be in the form of a blanket letter for each relevant jurisdiction.
“Interest Period” shall mean, with respect to any Transaction (including, if applicable, a Draw Transaction), the period commencing on the Purchase Date (or in the case of a Draw Transaction, if applicable, on the related Draw Date) with respect to such Transaction and ending on the calendar day prior to the related Repurchase Date. Notwithstanding the foregoing, no Interest Period may end after the Termination Date.
“Investment Company Act” shall mean the Investment Company Act of 1940, as amended, including all rules and regulations promulgated thereunder.
“Jumbo Mortgage Loan” shall mean, a First Lien Mortgage Loan for which the original loan amount is greater than the conforming limit in the jurisdiction where the related Mortgaged Property is located.
“Lien” shall mean any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement), any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement executed by or on behalf of the debtor named therein under the UCC or comparable law of any jurisdiction.
“Liquidity” shall have the meaning assigned thereto in the Pricing Side Letter.
“Loan to Value Ratio” or “LTV” shall mean with respect to any Mortgage Loan, the ratio of the outstanding principal amount (or, in the case of a HELOC, the current outstanding Draw amount) of such Mortgage Loan at the time of origination to the lesser of (a) the appraised value of the related Mortgaged Property at origination of such Mortgage Loan (except (i) in the case of any FNMA PIW Loan and any FHLMC ACE Loan with respect to which the related Agency shall have waived the appraisal and the related DU/LP Underwriter value is used or (ii) in the case of a Second Lien Mortgage Loan (other than a Second Lien Mortgage Loan originated under the CES Flex Program or any successor program) or a HELOC that is a First Lien Mortgage Loan, the value set forth in the related Valuation Product) and (b) if the related Mortgaged Property was purchased within twelve (12) months of the origination of such Mortgage Loan, the purchase price of the related Mortgaged Property.
“Location” shall mean, with respect to an eNote, the location of such eNote which is established by reference to the MERS eRegistry.
“Margin Notice Deadline” shall mean 10:00 A.M. (New York time), unless otherwise agreed to between the parties with respect to any Transaction.
“Market Value” shall mean the value, determined by Buyer in its sole discretion, of the Purchased Mortgage Loans if sold in their entirety to a single third-party purchaser taking into account the fact that the underlying Mortgage Loans may be sold under circumstances in which the Seller is in default under this Agreement. Buyer’s determination of Market Value shall be conclusive upon the parties, absent manifest error on the part of Buyer. Buyer shall have the right to mark to market the Purchased Mortgage Loans on a daily basis which Market Value with respect to one or more of the Purchased Mortgage Loans may be determined to be zero. Seller acknowledges that Buyer’s determination of Market Value is for the limited purpose of determining the value of Purchased Mortgage Loans which are subject to Transactions hereunder without the ability to perform customary purchaser’s due diligence and is not necessarily equivalent to a determination of the fair market value of the Mortgage Loans achieved by obtaining competing bids in an orderly market in which the originator/servicer is not in default under a revolving debt facility and the bidders have adequate opportunity to perform customary Mortgage Loan and servicing due diligence. The Market Value shall be deemed to be zero with respect to each Mortgage Loan that is not an Eligible Mortgage Loan.
“Master Servicer Field” shall mean, with respect to an eNote, the field entitled, “Master Servicer” in the MERS eRegistry.
“Master Services Agreement” means the Master Services Agreement entered into by Figure Lending Corp. and Seller, including any statements of work, exhibits, and addenda thereto.
“Material Adverse Effect” shall mean a material adverse effect on (a) the property, business, operations or financial condition of Seller, (b) the ability of Seller to perform its obligations under any of the Program Documents to which it is a party, (c) the validity or enforceability of any material provision of the Program Documents, (d) the rights and remedies of Buyer under any of the Program Documents, (e) the timely repurchase of the Purchased Mortgage Loans or payment of other amounts payable in connection therewith or (f) the Purchased Items taken as a whole.
“Maximum Aggregate Purchase Price” shall have the meaning set forth in the Pricing Side Letter.
“Maximum HELOC Amount” shall mean, with respect to a HELOC, the maximum amount that the related Mortgagor is permitted to draw under such HELOC, assuming that no other Draws are outstanding under such HELOC.
“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a Delaware corporation, or any successor in interest thereto.
“MERS eDelivery” shall mean the transmission system operated by the Electronic Agent that is used to deliver eNotes, other Electronic Records and data from one MERS eRegistry member to another using a system-to-system interface and conforming to the standards of the MERS eRegistry.
“MERS eRegistry” shall mean the electronic registry operated by the Electronic Agent that acts as the legal system of record that identifies the Controller, Delegatee and Location of the Authoritative Copy of registered eNotes.
“MERS Identification Number” shall mean the eighteen digit number permanently assigned to each MERS Mortgage Loan.
“MERS Mortgage Loan” shall mean any Mortgage Loan as to which the related Mortgage or Assignment of Mortgage has been recorded in the name of MERS, as agent for the holder from time to time of the Note, and which is identified as a MERS Mortgage Loan on the related Mortgage Loan Schedule.
“MERS Org ID” shall mean a number assigned by the Electronic Agent that uniquely identifies MERS members, or, in the case of a MERS Org ID that is a “Secured Party Org ID”, uniquely identifies MERS eRegistry members.
“MERS System” shall mean the mortgage electronic registry system operated and maintained by the Electronic Agent that tracks changes in Mortgage ownership, mortgage servicers and servicing rights ownership interests in Mortgage Loans.
“Modification Early Buyout” shall mean a Mortgage Loan that has been purchased from a GNMA Security due to modification of the original terms of the Mortgage Loan.
“Mortgage” shall mean with respect to a Mortgage Loan, the mortgage, deed of trust or other instrument, which creates a first or second Lien on the fee simple estate in such real property which secures the Note; provided that, for the avoidance of doubt, the “Mortgage” with respect to a HELOC sold and serviced under the Master Services Agreement is the related “Security Instrument” as defined therein.
“Mortgage File” shall mean, with respect to each Mortgage Loan, the related files required to be delivered to the applicable Custodian by the Seller pursuant to the applicable Custodial Agreement.
“Mortgage Loan” shall mean a mortgage loan that is secured by a Mortgaged Property, which applicable Custodian has been instructed to hold for Buyer pursuant to the applicable Custodial Agreement, and which Mortgage Loan includes, without limitation, (i) a Note, the related Mortgage and all other related loan documents, (ii) all right, title and interest of Seller in and to the Mortgaged Property covered by such Mortgage and (iii) the related Servicing Rights.
“Mortgage Loan Documents” shall mean, with respect to each Mortgage Loan, the documents comprising the Mortgage File for such Mortgage Loan, which shall include each of the documents set forth on Schedule 2 hereto.
“Mortgage Loan Schedule” shall mean the list of Purchased Mortgage Loans or Mortgage Loans proposed to be purchased by Buyer that will be delivered in hard copy or electronic format to Buyer and shall incorporate the fields delivered to the Seller by the Buyer and any other information required by Buyer and any other additional information to be provided pursuant to the applicable Custodial Agreement.
“Mortgaged Property” shall mean the real property (including all improvements, buildings, fixtures, building equipment and personal property thereon and all additions, alterations and replacements made at any time with respect to the foregoing) and all other collateral securing repayment of the debt evidenced by a Note; provided that, “Mortgaged Property” with respect to a HELOC sold and serviced under the Master Services Agreement is the related “Encumbered Property” as defined therein.
“Mortgagee” shall mean the record holder of a Note secured by a Mortgage; provided that, for the avoidance of doubt, the nominal “Mortgagee” with respect to a Dart Mortgage Loan is DCM.
“Mortgagor” shall mean the obligor or obligors on a Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder; provided that, for the avoidance of doubt, the “Mortgagor” with respect to a HELOC sold and serviced under the Master Services Agreement is the related “Obligor” as defined therein.
“Multiemployer Plan” shall mean, with respect to any Person, a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA which is or was at any time during the current year or the immediately preceding five years contributed to by Seller or any ERISA Affiliate thereof on behalf of its employees and which is covered by Title IV of ERISA.
“Net Income” shall have the meaning set forth in the Pricing Side Letter.
“Net Worth” shall have the meaning set forth in the Pricing Side Letter.
“Note” shall mean, with respect to any Mortgage Loan, the related promissory note together with all riders thereto and amendments thereof or other evidence of indebtedness of the related Mortgagor, which, with respect to a HELOC, may be the Credit Line Agreement.
“Obligations” shall mean (a) all of Seller’s obligation to pay the Repurchase Price on the Repurchase Date and other obligations and liabilities of Seller to Buyer (or any other Person) arising under, or in connection with, the Program Documents or directly related to the Purchased Mortgage Loans, whether now existing or hereafter arising; (b) any and all sums paid by Buyer or on behalf of Buyer pursuant to the Program Documents in order to preserve any Purchased Mortgage Loan or its interest therein; and (c) in the event of any proceeding for the collection or enforcement of any of Seller’s indebtedness, obligations or liabilities referred to in clause (a), the reasonable expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Purchased Mortgage Loan, or of any exercise by Buyer of its rights under the Program Documents, including without limitation, reasonable attorneys’ fees and disbursements and court costs.
“OFAC” shall mean the Office of Foreign Assets Control of the United States Department of the Treasury.
“OFAC Regulations” shall have the meaning set forth in Paragraph 10(t).
“Parthenon Investors” shall mean each of [***].
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Permitted Holders” shall mean any of the Hsieh Investors and the Parthenon Investors.
“Permitted Non-QM Mortgage Loan” shall mean a First Lien Mortgage Loan that (a) is not a Qualified Mortgage and (b) is originated and underwritten in conformity with the underwriting guideline summary attached to the Pricing Side Letter as Schedule II.
“Permitted Tax Distributions” shall mean as to any taxable period of Seller for which Seller, if a corporation, makes an S corporation election, or if a multi-member limited liability company or a partnership, does not make an election with the Internal Revenue Service to be treated as a corporation, an annual or quarterly distribution necessary to enable each shareholder, partner or member, as applicable, of Seller to pay income taxes attributable to such shareholder, partner or member resulting solely from such shareholder’s, partner’s or member’s allocated share of income of Seller for such period.
“Person” shall mean any legal person, including any individual, corporation, partnership, association, joint-stock company, trust, limited liability company, unincorporated organization, governmental entity (or any agency, instrumentality or political subdivision thereof) or other entity of similar nature.
“Plan” shall mean an employee benefit or other plan established or maintained by either Seller or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer Plan.
“Platform” shall mean Figure Technologies Inc., Figure, Provenance Blockchain Foundation, and any Affiliates thereof and any e-vault, e-registry, or other similar platforms, which use or otherwise employ Platform Technology in connection with its services and is used to provide services (including origination, transfer, and maintenance) in respect of the electronic record of the current ownership of the Mortgage Loans that are HELOCs subject to Transactions.
“Platform HELOC” shall mean a HELOC that was originated on the Platform.
“Platform Technology” shall mean Provenance Blockchain and any other software used by any Platform in connection with origination, transfer, holding, loan servicing, and information management software.
“Post-Default Rate” shall mean, as of any date, the Pricing Rate in effect on such date plus [***].
“Pricing Rate” shall as of any date of determination, be equal to a rate per annum equal to the sum of (i) the greater of (x) the sum of (1) Term SOFR plus (2) the Term SOFR Adjustment and (y) [***]% plus (ii) the Applicable Margin. The Pricing Rate is calculated on the basis of a 360-day year and the actual number of days elapsed between the Purchase Date and the Repurchase Date.
“Pricing Side Letter” shall mean that certain pricing side letter, by and between Buyer and Seller, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Program Documents” shall mean this Agreement and all Annexes, schedules and addendums to this Agreement, each Custodial Agreement, the Pricing Side Letter, the DART Escrow Agreement, the DART Electronic Tracking Agreement, each other Electronic Tracking Agreement, each Takeout Confirmation, the Purchase Agreement Program Documents, each Servicer Instruction Letter Agreement, any servicing agreement and any other agreement entered into by Seller, on the one hand, and Buyer and/or any of its affiliates or subsidiaries (or custodian on its behalf) on the other, in connection herewith or therewith and designated as a Program Document.
“Prohibited Jurisdiction” shall mean any country or jurisdiction, from time to time, that is the subject of a prohibition order (or any similar order or directive), sanctions or restrictions promulgated or administered by any Governmental Authority of the United States.
“Prohibited Person” shall mean any Person (i) listed in the annex to, or otherwise subject to the provisions of, the Executive Order, (ii) that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed to the Annex to, or is otherwise subject to the provisions of, the Executive Order, (iii) with whom the Buyer is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order, (iv) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order, (v) that is named as a “specially designated national and blocked person” on the most current list published by the OFAC at its official website, http://www.treas.gov.ofac/t11sdn.pdf or at any replacement website or other replacement official publication of such list, or (vi) who is an affiliate of a Person listed above.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Jumbo Mortgage Loan” shall mean a Jumbo Mortgage Loan that is originated and underwritten in conformity with Seller’s Underwriting Guidelines.
“Provenance Blockchain” shall mean the open source, public, blockchain-based distributed ledger which is developed and managed by the Provenance Blockchain Foundation, and a technology system used or intended to be used, among other purposes, for storing loan origination and servicing performance data.
“Purchase Agreement” shall mean that certain Mortgage Loan Participation Purchase Agreement, dated as of February 28, 2013, between Seller and Buyer, as the same shall be modified and supplemented and in effect from time to time.
“Purchase Agreement Program Documents” shall mean the “Program Documents” as defined in the Purchase Agreement.
“Purchase Price” shall mean the price at which a Purchased Mortgage Loan is transferred by Seller to Buyer in a Transaction, which shall be calculated as set forth in the Pricing Side Letter.
“Purchase Price Increase” shall mean an increase in the Purchase Price of a Purchased Mortgage Loan resulting from the funding or reimbursement of a Draw (if applicable) by Buyer in respect of one or more Purchased Mortgage Loans that are HELOCs, which shall be equal to the sum of (calculated with respect to each such Purchased Mortgage Loans) the product of (x) the Applicable Percentage times (y) the related Market Value times (z) the amount of the Draw being funded or reimbursed.
The term “Purchased Securities” and its corresponding definition shall be deleted in its entirety and replaced with the term “Purchased Mortgage Loans” and the following definition:
“Purchased Mortgage Loans” shall mean all Mortgage Loans, together with the related records and servicing rights, transferred by Seller to Buyer in a Transaction hereunder. The term “Purchased Mortgage Loans” with respect to any Transaction at any time also shall include any Additional Purchased Mortgage Loans delivered pursuant to Paragraph 4(a) of the Agreement.
“QM Rule” shall mean 12 CFR 1026.43(e), including all applicable official staff commentary.
“Qualified Affiliate” shall mean any Affiliate (including any Excluded Affiliate) that has a contractual or other right to require Seller to make payment, dividend or distribution to it of an amount greater than or equal to $[***], or otherwise could cause liability to Seller in an amount greater than or equal to $[***].
“Qualified Mortgage” shall mean a Mortgage Loan that satisfies the criteria for a “qualified mortgage” as set forth in the QM Rule.
“Rebuttable Presumption Qualified Mortgage” shall mean a Qualified Mortgage with an annual percentage rate that exceeds the average prime offer rate for a comparable mortgage loan as of the date the interest rate is set by 1.5 or more percentage points for a first-lien Mortgage Loan or by 3.5 or more percentage points for a subordinate-lien Mortgage Loan.
“Repurchase Date” shall mean the date on which Seller is to repurchase the Purchased Mortgage Loans from Buyer, which date shall occur on (i) the tenth (10th) Business Day of the month following the related Purchase Date or such other date as may be specified by Buyer in writing to Seller, (ii) the Termination Date, or (iii) at the option of Buyer, the date determined by application of Paragraph 11 hereof.
“Required Documents” shall mean those documents required pursuant to the applicable Custodial Agreement to be included in the Mortgage File related to each Mortgage Loan.
“Requirement of Law” shall mean as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation (including without limitation the Investment Company Act of 1940, as amended) or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Rescission” shall mean the right of a Mortgagor to rescind the related Note and related documents pursuant to applicable law and regulation.
“Responsible Officer” shall mean, as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person; provided, that in the event any such officer is unavailable at any time he or she is required to take any action hereunder, Responsible Officer shall mean any officer authorized to act on such officer’s behalf as demonstrated by a certificate of corporate resolution.
“Safe Harbor Qualified Mortgage” shall mean a Qualified Mortgage with an annual percentage rate that does not exceed the average prime offer rate for a comparable mortgage loan as of the date the interest rate is set by 1.5 or more percentage points for a first-lien Mortgage Loan or by 3.5 or more percentage points for a subordinate-lien Mortgage Loan.
“Scratch & Dent Mortgage Loan” shall mean a First Lien Mortgage Loan that does not contain all of the Mortgage Loan Documents required pursuant to Schedule 2 or with respect to which certain of the Mortgage Loan Documents contain errors, but which is not a Wet Loan.
“Second Lien Mortgage Loan” shall mean a Mortgage Loan that is secured by the Lien on the Mortgaged Property and is subject to only one prior Lien on such Mortgaged Property securing financing obtained by the related Mortgagor.
“Servicer” shall mean Seller, in its capacity as servicer of the Mortgage Loans.
“Servicer Instruction Letter Agreement” shall mean any letter agreement agreed to by Buyer, Seller and the applicable Subservicer, as each may be amended, restated, supplemented or otherwise modified from time to time.
“Servicing File” shall mean, with respect to each Purchased Mortgage Loan, the file retained by the Servicer consisting of (1) originals of all applicable documents in the related loan file as described in the applicable Custodial Agreement (if any) which are not delivered to Buyer or Buyer’s designee, (2) copies of any other applicable documents in such loan file for such Purchased Mortgage Loan maintained by the Servicer and (3) all other documents and records maintained by the Servicer in respect of such Purchased Mortgage Loan pursuant to a servicing agreement, including, without limitation the Servicing Records.
“Servicing Records” shall mean all servicing records, including but not limited to any and all servicing agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of the Purchased Mortgage Loans.
“Servicing Rights” shall mean contractual, possessory or other rights of Seller, Servicer or any other Person, whether arising under any servicing agreement, the applicable Custodial Agreement (if any) or otherwise to administer or service any Purchased Mortgage Loan or to possess related Servicing Files. The parties hereto acknowledge that Servicing Rights and Servicing Records with respect to Mortgage Loans serviced by each Servicer (other than Platform HELOCs) have been conveyed to the Seller and, as such, the Mortgage Loans are conveyed on a “servicing released” basis.
“Servicing Term” shall have the meaning set forth in Paragraph 31(f).
“Settlement Agent” shall mean a title company, escrow company or attorney that is (i) bonded by an Approved Title Insurance Company and (ii) insured against errors and omissions in an amount reasonably satisfactory to Buyer in its sole discretion, to which the proceeds of any Transaction related to a Wet Loan are to be wired prior to the occurrence of such Transaction in accordance with local law and practice in the jurisdiction where the related Wet Loan is being originated.
“Strict Compliance” shall mean compliance of Seller and the Mortgage Loans that are intended to be Agency Eligible Mortgage Loans with the requirements of the applicable Agency Guide as amended by any agreements between Seller and the Applicable Agency, sufficient to enable Seller to sell such Mortgage Loans to the FNMA or FHLMC through the cash window or to issue and GNMA to guarantee or FNMA or FHLMC to issue and guarantee a mortgage-backed security; provided, that until copies of any such agreements between Seller and the Applicable Agency have been provided to Buyer by Seller and agreed to by Buyer, such agreements shall be deemed, as between Seller and Buyer, not to amend the requirements of the applicable Agency Guide.
“Subservicer” shall have the meaning set forth in Paragraph 31(c), and shall mean (i) with respect to the Platform HELOCs, Figure Lending Corp., or (ii) or any other subservicer of any of the Purchased Mortgage Loans approved by Buyer in its sole discretion.
“Subservicer Field” shall mean, with respect to an eNote, the field entitled, “Subservicer” in the MERS eRegistry.
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. For purposes of this Agreement, the Subsidiaries of Seller shall only include those material Subsidiaries of Seller set forth on Schedule I to the Pricing Side Letter.
“Takeout Commitment” shall mean a fully assignable commitment of Seller to sell one or more identified Mortgage Loans to a Takeout Investor, and the corresponding Takeout Investor’s commitment back to Seller to effectuate the foregoing.
“Takeout Confirmation” shall mean the trade confirmation from the Takeout Investor to Seller that has been fully executed, is enforceable and is in full force and effect and confirms the details of a Takeout Commitment with respect to a Mortgage Loan.
“Takeout Investor” shall mean (i) an Agency or (ii) other institution which has made a Takeout Commitment and has been approved by Buyer.
“Tangible Net Worth” shall have the meaning assigned thereto in the Pricing Side Letter.
“Term SOFR” shall mean, with respect to any Transaction for any day, the Term SOFR Reference Rate for a tenor of one month, as such rate is published by the Term SOFR Administrator for such day [***]); provided, however, that if as of 5[***]the Term SOFR Reference Rate for the foregoing tenor has not been published by the Term SOFR Administrator, then Term SOFR will be the Term SOFR Reference Rate for such tenoras published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator.
“Term SOFR Adjustment” shall mean a percentage equal to [***] basis points ([***]%).
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Buyer in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the rate per annum published by the Term SOFR Administrator and identified by the Buyer as the forward-looking term rate based on SOFR.
“Termination Date” shall mean the earlier to occur of (i) the date on which this Agreement shall terminate in accordance with the provisions hereof or by operation of law or (ii) the Expiration Date.
“Total Liabilities” shall have the meaning assigned thereto in the Pricing Side Letter.
“Transaction” shall have the meaning set forth in Section 1 of this Agreement and shall include Draw Transactions (if applicable) as the context shall require.
“Transfer of Control” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller of such eNote.
“Transfer of Control and Location” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller and Location of such eNote.
“Transfer of Location” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Location of such eNote.
“Transfer of Servicing” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Master Servicer Field or Subservicer Field, as applicable, of such eNote.
“Transferable Record” shall mean an Electronic Record under E-SIGN and the UETA that (i) would be a note under the UCC if the Electronic Record were in writing, (ii) the issuer of the Electronic Record has expressly agreed is a “transferable record” within the meaning of Section 16 of the UETA, Section 201 of E-SIGN (codified at 15 U.S.C. § 7021), and other applicable eCommerce Laws, and (iii) for purposes of E-SIGN, relates to a loan secured by real property.
“UCC” shall mean the Uniform Commercial Code as in effect on the date hereof in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Purchased Items is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“UETA” shall mean the Uniform Electronic Transactions Act, as adopted in the relevant jurisdiction, and as may be supplemented, modified or replaced from time to time.
“Unauthorized Servicing Modification” shall mean, with respect to an eNote, an unauthorized Transfer of Location, an unauthorized Transfer of Servicing or any unauthorized change in any other information, status or data initiated by the Servicer, the Subservicer or a vendor of the Servicer or the Subservicer with respect to such eNote on the MERS eRegistry.
“Uncommitted Amount” shall have the meaning set forth in the Pricing Side Letter.
“Underwriting Guidelines” shall mean, with respect to a Mortgage Loan, the underwriting guidelines of the Approved Originator of such Mortgage Loan (which Approved Originator may be the Seller, as applicable), the Takeout Investor with respect to such Mortgage
Loan, or in the case of Platform HELOCs, the standards, procedures, and guidelines of Figure, as applicable, in each case that is acceptable to Buyer in its sole discretion and as in effect as of the date such Mortgage Loan was originated.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“VA” shall mean the United States Department of Veterans Affairs or any successor thereto.
“VA Approved Lender” shall mean a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” shall mean a Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate, or a Mortgage Loan which is a vender loan sold by the VA.
“VA Loan Guaranty Agreement” shall mean the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.
“VA Regulations” shall mean the regulations promulgated by the U.S. Department of Veterans Affairs and codified in 38 Code of Federal Regulations, and other U.S. Department of Veterans Affairs issuances relating to VA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“Valuation Product” shall have the meaning set forth in the definition of “CLTV”.
“Wet Loan” shall mean a wet-funded First Lien Mortgage Loan (other than a GNMA EBO) or Second Lien Mortgage Loan which does not contain all of the Required Documents and which shall have the following additional characteristics:
(i) the proceeds thereof have been funded by the Seller prior to the Purchase Date thereof;
(ii) the proceeds thereof have not been returned to the Seller by the escrow or closing agent for such Wet Loan;
(iii) upon recordation, such Mortgage Loan will constitute a first or second Lien, as applicable on the premises described therein; and
(iv) other than with respect to a Mortgage Loan that is not an Agency Eligible Mortgage Loan, upon delivery of all of the Required Documents specified in the applicable Custodial Agreement, such Wet Loan will become either a FHLMC Mortgage Loan, a FNMA Mortgage Loan or a GNMA Mortgage Loan.
“WSFS Custodial Agreement” shall mean that certain Custodial Agreement, dated as of March 26, 2026, among Seller, Buyer, and Wilmington Savings Fund Society, FSB, as Custodian, as amended, restated, supplemented, or otherwise modified from time to time.
“WSFS Custodian” shall mean Wilmington Savings Fund Society, FSB.
5.Transactions (Paragraph 3).
(a)Paragraph 3(a) of the Agreement is amended by adding the following language directly before the first sentence therein:
“Subject to the terms and conditions of the Program Documents, Buyer shall, with respect to the applicable Committed Amount and may in its sole discretion, with respect to the Uncommitted Amount, from time to time in its sole discretion, enter into Transactions with an aggregate Purchase Price for all Purchased Mortgage Loans acquired by Buyer not to exceed the Maximum Aggregate Purchase Price. Notwithstanding anything contained herein to the contrary, Buyer shall have the obligation to enter into Transactions up to the applicable Committed Amount and shall have no obligation to enter into Transactions with respect to the Uncommitted Amount. Unless otherwise agreed to between Buyer and Seller in writing, all purchases of Eligible Mortgage Loans (other than GNMA EBOs) shall be first deemed committed up to the applicable Committed Amount and then the remainder, if any, shall be deemed uncommitted up to the Uncommitted Amount and all purchases of Eligible Mortgage Loans that are GNMA EBOs shall be made solely with respect to the Uncommitted Amount.”
(b)Unless otherwise directed by Buyer, Confirmations, for the purposes of this Agreement, will be prepared by Buyer.
(c)Paragraph 3 of the Agreement is amended by adding the following new subparagraphs at the end thereof:
“(d) Upon Seller’s request to enter into a Transaction pursuant to Paragraph 3, Buyer shall, with respect to the applicable Committed Amount and may in its sole discretion, with respect to the Uncommitted Amount, assuming all conditions precedent set forth in this Paragraph 3 and in Paragraphs 21(a) and (b) have been met, and provided no Default shall have occurred and be continuing, purchase the Eligible Mortgage Loans included in the related Confirmation by transferring to the Seller, via wire transfer in accordance with the written wire transfer instructions provided by Seller, the Purchase Price in immediately available funds on the related Purchase Date and not later than the related time set forth in the applicable Custodial Agreement (if any). With respect to each Purchased Mortgage Loan, Seller acknowledges and agrees that the Purchase Price paid in connection with such Purchased Mortgage Loan that is purchased in any Transaction includes a mutually negotiated premium allocated to the portion of such Purchased Mortgage Loan that constitutes the related Servicing Rights. For the avoidance of doubt, the facility with respect to the Uncommitted Amount provided under this Agreement is an uncommitted repurchase facility and Buyer shall have no obligation to enter into any Transaction hereunder with respect to the Uncommitted Amount.
(e) Seller shall repurchase the related Purchased Mortgage Loans from Buyer on each related Repurchase Date and Buyer shall transfer the related Purchased Mortgage Loans on such Repurchase Date to Seller free and clear of any claim, Lien or other encumbrance created or attached by or through Buyer. Each obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Mortgage Loan. Seller is obligated to obtain the related Purchased
Mortgage Loans from Buyer or its designee (including the applicable Custodian) at Seller’s expense on (or after) the related Repurchase Date.
(f) Provided that the applicable conditions in Paragraphs 21(a) and (b) have been satisfied and provided further no Default shall have occurred and be continuing, unless Seller is notified by Buyer to the contrary [***], on each related Repurchase Date each Purchased Mortgage Loan shall automatically become subject to a new Transaction. In such event, the related Repurchase Date on which such Transaction becomes subject to a new Transaction shall become the “Purchase Date” for such Transaction. Seller shall deliver an updated Confirmation with respect to such Purchased Mortgage Loans. For each new Transaction, unless otherwise agreed, (y) the accrued and unpaid Price Differential shall be settled in cash on each related Repurchase Date, and (z) the Pricing Rate shall be as set forth in the Confirmation.
(g) If Seller intends to repurchase any Mortgage Loans on any day which is not a Repurchase Date, Seller shall give prior written notice thereof to Buyer [***]. If such notice is given, the Repurchase Price specified in such notice shall be due and payable on the date specified therein, together with the Price Differential to such date on the amount prepaid.
(h) If any Requirement of Law (other than with respect to any amendment made to Buyer’s certificate of incorporation and by-laws or other organizational or governing documents) adopted after the date hereof or any change in the interpretation or application thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
i.shall subject Buyer to any tax of any kind whatsoever with respect to this Agreement or any Mortgage Loans purchased pursuant to it (excluding net income taxes) or change the basis of taxation of payments to Buyer in respect thereof;
ii.shall impose, modify or hold applicable any reserve, special deposit, compulsory advance or similar requirement against assets held by deposits or other liabilities in or for the account of Transactions or extensions of credit by, or any other acquisition of funds by any office of Buyer which is not otherwise included in the determination of Term SOFR hereunder;
iii.shall impose on Buyer any other condition;
and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer deems to be material, of effecting or maintaining purchases hereunder, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, Seller shall promptly pay Buyer such additional amount or amounts as will compensate Buyer for such increased cost or reduced amount receivable thereafter incurred.
(i)Anything herein to the contrary notwithstanding, if, on or prior to the determination of Term SOFR:
i.Buyer determines, which determination shall be conclusive (absent manifest error), that quotations of interest rates for the relevant deposits referred to in the definition of “Pricing Rate” are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Transactions as provided herein; or
ii.it becomes unlawful for Buyer to enter into Transactions with a Pricing Rate based on Term SOFR;
then Buyer shall give Seller prompt notice thereof and, so long as such condition remains in effect, Seller shall, at its option, either repurchase such Mortgage Loans or pay a Pricing Rate at a rate per annum as reasonably determined by Buyer taking into account the increased cost to Buyer of purchasing and holding the Mortgage Loans.
(j) Draw Transactions. Buyer shall enter into each Draw Transaction subject to the satisfaction of the following conditions precedent, both immediately prior to entering into such Draw Transaction and also after giving effect to the consummation thereof:
i.No more frequently than one (1) time per week, Seller may request in writing that Buyer enter into a Draw Transaction by delivering a completed Draw Transaction Request to Buyer, and shall, in connection with such request, provide the amount of all Draws funded or to be funded with respect to the Mortgage Loans that are HELOCs;
ii.For each proposed Draw Transaction, [***], Seller shall deliver to Buyer the following: (a) the aggregate Draw requests with respect to the related Mortgage Loans that are HELOCs to which the Draw Transaction relates, each executed by the related Mortgagor (to the extent applicable), and (b) an updated Mortgage Loan Schedule with respect to all Mortgage Loans that are HELOCs reflecting the outstanding principal balance thereof, total loan limit, total principal payments as most recently reported by the related Servicer or Subservicer since the last Mortgage Loan Schedule and the related proposed Draw amounts thereunder;
iii.Upon the approval by Buyer of a particular Draw Transaction, on the related Draw Date, Buyer shall remit the related Purchase Price Increase to the Seller; and
iv.No Default, or Event of Default shall have occurred and/or be continuing (unless the proposed Transaction would cure any of the foregoing).”
6.Margin Maintenance (Paragraph 4).
(a)Paragraph 4(a) of the Agreement is amended by replacing the reference to “Seller’s option” with “Buyer’s option.”
(b)Paragraph 4(b) of the Agreement is amended by deleting the text in its entirety and replacing it with “Reserved”. Further, all references in the Agreement to Paragraph 4(b) and “Margin Excess” are deleted hereby.
7.Income Payments (Paragraph 5). Paragraph 5 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
“(a) The parties agree that in any Transaction hereunder whose term extends over an Income payment date for the Mortgage Loans subject to such Transaction, such Income shall be the property of Buyer. Seller shall (x) segregate all Income collected by or on behalf of Seller on account of the Purchased Mortgage Loans and shall hold such Income in trust for the benefit of Buyer that is clearly marked as such in Seller’s records, and (y) if requested by Buyer upon reasonable written notice, (i) remit (in its capacity as Seller and Servicer) and cause Subservicer to remit all such Income (other than prepayments in full in respect of any Purchased Mortgage Loan) to the Collection Account (if any) or to the account designated by Buyer for deposit therein no later than forty-eight (48) hours after receipt or as otherwise may be required under Paragraph 22(cc)(vi), and (ii) cause Subservicer to remit all prepayments in full in respect of any Purchased Mortgage Loan to the Seller [***], and Seller shall remit (in its capacity as Seller and Servicer) such prepayments in full to the Collection Account (if any) or to the account designated by Buyer for deposit therein no later than forty-eight (48) hours after receipt from Subservicer or Mortgagor, as the case may be. Notwithstanding the foregoing, and provided no Event of Default has occurred and is continuing, Buyer agrees that Seller shall be entitled to receive an amount equal to all Income received in respect of the Purchased Mortgage Loans (other than prepayments in full which shall at all times be remitted in accordance with the foregoing sentence), whether by Buyer, any Custodian or any servicer or any other Person, which is not otherwise received by Seller, to the full extent it would be so entitled if the Purchased Mortgage Loans had not been sold to Buyer; provided that any Income received by Seller while the related Transaction is outstanding shall be deemed to be held by Seller solely in trust for Buyer pending the repurchase on the related Repurchase Date. On each Repurchase Date, Buyer shall, as the parties may agree with respect to any Transaction (or, in the absence of any such agreement, as Buyer shall reasonably determine in its sole discretion) either (i) transfer (or permit the servicer to transfer) to Seller Income received as of such date with respect to any Purchased Mortgage Loans subject to such Transaction, or (ii) if a Margin Deficit then exists, apply the Income to reduce the amount, if any, to be transferred to Buyer by Seller upon termination of such Transaction. Buyer shall not be obligated to take any action pursuant to the preceding sentence (i) to the extent that such action would result in the creation of a Margin Deficit, unless prior thereto or simultaneously therewith Seller transfers to Buyer cash or Additional Purchased Mortgage Loans sufficient to eliminate such Margin Deficit, or (ii) if a Default or Event of Default with respect to Seller has occurred and is then continuing at the time such Income is paid or distributed.
(b) On each Repurchase Date, Seller shall pay to Buyer all accrued but unpaid Price Differential for each Transaction outstanding hereunder.”
8.Security Interest (Paragraph 6). Paragraph 6 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
“(a) Seller and Buyer intend that the Transactions hereunder be sales to Buyer of the Purchased Mortgage Loans and not loans from Buyer to Seller secured by the Purchased Mortgage Loans. However, in order to preserve Buyer’s rights under this Agreement in the event that a court or other forum recharacterizes the Transactions hereunder as other than sales, and as security for Seller’s performance of all of its obligations, Seller hereby grants Buyer a fully perfected first priority security interest in all of Seller’s rights, title and interest in and to the following property, whether now existing or hereafter acquired:
(i)all Purchased Mortgage Loans identified on a Confirmation delivered by Seller to Buyer and the custodian from time to time,
(ii)any other collateral pledged or otherwise relating to such Purchased Mortgage Loans, together with all files, material documents, instruments, surveys (if available), certificates, correspondence, appraisals, computer records, computer storage media, Mortgage Loan accounting records and other books and records relating thereto,
(iii)all rights of Seller to receive from any third party or to take delivery of any records or other documents which constitute a part of the mortgage file or servicing file,
(iv)the Collection Account (if any) and all amounts on deposit therein and all Income relating to such Purchased Mortgage Loans,
(v)all debenture interests payable by HUD on account of any Purchased Mortgage Loan that is a GNMA EBO,
(vi)all interests in real property collateralizing any Purchased Mortgage Loans,
(vii)all insurance policies and insurance proceeds relating to any Purchased Mortgage Loans or the related Mortgaged Property and all rights of Seller to receive from any third party or to take delivery of any of the foregoing,
(viii)any purchase agreements or other agreements, contracts or take-out commitments relating to or constituting any or all of the foregoing and all rights to receive documentation relating thereto (but excluding agreements and contract rights which by their express terms prohibit Seller from assigning, pledging or granting a security interest in Seller's rights, title or interest thereunder if and to the extent that such prohibition is not made ineffective by UCC §§ 9-406 or 9-408),
(ix)the Servicing Records and the related Servicing Rights,
(x)all of Seller’s rights under any Escrow Instruction Letters and Insured Closing Letters with respect to the Mortgage Loans that are Wet Loans (but excluding agreements and contract rights which by their express terms prohibit Seller from assigning, pledging or granting a security interest in Seller's rights, title or interest thereunder if and to the extent that such prohibition is not made ineffective by UCC §§ 9-406 or 9-408),
(xi)all “accounts”, “chattel paper”, “commercial tort claims”, “deposit accounts”, “documents,” “equipment”, “general intangibles”, “goods”, “instruments”, “inventory”, “investment property”, “letter of credit rights”, and “securities’ accounts” as each of those terms is defined in the UCC, in each case solely to the extent relating to or constituting the foregoing, and all cash and cash equivalents and all products and proceeds in each case solely to the extent relating to or constituting any or all of the foregoing, and
(xii)any and all replacements, substitutions, distributions on or proceeds of any or all of the foregoing (collectively the “Purchased Items”).
Seller acknowledges and agrees that its rights with respect to the Purchased Items (including without limitation, any security interest Seller may have in the Purchased Mortgage Loans and any other collateral granted by Seller to Buyer pursuant to any other agreement) are and shall continue to be at all times junior and subordinate to the rights of Buyer hereunder.
Seller further grants, assigns and pledges to Buyer a first priority security interest in and to all documentation and rights to receive documentation related to all Income related to the Purchased Mortgage Loans received by Seller and all rights to receive such Income, and all products, proceeds and distributions relating to or constituting any or all of the foregoing (collectively, the “Related Credit Enhancement”). The Related Credit Enhancement is hereby pledged as further security for Seller’s Obligations to Buyer hereunder.
(b) At any time and from time to time, upon the written request of Buyer, and at the expense of Seller, Seller will promptly and duly execute and deliver, or will promptly cause to be executed and delivered, such further instruments and documents and take such further action as Buyer may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted, including, without limitation, the filing of any financing or continuation statements under the UCC in effect in any jurisdiction with respect to the Purchased Items and the liens created hereby. Seller also hereby authorizes Buyer to file any such financing or continuation statement without the signature of Seller to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing in any jurisdiction. This Agreement shall constitute a security agreement under applicable law.
(c) Seller shall not (i) change the location of its chief executive office/chief place of business from that specified in Annex II, (ii) change its name, identity or corporate structure (or the equivalent) or change the location where it maintains its records with respect to the Purchased Items, or (iii) reincorporate or reorganize under the laws of another jurisdiction unless it shall have given Buyer [***]and shall have delivered to Buyer all UCC financing statements and amendments thereto as Buyer shall request and taken all other actions deemed reasonably necessary by Buyer to continue its perfected status in the Purchased Items with the same or better priority.
(d) Seller hereby irrevocably constitutes and appoints Buyer and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Buyer’s discretion, for the purpose of carrying out the terms of this Agreement, if a Default shall have occurred and be continuing, including without limitation, protecting, preserving and realizing upon the Purchased Items, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement, including without limitation, to protect and preserve and, if a Default shall have occurred and be continuing, to realize upon the Purchased Items, to file such financing statement or statements relating to the Purchased Items without Seller’s signature thereon as Buyer at its option may deem appropriate, and, without limiting the generality of the foregoing, Seller hereby gives Buyer the power and right, on behalf of Seller, without assent by, but with notice to, Seller, if a Default shall have occurred and be continuing, to do the following:
(i) in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due with respect to any Purchased Items and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any Purchased Items whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Purchased Items;
(iii) (A) to direct any party liable for any payment under any Purchased Items to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (B) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Purchased Items; (C) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Purchased Items; (D) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Purchased Items or any proceeds thereof and to enforce any other right in respect of any Purchased Items; (E) to defend any suit, action or proceeding brought against Seller with respect to any Purchased Items; (F) to settle, compromise or adjust any suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (G) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Purchased Items as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Purchased Items and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. This power of attorney shall not revoke any prior powers of attorney granted by Seller.
Seller also authorizes Buyer, if a Default shall have occurred and be continuing, from time to time, to execute, in connection with any sale provided for in Paragraph 11 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Items.
(e) The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Purchased Items and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
(f) If Seller fails to perform or comply with any of its agreements contained in the Program Documents and Buyer performs or complies, or otherwise cause performance or compliance, with such agreement, the reasonable out-of-pocket expenses of Buyer incurred in connection with such performance or compliance, together with interest thereon at a rate per annum equal to the Post-Default Rate, shall be payable by Seller to Buyer on demand and shall constitute Obligations.
(g) Buyer’s duty with respect to the custody, safekeeping and physical preservation of the Purchased Items in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Buyer deals with similar property for its own account. Neither Buyer nor any of its directors, officers or employees shall be liable for failure to demand, collect or realize upon all or any part of the Purchased Items or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Purchased Items upon the request of Seller or otherwise.
(h) All authorizations and agencies herein contained with respect to the Purchased Items are irrevocable and powers coupled with an interest.”
9.Substitution (Paragraph 9). Paragraph 9 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
“Seller shall not substitute any other Mortgage Loans for any Purchased Mortgage Loans.”
10.Representations (Paragraph 10). Paragraph 10 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
“Seller represents and warrants to Buyer that throughout the term of this Agreement:
(a) Existence. Seller (i) is duly organized, validly existing and in good standing as a trust, corporation, limited liability company or limited partnership (as applicable) under the laws of the jurisdiction in which it was formed, (ii) has all requisite corporate or other power, and has all governmental licenses, authorizations, consents and approvals, necessary to own its Mortgage Loans and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, consents and approvals would not be reasonably likely to have a Material Adverse Effect, (iii) is qualified to do business and is in good standing in all other jurisdictions in which the nature of the business conducted by it makes such qualification necessary, except where failure so to qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect, and (iv) is in compliance in all material respects with all Requirements of Law. Seller is an FHA Approved Mortgagee and, to the extent Seller is originating VA Loans, a VA Approved Lender.
(b) Litigation. Except as set forth on Schedule III to the Pricing Side Letter, there are no actions, suits, arbitrations, investigations or proceedings pending or, to its knowledge, threatened against Seller or any of its Subsidiaries or Affiliates (including Qualified Affiliates) or affecting any of the property thereof before any Governmental Authority, (i) as to which individually or in the aggregate there is a reasonable likelihood of an adverse decision which would be reasonably likely to have a Material Adverse Effect, or (ii) which questions the validity or enforceability of any of the Program Documents or any action to be taken in connection with the transactions contemplated thereby or (iii) which seeks to prevent the consummation of any Transaction.
(c) No Breach. Neither (i) the execution and delivery of this Agreement, nor (ii) the consummation of the transactions therein contemplated in compliance with the terms and provisions thereof will conflict with or result in a breach of the charter or by-laws of Seller, or any applicable law, rule or regulation, or any order, writ, injunction or decree of any Governmental Authority, or other material agreement or instrument to which Seller, or any of its Subsidiaries, is a party or by which any of them or any of their property is bound or to which any of them or their property is subject, or constitute a default under any such material
agreement or instrument, or (except for the Liens created pursuant to this Agreement) result in the creation or imposition of any Lien upon any property of Seller or any of its Subsidiaries, pursuant to the terms of any such agreement or instrument.
(d) Action. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Documents to which it is a party; the execution, delivery and performance by Seller of each of the Program Documents to which it is a party has been duly authorized by all necessary corporate or other action on its part; and each Program Document has been duly and validly executed and delivered by Seller and constitutes a legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms, except that the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other laws relating to creditors’ rights generally.
(e) Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority, or any other Person, are necessary for the execution, delivery or performance by Seller of the Program Documents to which it is a party or for the legality, validity or enforceability thereof, except for approvals and consents which have been received and filings and recordings in respect of the Liens created pursuant to this Agreement.
(f) Compliance with Law. No practice, procedure or policy employed or proposed to be employed by Seller in the conduct of its business violates any law, regulation, judgment, agreement, regulatory consent, order or decree applicable to it which, if enforced, would result in a Material Adverse Effect with respect to Seller.
(g) True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller or any of its Subsidiaries to Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Program Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of Seller or any of its Subsidiaries to Buyer in connection with this Agreement and the other Program Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer that, after due inquiry, could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Program Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby.
(h) Collection Practices; Loan-Level Representations and Warranties. The collection practices used by Seller and any servicer, as applicable, with respect to the Mortgage Loans have been, in all material respects legal, proper, prudent and customary in the residential mortgage loan origination and servicing business and in accordance with the terms of each Mortgage and the related Note. Each of the Mortgage Loans compiles with the representations and warranties listed in Schedule 1 hereto. The review and inquiries made on behalf of Seller in connection with the making of the representations and warranties listed on Schedule 1 hereto have been made by Persons having the requisite expertise, knowledge and background to verify such representations and warranties. Seller has no knowledge of any material fact that could
reasonably lead it to expect that the Market Value of any Purchased Mortgage Loan will not be obtained or realized. Each of the Purchased Mortgage Loans is an Eligible Mortgage Loan.
(i) ERISA. Each Plan which is not a Multiemployer Plan, and, to the knowledge of Seller, each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law. No event or condition has occurred and is continuing as to which Seller would be under an obligation to furnish a report to Buyer under Paragraph 22(e)(vi) of the Agreement contained in Annex I. The present value of all accumulated benefit obligations under each Plan subject to Title IV of ERISA (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of all such Plans. Seller and its Subsidiaries do not provide any material medical or health benefits to former employees other than as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or similar state or local law at no cost to the employer (collectively, “COBRA”).
(j) Independent Decisions. It has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any advice, counsel, or representation of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to expected results of that Transaction.
(k) Assessment and Assumption of the Risk. It is capable of assessing the merits of (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks (economic and otherwise) of that Transaction. It is also capable of assuming, and assumes, the risks of each Transaction.
(l) Buyer Not Fiduciary. The Buyer is not acting as a fiduciary for or an adviser to it in respect of that Transaction.
(m) No Material Adverse Effect. No Material Adverse Effect in the Seller’s financial condition has occurred since the date of the most recent financial statements furnished by Seller to the Buyer, and such financial statements are complete and correct and fairly present Seller’s financial condition and results of operations as at and for the period ended on the date thereof, all in accordance with generally accepted accounting principles and practices applied on a consistent basis.
(n) Investment Company Act. It is not, and after giving effect to the Transactions contemplated by the Agreement will not be, required to register as an “investment company” (within the meaning of the Investment Company Act).
(o) Agency Approvals. Seller has all such requisite Approvals and is in good standing with the Applicable Agency, with no event having occurred or Seller having any reason whatsoever
to believe or suspect will occur prior to the issuance of the consummation of any Takeout Commitment, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable Approvals or require notification to the Applicable Agency.
(p) No Adverse Actions. Seller has not received from the Applicable Agency a written notice of extinguishment or a written notice indicating material breach, default or material non-compliance which Seller reasonably determines may entitle the Applicable Agency to terminate, suspend, sanction or levy penalties against Seller, or a written notice from the Applicable Agency indicating any adverse fact or circumstance in respect of Seller which Seller reasonably determines may entitle the Applicable Agency, as the case may be, to revoke any Approval or otherwise terminate or suspend Seller as an approved issuer, seller or servicer, as applicable, or with respect to which such adverse fact or circumstance has caused the Applicable Agency to terminate Seller.
(q) Insured Closing Letter. Seller shall deliver all Insured Closing Letters in possession of Seller to Buyer or made available for audit by Buyer or its designee, promptly upon the request of Buyer.
(r) Escrow Agreement. Seller shall deliver all Insured Closing Letters in possession of Seller to Buyer or made available for audit by Buyer or its designee, promptly upon the request of Buyer.
(s) USA Patriot Act; OFAC. Neither Seller nor any of its Affiliates (including Qualified Affiliates) is a Prohibited Person and Seller is in full compliance with all applicable orders, rules, regulations and recommendations of OFAC. Neither Seller nor any of its members, directors, executive officers, parents or Subsidiaries: (1) is subject to U.S. or multilateral economic or trade sanctions currently in force; (2) is owned or controlled by, or act on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions currently in force; (3) is a Prohibited Person or is otherwise named, identified or described on any blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom U.S. persons may not conduct business, including but not limited to lists published or maintained by OFAC, lists published or maintained by the U.S. Department of Commerce, and lists published or maintained by the U.S. Department of State. Seller has established an anti-money laundering compliance program as required by all applicable anti-money laundering laws and regulations, including without limitation the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”) (collectively, the “Anti-Money Laundering Laws”).
(t) Anti-Money Laundering. Seller has complied with all applicable Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the acquisition of each Purchased Mortgage Loan for purposes of the Anti-Money Laundering Laws, and will maintain sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws. No Purchased Mortgage Loan is in violation of, or subject to nullification pursuant to, the Executive Order or any regulations promulgated by the OFAC (the “OFAC Regulations”), and no Mortgagor is subject to the provisions of the Executive Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC Regulations.”
11.Events of Default (Paragraph 11).
(a)The definition of “Event of Default” in Paragraph 11 of the Agreement is deleted in its entirety and shall instead be defined as the occurrence of any of the following events:
i.Seller shall fail to transfer the Purchased Mortgage Loans upon the applicable Purchase Date or Seller shall fail to repurchase the Purchased Mortgage Loans upon the applicable Repurchase Date;
ii.Seller shall default in the payment of any amount payable by it hereunder (including but not limited to Paragraphs 4, 5 and 16(a) hereof) when such amount is due, or Seller shall default in the payment of any amount payable by it under any other Program Document after notification by Buyer of such default, and such default shall have continued unremedied for [***];
iii.Seller shall fail to comply with the requirements of [***] ) of the Agreement contained in [***] and such failure to observe or perform shall continue unremedied for a period [***]s following the date on which Seller had knowledge or notice of such failure;
iv.(x) Any representation made by Seller in Paragraphs [***] shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated (other than the representations set forth in Schedule 1 or any representations as to the eligibility of a Purchased Mortgage Loan unless (A) Seller shall have made any such representations and warranties with actual knowledge that they were false or misleading at the time made or (B) any such representations and warranties have been determined in good faith by Buyer in its sole discretion to be false or misleading on a regular basis) or (y) any other representation made by Seller shall have been incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated and shall continue to be incorrect or untrue in any material respect for a period [***] the date on which Seller had knowledge or notice of such failure;
v.Seller shall admit in writing its inability to, or intention not to, perform any of Seller’s Obligations;
vi.Seller or any of Seller’s Qualified Affiliates files a voluntary petition in bankruptcy, seeks relief under any provision of any bankruptcy, reorganization, moratorium, delinquency, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction whether now or subsequently in effect; or consents to the filing of any petition against it under any such law; or consents to the appointment of or taking possession by a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar official for Seller or any of Seller’s Qualified Affiliates, or of all or any part of Seller’s or Seller’s Qualified Affiliates’ Property; or makes an assignment for the benefit of Seller or Seller’s Qualified Affiliates’ creditors;
vii.(A) A custodian, receiver, conservator, liquidator, trustee, sequestrator or similar official for Seller, or any of Seller’s Qualified Affiliates, or of any of Seller’s, or their respective Property (as a debtor or creditor protection procedure), is appointed or takes possession of such Property; or Seller or any of Seller’s Qualified Affiliates generally
fails to pay Seller’s or Seller’s Qualified Affiliates’ debts as they become due; or Seller or any of Seller’s Qualified Affiliates is adjudicated bankrupt or insolvent; or an order for relief is entered under the Bankruptcy Code, or any successor or similar applicable statute, or any administrative insolvency scheme, against Seller or any of Seller’s Qualified Affiliates; or any of Seller’s or Seller’s Qualified Affiliates’ Property is sequestered by court or administrative order; or (B) a petition is filed against Seller or any of Seller’s Qualified Affiliates under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution, moratorium, delinquency or liquidation law of any jurisdiction, whether now or subsequently in effect and such petition is not rescinded, voided or stayed or dismissed within [***];
viii.Any Governmental Authority or any person, agency or entity acting under Governmental Authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller or any of Seller’s Qualified Affiliates, or shall have taken any action to displace the management of Seller or any of Seller’s Qualified Affiliates or to curtail its authority in the conduct of the business of Seller or any of Seller’s Qualified Affiliates, or takes any action in the nature of enforcement to remove, limit or restrict the Seller’s Approvals or other approvals of Seller or its Qualified Affiliates as an issuer, buyer or a seller/servicer of Mortgage Loans or securities backed thereby, and such action provided for in this subparagraph (viii) shall not have been discontinued or stayed [***];
ix.An event of default shall have occurred and shall be continuing under any Program Document (other than this Agreement) beyond any applicable grace period or shall for whatever reason (including an event of default thereunder) be terminated; or any of Seller’s material obligations (other than Seller’s Obligations hereunder) shall cease to be in full force and effect, or the enforceability thereof shall be contested by Seller (in each case beyond any applicable grace period) which such failure to be in full force and effect could reasonably be expected to have a Material Adverse Effect; or any of Seller’s Obligations hereunder shall cease to be in full force and effect, or the enforceability thereof shall be contested by Seller;
x.A Change of Control of Seller shall have occurred without the prior consent of Buyer;
xi.Seller shall grant, or suffer to exist, any Lien on any Purchased Items except the Liens contemplated hereby; or the Liens contemplated hereby shall cease to be first priority perfected Liens on the Purchased Items in favor of Buyer or shall be Liens in favor of any Person other than Buyer;
xii.(i) Seller or any ERISA Affiliate shall engage in any “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) a determination that a Plan is “at risk” (within the meaning of Section 303 of ERISA) or any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller or any ERISA Affiliate, (iii) a Reportable Event shall occur with respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be appointed, to administer or to terminate, any Plan, which Reportable Event or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of Buyer, likely to result in the termination of such Plan for purposes of Title IV of ERISA, (iv) any Plan shall terminate for purposes of Title IV of ERISA, (v) Seller or any ERISA Affiliate shall, or in the reasonable opinion of Buyer is likely to, incur any liability in connection
with a withdrawal from, or the insolvency or reorganization of, a Multiemployer Plan, (vi) Seller or any ERISA Affiliate shall file an application for a minimum funding waiver under Section 302 of ERISA or Section 412 of the Code with respect to any Plan, (vii) any obligation for post-retirement medical costs (other than as required by COBRA) exists, (viii) the assets of Seller shall be treated as “plan assets” within the meaning of 29 C.F.R. 2510.3-101 (as modified by Section 3(42) of ERISA) or (ix) any other event or condition shall occur or exist with respect to a Plan and in each case in clauses (i) through (xi) above, such event or condition, together with all other such events or conditions, if any, is likely to subject Seller or any of its Affiliates to any tax, penalty or other liabilities in the aggregate material in relation to the business, operations, property or financial or other condition of Seller or any of its Affiliates or could reasonably be expected to have a Material Adverse Effect;
xiii.(A) Seller or any Qualified Affiliate of Seller shall default under (which default shall not have been waived or cured), or shall otherwise breach the terms of any instrument, agreement or contract between Seller or such other entity, on the one hand, and Buyer or any of Buyer’s affiliates on the other, which default entitles any party to require acceleration or prepayment of any indebtedness thereunder; or (B) Seller or any Qualified Affiliate of Seller shall default under (which default shall not have been waived or cured), the terms of any repurchase agreement, loan and security agreement or similar credit facility or agreement for borrowed funds entered into by Seller or such other entity and any third party in each case evidencing a facility size of $[***] or more, which default entitles any party to require acceleration or prepayment of any indebtedness thereunder;
xiv.If any Material Adverse Effect shall have occurred with respect to Seller and shall not have been waived as determined by Buyer in its discretion;
xv.Seller fails to perform any other of its obligations hereunder and does not remedy such failure within [***] after notice is given by the nondefaulting party requiring it to do so;
xvi.Seller (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction, or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person appointed or empowered to operate it or act on its behalf), and in each case under clauses (1) through (3) such default or other event results in a liability or loss to the Seller in an amount of $[***] or more. For the purposes hereof, “Specified Transaction” means (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between Seller or between Seller or Buyer and any third party which is (i) a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, securities option, weather transaction, or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (ii) a type of transaction that is similar to any transaction referred to in clause (i) that is currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made, and (b) any combination of these transactions;
xvii.Seller is suspended or expelled from membership of or participation in any national securities exchange or registered national securities association or registered clearing agency of which it is a member, or is suspended from dealing in securities by any federal or state government or agency thereof, or any of the assets of Seller or the assets of investors held by, or to the order of, Seller are transferred or ordered to be transferred to a trustee by a regulatory authority pursuant to any securities, banking or other regulating legislation;
xviii.Seller has its license, charter, or other authorization necessary to conduct a material portion of its business withdrawn, suspended or revoked by any applicable federal or state government or agency thereof;
xix.as a result of sovereign action or inaction (directly or indirectly) or directive issued or given by any governmental or regulatory agency or authority with competent jurisdiction, Seller becomes unable to perform any absolute or contingent obligation to make a payment or transfer or to receive a payment or transfer in respect of any Transaction under the Agreement or to comply with any other material provision of the Agreement relating to such Transaction;
xx.Seller shall not be in compliance with one or more of the financial covenants set forth in Section 4 of the Pricing Side Letter; or
xxi.With respect to Purchased Mortgage Loans that are GNMA EBOs, the applicable Custodian fails to maintain its good standing under the GNMA Guide or FHA Regulations and is not replaced or the Seller fails to repurchase such GNMA EBOs or such breach is not waived by Buyer in writing [***].
(b)The introductory paragraph of Paragraph 11(d) shall be amended by replacing the clause “without prior notice to the defaulting party” with “with such notice to the defaulting party as is reasonably practicable under the circumstances”.
(c)The following sentence shall be added to the end of Paragraph 11(g):
“Notwithstanding the foregoing, neither party shall be liable to the other for any consequential, indirect or punitive damages.”
(d)Paragraph 11(i) of the Agreement is amended by replacing the entire paragraph with the following:
“(i) In addition to all the rights and remedies specifically provided herein, Buyer shall have all other rights and remedies provided by applicable federal, state, foreign, and local laws, whether existing at law, in equity or by statute, including, without limitation, all rights and remedies available to a purchaser or a secured party, as applicable, under the UCC. Except as otherwise expressly provided in this Agreement, Buyer shall have the right to exercise any of its rights and/or remedies without presentment, demand, protest or further notice of any kind other than as expressly set forth herein, all of which are hereby expressly waived by Seller. Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives, to the extent permitted by law, any right Seller might otherwise have to require Buyer to enforce its rights by judicial process. Seller also waives, to the extent permitted by law, any defense Seller might otherwise have to the Obligations, arising from use of nonjudicial process, enforcement and sale of all or any portion of the Purchased Mortgage Loans and any other Purchased Items or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.”
(e)Paragraph 11 of the Agreement is amended by adding the following new subparagraph (j) at the end thereof:
“For any Purchased Mortgage Loan that is a DART Mortgage Loan, Buyer shall have the right to require Figure as Subservicer to obtain from the DART Electronic Agent (or DCM), and deliver to Buyer or to its order, a duly completed and executed original “wet-ink” Assignment of Mortgage in blank for each such DART Mortgage Loan in a commercially reasonable timeframe following such demand.”
12.Notices and Other Communications (Paragraph 13): Paragraph 13 of the Agreement is amended by replacing the entire paragraph with the following:
Any and all notices, statements, demands or other communications hereunder may be given by a party to the other by mail, facsimile, telegraph, messenger, electronic mail (except with respect to legal notices) or otherwise to the address specified in Annex II hereto, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence.
13.Non-assignability; Termination (Paragraph 15). Paragraph 15 of the Agreement is amended by replacing the entire paragraph with the following:
“(a) Seller shall not sell, assign or transfer any of its rights or its Obligations or delegate its duties under this Agreement or any other Program Document without the prior written consent of Buyer, and any attempt by Seller to so without such consent shall be null and void. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective permitted successors and assigns.
(b) Buyer may, in accordance with applicable law and with the consent of Seller (which consent shall not be unreasonably withheld, conditioned or delayed), at any time sell to one or more entities (“Participants”) participation interests in this Agreement, its agreement to purchase Mortgage Loans, or any other interest of Buyer hereunder and
under the other Program Documents. In the event of any such sale by Buyer of participation interests to a Participant, Buyer’s obligations under this Agreement to Seller shall remain unchanged, Buyer shall remain solely responsible for the performance thereof and Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the other Program Documents. Seller agrees that if amounts outstanding under this Agreement are due or unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set-off in respect of its participation interest in amounts owing under this Agreement to the same extent as if the amount of its participation interest were owing directly to it as a Buyer under this Agreement; provided, that such Participant shall only be entitled to such right of set-off if it shall have agreed in the agreement pursuant to which it shall have acquired its participation interest to share with Buyer the proceeds thereof.
(c) Buyer may furnish any information concerning Seller or any of its Subsidiaries in the possession of Buyer from time to time to assignees and Participants (including prospective assignees and Participants) only after notifying Seller in writing and securing signed confidentiality statements and only for the sole purpose of evaluating assignments or participations and for no other purpose.
(d) Seller agrees to cooperate with Buyer in connection with any such assignment and/or participation, to execute and deliver replacement notes, and to enter into such restatements of, and amendments, supplements and other modifications to, this Agreement and the other Program Documents in order to give effect to such assignment and/or participation. Seller further agrees to furnish to any Participant identified by Buyer to Seller copies of all reports and certificates to be delivered by Seller to Buyer hereunder, as and when delivered to Buyer.”
14.Use of Employee Plan Assets (Paragraph 18). Paragraph 18 of the Agreement is hereby amended by deleting such paragraph in its entirety and replacing it with the following:
“The assets of Seller are not “plan assets” (within the meaning of 29 C.F.R. 2510.3-101 (as modified by Section 3(42) of ERISA)) of a plan subject to Title I of ERISA or a “plan” within the meaning of Section 4975 of the Code.”
15.Intent (Paragraph 19). Paragraph 19 of the Agreement is amended by deleting the paragraph in its entirety and replacing it with the following:
(a)Seller and Buyer recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101(47) of the Bankruptcy Code, a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code, and a “master netting agreement” as that term is defined in Section 101(38A) of the Bankruptcy Code.
(b)It is understood that Buyer’s right to liquidate the Purchased Items delivered to it in connection with the Transactions hereunder or to accelerate or terminate the Agreement or otherwise exercise any other remedies pursuant to Paragraph 11 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Sections 555, 559 and 561 of the Bankruptcy Code.”
16.Additional Provisions. The Agreement is hereby amended by added the following new Paragraphs immediately following Paragraph 20:
“21. Conditions Precedent.
(a) As conditions precedent to the closing of this Agreement, Buyer shall have received on or before the date hereof the following, in form and substance satisfactory to Buyer and duly executed by each party thereto (as applicable):
i. Program Documents. The Program Documents duly executed and delivered by Seller thereto and being in full force and effect.
ii. Organizational Documents. A good standing certificate and certified copies of the charter and by-laws (or equivalent documents) of Seller, in each case dated as of a recent date, [***] and copies of resolutions or consents evidencing the corporate or other authority for Seller with respect to the execution, delivery and performance of the Program Documents and each other document to be delivered by Seller from time to time in connection herewith (and Buyer may conclusively rely on such certificate until it receives notice in writing from Seller to the contrary).
iii. Incumbency Certificate. An incumbency certificate of the secretary of Seller certifying the names, true signatures and titles of Seller’s representatives duly authorized to request Transactions hereunder and to execute the Program Documents and the other documents to be delivered thereunder.
iv. Underwriting Guidelines. Buyer and Seller shall have agreed upon Seller’s current Underwriting Guidelines for Mortgage Loans and Buyer shall have received a copy thereof certified by a Responsible Officer of Seller.
v. Legal Opinion. An opinion of Seller’s outside counsel as to such matters as Buyer may reasonably request (including, without limitation, (a) designation of the Master Repurchase Agreement as a “repurchase agreement”, “securities contract” and “master netting agreement” under the Bankruptcy Code, (b) perfection of security interest in the Purchased Items, (c) a corporate opinion, (d) the enforceability of the Program Documents under New York law and (e) Seller or any of its Subsidiaries is not an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act.
vi. Fees and Expenses. Buyer shall have received all expenses required to be paid by Seller on or prior to the initial Purchase Date, which expenses may be netted out of any Purchase Price paid by Buyer hereunder.
vii. Filings, Registrations, Recordings. (i) Any documents (including, without limitation, financing statements) required to be filed, registered or recorded in order to create, in favor of Buyer, a perfected, first-priority security interest in the Purchased Items, subject to no Liens other than those created hereunder, shall have been properly prepared and executed for filing (including the applicable county(ies) if Buyer determines such filings are necessary in its reasonable discretion), registration or recording in each office in each jurisdiction in which such filings, registrations and recordations are required to perfect such first-priority security interest; and (ii) UCC lien searches, dated as of a recent date, in
no event more than [***] such initial Transaction, in such jurisdictions as shall be applicable to Seller and the Purchased Items, the results of which shall be satisfactory to Buyer.
viii. Other Documents. Buyer shall have received such other documents as Buyer or its counsel may reasonably request, including without limitation each Custodial Agreement.
(b) The obligation (if any) of Buyer to enter into each Transaction pursuant to this Agreement (including the initial Transaction) is subject to the following further conditions precedent, both immediately prior to any Transaction and also after giving effect thereto and to the intended use thereof:
i. No Default or Event of Default shall have occurred and be continuing.
ii. The then aggregate outstanding Purchase Price for all Purchased Mortgage Loans, when added to the Purchase Price for the requested Transaction, shall not exceed the Maximum Aggregate Purchase Price. If the Transaction is with respect to the applicable Committed Amount, the aggregate outstanding Purchase Price for all Purchased Mortgage Loans then subject to Transactions with respect to the applicable Committed Amount, when added to the Purchase Price for the requested Transaction, shall not exceed the applicable Committed Amount as of such date. If the Transaction is with respect to the Uncommitted Amount, the aggregate outstanding Purchase Price for all Purchased Mortgage Loans then subject to Transactions with respect to the Uncommitted Amount, when added to the Purchase Price for the requested Transaction, shall not exceed the Uncommitted Amount as of such date.
iii. Buyer or its designee shall have received on or before the day of a Transaction the Confirmation and Mortgage Loan schedule with respect to the Mortgage Loans proposed to be sold, delivered pursuant to Paragraph 3(a) of the Agreement.
iv. Seller shall have paid to Buyer all fees and expenses owed to Buyer in accordance with this Agreement and any other Program Document.
v. Buyer or its designee shall have received any other documents reasonably requested by Buyer. stop
vi. Buyer shall have received a trust receipt (or in connection with Wet Loans, an intent to deliver a trust receipt) from the applicable Custodian, indicating such Custodian’s receipt and review of the related Mortgage Loan Documents, in accordance with the terms of the related Custodial Agreement with respect to the Purchased Mortgage Loans and without exceptions (unless otherwise waived by Buyer).
vii. No event shall have occurred and be continuing which results in a material adverse change to the Approvals of Seller since the closing date of this Agreement, and such Approvals shall be in good standing on and after such closing date.
viii. There is no Margin Deficit at the time immediately prior to entering into a new Transaction.
ix. Upon Buyer’s request or if otherwise required by FHMLC, GNMA or FNMA, Buyer shall have received certificates or other evidence of insurance detailing insurance coverage in respect of the related Mortgaged Property or Properties of types (including but not limited to casualty, general liability and terrorism insurance coverage), in amounts, with insurers and otherwise in compliance with the terms, provisions and conditions set forth in the Mortgage Loan Documents and otherwise reasonably satisfactory to Buyer. Such certificates or other evidence shall indicate that Seller will be named as an additional insured as its interest may appear and shall contain a loss payee endorsement in favor of such additional insured with respect to the policies required to be maintained under the Mortgage Loan Documents.
x. if obtained by the Seller, Buyer shall have received an appraisal of the related Mortgaged Property or Properties.
xi. Buyer shall have received such other information and documentation with respect to each Mortgage Loan proposed to be sold as Buyer may request, including but not limited to the following:
1. interest coverage ratios and Debt Yield Ratio;
2. LTV and CLTV; and
3. analyses and reports with respect to such other matters concerning such Mortgage Loan as Buyer may require in its discretion(including internal credit memos for approval and underwriting models),
and such information shall be satisfactory to Buyer in its sole discretion.
xii. With respect to each Mortgage Loan proposed to be sold that is subject to a security interest (including any precautionary security interest) immediately prior to the Purchase Date, Buyer shall have received a security release certification for such Mortgage Loan that is duly executed by the related secured party and Seller. Such secured party shall have filed UCC termination statements in respect of any UCC filings made in respect of such Mortgage Loan, and each such release and UCC termination statement has been delivered to Buyer prior to each Transaction and to the applicable Custodian as part of the collateral package.
xiii. With respect to any Mortgage Loan that is a Wet Loan (other than an eMortgage Loan or a Platform HELOC), the Buyer shall have received a true and complete copy of the Insured Closing Letter and Escrow Instruction Letters, if requested by Buyer.
xiv. None of the following shall have occurred and/or be continuing: an event or events resulting in the inability of Buyer to finance its purchases of assets with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events or a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under or otherwise comply with the terms of this Agreement.
xv. Reserved.
xvi. With respect to any Mortgage Loan that is an eMortgage Loan, Seller shall cause (i) the Authoritative Copy of the related eNote to be delivered to the eVault via a secure electronic file, (ii) the Controller status of the related eNote to be transferred to Buyer, (iii) the Location status of the related eNote to be transferred to DB Custodian, (iv) the Delegatee status of the related eNote to be transferred to DB Custodian, in each case using MERS eDelivery and the MERS eRegistry, (v) the Master Servicer Field status of the related eNote shall reflect the MERS Org ID of the Seller and (vi) the Subservicer Field status of the related eNote to be (x) if there is a third-party Subservicer, such Subservicer’s MERS Org ID or (y) if there is not a Subservicer, blank.
xvii. With respect to any Mortgage Loan that is a Platform HELOCs, Buyer shall be satisfied that, in accordance with the WSFS Custodial Agreement, the WSFS Custodian on behalf of the Buyer, in its capacity as owner of the related Purchased Mortgage Loan while subject to a Transaction hereunder, shall have been provided and shall possess all necessary credentials (i.e., a private key, security certificate, and login credentials) to authorize a transfer of the ownership record (i.e., the “token”) of such Mortgage Loan that is a Platform HELOC on the Provenance Blockchain.
xviii. If the Mortgage Loans to be funded in connection with such Transaction are DART Mortgage Loans, a DART Escrow Agreement and a DART Electronic Tracking Agreement shall have been executed and delivered.”
22.Covenants of Seller. Seller covenants and agrees with Buyer that during the term of this Agreement:
(a)Margin Deficit. If at any time there exists a Margin Deficit, Seller shall cure the same in accordance with Paragraph 4(a) of the Agreement.
(b)Notices. Seller shall give notice to Buyer promptly in writing of any of the following:
i. Upon Seller becoming aware of, and in any event within [***] after the occurrence of any Default, Event of Default or any event of default or default under any Program Document;
ii. Upon, and in any event [***] after, service of process on Seller or any of its Subsidiaries, or any agent thereof for service of process, in respect of any legal or arbitrable proceedings affecting Seller or any of its Subsidiaries (i) that questions or challenges the validity or enforceability of any of the Program Documents, (ii) in which the amount in controversy exceeds $[***] or (iii) which there is a reasonable likelihood of an adverse determination which would result in a Material Adverse Effect;
iii. Upon, and in any event within [***]after, the involuntary termination, acceleration, maturity of or reduction in the amount available for borrowing under any repurchase agreement, loan and security agreement or similar credit facility or agreement for Indebtedness entered into by Seller and any third party in an
amount of $[***] or more; provided, that if such termination, acceleration, maturity or reduction is voluntary, Seller shall give such notice in the subsequent monthly certificate of a Responsible Officer;
iv. Upon Seller becoming aware of any payment default related to any Purchased Items, any Material Adverse Effect and any event or change in circumstances which could reasonably be expected to have a Material Adverse Effect;
v. Any material dispute, licensing issue, litigation, investigation, proceeding or suspension between Seller or its Subsidiaries, on the one hand, and any Governmental Authority;
vii. Upon Seller becoming aware of any penalties, sanctions or charges levied, or threatened to be levied, against Seller or Servicer or any change or threatened change in Approval status, or the commencement of any Agency Audit, investigation, or the institution of any action or the threat of institution of any action against Seller by the Applicable Agency or any other agency, or any supervisory or regulatory Governmental Authority supervising or regulating the origination or servicing of mortgage loans by, or the issuer or seller status of, Seller or Servicer, other than routine ordinary course Agency Audits or investigations; and
vii. Upon Seller becoming aware of any Control Failure with respect to a Mortgage Loan that is an eMortgage Loan, or any eNote Replacement Failure.
Each notice pursuant to this Paragraph 22(b) shall be accompanied by a statement of a Responsible Officer of Seller, setting forth details of the occurrence referred to therein and stating what action Seller has taken or proposes to take with respect thereto.
(c)Defense of Title. Seller warrants and will defend the right, title and interest of Buyer in and to all Purchased Items against all adverse claims and demands of all Persons whomsoever.
(d)Preservation of Purchased Items. Seller shall do all things necessary to preserve the Purchased Items so that such Purchased Items remain subject to a first priority perfected security interest hereunder. Without limiting the foregoing, Seller will comply, in all material respects, with all applicable laws, rules and regulations of any Governmental Authority applicable to Seller or relating to the Purchased Items and cause the Purchased Items to comply with all applicable laws, rules and regulations of any such Governmental Authority. Seller will not allow any default to occur for which Seller is responsible under any Purchased Items or any Program Documents and Seller shall fully perform or cause to be performed when due all of its obligations under any Purchased Items or the Program Documents.
(e)Financial Statements. Seller shall deliver to Buyer:
i. As soon as available and in any event within thirty (30) days after the end of each calendar month, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for Seller and its
consolidated Subsidiaries for such period setting forth in each case in comparative form the figures for the previous year, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments);
ii. As soon as available and in any event within forty-five (45) days after the end of each of the first three quarterly fiscal periods of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, setting forth in each case in comparative form the figures for the previous year, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments);
iii. As soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by a certificate of a Responsible Officer of Seller in the form of Annex B attached to the Pricing Side Letter;
iv. From time to time such other information regarding the financial condition, operations, or business of Seller as Buyer may request;
v. Within [***] of any margin call (however defined or described in the applicable Indebtedness documents) of any amount or other similar request (including a claim under a guaranty) is made upon Seller under any Indebtedness of Seller in an aggregate amount in excess of $[***] (after giving effect to any offset to the amount of such margin call due to hedging), notice of such margin call or other request;
vi. As soon as reasonably possible, and in any event within [***] after a Responsible Officer knows, or with respect to any Plan or Multiemployer Plan to which Seller or any of its Subsidiaries makes direct contributions, has reason to believe, that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial officer of Seller setting forth details respecting such event or condition and the action, if any, that Seller or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by Seller or an ERISA Affiliate with respect to such event or condition):
(A) any reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has not by regulation or otherwise waived the requirement of Section 4043(a) of ERISA that it be notified within [***] of the occurrence of such event (provided that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 or 303 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(c) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan;
(B) the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or an ERISA Affiliate to terminate any Plan;
(C) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by Seller or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;
(D) the complete or partial withdrawal from a Multiemployer Plan by Seller or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by Seller or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA;
(E) the institution of a proceeding by a fiduciary of any Multiemployer Plan against Seller or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed within [***]; and
(F) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code, would result in the loss of tax-exempt status of the trust of which such Plan is a part if Seller or an ERISA Affiliate fails to timely provide security to such Plan in accordance with the provisions of said Sections.
vii. Seller shall furnish to Buyer, at the time it furnishes each set of financial statements pursuant to paragraphs (i), (ii) and (iii) above, a certificate of a Responsible Officer of Seller substantially in the form of Annex A to the Pricing Side Letter, or such other form acceptable to Buyer, to the effect that, to the best of such Responsible Officer’s knowledge, Seller during such period has observed or performed all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Program Documents to be observed, performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of any Default or Event of Default except as specified in such certificate (and, if any Default or Event of Default has occurred and is
continuing, describing the same in reasonable detail and describing the action Seller has taken or proposes to take with respect thereto).
(f)Litigation. Seller shall promptly, and in any event within [***] after service of process on any of the following, give to Buyer notice of all legal or arbitrable proceedings affecting Seller or any of its Subsidiaries that questions or challenges the validity or enforceability of any of the Program Documents or as to which there is a reasonable likelihood of an adverse determination which would result in a Material Adverse Effect.
(g)Existence, Etc. Each of Seller and its Subsidiaries will:
i. preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises;
ii. comply with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities and other Requirements of Law (including, without limitation, truth in lending, real estate settlement procedures, consumer protection and all environmental laws) if failure to comply with such requirements would be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect;
iii. keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied;
iv. not move its chief executive office or chief operating office from the addresses of such offices on the date hereof unless it shall have provided Buyer [***] prior written notice of such change;
v. pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained; and
vi. permit representatives of Buyer, during normal business hours upon prior written notice at a mutually desirable time (or at any time and from time to time upon the occurrence of an Event of Default and during the continuance thereof), to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by Buyer;
(h)Prohibition of Fundamental Changes. Seller shall not enter into any transaction of merger or consolidation or amalgamation unless Seller is the surviving entity, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its Mortgage Loans other than in connection with a whole loan sale or securitization, the proceeds of which shall be used to repurchase Purchased Mortgage Loans and all other Obligations then due and payable hereunder (other than entering into Transactions which will continue to be secured by the Purchased Items pursuant to the terms hereof).
(i)Financial Covenants. Seller shall at all times comply with the Financial Covenants set forth in Section 4 of the Pricing Side Letter.
(j)Reserved
(k)Limitation on Distributions. Upon the occurrence and during the continuance of a Default or Event of Default, Seller shall not declare or pay any dividends upon any shares of Seller’s stock now or hereafter outstanding (or upon any other interest of Seller held by any Person), nor shall Seller set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity, partnership, beneficial or other interest of Seller, whether now or hereafter outstanding, or make any other distribution in respect of any of the foregoing or to any shareholder, equity owner or holder of any interest in Seller, either directly or indirectly, whether in cash or property or in obligations of Seller or any of Seller’s consolidated Subsidiaries; except that, notwithstanding the foregoing, Seller shall be permitted at all times to make Permitted Tax Distributions (regardless of whether or not a Default or an Event of Default exists or will occur as a result of such Permitted Tax Distribution).
(l)Transactions with Affiliates. Seller will not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate (including any Excluded Affiliate) unless such transaction is (a) otherwise permitted (or not restricted) under the Agreement, (b) in the ordinary course of Seller’s business, and (c) upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate or Excluded Affiliate. For the avoidance of doubt, nothing herein prohibits Seller from making or paying any dividend or distribution to its members or shareholders on account of their equity interests in Seller.
(m)Use of Proceeds. Seller will use the proceeds of any Purchase Price solely to originate, purchase, fund, manage and service Purchased Mortgage Loans and to pay expenses related to any of the foregoing.
(n)Limitation on Liens. Seller will defend the Purchased Items against, and will take such other action as is necessary to remove, any Lien, security interest or claim on or to the Purchased Items, other than the security interests created under the Agreement, and Seller will defend the right, title and interest of Buyer in and to any of the Purchased Items against the claims and demands of all persons whomsoever. Seller shall not sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Documents), any of the Purchased Items or any interest therein, provided that this Paragraph 22(n) shall not prevent any contribution, assignment, transfer or conveyance of Purchased Items in accordance with the Program Documents.
(o)Limitation on Sale of Mortgage Loans. Seller shall not convey, sell, lease, assign, transfer or otherwise dispose of (collectively, “Transfer”), all or substantially all of its Property, business or assets (including, without limitation, receivables and leasehold interests) whether now owned or hereafter acquired or allow any Subsidiary to Transfer substantially all of its assets to any Person; provided, that
Seller may after prior written notice to Buyer allow such action with respect to any Subsidiary which is not a material part of Seller’s overall business operations or any sale of Purchased Items hereunder, including a whole loan sale or securitization, the proceeds of which shall be used to repurchase Purchased Mortgage Loans and satisfy other Obligations as provided hereunder (other than entering into Transactions which will continue to be secured by the Purchased Items pursuant to the terms hereof).
(p)Solvency. Seller is solvent and shall not be rendered insolvent by the transactions contemplated by the Agreement and the other Program Documents, and, after giving effect to such transactions, shall not be left with an unreasonably small amount of capital with which to engage in its business. Seller shall not incur debts beyond its ability to pay such debts as they mature. Seller shall not contemplate the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of Seller or any of its assets. Seller shall not pledge the Purchased Items to Buyer, as provided in the Agreement, with any intent to hinder, delay or defraud any of its creditors.
(q)No Amendment or Waiver. Seller will not, nor will it permit or allow others to amend, modify, terminate or waive any provision of any Purchased Mortgage Loan to which Seller is a party in any manner which shall reasonably be expected to materially and adversely affect the value of such Purchased Mortgage Loan.
(r)Maintenance of Property; Insurance. As applicable, Seller shall keep all property useful and necessary in its business in good working order and condition. Seller shall cause any servicer of the Purchased Mortgage Loans to maintain errors and omissions insurance and blanket bond coverage in such amounts as are in effect on the date hereof (as disclosed to Buyer in writing) and shall not reduce such coverage without the written consent of Buyer, and shall also maintain or cause such servicer to maintain such other insurance with financially sound and reputable insurance companies, and with respect to property and risks of a character usually maintained by entities engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such entities.
(s)Further Identification of Purchased Items. Seller will furnish to Buyer from time to time statements and schedules further identifying and describing the Purchased Items and such other reports in connection with the Purchased Items as Buyer may request, all in reasonable detail.
(t)Purchased Mortgage Loan Determined to be Defective. Upon discovery by Seller or Buyer of any breach of any loan level representation or warranty contained herein, the party discovering such breach shall promptly give notice of such discovery to the others.
(u)Further Documentation. At any time and from time to time, upon the written request of Buyer, and at the sole expense of Seller, Seller will promptly and duly execute and deliver such further instruments and documents and take such further actions as Buyer may request in order to ensure Buyer has a valid, first priority, perfected security interest in the Purchased Items or for the purposes of obtaining
or preserving the full benefits of the Agreement and of the rights and powers herein granted. If any amount payable under or in connection with any of the Purchased Items shall be or become evidenced by any instrument (including any certificated security or promissory note) or chattel paper (in each case as defined in the UCC), such instrument or chattel paper shall be immediately delivered to the custodian under the applicable Custodial Agreement (if any), on behalf of Buyer, duly endorsed in a manner satisfactory to Buyer, to be held as Purchased Items pursuant to the Agreement. Prior to such delivery, Seller shall hold all such instruments or chattel paper in trust as agent for Buyer and shall not commingle any of the foregoing with any Mortgage Loans of Seller.
(v)Servicing Transmission. Upon request of Buyer, Seller shall provide to Buyer (i) a data tape, on an asset-by-asset basis and in the aggregate, summarizing (A) Seller delinquency and loss experience with respect to Mortgage Loans serviced by Seller hereunder and on a portfolio basis (including the following categories: current, 30-59, 60-89 and 90+), (B) with respect to Purchased Mortgage Loans, any Mortgagor that is in bankruptcy and (C) with respect to Purchased Mortgage Loans, any amendments, modifications or waivers of any term or condition of or extension of the scheduled maturity date or modification of the interest rate of any item of the Purchased Mortgage Loan or settlement or compromise of any claim in respect of any Purchased Mortgage Loan and (ii) any other information reasonably requested by Buyer with respect to the Purchased Mortgage Loans. Each monthly servicing report described above shall separately identify Purchased Mortgage Loans subject to outstanding Transactions hereunder and the related Purchase Date therefor.
(w)Taxes, Etc. Seller shall pay and discharge or cause to be paid and discharged, when due, all taxes, assessments and governmental charges or levies imposed upon Seller or upon its income and profits or upon any of its property, real, personal or mixed (including without limitation, the Purchased Mortgage Loans) or upon any part thereof, as well as any other lawful claims which, if unpaid, might become a Lien upon such properties or any part thereof, except for any such taxes, assessments and governmental charges, levies or claims as are appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves are provided. Seller shall file on a timely basis all federal, state and material local tax returns, and any other tax statements or schedules required to be filed by or in respect of it.
(x)Establishment of Collection Account. Buyer may require Seller to establish the Collection Account for the sole and exclusive benefit of Buyer upon written notice from Buyer to Seller. Seller shall segregate all amounts collected on account of the Purchased Mortgage Loans, to be held in trust for the benefit of Buyer, and shall remit such collections in accordance with Buyer’s written instructions (if any). Except as set forth in Section 5 of this Agreement, no amounts deposited into such account shall be removed without Buyer’s prior written consent. Seller shall deliver to Buyer any information with respect to the Purchased Mortgage Loans reasonably requested by Buyer. Upon and after the occurrence of a Default, Seller shall deposit or credit to the Collection Account all items to be deposited or credited thereto irrespective of any right of setoff or counterclaim
arising in favor of it (or any third party claiming through it) under any other agreement or arrangement.
(y)Agreement to Deliver Documents. Seller agrees that upon execution and delivery of this Agreement and thereafter upon reasonable request of Buyer, it will deliver to Buyer:
i. evidence of authority and specimen signatures of individuals executing this Agreement and any Confirmation hereunder;
ii. a correct, complete and executed U.S. Internal Revenue Service Form W-8BEN, W-8IMY, W-8ECI, W-9 (or any successor thereto), including appropriate attachments, that eliminates U.S. federal backup withholding tax on payments under this Agreement; and
iii. a copy of its organizational documents, including all amendments thereto, and such other documents as the other party may reasonably request in connection with its “know your customer” and anti-money laundering compliance programs.
(z)Agency Audit and Approval Maintenance. Seller shall (i) at all times maintain copies of relevant portions of all Agency Audits in which there are material adverse findings, including without limitation written notices of defaults, written notices of termination of approved status, written notices of imposition of supervisory agreements or interim servicing agreements, and written notices of probation, suspension, or non-renewal, (ii) subject to confidentiality agreements with the applicable Agency, provide Buyer with copies of such Agency Audits promptly upon Buyer’s request, and (iii) take all actions necessary to maintain its respective Approvals.
(aa) OFAC. At all times throughout the term of this Agreement, Seller (i) shall be in full compliance with all applicable orders, rules, regulations and recommendations of OFAC and (ii) shall not permit any Purchased Mortgage Loans to be maintained, insured, traded, or used (directly or indirectly) in violation of any United States statutes, rules or regulations, in a Prohibited Jurisdiction or by a Prohibited Person.
(ab)Additional Repurchase or Warehouse Facility. Seller shall collectively maintain throughout the term of the Agreement, with nationally recognized and established counterparties (other than Buyer), mortgage loan repurchase or warehouse facilities that, in the aggregate provide funding on a committed basis in an amount equal to the lesser of (i) $[***] and (ii) the Committed Amount.
(ac)GNMA EBOs. With respect to each Purchased Mortgage Loan that is a GNMA EBO:
(i)Seller shall provide prior written notice to Buyer if such GNMA EBO shall become a real estate owned property. The Market Value with respect to such GNMA EBO shall be decreased to zero and Seller shall immediately repurchase such GNMA EBO prior to the conversion of the GNMA EBO to a real estate owned property.
(ii)Seller shall be listed as the mortgagee of record and shall deposit all claims submitted on account of such GNMA EBO into the payee account (the “Clearing Account”) and shall transfer (or cause to be transferred) all such amounts so received into the Collection Account (if any) or such other account designated by Buyer [***].
(iii)If such GNMA EBO is an FHA Loan, Seller shall list the Servicer or the Subservicer, as applicable, as the servicer on FHA LEAP System and Seller shall be identified as the mortgagee of record on such system under mortgagee number [***]. Seller shall cause Servicer or Subservicer to submit all claims to HUD under such applicable number for remittance of amounts to the HUD Account.
(iv)If such GNMA EBO is a VA Loan, Seller shall list the Servicer or the Subservicer, as applicable, as the servicer on the VALERI system and Seller shall be identified as the payee under payee vendor identification number [***]. Seller shall or shall cause Servicer or Subservicer to submit all claims to HUD and VA under such applicable number for remittance of amounts to the Clearing Account.
(v)If HUD deducts or sets off any amounts owing by Seller (as Seller or Servicer) or Subservicer to HUD that are unrelated to such GNMA EBO, Seller shall promptly notify Buyer and shall deposit, or cause Servicer or Subservicer to deposit, within [***] following notice or knowledge of such deduction by HUD, such deducted amounts into the Collection Account (if any) or such other account designated by Buyer.
(vi)Following the occurrence of an Event of Default, Seller shall and shall cause all amounts received in the HUD Account to be remitted into the Collection Account within [***] after receipt, and all amounts paid by VALERI with respect to a VA Loan to be paid to the Collection Account (if any) or such other account designated by Buyer.
(vii)Seller shall maintain all relevant HUD and GNMA Approvals and shall notify Buyer immediately in writing if Seller for any reason, ceases to possess any such HUD or GNMA Approval.
(viii)Seller shall cooperate and do all things deemed necessary or appropriate by Buyer to comply with and effectuate the foregoing.
(ad)Certain Matters Relating to the DART System and the Provenance Blockchain. Seller shall ensure that (i) Seller is and will remain at all times a member of DART System in good standing; (ii) for each DART Mortgage Loan subject to a Transaction, the Seller will be designated in the DART System as the “Owner” of each such Mortgage Loan; (iii) Seller will provide the Buyer and Wilmington Savings Fund Society, FSB (as Custodian) with a Universal Unique Identification Number (as described in the DART Procedures Manual) for each DART Mortgage Loan sold to the Buyer for which DCM is the mortgagee of record, and any other identifiers needed to track the DART Mortgage Loans in the DART System pursuant to the DART Procedures Manual; (iv) for each DART Mortgage Loan subject to a Transaction, Buyer shall be designated therein as the “Secured Party” with respect to any such Mortgage Loan in the DART System; (v) for each DART Mortgage Loan subject to a Transaction, Seller shall notify Buyer who is identified as the “Servicer” or “Subservicer” in the corresponding field of the DART System and (vi) for
each DART Mortgage Loan subject to a Transaction, the ownership record of such DART Mortgage Loan shall be registered on the Provenance Blockchain, and without Buyer’s prior written consent, no Person other than Wilmington Savings Fund Society, FSB (as Custodian) shall have access or control permissions via the Provenance Blockchain to alter the “Secured Party” with respect to any such Mortgage Loan in the DART System.
23.Indemnity and Expenses.
(a)Seller agrees to hold Buyer, and its affiliates and their officers, directors, employees, agents and advisors (each an “Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments and costs and expenses relating thereto of any kind which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, the “Costs”) relating to or arising out of this Agreement, any other Program Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Program Document or any transaction contemplated hereby or thereby, that, in each case, results from anything other than any Indemnified Party’s gross negligence or willful misconduct (including failure by Buyer to comply with applicable law). Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to all Purchased Mortgage Loans relating to or arising out of any violation or alleged violation of any applicable laws, rules and regulations that, in each case, results from anything other than such Indemnified Party’s gross negligence or willful misconduct. In any suit, proceeding or action brought by an Indemnified Party in connection with any Purchased Mortgage Loan for any sum owing thereunder, or to enforce any provisions of any Purchased Mortgage Loan, Seller will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction of liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller. Seller also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all such Indemnified Party’s reasonable costs and expenses incurred in connection with the enforcement or the preservation of such Indemnified Party’s rights under this Agreement, any other Program Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel. Seller hereby acknowledges that, the obligations of Seller under this Agreement are recourse obligations of Seller.
(b)Seller agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred by Buyer and/or custodian in connection with the negotiation, development, preparation and execution of, any amendment, supplement or modification to, and enforcement of (including any waivers) this Agreement, any other Program Document or any other documents prepared in connection herewith or therewith (regardless of whether a Transaction is entered into hereunder) and the taking of any action, including legal action, required or permitted to be taken by Buyer (without duplication to Buyer) and/or custodian pursuant thereto, any “due diligence” or loan agent reviews conducted by Buyer or on its behalf or by refinancing or restructuring in the nature of a “workout”. Seller agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the
consummation and administration of the transactions contemplated hereby and thereby including, without limitation, (i) all the reasonable fees, disbursements and expenses of counsel to Buyer and (ii) all the due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Purchased Items. Seller also agrees not to assert any claim against Buyer or any of its affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the Program Documents, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated hereby or thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
(c)If Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, reasonable fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Buyer, in its sole discretion and Seller shall remain liable for any such payments by Buyer. No such payment by Buyer shall be deemed a waiver of any of Buyer’s rights under the Program Documents.
(d)All payments made by Seller under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto imposed by any Governmental Authority (excluding income taxes, branch profits taxes, franchise taxes, any taxes imposed by Sections 1471 through 1474 of the United States Internal Revenue Code or any other tax imposed on net income by the United States, a state or a foreign jurisdiction under the laws of which Buyer is organized or of its applicable lending office, or any political subdivision thereof, or as a result of a connection of the Buyer to such jurisdiction beyond merely owning an interest in a Transaction) (collectively, “Taxes”), all of which shall be paid by Seller for its own account not later than the date when due. If Seller is required by law or regulation to deduct or withhold any Taxes from or in respect of any amount payable hereunder, it shall: (i) make such deduction or withholding; (ii) pay the amount so deducted or withheld to the appropriate Governmental Authority not later than the date when due; (iii) deliver to Buyer, promptly, original tax receipts and other evidence satisfactory to Buyer of the payment when due of the full amount of such Taxes; and (iv) pay to Buyer such additional amounts as may be necessary so that such Buyer receives, free and clear of all Taxes, a net amount equal to the amount it would have received under this Agreement, as if no such deduction or withholding had been made. In addition, Seller agrees to pay to the relevant Governmental Authority in accordance with applicable law any current or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies (including, without limitation, mortgage recording taxes, transfer taxes and similar fees) imposed by the United States or any taxing authority thereof or therein that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement (“Other Taxes”). Seller agrees to indemnify Buyer for Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this Paragraph 23(d), provided that Buyer shall have provided such Seller with evidence, reasonably satisfactory to Seller, of payment of Taxes or Other Taxes, as the case may be.
(e)Without prejudice to the survival of any other agreement of Seller hereunder, the covenants and obligations of Seller contained in this Paragraph 23 shall survive the payment in full of the Repurchase Price and all other amounts payable hereunder and delivery of the Purchased Mortgage Loans by Buyer against full payment therefor.
24.Submission and Service of Process. Each party irrevocably and unconditionally (i) submits to the non-exclusive jurisdiction of any United States Federal or New York State court sitting in Manhattan, and any appellate court from any such court, solely for the purpose of any suit, action or proceeding brought to enforce its obligations under the Agreement or relating in any way to the Agreement or any Transaction under the Agreement and (ii) waives, to the fullest extent it may effectively do so, any defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and any right of jurisdiction on account of its place of residence or domicile.
25.Waiver of Immunity. Each party hereto hereby waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgment) and execution to which it might otherwise be entitled in any action or proceeding in any state or federal court or court of any other country or jurisdiction, relating in any way to this Agreement or any Transaction, and agrees that it will not raise, claim or cause to be pleaded any such immunity at or in respect of any such action or proceeding.
26.Force Majeure. Buyer and Seller shall not be responsible or liable for any failure or delay in the performance of their respective obligations under the Agreement arising out of or caused, directly or indirectly, by circumstances beyond their reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities; computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions; it being understood that Buyer and Seller shall use their best efforts to resume performance as soon as practicable under the circumstances.
27.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service with appropriate document access tracking, electronic signature tracking and document retention.
28.Hypothecation or Pledge of Purchased Mortgage Loans. Buyer shall have free and unrestricted use of all Purchased Mortgage Loans and nothing in this Agreement shall preclude Buyer from engaging in repurchase transactions with the Purchased Mortgage Loans or otherwise pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Mortgage Loans, but no such transaction shall relieve Buyer of its obligations to transfer Purchased Mortgage Loans to Seller pursuant to Paragraph 3, 4 or 11 hereof, or of Buyer's obligation to credit or pay Income to,
or apply Income to the obligations of, Seller pursuant to Paragraph 5 hereof. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Mortgage Loans delivered to Buyer by Seller.
29.Termination. This Agreement shall remain in effect until the Termination Date. However, no such termination shall impair Seller’s outstanding Obligations to Buyer at the time of such termination. Seller’s obligations under Paragraph 3(e), Paragraph 10 and Paragraph 17 and any other reimbursement or indemnity obligation of Seller to Buyer pursuant to this Agreement or any other Program Documents shall survive the termination hereof.
30.Further Assurances. Seller agrees to do such further acts and things and to execute and deliver to Buyer such additional assignments, acknowledgments, agreements, powers and instruments as are reasonably required by Buyer to carry into effect the intent and purposes of this Agreement and the other Program Documents, to perfect the interests of Buyer in the Purchased Items or to better assure and confirm unto Buyer its rights, powers and remedies hereunder and thereunder.
31.Servicing.
(a)Seller covenants to maintain or cause the servicing of the Purchased Mortgage Loans to be maintained in conformity with Accepted Servicing Practices and pursuant to the related underlying Servicing Agreement (as defined below). In the event that the preceding language is interpreted as constituting one or more servicing contracts, each such servicing contract shall terminate automatically upon the earliest of (i) the termination thereof by Buyer pursuant to subparagraph (d) below, (ii) Buyer’s non-renewal of the Servicing Term pursuant to subparagraph (f) below, (iii) a Default or an Event of Default, (iv) the date on which all the Obligations have been paid in full, or (v) the transfer of servicing to any entity approved by Buyer and the assumption thereof by such entity. Upon any such termination, Seller shall comply with the requirements set forth in Paragraph 31(f) as to the delivery of the Servicing Records and the physical servicing of each Purchased Mortgage Loan.
(b)During the period Seller is servicing the Purchased Mortgage Loans, (i) Seller agrees that Buyer is the owner of the Servicing Rights and all servicing records, including but not limited to any and all servicing agreements, files, documents, records, data bases, computer tapes, copies of computer tapes, proof of insurance coverage, insurance policies, appraisals, other closing documentation, payment history records, and any other records relating to or evidencing the servicing of such Mortgage Loans (the “Servicing Records”), and (ii) Seller grants Buyer a security interest in all servicing fees and rights relating to the Purchased Mortgage Loans and all Servicing Records to secure the obligation of Seller or its designee to service in conformity with this Paragraph 31 and any other obligation of Seller to Buyer. At all times during the term of this Agreement, Seller covenants to hold such Servicing Records in trust for Buyer and to safeguard, or cause each Servicer or Subservicer to safeguard, such Servicing Records and to deliver them, or cause any such Servicer or Subservicer to deliver them to the extent permitted under the related Servicing Agreement promptly to Buyer or its designee (including the applicable Custodian) at Buyer’s request or otherwise as required by operation of Paragraph 31(f) hereof. It is understood and agreed by the parties that prior to an Event of Default, Seller, as servicer, shall retain the servicing fees with respect to the Purchased Mortgage Loans.
(c)If any Mortgage Loan that is proposed to be sold on a Purchase Date is serviced by a servicer other than Seller (a “Subservicer”), or if the servicing of any Purchased Mortgage Loan is to be transferred to a Servicer or Subservicer, Seller shall provide a copy of the
related servicing agreement (if any) or the Master Services Agreement, as applicable, and a Servicing Instruction Letter Agreement executed by such Servicer or Subservicer (collectively, the “Servicing Agreement”) to Buyer at [***] such Purchase Date or transfer date, as applicable, which Servicing Agreement shall be in form and substance acceptable to Buyer. In addition, Seller shall have obtained the prior written consent of Buyer for such Servicer or Subservicer to subservice the Mortgage Loans.
(d)In addition to the rights provided in Paragraph 31(a), Buyer shall have the right, exercisable at any time in its sole discretion, upon written notice, to terminate Seller or any Servicers or Subservicers as servicer or subservicer, respectively, and any related Servicing Agreement, free and clear of any obligations (including without limitation any obligation to pay or reimburse any previous servicer for outstanding servicing advances). Upon any such termination, Seller shall transfer or shall cause Servicer or Subservicer to transfer such servicing with respect to such Purchased Mortgage Loans to Buyer or its designee, at no cost or expense to Buyer. Seller agrees to cooperate with Buyer in connection with the transfer of servicing.
(e)Buyer shall have the right in its sole discretion to appoint a third party to perform due diligence with respect to Seller’s servicing facilities at any time. Seller shall cooperate with Buyer and/or its designees to provide access to Seller’s servicing facilities upon reasonable prior written notice at a mutually convenient time including without limitation its books and records with respect to Seller’s servicing portfolio and the Purchased Mortgage Loans. In addition to the foregoing, Seller shall permit Buyer to inspect upon reasonable prior written notice at a mutually convenient time, Seller’s or its Affiliate’s servicing facilities, as the case may be, for the purpose of satisfying Buyer that Seller or its Affiliate, as the case may be, has the ability to service the Mortgage Loans as provided in this Agreement. In addition, with respect to any Servicer or Subservicer which is not an Affiliate of Seller, Seller shall use its best efforts to enable Buyer to inspect the servicing facilities of such Servicer or Subservicer and to cause such Servicer or Subservicer to cooperate with Buyer and/or its designees in connection with any due diligence performed by Buyer and/or such designees in accordance with this Paragraph 31(e). Seller and Buyer further agree that all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with any due diligence or inspection performed pursuant to this Paragraph 31(e) shall be paid by Buyer.
(f)With respect to the Servicing Rights appurtenant to each Purchased Mortgage Loan, Buyer shall own, and Seller shall deliver, such Servicing Rights to Buyer on the related Purchase Date. Seller shall transfer the servicing by delivering (or shall cause the related Subservicer to deliver) the Servicing Records and the physical and contractual servicing of each Purchased Mortgage Loan, to Buyer or its designee upon the earlier of (i) the termination of Seller or Subservicer as the servicer or subservicer, respectively, pursuant to Paragraph 31(d) or, as applicable, (ii) the expiration of the Servicing Term. Each Servicer and Subservicer shall service the Mortgage Loans on a monthly basis, beginning on the Purchase Date therefor and ending on the subsequent Purchase Date (the “Servicing Term”), and such Servicing Term shall automatically terminate unless Buyer delivers written notice of the extension of such Servicing Term to Servicer or Subservicer, as applicable, on or prior to such subsequent Purchase Date (the “Servicing Renewal Notice”), in which case a new monthly Servicing Term will be deemed to commence for such Purchased Mortgage Loans as of the date of such Servicing Renewal Notice. The Servicing Term will no longer apply to any Purchased Mortgage Loan that is repurchased in full by the related Seller in accordance with the provisions of this Agreement and is no longer
subject to a Transaction. Seller’s transfer of the Servicing Rights, Servicing Records and the physical and contractual servicing under this Paragraph 31(f) shall be in accordance with customary standards in the industry and such transfer shall include the transfer of the gross amount of all escrows held for the related Mortgagors (without reduction for unreimbursed advances or “negative escrows”).
32.Set-off. In addition to any rights and remedies of Buyer provided by this Agreement and by law, Buyer shall have the right, without prior notice to Seller, any such notice being expressly waived by Seller to the extent permitted by applicable law, upon any amount becoming due and payable by Seller hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all Property and deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Buyer or any Affiliate thereof to or for the credit or the account of Seller. Buyer may set-off cash, the proceeds of the liquidation of any Purchased Items and all other sums or obligations owed by Buyer or its Affiliates to Seller against all of Seller’s obligations to Buyer or its Affiliates, whether under this Agreement or under any other agreement between the parties or between Seller and any Affiliate of Buyer, or otherwise, whether or not such obligations are then due, without prejudice to Buyer’s or its Affiliate’s right to recover any deficiency. Buyer agrees promptly to notify Seller after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.
33.Periodic Due Diligence Reviews. Seller acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Purchased Mortgage Loans for purposes of verifying compliance with the representations, warranties, covenants and specifications made hereunder or under any other Program Document, or otherwise, and Seller agrees that upon reasonable [***] prior notice to Seller (provided that upon the occurrence of a Default or an Event of Default, no such prior notice shall be required), Buyer or its authorized representatives will be permitted during normal business hours to examine, inspect, make copies of, and make extracts of, the Mortgage Files, the Servicing Records and any and all documents, records, agreements, instruments or information relating to such Purchased Mortgage Loans in the possession, or under the control, of Seller and/or any Custodian. Seller also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Purchased Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer shall purchase Mortgage Loans from Seller based solely upon the information provided by Seller to Buyer in the Mortgage Loan Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right, at any time to conduct a partial or complete due diligence review on some or all of the Purchased Mortgage Loans, including, without limitation, ordering new credit reports, new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loan. Buyer may underwrite such Mortgage Loans itself or engage a third party underwriter to perform such underwriting. Seller agrees to cooperate with Buyer and any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller. In addition, Buyer has the right to perform continuing due diligence reviews (including, without limitation, operational, legal, corporate and background due diligence) of Seller and its Affiliates, directors, and their respective Subsidiaries and the officers, employees and significant shareholders thereof. Seller and Buyer further agree
that all reasonable out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s activities pursuant to this Paragraph 27 shall be paid by Seller.
34.Delay Not Waiver; Rights Cumulative. No failure on the part of Buyer to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Buyer of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All rights and remedies of Buyer provided for herein are cumulative and in addition to any and all other rights and remedies provided by law, the Program Documents and the other instruments and agreements contemplated hereby and thereby, and are not conditional or contingent on any attempt by Buyer to exercise any of its rights under any other related document. Buyer may exercise, at any time an Event of Default exists, one or more remedies, as Buyer so desires, and may thereafter at any time and from time to time exercise any other remedy or remedies.
35.WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDINGS IN CONNECTION WITH THE AGREEMENT.
36.Confidentiality. Each party acknowledges that Confidential Information (as defined below) may be exchanged between the parties pursuant to this Agreement. Each party shall use no less than the same means it uses to protect its similar confidential and proprietary information, but in any event not less than reasonable means, to prevent the disclosure and to protect the confidentiality of the Confidential Information of the other party. Each party agrees that it will not disclose or use the Confidential Information of the other party except for the purposes of this Agreement and as authorized herein. Notwithstanding the foregoing, the recipient of Confidential Information (the “Recipient”) may use or disclose the Confidential Information to the extent that such Confidential Information is: (a) already known by the Recipient without an obligation of confidentiality, (b) publicly known or becomes publicly known through no unauthorized act of the Recipient, (c) rightfully received from a third party without any obligation of confidentiality, (d) independently developed by the Recipient without use of the Confidential Information of the disclosing party (the “Disclosing Party”), (e) approved by the Disclosing Party for disclosure, or (f) required to be disclosed pursuant to a requirement of a governmental agency, regulatory or self-regulatory agency or law; provided that, to the extent permitted by the requesting body, the Recipient provides the other party with notice of such requirement prior to any such disclosure and requests that the requesting body afford confidential treatment to the information disclosed. In the event of any unauthorized disclosure or loss of, or inability to account for, Confidential Information of the Disclosing Party, the Recipient will notify the Disclosing Party immediately and will take all available steps to terminate the unauthorized use or further unauthorized disclosure of the Confidential Information of the Disclosing Party. “Confidential Information” shall mean all information disclosed to one party to this Agreement by the other party to this Agreement in written (including in any monthly certificate delivered by Seller), verbal, graphic, recorded, photographic, or any other form about such Disclosing Party and its business, including without limitation business partners and suppliers, financial statements, intellectual property rights, products, research and development, costing, licensing and pricing, disclosed in writing, verbally or visually, designated as confidential at the time of disclosure or is of a nature that a reasonable person would consider the information confidential. In addition, loanDepot, Inc. may disclose the Confidential Terms with prior (if feasible) written notice by Seller to Buyer, any disclosures or filing required under Securities and Exchange Commission (“SEC”) or state securities’ laws; provided that loanDepot, Inc. shall not file the Pricing Side Letter without Buyer’s prior written consent.
37. Amendment and Restatement. The terms and provisions of the Existing Agreement are hereby amended and restated in their entirety by the terms and provisions of this Agreement. This Agreement is not intended to, and shall not, effect a novation of any of the obligations of the parties to the Existing Agreement, but merely an amendment and restatement of the terms governing such obligations.
38.Provenance Blockchain. In the event of any inconsistency between the entries made on the Provenance Blockchain in respect of any Platform HELOC that is a Purchased Mortgage Loan and records maintained by the Seller, the records maintained on the Provenance Blockchain will be deemed to be informational only and shall not control, and instead the books and records maintained by the Seller in respect of such Platform HELOC shall control.
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Agreed and acknowledged as of the first date set forth above:
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JEFFERIES FUNDING LLC
By:
Title:
Date: | LOANDEPOT.COM, LLC
By:
Title:
Date: |
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Schedule 1 to Annex I
Mortgage Loan-Level Representations and Warranties
I. Representations and Warranties with respect to Mortgage Loans
(a)Mortgage Loans as Described. The information set forth in the Mortgage Loan Schedule delivered with respect to the Mortgage Loan is complete, true and correct in all material respects.
(b)Payments Current. The first monthly payment on the Mortgage Loan shall have been made prior to the second scheduled monthly payment on the Mortgage Loan becoming due. Except with respect to GNMA EBOs, no payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent at any time since the origination of the Mortgage Loan.
(c)No Outstanding Charges. There are no defaults in complying with the terms of the Mortgage securing the Mortgage Loan, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither Seller nor the Approved Originator from which Seller acquired the Mortgage Loan has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is more recent, to the day which precedes by one month the due date of the first installment of principal and interest thereunder.
(d)Original Terms Unmodified. Except with respect to a GNMA EBO, the terms of the Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the applicable Custodian and the terms of which are reflected in the Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required by the title insurance policy, and its terms are reflected on the Mortgage Loan Schedule. No Mortgagor in respect of the Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Mortgage File delivered to the applicable Custodian and the terms of which are reflected in the Mortgage Loan Schedule.
(e)No Defenses. The Mortgage Loan is not subject to any right of rescission, setoff, counterclaim or defense, including without limitation the defense of usury, nor will the operation of any of the terms of the Note or the Mortgage, or the exercise of any right thereunder, render either the Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and except with respect to a GNMA EBO, no Mortgagor in respect of the Mortgage Loan was a debtor in any state or federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated.
(f)Hazard Insurance. Each Mortgaged Property is insured by a fire and extended perils insurance policy, issued by an insurer approved by Buyer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of
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origination consistent with the Underwriting Guidelines, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount not less than the greatest of (i) 100% of the replacement cost of all improvements to the Mortgaged Property, (ii) the outstanding principal balance of the Mortgage Loan with respect to each Mortgage Loan (or with respect to each Second Lien Mortgage Loan, the sum of the outstanding principal balance of the related first lien Mortgage Loan and the outstanding principal balance of such Second Lien Mortgage Loan), (iii) the amount necessary to avoid the operation of any co-insurance provisions with respect to the Mortgaged Property, and consistent with the amount that would have been required as of the date of origination in accordance with the Underwriting Guidelines or (iv) the amount necessary to fully compensate for any damage or loss to the improvements that are a part of such property on a replacement cost basis. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Insurance Administration is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan (or with respect to each Second Lien Mortgage Loan, the sum of the outstanding principal balance of the related first lien Mortgage Loan and the outstanding principal balance of such Second Lien Mortgage Loan), (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the Flood Disaster Protection Act of 1973, as amended. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard Mortgagee clause naming Seller, its successors and assigns (including without limitation, subsequent owners of the Mortgage Loan), as Mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the Mortgagee. No such notice has been received by Seller. All premiums due and owing on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the Mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.
(g)Location of Property. Each Mortgaged Property is located in the state identified in the Mortgage Loan Schedule and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development or a de minimis planned unit development, provided, however, that any condominium unit or planned unit development shall conform with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings, and that no residence or dwelling is a mobile home or a manufactured dwelling. No portion of the Mortgaged Property is used for commercial purposes.
(h)No Mechanics’ Liens. At origination, there were no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with the lien of the Mortgage.
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(i)No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole-or in part, nor has any instrument been executed that would effect any such release, cancellation, subordination or rescission other than in the case of a release of a portion of the land comprising a Mortgaged Property or a release of a blanket Mortgage which release will not cause the Mortgage Loan to fail to satisfy the Underwriting Guidelines. Except with respect to GNMA EBOs. Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(j)Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, all applicable predatory and abusive lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the origination and servicing of such Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, [***] , evidence of compliance with all such requirements.
(k)No Foreclosure or Bankruptcy. The Mortgaged Property is not the subject of a foreclosure proceeding nor is the related Mortgagor be the subject of a bankruptcy proceeding.
(l)Valid Assignment; Valid Lien. Each Assignment of Mortgage from the Seller constitutes a legal, valid and binding assignment from the Seller. Each related Mortgage is freely assignable without the consent of the related Mortgagor. The Mortgage is a valid, subsisting, enforceable and perfected first or second Lien and first priority security interest with respect to each Mortgage Loan on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the Mortgaged Property. The Lien of the Mortgage is subject only to:
1.the lien of current real property taxes and assessments not yet due and payable;
2.covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in the lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the appraised value of the related Mortgaged Property set forth in such appraisal;
3.other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property; and
4.with respect to each Second Lien Mortgage Loan, a prior mortgage lien on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable first or second Lien and first priority security interest with respect to each Mortgage Loan, on the property described therein and Seller has full right to pledge and assign the same to Buyer. The Mortgaged Property was not, as of
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the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.
(m)Validity of Mortgage Documents. The Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and in full force and effect, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms, subject to no right of rescission, set-off, counterclaim or defense. All parties to the Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Note, the Mortgage and any such agreement, and the Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. Seller has reviewed all of the documents constituting the Servicing File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. The related Note shall not have been extinguished under relevant state law in connection with a judgment of foreclosure or foreclosure sale or otherwise. Neither the Approved Originator nor the Seller has made any representations to the Mortgagor that are inconsistent with the HELOC Documents.
(n)Origination and Underwriting; Servicing. The origination of each Mortgage Loan complied in all material respects with all applicable laws and regulations. At the time of the origination of such Mortgage Loan, the origination, due diligence and underwriting performed by or on behalf of the Seller in connection with each Mortgage Loan complied in all material respects with the terms, conditions and requirements of the Seller’s origination, due diligence, underwriting procedures, Underwriting Guidelines and standards for similar commercial and multifamily mortgage loans intended for securitization. The Mortgage Loan has been originated by, and, if applicable, purchased by Seller from, an Approved Originator. The servicing and collection of each Purchased Mortgage Loan was in all material respects legal, proper and prudent, in accordance with customary residential mortgage servicing practices.
(o)Location of Improvements; No Encroachments. All improvements which were considered in determining the appraised value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(p)Custodian.
1.With respect to each Mortgage Loan (other than Platform HELOCs):
i.The DB Custodian is in possession of each Required Document for such Mortgage Loan, other than documents that are released pursuant to the terms of the DB Custodial Agreement and other than such documents that are missing from the Mortgage File with respect to Scratch & Dent Mortgage Loans. With respect to each Mortgage Loan Document that has been released from the possession of the DB Custodian under the terms of the DB Custodial Agreement to Seller or its bailee, such Mortgage Loan Document shall be returned to the DB Custodian within [***] of release thereof. With respect to each Mortgage Loan Document that has been released from the possession of the DB DB Custodian under the terms of the DB Custodial Agreement under any transmittal letter such Mortgage Loan Document shall be returned to the DB Custodian within the time period stated in such transmittal letter. With respect to each Mortgage Loan
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Document that has been released from the possession of the DB Custodian under the terms of the DB Custodial Agreement under an attorney bailee letter, such Mortgage Loan Document shall be returned to the DB Custodian from and after the date such attorney’s bailee letter is terminated or ceases to be in full force and effect.
2.Solely with respect to Platform HELOCs:
i.The Mortgage and the other Mortgage Loan Documents (excluding the Assignment of Mortgage for such Mortgage Loan) required to be delivered have been delivered electronically through the Platform to the WSFS Custodian in compliance with the specific requirements of the WSFS Custodial Agreement. Following the related Purchase Date, the related Assignment of Mortgage has been or will be delivered to the WSFS Custodian in compliance with the specific requirements of the WSFS Custodial Agreement, upon the written request of Buyer. Buyer has “view access” to the digital items in the Mortgage File maintained through the Platform by the WSFS Custodian. With respect to each Mortgage Loan, the WSFS Custodian is in possession of a complete Mortgage File, whether electronically through the Platform or otherwise, including all documents used in the qualification of the Mortgagor, except for such documents that have not been delivered to the WSFS Custodian. Once the complete Mortgage File is delivered, such Mortgage File contains each of the documents and instruments specified to be included therein duly executed and in due and proper form, and each such document or instrument is in form acceptable to the applicable federal or state regulatory agency.
(q)Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged Property is either vacant or lawfully occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. Seller has not received written notification from any governmental authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. Except as otherwise set forth in the Mortgage Loan Schedule, the Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.
(r)No Condemnation Proceedings. There is no proceeding pending or threatened for the total or partial condemnation of such Mortgaged Property that would have a material adverse effect on the value, use or operation of the Mortgaged Property.
(s)Escrow Deposits. All escrow deposits and payments required pursuant to each Mortgage Loan (including capital improvements and environmental remediation reserves), if any, are in the possession, or under the control, of the Seller or its servicer, and there are no deficiencies (subject to any applicable grace or cure periods) in connection therewith. Any and all requirements under the Mortgage Loan as to completion of any material improvements and as to disbursements of any funds escrowed for such purpose, which requirements were to have been complied with on or before Purchase Date, have been complied with in all material respects or the funds so escrowed have not been released. No other escrow amounts have been released except in accordance with the terms and conditions of the related Mortgage Loan Documents.
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(t)No Holdbacks. Other than with respect to HELOCs, the principal amount of the Mortgage Loan stated on the Mortgage Loan Schedule has been fully disbursed as of the Purchase Date and there is no requirement for future advances thereunder (except in those cases where the full amount of the Mortgage Loan has been disbursed but a portion thereof is being held in escrow or reserve accounts pending the satisfaction of certain conditions relating to leasing, repairs or other matters with respect to the related Mortgaged Property), and any requirements or conditions to disbursements of any loan proceeds held in escrow have been satisfied with respect to any disbursement of any such escrow fund. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Note or Mortgage.
(u)No Exception. Other than as noted by the applicable Custodian to Buyer, no Exception (as defined in such Custodial Agreement) exists with respect to the Mortgage Loan that has not been waived by Buyer.
(v)Title Insurance. The Mortgage Loan (unless such Mortgage Loan is a Second Lien Mortgage Loan or a HELOC that is a First Lien Mortgage Loan) is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an American Land Title Association lender’s title insurance policy or comparable policy acceptable to Fannie Mae or Freddie Mac and approved for use in the applicable jurisdiction and each such title insurance policy is issued by a title insurer acceptable in the industry and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Seller, its successors and assigns, as to the first priority Lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (1), (2), and (3) below of paragraph (l) of this Schedule 1 and, with respect to each Second Lien Mortgage Loan, clause (4) of paragraph (l) of this Schedule 1, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the mortgage interest rate and monthly payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Seller.
(w)Ownership.
1.With respect to each Mortgage Loan (other than Platform HELOCs):
i.Seller is the sole owner and holder of the Mortgage Loan. All Mortgage Loans acquired by Seller from third parties (including affiliates) were acquired in a true and legal sale pursuant to which such third party sold, transferred, conveyed and assigned to Seller all of its right, title and interest in, to and under such Mortgage
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Loan and retained no interest in such Mortgage Loan. In connection with such sale, such third party received reasonably equivalent value and fair consideration and, in accordance with GAAP and for federal income tax purposes, reported the sale of such Mortgage Loan to Seller as a sale of its interests in such Mortgage Loan. The Mortgage Loan is not assigned or pledged, and Seller has good, indefeasible and marketable title thereto, and has full right to transfer, pledge and assign the Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to assign, transfer and pledge each Mortgage Loan pursuant to this Agreement and following the pledge of each Mortgage Loan, Buyer will hold such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.
2.Solely with respect to Platform HELOCs:
i.The Seller is the sole owner of record and holder of such HELOC, and the related Credit Line Agreement and the related Mortgage are not assigned or pledged to any other Person, and such Seller has good, indefeasible and marketable title thereto and has full right and authority subject to no interest or participation of, or agreement with any other Person, to transfer, assign and sell such HELOC. Such HELOC is free and clear of any and all encumbrances, liens, pledges, equities, participation interests, charges, claims (including, but not limited to, any preference or fraudulent transfer claims, but excluding any notice required by law or regulation to be delivered to the Mortgagors), agreements with other parties to sell or otherwise transfer the HELOC or security interests of any nature encumbering such HELOC except any such interest created pursuant to or in accordance with the terms of this Agreement. Following the acquisition or origination of the HELOC by the Seller, the Seller will own and hold such HELOC free and clear of any and all encumbrances, equities, participation interests, liens, pledges, charges, claims (including, but not limited to, any preference or fraudulent transfer claims), agreements with other parties to sell or otherwise transfer the HELOC or security interest of any nature encumbering such HELOC (except that legal title to the related Mortgage will be held by the Servicer as nominee for the Seller) except any such interest created pursuant to or in accordance with the terms of this Agreement;
(x)Doing Business. All parties which have had any interest in the Mortgage Loan, whether as Mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state or (D) not doing business in such state.
(y)LTV. As of the date of origination of the Mortgage Loan, the LTV and CLTV (if applicable) are as identified on the Mortgage Loan Schedule.
(z)No Defaults. Except with respect to GNMA EBOs, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any
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default, breach, violation or event of acceleration. With respect to each Mortgage Loan which is indicated by Seller to be a Second Lien Mortgage Loan (as reflected on the Mortgage Loan Schedule) (i) the first Lien is in full force and effect, (ii) there is no default, breach, violation or event of acceleration existing under such first Lien mortgage or the related mortgage note, (iii) no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration thereunder, and either (A) the first Lien mortgage contains a provision which allows or (B) applicable law requires, the Mortgagee under the Second Lien Mortgage Loan to receive notice of, and affords such Mortgagee an opportunity to cure any default by payment in full or otherwise under the first lien mortgage.
(aa)Origination; Payment Terms. The Mortgage Loan was originated by or in conjunction with a Mortgagee approved by HUD pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state authority. Other than with respect to HELOCs, monthly payments on the Mortgage Loan commenced no more than sixty (60) days after funds were disbursed in connection with the Mortgage Loan. The mortgage interest rate is adjusted, with respect to adjustable rate Mortgage Loans, on each interest rate adjustment date to equal the index plus the gross margin (rounded up or down to the nearest .125%), subject to the mortgage interest rate cap. Other than with respect to HELOCs, the Note is payable on the first day of each month in equal monthly installments of principal and interest, which installments of interest, with respect to an adjustable rate Mortgage Loan, are subject to change due to the adjustments to the mortgage interest rate on each adjustment date, with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than 30 years from commencement of amortization. No Mortgage Loan allows for negative amortization. No Mortgage Loan is an interest-only Mortgage Loan.
(ab)Customary Provisions. The Note has a stated maturity. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage.
(ac)Licenses and Permits. Each Mortgagor covenants in the Mortgage Loan Documents that it shall keep all material certifications, permits, licenses and approvals, including certificates of completion and occupancy and permits required for the legal use, occupancy and operation of the Mortgaged Property in full force and effect, and to the Seller’s knowledge based upon any of a letter from any government authorities, a review of a zoning consultant’s report or other affirmative investigation of local law compliance consistent with the investigation conducted by the Seller for similar residential mortgage loans intended for securitization, all such material licenses, permits, franchises, certificates of occupancy, consents, and other approvals are in effect. The Mortgage Loan requires the related Mortgagor to be qualified to do business in the jurisdiction (if and to the extent required by such jurisdiction) in which the related Mortgaged Property is located and for the Mortgagor and the Mortgaged Property to be in compliance in all material respects with all zoning regulations and building laws.
(ad)No Predatory Lending. No predatory, abusive or deceptive lending practices, including but not limited to, the extension of credit to a Mortgagor without regard for the Mortgagor’s ability to
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repay the Mortgage Loan and the extension of credit to a Mortgagor which has no tangible net benefit to the Mortgagor, were employed in connection with the origination of the Mortgage Loan.
(ae)Acceptable Investment. No specific circumstances or conditions exist with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that should reasonably be expected to (i) cause private institutional investors which invest in Mortgage Loans similar to the Mortgage Loan to regard the Mortgage Loan as an unacceptable investment, (ii) cause the Mortgage Loan to be more likely to become past due in comparison to similar Mortgage Loans, or (iii) adversely affect the value or marketability of the Mortgage Loan in comparison to similar Mortgage Loans.
(af)HOEPA. No Mortgage Loan is (a) subject to the provisions of the Homeownership and Equity Protection Act of 1994 as amended (“HOEPA”), (b) a “high cost” mortgage loan, “covered” mortgage loan, “high risk home” mortgage loan, or “predatory” mortgage loan or any other comparable term, no matter how defined under any federal, state or local law, (c) subject to any comparable federal, state or local statutes or regulations, or any other statute or regulation providing for heightened regulatory scrutiny or assignee liability to holders of such mortgage loans, or (d) a High Cost Loan or Covered Loan, as applicable (as such terms are defined in the current Standard & Poor’s LEVELS® Glossary Revised, Appendix E).
(ag)Mortgaged Property Undamaged. The Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty so as to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended and each Mortgaged Property is in good repair. There have not been any condemnation proceedings with respect to the Mortgaged Property and Seller has no knowledge of any such proceedings.
(ah)Servicepersons’ Civil Relief Act. The Mortgagor has not notified Seller, and Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicepersons’ Civil Relief Act.
(ai)No Additional Collateral. The Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.
(aj)Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(ak)Reserved.
(al)Transfer of Mortgage Loans. The Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.
(am)Due-On-Sale. The Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the Mortgagee thereunder.
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(an)Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the origination of the Mortgage Loan have been or will be consolidated with the outstanding principal amount secured by the Mortgage and evidenced by the Note, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. Except with respect to Second Lien Mortgage Loans, the lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority with respect to each Mortgage Loan, by a title insurance policy, an endorsement to the policy insuring the Mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae and Freddie Mac. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
(ao)Collection Practices; Escrow Deposits: Interest Rate Adjustments. The origination and collection practices used by the originator, each servicer of the Mortgage Loan and Seller with respect to the Mortgage Loan have been in all material respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments (other than Second Lien Mortgage Loans for which the mortgagee under the related first lien Mortgage Loan is collecting Escrow Payments), all such payments are in the possession of, or under the control of, Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Seller have been capitalized under the Mortgage or the Note. All mortgage interest rate adjustments have been made in strict compliance with state and federal law and the terms of the related Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
(ap)Conversion to Fixed Interest Rate. With respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(aq)Appraisal. Except with respect to any FNMA PIW Loan, any FHLMC ACE Loan, any HELOC and any Second Lien Mortgage Loan (other than any Second Lien Mortgage Loan originated under the CES Flex Program or any successor program), the Mortgage File contains an appraisal of the related Mortgaged Property signed prior to the approval of the Mortgage Loan application by a qualified appraiser, duly appointed by Seller or the originator, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated. Each FNMA PIW Loan received an appraisal waiver from Fannie Mae in accordance with the FNMA Guide in effect at the time of the origination of such Mortgage Loan through Fannie Mae’s Property Inspection Waiver (PIW) program. Each FHLMC ACE Loan received an appraisal waiver from Freddie Mac in accordance with the FHLMC Guide in effect at the time of the origination of such Mortgage Loan through Freddie Mac’s Automated Collateral Evaluation (ACE) program.
(ar)Construction or Rehabilitation of Mortgaged Property. No Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.
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(as)No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(at)Capitalization of Interest. The Note does not by its terms provide for the capitalization or forbearance of interest.
(au)No Equity Participation. No Mortgage Loan has a shared appreciation feature, any other contingent interest feature or a negative amortization feature or an equity participation by Seller.
(av)Mortgage Submitted for Recordation. The Mortgage (other than for a MERS Mortgage Loan) has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.
(aw)Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Seller maintains such statement in the Mortgage File.
(ax)Conformance with Underwriting Guidelines and Agency Standards. The Mortgage Loan was underwritten in accordance with the Underwriting Guidelines. If such Mortgage Loan is a Platform HELOC, the Seller has originated such Mortgage Loan on the Branded Origination Application and has not made any unauthorized modifications to the Branded Origination Application. The Note and Mortgage are on forms similar to those used by Freddie Mac or Fannie Mae and Seller has not made any representations to a Mortgagor that are inconsistent with the mortgage instruments used.
(ay)No Buydown Provisions; No Graduated Payments or Contingent Interests. The Mortgage Loan does not contain provisions pursuant to which monthly payments on the Mortgage Loan are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(az)Advance of Funds by the Seller. Other than with respect to HELOCs, no advance of funds has been made by Seller to the related Mortgagor. No funds have been received from any person other than the related Mortgagor or an affiliate, directly, or, to the knowledge of the Seller, indirectly for, or on account of, payments due on the Mortgage Loan. Neither Seller nor any affiliate thereof has any obligation to make any capital contribution to any Mortgagor under a Mortgage Loan, other than contributions made on or prior to the date hereof.
(ba)Ground Leases. For purposes of this paragraph, a “ground lease” shall mean a leasehold estate in real property where the fee owner as the ground lessor conveys for a term or terms of years its
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entire interest in the land and buildings and other improvements, if any, to the ground lessee (who may, in certain circumstances, own the building and improvements on the land), subject to the reversionary interest of the ground lessor as fee owner. With respect to any Mortgage Loan where the Mortgage Loan is secured by a Mortgage on a ground leasehold estate in whole or in part, and the related Mortgage does not also encumber the related lessor’s fee interest in such Mortgaged Property, based upon the terms of the ground lease and any estoppel or other agreement received from the ground lessor in favor of Seller, its successors and assigns, Seller represents and warrants that:
1.The ground lease or a memorandum regarding such ground lease has been duly recorded or submitted for recordation in a form that is acceptable for recording in the applicable jurisdiction. The ground lease or an estoppel or other agreement received from the ground lessor permits the interest of the lessee to be encumbered by the related Mortgage and does not restrict the use of the related Mortgaged Property by such lessee, its successors or assigns in a manner that would materially and adversely affect the security provided by the related Mortgage. No material change in the terms of the ground lease had occurred since its recordation, except by any written instruments which are included in the related Mortgage File;
2.The lessor under such ground lease has agreed in a writing included in the related Mortgage File (or in such ground lease) that the ground lease may not be amended, modified, canceled or terminated without the prior written consent of the agent or lender (unless in connection with an amendment to correct typographical errors or are otherwise de-minis in nature) and that any such action without such consent is not binding on the agent or lender, its successors or assigns;
3.The ground lease has an original term (or an original term plus one or more optional renewal terms, which, under all circumstances, may be exercised, and will be enforceable, by either borrower or the Mortgagee) that extends not less than 20 years beyond the stated maturity of the related Mortgage Loan, or 10 years past the stated maturity if such Mortgage Loan fully amortizes by the stated maturity (or with respect to a Mortgage Loan that accrues on an actual 360 basis, substantially amortizes);
4.The ground lease is not subject to any interests, estates, liens or encumbrances superior to, or of equal priority with, the Mortgage, except for the related fee interest of the ground lessor and the Permitted Liens;
5.The ground lease does not place commercially unreasonable restrictions on the identity of the Mortgagee and the ground lease is assignable to the holder of the Mortgage Loan and its successors and assigns without the consent of the lessor thereunder (provided that proper notice is delivered (if required) in accordance with such ground lease), and in the event it is so assigned, it is further assignable by the holder of the Mortgage Loan and its successors and assigns without the consent of (but with prior notice to) the lessor;
6.The Seller has not received any written notice of default under or notice of termination of such ground lease. To the Seller’s knowledge, there is no default under such ground lease and no condition that, but for the passage of time or giving of notice, would result in a default under the terms of such ground lease and to the Seller’s knowledge, such ground lease is in full force and effect;
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7.The ground lease or ancillary agreement between the lessor and the lessee requires the lessor to give to the agent or lender written notice of any material default, provides that no notice of default or termination is effective unless such notice is given to the agent or lender;
8.The agent or lender is permitted a reasonable opportunity (including, where necessary, sufficient time to gain possession of the interest of the lessee under the ground lease through legal proceedings) to cure any default under the ground lease which is curable after the agent’s or lender’s receipt of notice of any default before the lessor may terminate the ground lease;
9.The ground lease does not impose any restrictions on subletting that would be viewed as commercially unreasonable by a prudent residential mortgage lender;
10.Under the terms of the ground lease, an estoppel or other agreement received from the ground lessor and the related Mortgage (taken together), any related insurance proceeds or the portion of the condemnation award allocable to the ground lessee’s interest (other than in respect of a total or substantially total loss or taking as addressed in clause (k) below) will be applied either to the repair or to restoration of all or part of the related Mortgaged Property with (so long as such proceeds are in excess of the threshold amount specified in the related Mortgage Loan Documents) the agent, lender or a trustee duly appointed having the right to hold and disburse such proceeds if in excess of 10% of the principal amount of the related Mortgage Loans as repair or restoration progresses, or to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest;
11.Under the terms of the ground lease and the related Mortgage (taken together), any related insurance proceeds, or portion of the condemnation award allocable to ground lessee’s interest in respect of a total or substantially total loss or taking of all or substantially all of the related Mortgaged Property to the extent not applied to restoration, will be applied first to the payment of the outstanding principal balance of the Mortgage Loan, together with any accrued interest; and
12.Provided that the agent or lender cures any defaults which are susceptible to being cured, the ground lessor has agreed to enter into a new lease with agent or lender upon termination of the ground lease for any reason, including rejection of the ground lease in a bankruptcy proceeding.
(bb)Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, PMI Policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by Seller or by any officer, director, or employee of Seller or any designee of Seller or any corporation in which Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.
(bc)Environmental Matters. The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation.
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(bd)Withdrawn Loans. If the Mortgage Loan has been released to Seller pursuant to terms of the applicable Custodial Agreement, then the promissory note relating to the Mortgage Loan was returned to the related Custodian within [***].
(be)MERS Mortgage Loan. With respect to each MERS Mortgage Loan, a MERS Identification Number has been assigned by MERS and such MERS Identification Number is accurately provided on the Mortgage Loan Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Mortgage Loan, Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(bf)Qualified Mortgage. Each Mortgage Loan (other than a Permitted Non-QM Mortgage Loan, a HELOC or a Second Lien Mortgage Loan) satisfies the following criteria:
(i)Such Mortgage Loan is a Qualified Mortgage;
(ii)Such Mortgage Loan is accurately identified in writing to Buyer as either a Safe Harbor Qualified Mortgage or a Rebuttable Presumption Qualified Mortgage;
(iii)Prior to the origination of such Mortgage Loan, the related originator made a reasonable and good faith determination that the related Mortgagor would have a reasonable ability to repay such Mortgage Loan according to its terms, in accordance with, at a minimum, the eight underwriting factors set forth in 12 CFR 1026.43(c)(2); and
(iv)Such Mortgage Loan is supported by documentation that evidences compliance with the Ability to Repay Rule and the QM Rule.
(bg)Ability to Repay Determination. Other than with respect to HELOCs, there is no action, suit or proceeding instituted by or against or threatened against Seller in any federal or state court or before any commission or other regulatory body (federal, state or local, foreign or domestic) that questions or challenges the compliance of any Mortgage Loan (or the related underwriting) with the Ability to Repay Rule or, except with respect to a Permitted Non-QM Mortgage Loan, the QM Rule.
(bh)Points and Fees. All points and fees related to the Mortgage Loan were disclosed in writing to the Mortgagor in accordance with applicable state and federal law and regulation. The points and fees related to such Mortgage Loan did not exceed 3% of the total loan amount (or such other applicable limits for lower balance Mortgages) as specified under 12 CFR 1026.43(e)(3), and the points and fees were calculated using the calculation required for qualified mortgages under 12 CFR 1026.32(b) to determine compliance with applicable requirements.
(bi)Permitted Non-Qualified Mortgage. Each Mortgage Loan that is a Permitted Non-QM Mortgage Loan satisfies the following criteria:
(i) prior to the origination of such Mortgage Loan, the related originator made a reasonable and good faith determination that the related Mortgagor would have a reasonable ability to repay such Mortgage Loan according to its terms, in accordance with, at a minimum, the eight (8) underwriting factors set forth in 12 CFR 1026.43(c)(2); and
(ii) such Mortgage Loan is supported by documentation that evidences compliance with the Ability to Repay Rule.
(bj)Insured Closing Letter. As of the Purchase Date of each Wet Loan (other than an eMortgage Loan or a Platform HELOC), the Settlement Agent has obtained an Insured Closing Letter,
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closing protection letter or similar authorization letter from a nationally recognized title insurance company that has been approved by Buyer in writing. The Insured Closing Letter covers any losses occurring due to the fraud, dishonesty or mistakes of the closing agent and insures to the benefit of, and the rights thereunder may be enforced by, the loan originator and its successors and assigns, including Buyer.
(bk)Escrow Agreement. As of the Purchase Date of each Wet Loan (other than an eMortgage Loan or a Platform HELOC), the Settlement Agent has executed an Escrow Instruction Letter in form and substance satisfactory to Buyer in its sole discretion stating that in the event of a Rescission of or if for any reason the Mortgage Loan fails to fund on a given day, the party conducting the closing is holding all funds which would have been disbursed on behalf of the Mortgagor as agent for the benefit of Buyer and such funds shall be redeposited in the Disbursement Account for the benefit of Buyer [***] after the date of Rescission or other failure of the Mortgage Loan to fund on a given day. Such Escrow Instruction Letter shall inure to the benefit of, and the rights thereunder may be enforced by, the loan originator and its successors and assigns, including Buyer.
(bl)Wet Loans. For each Mortgage Loan (other than an eMortgage Loan or a Platform HELOC) that is a Wet Loan, the Required Documents shall have been delivered to the applicable Custodian within [***] of the related Purchase Date. For each eMortgage Loan that is a Wet Loan, the Required Documents shall have been delivered to the applicable Custodian within [***] of the related Purchase Date.
(bm)Agency Eligible Mortgage Loan. Each Mortgage Loan (other than Second Lien Mortgage Loans, HELOCs, Proprietary Jumbo Mortgage Loans, Scratch & Dent Mortgage Loans, Conventional Bridge Mortgage Loans and Permitted Non-Qualified Mortgage Loans) is an Agency Eligible Mortgage Loan.
(bn)Payment Terms. With respect to each HELOC, the related Mortgagor may request advances up to the Credit Limit within the first ten years following the date of origination. Each HELOC will amortize within 30 years from the date of origination. No Draw has been made with respect to a HELOC that causes the outstanding principal balance thereunder to exceed the Maximum HELOC Amount.
(bo)eNote Legend. If the Mortgage Loan is an eMortgage Loan, the related eNote contains the Agency-Required eNote Legend.
(bp)eNotes. With respect to each eMortgage Loan, the related eNote satisfies all of the following criteria:
(i)the eNote bears a digital or electronic signature;
(ii)the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash Value of the eNote as reflected in the eVault;
(iii)there is a single Authoritative Copy of the eNote, as applicable and within the meaning of Section 9-105 of the Uniform Commercial Code or Section 16 of the UETA, as applicable, that is held in the eVault;
(iv)the Location status of the eNote on the MERS eRegistry reflects the MERS Org ID of the DB Custodian;
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(v)the Controller status of the eNote on the MERS eRegistry reflects the MERS Org ID of Buyer;
(vi)the Delegatee status of the eNote on the MERS eRegistry reflects the MERS Org ID of DB Custodian;
(vii)the Master Servicer Field status of the eNote on the MERS eRegistry reflects the MERS Org ID of Seller;
(viii)the Subservicer Field status of the eNote on the MERS eRegistry (i) reflects, if there is a third-party Subservicer, such Subservicer’s MERS Org ID or (ii) if there is not a Subservicer, is blank;
(ix)there is no Control Failure, eNote Replacement Failure or Unauthorized Servicing Modification with respect to such eNote;
(x)the eNote is a valid and enforceable Transferable Record or comprises “electronic chattel paper” within the meaning of the Uniform Commercial Code;
(xi)there is no defect with respect to the eNote that would result in Buyer having less than full rights, benefits and defenses of “Control” (within the meaning of the UETA) of the Transferable Record; and
(xii)there is no paper copy of the eNote in existence nor has the eNote been papered-out.
(bq) Platform HELOCs. Each Platform HELOC was originated for the purpose of fulfilling an agreed-upon sale through Figure Connect. There are no defenses, counterclaims, or rights of setoff affecting any Platform HELOC based on the use of blockchain and/or other distributed ledger technology in the origination, transfer, or holding of such Platform HELOC. With respect to each Platform HELOC, (i) the Seller is recorded as the current owner of such Platform HELOC on the Platform utilizing the Provenance Blockchain, (ii) such record of ownership is maintained through a unique, identifiable and unalterable “hash value” produced by a cryptographic algorithm, (iii) only the WSFS Custodian and Buyer have credentials (i.e., a key, security certificate and login credentials) to authorize a transfer of the ownership record of such Mortgage File on the Platform utilizing the Provenance Blockchain, and (iv) an electronic record of the current ownership of such Platform HELOC is maintained on the Provenance Blockchain through a unique, identifiable and unalterable “hash value” produced by a cryptographic algorithm. The Platform utilizing the Provenance Blockchain accommodates the timely and accurate transfer of Platform HELOCs and related rights, titles and interests to purchasers and a transfer through the Provenance Blockchain does not violate any Requirements of Law.
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Schedule 2 to Annex I
Required Mortgage Loan Documents
With respect to each Purchased Mortgage Loan other than a Platform HELOC, the following documents shall be delivered to the Buyer or its designee (including the DB Custodian), as applicable:
(A) The original Note bearing all intervening endorsements, endorsed “Pay to the order of _________ without recourse” and signed in the name of the last endorsee (the “Last Endorsee”) by an authorized Person of the Last Endorsee (in the event that the Mortgage Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Mortgage Loan was acquired or originated by the Last Endorsee while doing business under another name, the signature must be in the following form: “[Last Endorsee], [formerly known] or [doing business] as [previous name]”) or a lost note affidavit in a form reasonably approved by Buyer, with a copy of the applicable Note attached thereto. If the Note is an eNote, the eNote, bearing a digital or electronic signature;
(B) An original or a copy of the loan agreement and the guarantee, if any, executed in connection with the Mortgage Loan, or in connection with a HELOC, an original or a copy of the Credit Line Agreement;
(C) An original Mortgage with evidence of recording thereon, or a copy thereof together with an officer’s certificate of Seller certifying that such copy represents a true and correct copy of the original and that such original has been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located;
(D) The originals of all assumption, modification, consolidation or extension agreements with evidence of recording thereon, or copies thereof together with an officer’s certificate of Seller certifying that such copies represent true and correct copies of the originals and that such originals have each been submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located;
(E) The original Assignment of Mortgage in blank for each Mortgage Loan, in form and substance acceptable for recording and signed in the name of the Last Endorsee (in the event that the Mortgage Loan was acquired by the Last Endorsee in a merger, the signature must be in the following form: “[Last Endorsee], successor by merger to [name of predecessor]”; in the event that the Mortgage Loan was acquired or originated while doing business under another name, the signature must be in the following form: “[Last Endorsee], [formerly known] or [doing business] as [previous name]”);
(F) The originals of all intervening assignments of mortgage (if any) with evidence of recording thereon, or copies thereof;
(G) Other than in connection with a Second Lien Mortgage Loan or a HELOC that is a First Lien Mortgage Loan, the original title policy or a copy thereof;
(H) An original or copy of any security agreement, chattel mortgage or equivalent document executed in connection with the Mortgage Loan; and
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(I) Other than in connection with a Second Lien Mortgage Loan or a HELOC that is a First Lien Mortgage Loan, a copy of a survey of the Mortgaged Property (if any) as accepted by the title company for issuance of the title policy.
(J) All additional original documents evidencing any assumption, modification, consolidation or extension of such Mortgage Loan approved in accordance with the terms of this Agreement, and upon receipt of any such other documents.
With respect to each Purchased Mortgage Loan that is a Platform HELOC, the following documents shall be delivered to the Buyer or its designee (including the WSFS Custodian), as applicable:
(A) A copy of the Credit Line Agreement;
(B) Original or complete copy of any guarantee executed in connection with the Credit Line Agreement (if any), if applicable;
(C) Original or complete copy of the Mortgage with evidence of recording thereon (when available);
(D) The original Assignment of Mortgage, in blank, for each Mortgage Loan that is not a DART Mortgage Loan, in form and substance acceptable for recording (except for the insertion of the name of the assignee and recording information);
(E) A complete copy of the credit report (to the extent in the possession of Seller);
(F) A complete copy of the Mortgaged Property valuation (to the extent in the possession of Seller); and
(G) Original or complete copy of any required disclosure statements.
Sched. 2 - 2
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Annex II
Names and Addresses for Communications Between Parties
If to Buyer:
Jefferies Funding LLC
c/o Jefferies LLC
520 Madison Avenue
New York, New York 10022
Attention: [***]
Telephone: [***]
With a copy to:
Jefferies Funding LLC
c/o Jefferies LLC
520 Madison Avenue
New York, New York 10022
Attention: General Counsel
Facsimile: [***]
If to Seller:
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, California 92618
Attention: [***]
Email: [***]
with a copy to
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, California 92618
Attention: General Counsel
Email: [***]
Certain confidential information contained in this document, marked by “[***]”, has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential. Certain schedules (or similar attachments) also marked by “[***]” have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
FUNDING 2 FACILITY EXECUTION
Exhibit 10.2
AMENDMENT NO. 4
TO MASTER REPURCHASE AGREEMENT
Amendment No. 4 to Master Repurchase Agreement, dated as of March 25, 2026 (this “Amendment”), among ATLAS SECURITIZED PRODUCTS, L.P. (“Atlas”, the “Administrative Agent” and a “Buyer”), ATLAS SECURITIZED PRODUCTS FUNDING 2, L.P. (a “Buyer” and together with Atlas, “Buyers”), and LOANDEPOT.COM, LLC (the “Seller”).
RECITALS
The Administrative Agent, Buyers and the Seller are parties to that certain
(a) Master Repurchase Agreement, dated as of November 14, 2024 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) Pricing Side Letter, dated as of November 14, 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Side Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement.
The Administrative Agent, Buyers and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Administrative Agent, Buyers and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Amendment to the Existing Repurchase Agreement. Effective as of the Amendment Effective Date, the Existing Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto. The parties hereto further acknowledge and agree that Exhibit A constitutes the Repurchase Agreement as amended and modified by the terms set forth herein.
SECTION 2. Conditions Precedent to Amendment. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the execution and delivery of this Amendment, by all parties hereto.
SECTION 3. Representations and Warranties. Seller hereby represents and warrants to the Administrative Agent and the Buyers that it is in compliance with all the terms
and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 13 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms. SECTION 5. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 6. Counterparts. This Amendment may be executed in one or more counterparts and by different parties hereto on separate counterparts, each of which, when so executed, shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment in a Portable Document Format (PDF) shall be effective as delivery of a manually executed original counterpart of this Amendment. The parties agree that this Amendment, any addendum or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as
Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner
By: / s/ Dominic Obaditch
Name: Dominic Obaditch
Title: Managing Director
Signature Page to Amendment No. 4 to MRA (Atlas – Funding 2/loanDepot)
ATLAS SECURITIZED PRODUCTS
FUNDING 2, L.P., as a Buyer
By: AASP Management, LP, its investment manager
By:/s/ William B. Kuesel
Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to Amendment No. 4 to MRA (Atlas – Funding 2/loanDepot)
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as
Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner
By: / s/ Dominic Obaditch
Name: Dominic Obaditch
Title: Managing Director
ATLAS SECURITIZED PRODUCTS
FUNDING 2, L.P., as a Buyer
By: AASP Management, LP, its investment manager
By: /s/ William B. Kuesel
Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to Amendment No. 4 to MRA (Atlas – Funding 2/loanDepot)
LOANDEPOT.COM, LLC, as Seller
By: /s/ David Hayes
Name: David Hayes
Title: CFO
Signature Page to Amendment No. 4 to MRA (Atlas – Funding 2/loanDepot)
Exhibit A REPURCHASE AGREEMENT
(See attached)
FUNDING 2 FACILITY CONFORMED THROUGH AMENDMENT NO. 34
MASTER REPURCHASE AGREEMENT
ATLAS SECURITIZED PRODUCTS, L.P., as administrative agent (“Administrative Agent”) and as a buyer (a “Buyer”),
ATLAS SECURITIZED PRODUCTS FUNDING 2, L.P., as a buyer (a “Buyer”), and other Buyers from time to time (“Buyers”),
and
LOANDEPOT.COM, LLC, as seller (“Seller”) Dated November 14, 2024
TABLE OF CONTENTS
Page
1.Applicability 1
2.Definitions 1
3.Program; Initiation of Transactions 31
4.Repurchase 3332
5.Price Differential. 3433
6.Margin Maintenance; Reallocation of Purchase Price 35
7.Income Payments 36
8.Security Interest 39
9.Payment and Transfer 41
10.Conditions Precedent 41
11.Program; Costs 45
12.Servicing 49
13.Representations and Warranties 50
14.Covenants 56
15.Events of Default 63
16.Remedies Upon Default 6665
17.Reports 6968
18.Repurchase Transactions 72
19.Single Agreement 73
20.Notices and Other Communications 73
21.Entire Agreement; Severability 7574
22.Non assignability 7574
23.Set-off 76
24.Binding Effect; Governing Law; Jurisdiction 76
25.No Waivers, Etc. 7776
26.Intent 77
27.Disclosure Relating to Certain Federal Protections 78
28.Power of Attorney 78
29.Buyers May Act Through Administrative Agent 7978
30.Indemnification; Obligations 79
31.Counterparts 80
32.Confidentiality 80
33.Recording of Communications 8281
34.Conflicts 8281
35.Acknowledgment of Assignment and Administration of Repurchase Agreement 8382
36.Periodic Due Diligence Review 8382
37.Authorizations 8483
38.Administration of Repurchase Agreement 8483
39.Acknowledgement of Anti-Predatory Lending Policies 8584
40.Documents Mutually Drafted 8584
41.General Interpretive Principles 8584
42.Bankruptcy Non-Petition 8685
43.Limited Recourse 8685
44.Pool Subdivisions 8786
SCHEDULES
Schedule 1 – Representations and Warranties with Respect to Purchased Mortgage Loans Schedule 2 – Authorized Representatives
Schedule 3 – Non-Affiliate Joint Venture Companies EXHIBITS
Exhibit A Form of Power of Attorney (Seller) Exhibit B Escrow Instruction Letter
This is a MASTER REPURCHASE AGREEMENT, dated as of November 14, 2024, by and between ATLAS SECURITIZED PRODUCTS, L.P. (“Atlas”, the “Administrative Agent” and a “Buyer”) on behalf of Buyers, including but not limited to ATLAS SECURITIZED PRODUCTS FUNDING 2, L.P. (“Funding 2” and a “Buyer” and together with Atlas, the “Buyers”) and LOANDEPOT.COM, LLC (“Seller”).
1.Applicability
From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Administrative Agent on behalf of Buyers certain Purchased Assets (as hereinafter defined) on a servicing released basis against the transfer of funds by Administrative Agent, with a simultaneous agreement by Administrative Agent on behalf of Buyers to transfer to Seller such Purchased Assets on a servicing released basis at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. For the avoidance of doubt, and for administrative and tracking purposes,
(a) the purchase and sale of each Purchased Mortgage Loan shall be deemed a separate Transaction and (b) with respect to each Designated Mortgage Loan, such Designated Mortgage Loan may, at Buyers’ option, be sold to different Buyers on a pro rata basis, such that one Buyer pays the Purchase Price-Base and other Buyers pay the Purchase Price-Incremental 1 and Purchase Price-Incremental 2, as applicable, and, in which case, the Administrative Agent shall own the Designated Mortgage Loan, for the benefit of the purchasing Buyers, on a pro rata, pari passu basis.
2.Definitions
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings; provided that any terms used but not otherwise defined herein shall have the meanings given to them in the Pricing Side Letter:
“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Acceptable State” means any state acceptable pursuant to Seller’s Underwriting Guidelines.
“Acceptable Valuation” means, with respect to a Mortgaged Property or an REO Property, (a) on the Purchase Date, a FIRREA Appraisal (including, without limitation, property inspection waivers permitted pursuant to the Fannie Mae Guides and Freddie Mac Guides); (b) on any date after the initial Purchase Date, any other written valuation approved by the Administrative Agent in its sole discretion; and (c) solely with respect to HELOCs and Second Lien Mortgage Loans, an AVM that is FIRREA compliant.
“Act of Insolvency” means, with respect to any Person, (a) (i) the filing of a petition by such Person commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining by such Person of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or (ii) suffering by such Person of any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief, which, in the case of clause (ii) (and solely to the extent not consented to), remains undismissed, unstayed or in effect for a period of [***] days or more; (b) the seeking of the appointment of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (c) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (d) the making or offering by such Person of a composition with its creditors or a general assignment for the benefit of creditors; (e) the admission by a Responsible Officer of such Person of its inability to pay its debts or discharge its obligations as they become due or mature; or (f) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person.
“Additional Buyers” shall have the meaning set forth in Section 35 hereof.
“Additional Collateral” has the meaning set forth in Section 8.a(2) hereof.
“Administration Agreement” means that certain Repo Administration and Allocation Agreement, dated as of the date hereof, by and among Seller, Atlas Securitized Products, L.P. as administrative agent and certain Buyers identified therein, as amended, restated, supplemented or otherwise modified from time to time.
“Administrative Agent” means Atlas Securitized Products, L.P. or any successor thereto under the Administration Agreement.
“Affiliate” means, with respect to any specified entity, any other entity directly or indirectly controlling, or controlled by, or under common control with such entity, provided that no securitization trust or special purpose vehicle that issues non-recourse debt shall be considered an Affiliate; provided that, for the avoidance of doubt, with respect to Administrative Agent and Buyers, “Affiliate” means Atlas Securitized Products, L.P., WHCO Intermediate Holdings L.P., their respective Subsidiaries and any CP Conduit. For the purposes of this definition, “control” means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting equity, by contract or otherwise. For the avoidance of doubt, none of the Permitted Holders, nor any joint venture of which Seller or LD Holdings Group LLC owns less than fifty percent (50%) of the equity interests therein nor any of the joint venture companies listed on Schedule 3 hereto, shall be considered an Affiliate for purposes of this Agreement.
“Agency” means Freddie Mac, Fannie Mae or GNMA, as applicable.
“Agency Approvals” means approval by GNMA as an approved issuer, by FHA as an approved mortgagee, by VA as an approved VA lender, in each case in good standing, by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.
“Agency Mortgage Loan” means, collectively, Conforming Mortgage Loans, State Agency Program Loans, USDA Loans, FHA Loans and VA Loans (but not Early Buyout Loans).
“Agency Security” means a mortgage-backed security issued by an Agency including a GNMA Security.
“Agency Title Alternative Mortgage Loan” means a Mortgage Loan that is eligible for sale to Fannie Mae which (i) Fannie Mae has agreed to waive the requirement to obtain title insurance and/or an attorney title policy in accordance with the Fannie Mae Guide, as amended, supplemented or otherwise modified by the variance issued to Seller pursuant to the title acceptance pilot program (the “Title Variance Program”); (ii) a “Title Alternative” was received in accordance with and as defined in the Title Variance Program; (iii) the terms of the Mortgage Loan meet the requirements of the Title Variance Program and (iv) Seller has otherwise satisfied all the terms and conditions of the Title Variance Program.
“Agency-Required eNote Legend” means the legend or paragraph required by Fannie Mae, Freddie Mac or GNMA, as applicable, to be set forth in the text of an eNote, which includes the provisions set forth on an exhibit to the Custodial Agreement, as may be amended from time to time by Fannie Mae, Freddie Mac or GNMA, as applicable.
“Aggregate Purchase Price-Base” means, as of any date of determination, the aggregate outstanding Purchase Price-Base for a Purchased Mortgage Loan.
“Aggregate Purchase Price-Incremental 1” means, as of any date of determination, the aggregate outstanding Purchase Price-Incremental 1 for a Purchased Mortgage Loan.
“Aggregate Purchase Price-Incremental 2” means, as of any date of determination, the aggregate outstanding Purchase Price-Incremental 2 for a Purchased Mortgage Loan.
“Aging Limit” has the meaning assigned to such term in the Pricing Side Letter.
“Agreement” means this Master Repurchase Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Allocated Percentage” means, with respect to a Purchased Mortgage Loan, the percentage obtained by (a) with respect to the Purchase Price-Base, the Purchase Price Percentage-Base divided by the Purchase Price Percentage-Total; (b) with respect to the Purchase Price-Incremental 1, the Purchase Price Percentage-Incremental 1 divided by the Purchase Price Percentage-Total and (c) with respect to the Purchase Price-Incremental 2, the Purchase Price Percentage-Incremental 2 divided by the Purchase Price Percentage-Total.
“Appraised Value” means (i) the “as is” value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property, (ii) in the case of property inspection waiver Mortgage Loans, the value accepted by Fannie Mae or Freddie Mac’s automated underwriting system as the value of the Mortgaged Property or (iii) in the case of Second Lien Mortgage Loans and HELOCs, the value set forth in the AVM.
“Approved Product Type” has the meaning assigned to such term in the Pricing Side Letter.
“Asset Documents” means the documents in the related Asset File to be delivered to the Custodian.
“Asset File” means the Mortgage File.
“Asset Matrix” has the meaning assigned to such term in the Pricing Side Letter.
“Asset Schedule” means, with respect to any Transaction as of any date, an Asset Schedule in the form prescribed by the Custodial Agreement.
“Asset Value” means with respect to any Purchased Mortgage Loan, the sum of the Asset Value-Base, the Asset Value-Incremental 1 and the Asset Value-Incremental 2.
“Asset Value-Base” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Base, and (b) the applicable Maximum Value Amount; provided that the Asset Value-Base of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur.
“Asset Value-Incremental 1” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Incremental 1, and (b) the applicable Maximum Value Amount; provided, that, the Asset Value-Incremental 1 of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur.
“Asset Value-Incremental 2” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Incremental 2, and (b) the applicable Maximum Value Amount; provided, that, the Asset Value-Incremental 2 of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur.
"Assignment and Acceptance" has the meaning assigned to such term in Section 22.
"Assignment of Mortgage" means an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgage Property is located to reflect the assignment and pledge of the Mortgage.
“Assignment of Proprietary Lease” means the specific agreement creating a first lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease securing a Co-op Loan.
“Authoritative Copy” means, with respect to an eNote, a single authoritative copy of such document that is unique, identifiable and unalterable, is marked as the original and has no indication that it is a non-authoritative copy.
“AVM” means an automated valuation model providing computer-generated home appraisals for mortgages based on comparable sales, title records and other market factors, and having a minimum confidence score of at least 80%.
“Bailee Letter” has the meaning assigned to such term in the applicable Custodial Agreement.
“Bank” means JPMorgan Chase Bank, National Association and any successor or assign.
“Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended from
time to time.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BPL – Holdback” means a Business Purpose Mortgage Loan with respect to which there exists a Holdback Amount.
“BPL – Long” means a Business Purpose Mortgage Loan with respect to which (a) the related Mortgaged Property consists of (i) [***] or less or (ii) between [***] and [***] and with an original outstanding principal amount less than $[***] and (b) the related maturity date [***] or more from the date of the Mortgage Note.
“Business Day” means any day other than (i) a Saturday or Sunday; (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed or (iii) a public or bank holiday in New York City.
“Business Purpose Mortgage Loan” means a Mortgage Loan with respect to which the related Mortgaged Property (a) is non-owner occupied; (b) is primarily used for business or commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z); and (c) has been originated or acquired in accordance with Underwriting Guidelines.
“Buyer” means Administrative Agent, in its capacity as a buyer, Funding 2 and each other Buyer which becomes a party hereto pursuant to and in accordance with Section 22 hereof and, with respect to Section 11 hereof, its participants.
“Capital Lease Obligations” means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP, and, for purposes of the Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Change in Control” means:
(1)any event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan, other than the Permitted Holders becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of fifty-one percent (51%) of the equity securities of loanDepot, Inc., a Delaware corporation, entitled to vote for members of the board of directors or equivalent governing body of Seller on a fully-diluted basis;
(2)the sale, transfer, or other disposition of all or substantially all of Seller’s assets (excluding any such action taken in connection with any securitization transaction); or
(3)if Seller is a Delaware limited liability company, Seller enters into any transaction or series of transactions to adopt, file, effect or consummate a Division, or otherwise permits any such Division to be adopted, filed, effected or consummated.
“Clearing Account” means the account into which HUD, VA and USDA remit all Income (including, without limitation, claims and proceeds) on account of Early Buyout Loans.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collection Account” means the account described in the Collection Account Control Agreement, into which all collections and proceeds on or in respect of the Purchased Mortgage Loans shall be deposited by Seller or Servicer.
“Collection Account Control Agreement” means that certain collection account control agreement, dated as of the date hereof, among Administrative Agent, Seller and Bank, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Combined Loan to Value Ratio” or “CLTV” means with respect to any Second Lien Mortgage Loan or HELOC, the ratio of (i) the combined amount of the original amount (or the related credit limit with respect to a HELOC) of the Second Lien Mortgage Loan or HELOC, as applicable, plus all secured loans on the related property that are equal or senior in priority to that Second Lien Mortgage Loan or HELOC, as applicable, the Appraised Value of the Mortgaged Property at origination of the Second Lien Mortgage Loan or HELOC.
“Committed Mortgage Loan” means a Purchased Mortgage Loan which is the subject of a Take-out Commitment with a Take-out Investor.
“Concentration Limit” has the meaning assigned to such term in the Pricing Side Letter.
“Conforming Mortgage Loan” means a first lien Mortgage Loan, including State Agency Program Loans, originated in accordance with the criteria of an Agency for purchase of
Mortgage Loans, including, without limitation, conventional Mortgage Loans, as determined by Administrative Agent in its sole good faith discretion.
“Control” means, with respect to an eNote, the “control” of such eNote within the meaning of UETA and/or, as applicable, E-SIGN, which is established by reference to the MERS eRegistry and any party designated therein as the Controller.
“Control Failure” means, with respect to an eNote, the failure of the Controller status of the eNote in the MERS eRegistry to reflect Administrative Agent’s MERS Org ID as a result of an unauthorized Transfer of Control or unauthorized Transfer of Control and Location, in either case, initiated by Custodian or through Custodian’s system, in contravention of the terms of this Agreement; provided that (i) Custodian delivered the most recent Custodial Mortgage Loan Schedule and exception report reflecting the Location status of the eNote as the Custodian’s MERS Org ID and the Controller status of the eNote as Administrative Agent’s MERS Org ID and (ii) the Controller status and Location status of such eNote have not been transferred pursuant to (x) a Request for Release of Documents (as defined in the Custodial Agreement) or
(y) Administrative Agent’s written request or instruction.
“Controller” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Controller”, and who in such capacity shall be deemed to be “in control” or to be the “controller” of such eNote within the meaning of UETA or E-SIGN, as applicable.
“Co-op Corporation” means, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Co-op Loan” means a Mortgage Loan secured by the pledge of stock allocated to a Co-op Unit in a Co-op Corporation and collateral assignment of the related Proprietary Lease.
“Co-op Project” means, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.
“Co-op Shares” means, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock Certificates.
“Co-op Unit” means, with respect to any Co-op Loan, a specific unit in a Co-op Project.
“CP Conduit” means any Buyer that is an asset-backed commercial paper conduit.
“Credit Limit” means, with respect to each HELOC, the maximum amount permitted under the terms of the related Credit Line Agreement as identified in the related Asset Schedule.
“Credit Line Agreement” means, with respect to each HELOC, the related home equity line of credit agreement, account agreement and promissory note (if any) executed by the related Mortgagor and any amendment or modification thereof.
“Custodial Agreement” means the custodial agreement, dated as of the date hereof, among Seller, Administrative Agent, Buyers and Custodian identified therein, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Custodial Mortgage Loan Schedule” has the meaning assigned to such term in the Custodial Agreement.
“Custodian” means Deutsche Bank National Trust Company or such other party specified by Administrative Agent and agreed to by Seller, which approval shall not be unreasonably withheld.
“Daily Simple SOFR” means, for any day, SOFR, with conventions (including, without limitation, a lookback) established by the Administrative Agent [***] in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR”; provided that, if the Administrative Agent determines that any such convention is not administratively, operationally, or technically feasible for the Administrative Agent, then the Administrative Agent may establish another convention [***].
“DE Compare Ratio” means the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.
“Debtor Relief Law” means any law, administration, or regulation relating to reorganization, winding up, administration, composition or adjustment of debts or otherwise relating to bankruptcy or insolvency.
“Default” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Delegatee” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Delegatee” or “Delegatee for Transfers”, and in such capacity is authorized by the Controller to perform certain MERS eRegistry transactions on behalf of the Controller such as Transfers of Control and Transfers of Control and Location.
“Delinquency Advance” means any advance made by Seller under the Servicing Agreements, to cover due, but uncollected or unavailable as a result of funds not yet being cleared, principal and interest payments on the Purchased Mortgage Loans included in the portfolio of Purchased Mortgage Loans serviced by Seller pursuant to the Servicing Agreements, including Purchased Mortgage Loans with respect to which the related Mortgaged Property is being held pending liquidation.
“Designated Mortgage Loan” means a Purchased Mortgage Loan that is identified by Administrative Agent as eligible for a Purchase Price-Base, a Purchase Price-Incremental 1 and/or a Purchase Price-Incremental 2.
“Disqualification Event” means, with respect to a Designated Mortgage Loan which has Purchase Price-Incremental 2, the occurrence of any of the following events: (a) a Participant materially breaches the applicable Participation Agreement, (b) an Act of Insolvency occurs with respect to a Participant, (c) the failure of a Participant to purchase the participation interest
pursuant to a Participation Agreement with respect to a Designated Mortgage Loan, (d) the Administrative Agent, a Participant or a Buyer shall have determined in its sole good faith discretion that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Administrative Agent, any Participant or any Buyer has made it unlawful, for Administrative Agent, any Participant or any Buyer to purchase Purchased Mortgage Loan or participations in Transactions, or (e) the Administrative Agent determines in its sole discretion, that it will no longer enter into Transactions comprised of Purchase Price-Incremental 2 on account of a Purchased Mortgage Loan.
“Division” means the division of a limited liability company into two or more limited liability companies pursuant to and in accordance with Section 18-217 of Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.
“Dollars” and “$” means dollars in lawful currency of the United States of America. “Draw” means, with respect to each HELOC, an additional borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
“Due Date” means the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“Early Buyout” means the purchase of a modified or delinquent FHA Loan, VA Loan or USDA Loan by Seller from a pool of mortgage loans backing a GNMA Security.
“Early Buyout Loans” means an FHA Loan, USDA Loan or VA Loan which is subject to an Early Buyout and is a Purchased Mortgage Loan.
“Effective Date” means the date upon which the conditions precedent set forth in Section 10 shall have been satisfied.
“Electronic Agent” means MERSCORP Holdings, Inc., or its successor in interest or assigns.
“Electronic Record” means, as the context requires, (i) “Record” and “Electronic Record,” both as defined in E-SIGN, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, including without limitation, those involving the Warehouse Electronic System, and (ii) with respect to an eMortgage Loan, the related eNote and all other documents comprising the Mortgage File electronically created and that are stored in an electronic format, if any.
“Electronic Tracking Agreement” means one or more Electronic Tracking Agreements with respect to (x) the tracking of changes in the ownership, mortgage servicers and servicing rights ownership of Purchased Mortgage Loans held on the MERS System, and (y) the tracking of the Control of eNotes held on the MERS eRegistry, each in a form acceptable to Administrative Agent.
“eMortgage Loan” means a Mortgage Loan that is a Conforming Mortgage Loan (other than an FHA Loan or VA Loan) with respect to which there is an eNote and as to which some or all of the other documents comprising the related Mortgage File may be created electronically and not by traditional paper documentation with a pen and ink signature.
“eNote” means, with respect to any eMortgage Loan, the electronically created and stored Mortgage Note that is a Transferable Record.
“eNote Delivery Requirements” shall have the meaning set forth in Section 3(c) hereof.
“eNote Replacement Failure” shall have the meaning set forth in the Custodial Agreement.
“eNote Secured Party” means the party designated in the MERS eRegistry as the “Secured Party”.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and administrative rulings issued thereunder.
“ERISA Affiliate” means any corporation or trade or business that, together with Seller is treated as a single employer under Section 414(b) or (c) of the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described in Section 414 of the Code.
“Escrow Agreement” means that certain Fourth Amended and Restated Escrow Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Escrow Instruction Letter” means the Escrow Instruction Letter from Seller to the Settlement Agent, in the form of Exhibit B hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Escrow Payments” means, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges, mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“eVault” means an electronic repository established and maintained by an eVault Provider for delivery and storage of eNotes.
“eVault Provider” means Document Systems, Inc. d/b/a DocMagic, or its successor in interest or assigns, or such other entity agreed upon by Custodian or Administrative Agent.
“Event of Default” has the meaning specified in Section 15 hereof.
“Event of Termination” means with respect to Seller (a) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within [***] days of the occurrence of such event, or (b) the withdrawal of Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (c) the failure by Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment
under Section 412(m) of the Code (or Section 430(j) of the Code as amended by the Pension Protection Act) or Section 302(e) of ERISA (or Section 303(j) of ERISA, as amended by the Pension Protection Act), (d) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or any ERISA Affiliate thereof to terminate any Plan, or (e) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (f) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (g) the receipt by Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (f) has been taken by the PBGC with respect to such Multiemployer Plan, or (h) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412 (b) or 430 (k) of the Code with respect to any Plan.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Buyer or other recipient of any payment hereunder or required to be withheld or deducted from a payment to such Buyer or such other recipient: (a) Taxes based on (or measured by) net income or net profits, franchise Taxes and branch profits Taxes that are imposed on a Buyer or other recipient of any payment hereunder as a result of (i) being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) a present or former connection between such Buyer or other recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof (other than connections arising from such Buyer or other recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced under this Agreement or any Program Agreement, or sold or assigned an interest in any Purchased Mortgage Loan); (b) any Tax imposed on a Buyer or other recipient of a payment hereunder that is attributable to such Buyer’s or other recipient’s failure to comply with relevant requirements set forth in Section 11(e)(ii); (c) any withholding Tax that is imposed on amounts payable to or for the account of such Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to or under this Agreement, or such person changes its lending office, except in each case to the extent that amounts with respect to Taxes were payable either to such person’s assignor immediately before such person became a party hereto or to such person immediately before it changed its lending office; and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Indebtedness” has the meaning specified in Section 13(a)(23) hereof.
“E-SIGN” means the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.
“Fannie Mae” means the Federal National Mortgage Association or any successor thereto.
“Fannie Mae Guides” means the Fannie Mae Seller’s Guide and Fannie Mae Servicers’ Guide and all amendments or additions thereto, including, but not limited to, future updates thereof.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FDIA” has the meaning set forth in Section 26(c) hereof.
“FDICIA” has the meaning set forth in Section 26(d) hereof.
“FHA” means the Federal Housing Administration, an agency within the HUD, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of HUD where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA Connection System” means the FHA Connection system, together with any successor FHA electronic access portal.
“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.
“FHA Mortgage Insurance” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.
“FHA Mortgage Insurance Contract” means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” means the regulations promulgated by the HUD under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” means Fair Isaac & Corporation, or any successor thereto.
“Fidelity Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Seller’s regulators.
“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
“FIRREA Appraisal” means an opinion of the “as is” fair market value of a Mortgaged Property or an REO Property that (a) is given by a licensed real estate agent or broker in conformity with customary and usual business practices, which includes comparable sales and comparable listings and (b) complies with the criteria set forth in FIRREA for an “appraisal” or if an appraisal is not required by the statute, an “evaluation”.
“Freddie Mac” means the Federal Home Loan Mortgage Corporation or any successor thereto.
“Freddie Mac Guides” means any and all applicable rules, regulations, requirements and guidelines of Freddie Mac, including the Freddie Mac Guide and including any representations and warranties incorporated into any sale contract with Freddie Mac.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.
“GNMA” means the Government National Mortgage Association and any successor thereto.
“GNMA Guide” means the GNMA Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by GNMA.
“GNMA Haircut Amount” means, with respect to a Simultaneously Funded Early Buyout Loan, an amount equal to (i) the amount due to GNMA to repurchase such Mortgage Loan from GNMA less (ii) the Purchase Price for such Mortgage Loan.
“GNMA Security” means a mortgage-backed security guaranteed by GNMA pursuant to the GNMA Guide.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over Seller, Administrative Agent or any Buyer, as applicable.
“Gross Margin” means, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantee” means, as to any Person, [***]. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Hash Value” means, with respect to an eNote, the unique, tamper-evident digital signature of such eNote that is stored with MERS.
“HELOC” means a home equity revolving line of credit secured by a first lien or second lien on the related Mortgaged Property.
“High Cost Mortgage Loan” means a Mortgage Loan (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; (b) classified as a “high cost,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (c) having a percentage listed under the Indicative Loss Severity Column (the column that appears in the S&P Anti-Predatory Lending Law Update Table, included in the then-current S&P’s LEVELS® Glossary of Terms on Appendix E).
“Holdback Account” means an account held by Servicer pursuant to the terms of the applicable Servicing Agreement, if any, in each case, into which any Holdback Amounts with respect to BPL – Holdback may be deposited and held.
“Holdback Amount” means, with respect to a BPL – Holdback, such escrow or holdback amounts that are advanced by the related originator but not disbursed to the related Mortgagor at such Mortgage Loan’s origination date, with such undisbursed amounts being held by the applicable Servicer in the related Holdback Account for funding amounts for the related Mortgagor to improve and rehabilitate the related Mortgaged Property in accordance with the related Servicing Agreement and Asset Documents.
“Hsieh Investors” means [***].
“HUD” means the United States Department of Housing and Urban Development or any successor thereto.
“Income” means, with respect to any Purchased Mortgage Loan, without duplication, all principal and income or dividends or distributions received with respect thereto, including any sale or liquidation premiums, liquidation proceeds, insurance proceeds, dividends or other distributions payable thereon or any fees or payments of any kind received by the related Servicer (net of any servicing fees and advances then due and owing pursuant to the terms of the applicable Servicing Agreement).
“Indebtedness” has the meaning assigned to such term in the Pricing Side Letter.
“Indemnified Party” has the meaning set forth in Section 30 hereof.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Seller hereunder or under any Program Agreement and (b) Other Taxes.
“Index” means, with respect to any adjustable rate Mortgage Loan, the index identified on the Asset Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.
“Intercreditor Agreement” means that certain Fourth Amended and Restated Intercreditor Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Interest Rate Adjustment Date” means the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.
“Interest Rate Protection Agreement” means, with respect to any or all of the Purchased Mortgage Loans, or any short sale of a security issued by the U.S. Department of the Treasury, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement, or similar arrangement providing for
protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller.
“Joint Securities Account Control Agreement” means that certain Fourth Amended and Restated Joint Securities Account Control Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“LD Holdings” means LD Holdings Group LLC, a Delaware limited liability company.
“Lender Insurance Authority” means the permission granted to certain FHA-approved lenders to process single family mortgage applications without first submitting documentation to the United States Department of Housing and Urban Development as set forth in 12 U.S.C. §1715z-21 and the regulations enacted thereunder set forth in 24 CFR §203.6.
“Lien” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount (or the related credit limit with respect to a HELOC) of such Mortgage Loan to the Appraised Value of the Mortgaged Property at origination.
“Location” means, with respect to an eNote, the location of such eNote which is established by reference to the MERS eRegistry.
“Margin Call” has the meaning specified in Section 6(a) hereof. “Margin Deadlines” has the meaning specified in Section 6(b) hereof. “Margin Deficit” has the meaning specified in Section 6(a) hereof.
“Market Value” has the meaning assigned to such term in the Pricing Side Letter.
“Master Servicer Field” means, with respect to an eNote, the field entitled, “Master Servicer” in the MERS eRegistry.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or condition (financial or otherwise) of Seller or any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of Seller or any Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against Seller or any Affiliate that is a party to any Program Agreement, in each case as determined by the Administrative Agent in its good faith discretion.
“Maximum Aggregate Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Available Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Available Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Value Amount” means, on each date of determination, an amount equal to [***].
“MBA Method of Delinquency” means, with respect to Mortgage Loans, the methodology used by the Mortgage Bankers Association for assessing delinquency. For the avoidance of doubt, under the MBA Method of Delinquency, a Mortgage Loan is considered “30 days delinquent” if the Mortgagor fails to make a monthly payment prior to the close of business on the day that immediately precedes the due date on which the next monthly payment is due. For example, a Mortgage Loan will be considered thirty (30) days delinquent if the Mortgagor fails to make a monthly payment originally due on October 1 by the close of business on October 30.
“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS eDelivery” means the transmission system operated by the Electronic Agent that is used to deliver eNotes, other Electronic Records and data from one MERS eRegistry member to another using a system-to-system interface and conforming to the standards of the MERS eRegistry.
“MERS eRegistry” means the electronic registry operated by the Electronic Agent that acts as the legal system of record that identifies the Controller, Delegatee and Location of the Authoritative Copy of registered eNotes.
“MERS Org ID” means a seven-digit number assigned by MERSCORP Holdings that uniquely identifies a member entity on the MERS eRegistry.
“MERS System” means the mortgage electronic registry system operated by the Electronic Agent that tracks changes in Mortgage ownership, mortgage servicers and servicing rights ownership.
“Monthly Payment” means the scheduled monthly payment of principal and/or interest on a Mortgage Loan.
“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto. “Mortgage” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares and in the Proprietary Lease relating to such Co-op Shares.
“Mortgage File” means, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in an exhibit to the Custodial Agreement.
“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Interest Rate Cap” means, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgage Loan” means any Approved Product Type which is a fixed or floating rate, one to four family residential mortgage or home equity loan evidenced by a promissory note and secured by a first (or, in the case of Second Lien Mortgage Loans or second lien HELOCs, second) lien mortgage, which satisfies the requirements set forth in the Underwriting Guidelines and Section 13(b) hereof; provided that Mortgage Loans shall not include any High Cost Mortgage Loans and shall not include home equity conversion loans.
“Mortgage Note” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage, including the Credit Line Agreement in the case of a HELOC.
“Mortgaged Property” means the real property or other Co-op Loan collateral securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.
“Nominee” means Seller, or any successor Nominee appointed by Administrative Agent following the occurrence and during the continuance of an Event of Default.
“Non-Affiliate Buyer” has the meaning specified in Section 19 hereof. “Non-Affiliate MRA” has the meaning specified in Section 19 hereof.
“Non-Affiliate Transactions” has the meaning specified in Section 19 hereof.
“Non-Agency Mortgage Loan” means a Mortgage Loan other than an Early Buyout Loan that (a) is not a Non-Agency Non-QM Mortgage Loan; (b) either (i) does not meet the criteria for an Agency Mortgage Loan or (ii) is an Agency Mortgage Loan that is aggregated for placement into a private label securitization or for sale to a Take-out Investor other than an Agency; (c) meets all applicable criteria as set forth in the Underwriting Guidelines and (d) is identified as a Non-Agency Mortgage Loan by Administrative Agent and Seller.
“Non-Agency Non-QM Mortgage Loan” a Non-Agency Mortgage Loan that (a) does not meet the criteria for a Qualified Mortgage Loan; (b) meets all applicable criteria as set forth in the Underwriting Guidelines and (c) is otherwise acceptable to Administrative Agent in its sole good faith discretion.
“Non-Performing Mortgage Loan” means (a) any Mortgage Loan for which any payment of principal or interest is [***] or more days past due (according to the MBA Method of Delinquency), (b) any Mortgage Loan with respect to which the related mortgagor is in bankruptcy or (c) any Mortgage Loan with respect to which the related mortgaged property is in foreclosure.
“Obligations” means ([***].
“OFAC” has the meaning set forth in Section 13(a)(27) hereof.
“Officer’s Compliance Certificate” has the meaning assigned to such term in the Pricing Side Letter.
“Ordinary Course Litigation” means any litigation or arbitration proceeding commenced by a Mortgagor, or the assertion by a Mortgagor of any common or necessary or compulsory cause of action, defense or counterclaim, seeking to enjoin, hinder, delay, set aside or temporarily restrain a foreclosure proceeding or other enforcement action commenced by the holder or servicer of a Mortgage Loan or real estate owned Property in the ordinary course of its business.
“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any excise, sales, goods and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Program Agreement.
“Parthenon Investors” means each of [***] and each of their respective affiliates.
“Participant” means any participant as contemplated by Section 22.b of this Agreement which has entered into a Participation Agreement.
“Participation Agreement” means a participation agreement by and among a Participant, the Administrative Agent and the Buyers in form and substance acceptable to Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Payment Date” means, (a) with respect to the payment of Price Differential, the fifth (5th) day of the month and (b) with respect to the payment of all other amounts due hereunder, the twelfth (12th) day of the month; provided, that, in the case of clauses (a) and (b) if any such day is not a Business Day, the Payment Date shall be the next succeeding Business Day and provided, further, the final Payment Date shall be the related Repurchase Date.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Pension Protection Act” means the Pension Protection Act of 2006.
“Permitted Holders” means any of the Hsieh Investors and the Parthenon Investors.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan” means an employee pension benefit or other plan as defined in Section 3(2) of ERISA, established or maintained by Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan.
“Pool” means a subset of Purchased Mortgage Loans subject to Transactions which shall be identified from time to time by the Administrative Agent.
“Pool Subdivision Notice” means a written notice delivered by Administrative Agent to Seller, which shall identify the discrete Purchased Mortgage Loans which shall be allocated to different Pools.
“Post-Default Rate” means an annual rate of interest equal to the sum of (a) the Pricing Rate plus (b) [***].“Power of Attorney” means a Power of Attorney substantially in the form of Exhibit A hereto delivered by Seller.
“Price Differential” means, for each Purchased Mortgage Loan, calculated daily on the basis of a 360-day year for the actual number of days during each Pricing Period, the sum of the Price Differential-Base, Price Differential-Incremental 1 and Price Differential-Incremental 2 for such Pricing Period.
“Price Differential-Base” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Base and (b) the Aggregate Purchase Price-Base.
“Price Differential-Incremental 1” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Incremental 1 and (b) the Aggregate Purchase Price-Incremental 1.
“Price Differential-Incremental 2” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Incremental 2 and (b) the Aggregate Purchase Price-Incremental 2.
“Pricing Floor” has the meaning assigned to such term in the Pricing Side Letter. “Pricing Period” means, with respect to each Payment Date, the period commencing on
(and including) the date that is the first calendar day of the preceding month and terminating on (and including) the earlier of (i) the Repurchase Date and (ii) last calendar day of the preceding month; provided, that the initial Pricing Period shall commence on the initial Purchase Date.
“Pricing Rate” means with respect to each Purchased Mortgage Loan, the sum of (a) with respect to the Purchase Price-Base, the Pricing Rate-Base; (b) with respect to the Purchase Price-Incremental 1, if any, the Pricing Rate-Incremental 1 and (c) with respect to the Purchase Price-Incremental 2, if any, the Pricing Rate-Incremental 2.
“Pricing Rate-Base” means with respect to the Purchase Price-Base, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Rate-Incremental 1” means with respect to the Purchase Price-Incremental 1, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Rate-Incremental 2” means with respect to the Purchase Price-Incremental 2, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Side Letter” means the letter agreement dated as of the date hereof, among Administrative Agent, Buyers and Seller, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Principal Paydown Payments” means payments of principal, including full and partial prepayments, related to the Purchased Mortgage Loans.
“Program Account” means such account identified by Administrative Agent in writing.
“Program Agreements” means, collectively, this Agreement; the Administration Agreement; Custodial Agreement; the Pricing Side Letter; the Electronic Tracking Agreement; the Collection Account Control Agreement; the Power of Attorney; each Servicing Agreement; each Servicer Notice; when entered into, the Escrow Agreement, the Intercreditor Agreement and the Joint Securities Account Control Agreement.
“Prohibited Person” has the meaning set forth in Section 13(a)(27) hereof.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” means the lease on a Co-op Unit evidencing the possessory interest of the owner in the Co-op Shares in such Co-op Unit.
“Protective Advance” means any servicing advance (including, but not limited to, any advance made to pay taxes and insurance premiums; any advance to pay the costs of protecting the value of any real property or other security for a mortgage loan; and any advance to pay the costs of realizing on the value of any such security) made by Seller in connection with any Purchased Mortgage Loans that are Early Buyout Loans.
“Purchase Date” means the date on which a Purchased Asset is to be transferred by Seller to Administrative Agent for the benefit of Buyers.
“Purchase Price” means the price at which each Purchased Mortgage Loan is transferred by or contributed to Seller, as applicable, to Administrative Agent for the benefit of Buyers, which shall equal:
a.on the applicable Purchase Date, the applicable Purchase Price-Base plus the Purchase Price-Incremental 1, if any plus the Purchase Price-Incremental 2, if any; and
b.on any day after the Purchase Date, except where Administrative Agent for the benefit of Buyers and Seller agree otherwise, the amount determined under the immediately preceding clause (a), (i) increased by the amount of any additional Purchase Price-Incremental 1 and additional Purchase Price-Incremental 2 advanced pursuant to this Agreement and (ii) decreased by the amount of any cash transferred by Seller and applied to reduce Seller’s Obligations in accordance with this Agreement.
“Purchase Price-Base” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Base, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause (a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price-Incremental 1” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Incremental 1, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause (a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price-Incremental 2” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Incremental 2, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause (a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price Percentage” means, (a) with respect to the Purchase Price-Base, the Purchase Price Percentage-Base; (b) with respect to the Purchase Price-Incremental 1, if any, the Purchase Price Percentage-Incremental 1 and (c) with respect to the Purchase Price-Incremental 2, if any, the Purchase Price Percentage-Incremental 2.
“Purchase Price Percentage-Base” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 1” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 2” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage - Total” means, with respect to each Purchased Mortgage Loan, the sum of (a) the Purchase Price Percentage-Base, plus (b) the Purchase Price Percentage-Incremental 1 plus (c) the Purchase Price Percentage-Incremental 2.
“Purchased Assets” means the collective reference to Purchased Mortgage Loans together with the Repurchase Assets related to such Purchased Mortgage Loans transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder and/or listed on the related Asset Schedule attached to the related Transaction Request, which such Asset Files the Custodian has been instructed to hold for the benefit of Administrative Agent pursuant to the Custodial Agreement until such asset has been repurchased by Seller in accordance with the terms of this Agreement.
“Purchased Mortgage Loans” means each Mortgage Loan and the Servicing Rights and Asset Documents related to such Mortgage Loan transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder, listed on the related Asset Schedule attached to the related Transaction Request, which such Mortgage Loans the Custodian has been instructed to
hold pursuant to the Custodial Agreement until such asset has been repurchased by Seller in accordance with the terms of this Agreement.
“Qualified Insurer” means an insurance company duly authorized and licensed where required by law to transact insurance business and approved as an insurer by Fannie Mae or Freddie Mac or GNMA, as applicable.
“Qualified Mortgage Loan” means a Mortgage Loan which is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e).
“Qualified Originator” means an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.
“Recognition Agreement” means, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
“Records” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller, Servicer or any other person or entity with respect to a Purchased Asset. Records shall include the Mortgage Notes, any Mortgages, the Asset Files and the credit files, in each case, related to the Purchased Asset and any other instruments necessary to document or service a Purchased Mortgage Loan.
“Reference Rate” means Daily Simple SOFR, or a Successor Rate pursuant to Section 5(c) of this Agreement.
“Register” has the meaning set forth in Section 22 hereof.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor of any of the foregoing.
“Remittance Date” means such date as mutually agreed to by Seller and Administrative Agent.
“Remittance Report Date” means, with respect to each Pricing Period, the close of business on the final day of such Pricing Period, or the next succeeding Business Day, if such calendar day shall not be a Business Day.
“REO Property” means real property acquired through foreclosure of a Purchased Mortgage Loan or by deed in lieu of such foreclosure.
“Repledge Transaction” has the meaning set forth in Section 18 hereof.
“Repledgee” means each Repledgee identified by the Administrative Agent from time to time pursuant to the Administration Agreement.
“Reporting Date” means the fifteenth (15th) calendar day of each month or, if such day is not a Business Day, the next succeeding Business Day.
“Repurchase Assets” has the meaning assigned thereto in Section 8 hereof.
“Repurchase Date” means the earlier of (a) the Termination Date, (b) the date requested pursuant to Section 4 or (c) the date determined by application of Section 16 hereof.
“Repurchase Price” means the price at which Purchased Assets are to be transferred from the Administrative Agent for the benefit of Buyers to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price for such Purchased Assets and the accrued but unpaid Price Differential relating to such Purchased Assets as of the date of such determination.
“Request for Certification” means a notice sent to the Custodian reflecting the sale of one or more Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers hereunder.
“Requirement of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other governmental authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person.
“S&P” means Standard & Poor’s Ratings Services, or any successor thereto.
“Scratch and Dent Mortgage Loan” means [***].
“SEC” means the Securities and Exchange Commission, or any successor thereto.
“Second Lien – Prime” means a Second Lien Mortgage Loan that has (a) a CLTV of [***] or less and (b) a FICO score of [***] or greater.
“Second Lien – Standard” means a Second Lien Mortgage Loan that has (a) a CLTV greater than [***] and not to exceed [***] or (b) a FICO score less than [***].
“Second Lien Mortgage Loan” means a closed-end Mortgage Loan secured by a second lien on the related Mortgaged Property.
“Seller” means loanDepot.com, LLC or its permitted successors and assigns.
“Seller Repurchase Assets” has the meaning assigned thereto in Section 8.a(1) hereof.
“Servicer” means Seller and any other servicer or subservicer approved by Administrative Agent in its sole good faith discretion.
“Servicer Account” means with respect to Purchased Mortgage Loans serviced by any third party Servicer, the account as identified in the related Servicing Agreement into which such Servicer deposits Income and related collections.
“Servicer Advance” means a Delinquency Advance or a Protective Advance.
“Servicer Notice” means the notice acknowledged by Servicer (if Servicer is not Seller) or, with respect Early Buyout Loans, in such form as mutually agreed to by Seller and Administrative Agent, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Servicing Agreement” means any servicing agreement entered into between Seller and Servicer (if Servicer is not Seller), as the same may be amended from time to time.
“Servicing Rights” means rights of any Person to administer, service or subservice, the Purchased Mortgage Loans or to possess related Records.
“Settlement Agent” means, with respect to any Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Administrative Agent, in its sole good-faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Administrative Agent notifies Seller otherwise at any time electronically or in writing.
“Severance Notice” has the meaning specified in Section 19 hereof.
“Simultaneously Funded Early Buyout Loan” means an Early Buyout which Seller intends to be repurchased from GNMA substantially concurrently with the funding of the related Transaction hereunder.
“SIPA” means the Securities Investor Protection Act of 1970, as amended from time to time.
“SOFR” means, with respect to any SOFR Business Day, a rate per annum equal to the secured overnight financing rate for such SOFR Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately [***].
“SOFR Administrator” means the Federal Reserve Bank of New York (or any successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the SOFR Administrator’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Business Day” means a day on which banks are open for dealing in foreign currency and exchange in London, New York City and Washington, D.C.
“State Agency Program Loan” means a mortgage loan originated or acquired by Seller in accordance with the applicable guidelines of, and in anticipation of sale to, the state housing authorities in Acceptable States and as approved by Administrative Agent in writing in its sole discretion.
“Statement Date” shall have the meaning set forth in Section 13(a)(5) hereof.
“Stock Certificate” means, with respect to a Co-op Loan, the certificates evidencing ownership of the Co-op Shares issued by the Co-op Corporation.
“Stock Power” means, with respect to a Co-op Loan, an assignment of the Stock Certificate or an assignment of the Co-op Shares issued by the Co-op Corporation.
“Subservicer Field” means, with respect to an eNote, the field entitled, “Subservicer” in the MERS eRegistry.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Successor Rate” means a rate determined by Administrative Agent in accordance with Section 5(c) hereof.
“Successor Rate Conforming Changes” means with respect to any proposed Successor Rate, any technical, administrative or operational change (including any change to the timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides, [***], may be appropriate to reflect the adoption and implementation of such Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Successor Rate exists, in such other manner of administration as the Administrative Agent decides, [***], is reasonably necessary in connection with the administration of this Agreement or any other Program Agreement).
“Take-out Commitment” means a commitment of Seller to either (a) sell one or more identified Mortgage Loans to a Take-out Investor or (b) (i) swap one or more identified Mortgage Loans with a Take-out Investor that is an Agency for an Agency Security, and (ii) sell the related Agency Security to a Take-out Investor, and in each case, the corresponding Take-out Investor’s commitment back to Seller to effectuate any of the foregoing, as applicable. With respect to any Take-out Commitment with an Agency, the applicable agency documents list Administrative Agent or such other Person as required under the Intercreditor Agreement or Joint Securities Account Control Agreement as sole subscriber.
“Take-out Investor” means (a) an Agency or (b) any other institution which has made a Take-out Commitment and has been approved by Administrative Agent for the benefit of Buyers.
“Tax Distributions” means distributions by the Seller for the purpose of enabling LD Holdings to make Tax Distributions, as defined and set forth in the limited liability company agreement of LD Holdings.
“Taxes” means any and all present or future taxes (including social security contributions and value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings (including backup withholding), assessments, fees or other charges of any nature whatsoever imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Date” has the meaning assigned to such term in the Pricing Side Letter. “Third Party Evaluator” means an appraiser approved by Administrative Agent in its sole good faith discretion.
“TILA-RESPA Integrated Disclosure Rule” means the Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the Consumer Finance Protection Bureau, which is effective for residential mortgage loan applications received on or after October 3, 2015.
“Transaction” has the meaning set forth in Section 1 hereof.
“Transaction Request” means a request via email from Seller to Administrative Agent notifying Administrative Agent that Seller wishes to enter into a Transaction hereunder and that indicates that it is a Transaction Request under this Agreement. For the avoidance of doubt, a Transaction Request may refer to multiple Mortgage Loans; provided that each Mortgage Loan shall be deemed to be subject to its own Transaction.
“Transfer of Control” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller of such eNote.
“Transfer of Control and Location” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller and Location of such eNote.
“Transfer of Location” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Location of such eNote.
“Transfer of Servicing” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Master Servicer Field or Subservicer Field of such eNote.
“Transferable Record” means an Electronic Record under E-SIGN and UETA that (i) would be a note under the Uniform Commercial Code if the Electronic Record were in writing,
(ii) the issuer of the Electronic Record has expressly agreed is a “transferable record”, and (iii) for purposes of E-SIGN, relates to a loan secured by real property.
“Trust Receipt” means, with respect to any Transaction as of any date, a receipt in the form attached as an exhibit to the Custodial Agreement.
“UETA” means the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.
“Unauthorized Master Servicer or Subservicer Modification” means, with respect to an eNote, a Transfer of Location, Transfer of Servicing or a change in any other information, status or data, including, without limitation, a change of the Master Servicer Field or Subservicer Field with respect to such eNote on the MERS eRegistry, initiated by the Seller, any Servicer or a vendor.
“Underwriting Guidelines” means the standards, procedures and guidelines of the Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of the Seller, a copy of which have been provided to Administrative Agent and such other guidelines as are identified to Administrative Agent in writing.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect on the date hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“USDA” means the United States Department of Agriculture or any successor thereto.
“USDA Loan” means a first lien Mortgage Loan guaranteed by and originated in accordance with the criteria established by the USDA pursuant to the USDA Rural Development Guaranteed Housing Loan Program.
“U.S. Tax Compliance Certificate” has the meaning set forth in Section 11(e)(ii)(B) hereof.
“VA” means the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Approved Lender” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” means a Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate, or a Mortgage Loan which is a vender loan sold by the VA.
“VA Loan Guaranty Agreement” means the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.
“VA Regulations” means the regulations promulgated by the U.S. Department of Veterans Affairs and codified in 38 Code of Federal Regulations, and other U.S. Department of Veterans Affairs issuances relating to VA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“Value Reduction Event” has the meaning assigned to such term in the Pricing Side Letter.
“Warehouse Electronic System” means the system utilized by or Administrative Agent either directly, or through its vendors, and which may be accessed by Seller in connection with delivering and obtaining information and requests in connection with the Program Agreements.“Wet-Ink Delivery Date” has the meaning assigned to such term in the Pricing Side Letter.
“Wet-Ink Documents” means, with respect to any Wet-Ink Mortgage Loan, the (a) Transaction Request and (b) the Asset Schedule.
“Wet-Ink Mortgage Loan” means a Mortgage Loan (other than an Early Buyout Loan) which Seller is selling to Administrative Agent for the benefit of a Buyer simultaneously with the origination thereof.
“WHCO Repo Agreement” means that certain Master Repurchase Agreement, by and among Administrative Agent, AGF WHCO 1-A3 LP and Seller, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.
“WHCO Repo Documents” means the WHCO Repo Agreement and the “Program Agreements” as defined in the WHCO Repo Agreement.
3. Program; Initiation of Transactions
a.From time to time, in the sole discretion of Buyers, Administrative Agent (for the benefit of Buyers) may facilitate the purchase by Buyers from Seller of certain Mortgage Loans that have been originated and/or purchased by Seller. This Agreement is not a commitment by Administrative Agent on behalf of Buyers to enter into Transactions with Seller but rather sets forth the procedures to be used in connection with periodic requests for Buyers or Administrative Agent on behalf of Buyers to enter into Transactions with Seller. Seller hereby acknowledges that Administrative Agent on behalf of Buyers is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement. All Purchased Mortgage Loans shall exceed or meet the Underwriting Guidelines, and shall be serviced by Seller or Servicer, as applicable. The sum of the aggregate outstanding Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 shall not exceed the Maximum Available Purchase Price.
b.Seller shall request that Administrative Agent enter into a Transaction by delivering (i) to Administrative Agent, a Transaction Request [***] for all Mortgage Loans and (ii) to Administrative Agent and Custodian an Asset Schedule in accordance with the Custodial Agreement. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Administrative Agent shall provide written or electronic notice to Seller describing such error and Seller shall correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein.
c.With respect to any eMortgage Loan, Seller shall deliver to Custodian each of Administrative Agent’s and Seller’s MERS Org IDs, and shall cause (i) the Authoritative Copy
of the related eNote to be delivered to the eVault via a secure electronic file, (ii) the Controller status of the related eNote to be transferred to Administrative Agent’s MERS Org ID and the eNote Secured Party status of the related eNote is blank, (iii) the Location status of the related eNote to be transferred to Custodian, (iv) the Master Servicer Field status of the related eNote shall reflect the MERS Org ID of Seller, (v) the Subservicer Field status of the related eNote to be (x) if there is a third-party subservicer, such subservicer’s MERS Org ID or (y) if there is not a subservicer, blank and (vi) the Delegatee status of the related eNote to be transferred to Custodian reflects Custodian’s MERS Org ID, in each case using MERS eDelivery and the MERS eRegistry (collectively, the “eNote Delivery Requirements”).
d.With respect to a Simultaneously Funded Early Buyout Loan for which Seller has submitted a Transaction Request, provided that the GNMA Haircut Amount has been remitted to the Administrative Agent, Administrative Agent shall remit the purchase price due to GNMA for such Simultaneously Funded Early Buyout Loan to the general payment clearing account of Servicer. Within [***] of such remittance, Seller shall cause Servicer to (i) segregate and remit such purchase price to the custodial account held for the Seller and (ii) report to GNMA that such Simultaneously Funded Early Buyout Loan has been repurchased from GNMA. In the event that Servicer fails to repurchase such Simultaneously Funded Early Buyout Loan, Seller shall cause Servicer to remit the Purchase Price for such Simultaneously Funded Early Buyout Loan to the account set forth in Section 9 within [***] following the related Purchase Date. Notwithstanding the foregoing, when a Simultaneously Funded Early Buyout Loan is repurchased, the Purchase Date hereunder shall be deemed the date of remittance of proceeds by Administrative Agent to Servicer.
e.Upon the satisfaction of the applicable conditions precedent set forth in Section 10 hereof, all of Seller’s interest in the Repurchase Assets shall pass to Administrative Agent on behalf of Buyers on the Purchase Date, against the transfer of the Purchase Price to Seller. Upon transfer of the Purchased Assets to Administrative Agent on behalf of Buyers as set forth in this Section and until termination of any related Transactions as set forth in Sections 4 or 16 of this Agreement, ownership of each Purchased Asset, including each document in the related Asset File and Records, is vested in the Buyers identified under the Administration Agreement; provided that, prior to the recordation, record title shall be retained by the Seller, in trust, for the benefit of Buyers, for the sole purpose of facilitating the servicing and the supervision of the servicing of the Mortgage Loans. For the avoidance of doubt, the parties acknowledge and agree that the Purchased Assets shall be held by the Administrative Agent for the benefit of Buyers, as more particularly set forth in the Administration Agreement.
f.On each Purchase Date, Administrative Agent shall allocate the Purchase Price for such Purchased Mortgage Loan among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 according to the Allocated Percentages attributable thereto.
g.With respect to each Wet-Ink Mortgage Loan, by no later than the Wet-Ink Delivery Date, Seller shall cause the related Settlement Agent to deliver to the applicable Custodian the remaining documents in the Asset File as more particularly set forth in the related Custodial Agreement.
3.Repurchase
a.Seller shall repurchase the related Purchased Assets from Administrative Agent for the benefit of Buyers on each related Repurchase Date. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Mortgage Loan (but liquidation or foreclosure proceeds received by Administrative Agent shall be applied to reduce the Repurchase Price for such Purchased Mortgage Loan on each Payment Date except as otherwise provided herein). Seller is obligated to repurchase and take physical possession of the Purchased Assets and related Asset Files from Administrative Agent or its designee (including the Custodian) at Seller’s expense on the related Repurchase Date.
b.Provided that no Default shall have occurred and is continuing, and Administrative Agent has received the related Repurchase Price (excluding accrued and unpaid Price Differential, which, for the avoidance of doubt, shall be paid on the next succeeding Payment Date) upon repurchase of the Purchased Assets, Administrative Agent and Buyers will each be deemed to have released their respective interests hereunder in the Purchased Assets (and the Repurchase Assets related thereto) at the request of Seller. The Purchased Assets (and the Repurchase Assets related thereto) shall be delivered to Seller free and clear of any lien, encumbrance or claim of Administrative Agent or the Buyers, and the Administrative Agent shall execute and deliver such terminations and releases as the Seller may reasonably request to evidence the foregoing. With respect to payments in full by the related Mortgagor of a Purchased Mortgage Loan, Seller agrees to promptly remit (or cause to be remitted) to Administrative Agent for the benefit of Buyers the Repurchase Price with respect to such Purchased Mortgage Loan. Administrative Agent and Buyers agree to release their respective interests in Purchased Mortgage Loans which have been prepaid in full after receipt of evidence of compliance with the immediately preceding sentence.
c.Prior to an Early Buyout Loan becoming a real estate owned property, Seller shall (i) notify Administrative Agent in writing that such Early Buyout Loan shall become a real estate owned property and (ii) the Asset Value on account of the related Early Buyout Loan shall be decreased to zero and Seller shall immediately repurchase such Early Buyout Loan prior to the conversion of the Early Buyout Loan to a real estate owned property.
d.With respect to any Purchased Mortgage Loan, Administrative Agent shall allocate any Repurchase Price in respect thereof (x) prior to an Event of Default, pro rata among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 based upon the Allocated Percentage of each; and (y) on and after an Event of Default, first to the Buyers of the Purchase Price-Base until all Obligations in respect of the Purchase Price-Base are reduced to zero, second to the Purchase Price-Incremental 1 until all Obligations in respect of the Purchase Price-Incremental 1 are reduced to zero and third to the Purchase Price-Incremental 2 until all Obligations in respect of the Purchase Price-Incremental 2 are reduced to zero.
4.Price Differential.
a.On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential for the preceding Pricing Period shall be settled in cash on each related Payment Date. [***], Administrative
Agent shall give Seller written or electronic notice of the amount of the Price Differential due on such Payment Date. On the Payment Date, Seller shall pay to Administrative Agent the Price Differential for the benefit of Buyers for such Payment Date along with any other amounts then due and owing pursuant to Sections 7 and 36 hereof and Section 3 of the Pricing Side Letter), by wire transfer in immediately available funds. Prior to the occurrence and continuance of an Event of Default, the Administrative Agent shall apply all payments of Price Differential in respect of any Purchased Mortgage Loan pro rata among the Price Differential-Base, the Price Differential-Incremental 1 and the Price Differential-Incremental 2 based upon the Allocated Percentage of each. On and after an Event of Default, any application of Price Differential will first be attributed to the Price Differential-Base then due and owing until reduced to zero, second to the Price Differential-Incremental 1 then due and owing until reduced to zero and third to the Price Differential-Incremental 2 then due and owing until reduced to zero.
b.If Seller fails to pay all or part of the Price Differential [***], with respect to any Purchased Asset, Seller shall be obligated to pay to Administrative Agent for the benefit of Buyers (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Administrative Agent for the benefit of Buyers.
c.If prior to any Payment Date, Administrative Agent determines [***] that, by reason of circumstances affecting the relevant market, (i) adequate and reasonable means do not exist for ascertaining the Reference Rate; (ii) the Reference Rate is no longer in existence; (iii) continued implementation of the Reference Rate is no longer operationally, administratively or technically feasible or no significant market practice for the administration of the Reference Rate exists, (iv) the Reference Rate will not adequately and fairly reflect the cost to Administrative Agent and Buyers of purchasing or maintaining Transactions or (v) the administrator of the Reference Rate or a Governmental Authority having jurisdiction over Administrative Agent has made a public statement identifying a specific date after which the Reference Rate shall no longer be made available or used for determining the interest rate of loans, Administrative Agent may give prompt written notice (which may be delivered via email) thereof to Seller, whereupon the rate for such period that will replace the Reference Rate for such period, and for all subsequent periods until such notice has been withdrawn by Administrative Agent, shall be the greater of (x) an alternative benchmark rate (including any mathematical or other adjustments to the benchmark rate (if any) incorporated therein) and (y) zero, together with any proposed Successor Rate Conforming Changes, as determined by Administrative Agent in its sole good faith discretion (any such rate, a “Successor Rate”).
d.To the extent Administrative Agent implements a Successor Rate and Successor Rate Conforming Changes it will promptly notify Seller of the effectiveness of any such changes. Any determination of a Successor Rate and the adoption of Successor Rate Conforming Changes shall be made by Buyer in a manner substantially consistent with market practice with respect to similarly situated counterparties with substantially similar assets in similar facilities and any such Successor Rate Conforming Changes will becomeeffective without any further action or consent of Seller to this Agreement or the other Program Agreements.
5.Margin Maintenance; Reallocation of Purchase Price
a.If at any time the outstanding Purchase Price of any Purchased Mortgage Loan subject to a Transaction is greater than the Asset Value of such Purchased Mortgage Loan subject to a Transaction (a “Margin Deficit”), then Administrative Agent may by notice to Seller require Seller to transfer to Administrative Agent for the benefit of Buyers cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”).
b.Notice delivered pursuant to Section 6(a) above may be given by any written or electronic means. Any notice given [***] shall be met, and the related Margin Call satisfied, [***]; notice given after [***]shall be met, and the related Margin Call satisfied, [***] (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “Margin Deadlines”). The failure of Administrative Agent, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Administrative Agent to do so at a later date. Seller and Administrative Agent each agree that a failure or delay by Administrative Agent to exercise its rights hereunder shall not limit or waive Administrative Agent’s or Buyers’ rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.
c.In the event that a Margin Deficit exists with respect to any Purchased Asset, Administrative Agent may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Administrative Agent against the related Margin Deficit and (ii) may be applied by Administrative Agent against the Repurchase Price of any Purchased Asset for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, the Administrative Agent retains the right, [***], to make a Margin Call in accordance with the provisions of this Section 6.
6.Income Payments
a.If Income is paid in respect of any Purchased Mortgage Loan during the term of a Transaction, such Income shall be held in trust for the Administrative Agent and Buyers and shall constitute the property of the applicable Buyers except for tax purposes as to which it shall be treated as income and property of Seller.
b.Seller shall and to the extent it engages a third-party Servicer shall cause such Servicer to deposit all Income with respect to Purchased Mortgage Loans into the related Servicer Account, as applicable, in accordance with the applicable Servicing Agreement and Servicer Notice.
c.Provided no Event of Default has occurred and is continuing, and the Price Differential has been paid to Administrative Agent for the benefit of Buyers in accordance with Section 5 hereof, Seller shall be entitled to the remittance of all Income related to Purchased Mortgage Loans to the full extent it would have been so entitled if the Purchased Mortgage Loans had not been sold to Administrative Agent for the benefit of Buyers except to the extent that Seller receives any related Principal Paydown Payments in excess of [***], which Seller shall deposit such Principal Paydown Payments in the Program Account within [***] of receipt. Notwithstanding the preceding, any Income (including Principal Paydown Payments) received by Seller while the related Transaction is outstanding shall be deemed to be held by Seller solely
in trust for Administrative Agent for the benefit of Buyers pending the payment of the Repurchase Price in respect of such Transaction and the repurchase of the related Mortgage Loans, and if a Default or an Event of Default has occurred and is continuing, or a Margin Deficit exists that Seller has not satisfied in accordance with the provisions of Section 6, with respect to any Purchased Mortgage Loan, Administrative Agent may direct Seller in writing to deposit into the Collection Account (provided that, to the extent the Collection Account is not opened, to the Program Account): (i) all Income [***] then held by Seller in respect of Purchased Mortgage Loans subject to outstanding Transactions and (ii) all future Income (including [***]) in respect of Purchased Mortgage Loans subject to new or outstanding Transactions when received by Seller, and upon receipt of any such direction, Seller shall immediately cause all such Income [***] then held to be deposited, and all such future Income [***] to be deposited [***] after its receipt by Seller, into the Collection Account or the Program Account as Administrative Agent may direct.
d.Administrative Agent shall immediately apply any such amount received by Buyers or the Administrative Agent to reduce the amount of the Repurchase Price due upon termination of the related Transaction.
e.Provided that no Event of Default has occurred and is continuing, on each Repurchase Date, Administrative Agent shall remit any Income received with respect to the Purchased Mortgage Loans as follows:
i.first, to Administrative Agent, for the benefit of the applicable Buyers, pro rata, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Mortgage Loan up to the amount advanced by Administrative Agent on behalf of Buyers as set forth in Section 4.d hereof;
ii.second, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
iii.third, to the payment of all other Obligations then due and owing to Administrative Agent and Buyers in the order of priority set forth in Section 4.d; and
iv.fourth, to, or at the direction of Seller, any remaining amounts.
f.Provided that no Event of Default has occurred and is continuing, on each Payment Date, Administrative Agent shall remit any Income received with respect to the Purchased Mortgage Loans as follows:
i.first, to Administrative Agent, for the benefit of Buyers, in the order of priority as determined in accordance with Section 5.a hereof, in payment of any accrued and unpaid Price Differential to the extent not paid by Seller to Administrative Agent pursuant to Section 5 hereof;
ii.second, to Administrative Agent, for the benefit of the applicable Buyers, in the order of priority as determined in accordance with Section 4.d, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Mortgage Loan up to the amount advanced by Administrative Agent on behalf of Buyers;
iii.third, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
iv.fourth, to the payment of all other Obligations then due and owing to Administrative Agent and Buyers in the order of priority set forth in Section 4.d; and
v.fifth, to, or at the direction of Seller, any remaining amounts.
g.On the Termination Date or upon the occurrence and during the continuation of an Event of Default, all Income received with respect to the Purchased Mortgage Loans shall be allocated as directed by Administrative Agent as follows:
i.first, pro rata, to each Servicer and Custodian in payment of any fees and expenses due and owing to the extent not otherwise paid pursuant to the terms of the applicable Servicing Agreement and Custodial Agreement;
ii.second, to Administrative Agent in payment of any accrued and unpaid Price Differential, to the extent not paid by the Seller to Administrative Agent pursuant to Section 5 and in the order of priority set forth in Section 5;
iii.third, to Administrative Agent, for the benefit of the applicable Buyers, in reduction of the Repurchase Price of all Purchased Assets and in the order of priority set forth in Section 4.d;
iv.fourth, to the payment of all other Obligations until paid in full and in the order of priority set forth in Section 4.d; and
v.fifth, to, or at the direction of Seller, any remaining amounts.
h.To the extent that Administrative Agent receives any funds from a Take-out Investor with respect to the purchase by such Take-out Investor of a Purchased Asset, the Administrative Agent shall promptly apply such funds to the Repurchase Price of the Purchased Asset purchased by such Take-out Investor and shall promptly remit any excess to the applicable Seller.
i.Reserved.
j.With respect to each Early Buyout Loan, the Seller shall be listed as the mortgagee of record and shall deposit all claims submitted on account such Early Buyout Loans into the payee account (the “Clearing Account”) and shall transfer (or cause to be transferred) all such amounts so received [***]. Seller shall remit all such funds from the Clearing Account to the Collection Account (. To the extent HUD deducts any amounts owing by the Seller to HUD, which are not attributable to the Early Buyout Loans, the Seller shall remit, within [***], such deducted amounts into the Collection Account.
k.Provided no Event of Default has occurred and is continuing, on each Payment Date, Seller shall remit to Administrative Agent for the benefit of Buyers an amount equal to the Price Differential in accordance with Section 5 of this Agreement.
7.Security Interest
a.Conveyance; Security Interest.
1.1. On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified on the related Asset Schedule, including related Servicing Rights and Asset Documents, and the Repurchase Assets t
o Administrative Agent for the benefit of Buyers. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Administrative Agent as security for the performance by Seller of the Obligations and hereby grants, assigns and pledges to Administrative Agent a fully perfected first priority security interest (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement) in the Purchased Assets, including related Servicing Rights and Asset Documents related to such Purchased Assets, the Servicer Advances related to such Purchased Assets, all debenture interests payable by HUD on account of any Early Buyout Loan which constitutes a Purchased Asset, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Purchased Assets, the Records related to the Purchased Assets, the Program Agreements (to the extent such Program Agreements and Seller’s rights thereunder relate to the Purchased Assets), any related Take-out Commitments related to such Purchased Assets, any Property relating to the Purchased Assets, all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income related to such Purchased Assets, the Collection Account, Interest Rate Protection Agreements related to such Purchased Assets, deposit accounts or securities accounts related to the Purchased Assets (including any interest of Seller in escrow accounts) and any other contract rights, instruments, deposit accounts or securities accounts, payments, rights to payment (including payments of interest or finance charges), general intangibles and other assets, in each case, relating to the Purchased Assets and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing, whether now owned or hereafter acquired, now existing or hereafter created in each case excluding any Take-out Commitments and Interest Rate Protection Agreements to the extent Seller may not, pursuant to the provisions thereof, assign or transfer, or pledge or grant a security interest in, such Take-out Commitments or Interest Rate Protection Agreements without the consent of, or without violating its obligations to, the related Take-out Investor or counterparty to such Interest Rate Protection Agreement, but only to the extent such provisions are not rendered ineffective against the Administrative Agent under Article 9, Part 4 of the Uniform Commercial Code (collectively
, the “Seller Repurchase Assets” and together with the Additional Collateral, the “Repurchase Assets”).
2. Administrative Agent and Seller hereby agree that in order to further secure Seller’s Obligations hereunder, Seller hereby grants to Administrative Agent, for the benefit of Buyers, a security interest in (i) any “Repurchase Assets” as such term is defined in the WHCO Repo Agreement that are otherwise deliverable to Seller thereunder and to the extent all obligations then due and owing under the WHCO Repo Agreement have been paid in full; (ii) Seller’s rights under the WHCO Repo Agreement, including, without limitation, any rights to receive payments thereunder or any rights to collateral thereunder whether now owned or hereafter acquired, now existing or hereafter created, and (iii) all collateral however defined or described under the WHCO Repo Agreement to the extent not otherwise included under the definition of Repurchase Assets therein, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Additional Collateral”).
b.Servicing Rights. Seller acknowledges that it has no rights to service the Purchased Mortgage Loans except to the extent set forth in this Agreement, the Servicer Notice or the Servicing Agreement. Without limiting the generality of the foregoing and in the event that Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to Administrative Agent a security interest in the Servicing Rights related to the Purchased Assets and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
c.Financing Statements. Seller agrees to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement) Administrative Agent’s security interest created hereby. Furthermore, Seller hereby authorizes the Administrative Agent to file financing statements relating to the Seller Repurchase Assets, as the Administrative Agent, at its option, may deem appropriate. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 8.
d.Power of Attorney. In addition to the foregoing, Seller agrees to execute a Power of Attorney, in the form of Exhibit A hereto, to be delivered on the date hereof which may be used only in accordance with Section 28 hereof.
e.Intent. The foregoing provisions in Section 8(a) are intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 1001(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
8.Payment and Transfer
Unless otherwise mutually agreed in writing or as otherwise set forth in Section 7 hereof, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent in the Program Account. Seller acknowledges that it has no rights of withdrawal from the Program Account. All Purchased Assets transferred by one party hereto to the other party shall be in the case of a purchase by a Buyer in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as Administrative Agent may reasonably request. All Purchased Assets shall be evidenced by a Trust Receipt. Any Repurchase Price received by Administrative Agent [***].
9.Conditions Precedent
a.Initial Transaction. As conditions precedent to the initial Transaction, Administrative Agent shall have received on or before the day of such initial Transaction the following, in form and substance satisfactory to Administrative Agent and duly executed by Seller and each other party thereto:
(1)Program Agreements. The Program Agreements (with the exception of the Collection Account Control Agreement pursuant to Section 10.b(14) below) duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(2)Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s and Buyers’ interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(3)Organizational Documents. A certificate of the corporate secretary or other authorized person of Seller substantially in form and substance acceptable to Administrative Agent in its sole good faith discretion, attaching certified copies of Seller’s organizational documents and resolutions approving the Program Agreements and transactions thereunder (either specifically or by general resolution) and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Program Agreements.
(4)Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date ten (10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder.
(5)Incumbency Certificate. An incumbency certificate of the corporate secretary or other authorized person of Seller, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(6)Opinion of Counsel. An opinion of Seller’s counsel, as to such matters as Administrative Agent may request and in form and substance acceptable to Administrative Agent in its sole discretion, including, without limitation, with respect to the non-contravention, enforceability and corporate opinions with respect to Seller, including an opinion in form and substance reasonably acceptable to Administrative Agent on behalf of Buyers, indicating that as of the date hereof, Seller is not required to register as an
“investment company,” as such term is defined in the Investment Company Act.
(7)Underwriting Guidelines. Other than underwriting guidelines of the Agencies, a true and correct copy of the Underwriting Guidelines certified by an officer of the Seller.
(8)Fees. Payment of any fees due to Administrative Agent and Buyers hereunder.
(9)Insurance. Evidence that Seller has added Administrative Agent as an additional loss payee under the Seller’s Fidelity Insurance.
b.All Transactions. The obligation of Administrative Agent for the benefit of Buyers to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:
(1)Due Diligence Review. Without limiting the generality of Section 36 hereof, Administrative Agent and Buyers shall have completed, to their satisfaction, their due diligence review of the related Purchased Assets, Seller and the Servicer.
(2)Required Documents.
(a)With respect to each Purchased Mortgage Loan which is not a Wet-Ink Mortgage Loan, the Asset File has been delivered to the applicable Custodian in accordance with the applicable Custodial Agreement;
(b)With respect to each Wet-Ink Mortgage Loan, the Wet-Ink Documents have been delivered to Administrative Agent or the applicable Custodian, as the case may be, in accordance with the applicable Custodial Agreement.
(3)Transaction Documents. Administrative Agent or its designee shall have received on or before the day of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Administrative Agent and (if applicable) duly executed:
(a)A Transaction Request and Asset Schedule delivered by Seller pursuant to Section 3(b) hereof.
(b)If not a Wet-Ink Mortgage Loan, the Request for Certification and the related Asset Schedule delivered by Seller, and (i) with respect to Mortgage Loans other than Simultaneously Funded Early Buyout Loans, the Trust Receipt and the Custodial Mortgage Loan Schedule or (ii) with respect to Mortgage Loans that are
Simultaneously Funded Early Buyout Loans, a preliminary Custodial Mortgage Loan Schedule, in each case, delivered by the Custodian.
(c)Such certificates, opinions of counsel or other documents as Administrative Agent may reasonably request.
(4)No Default. No Default or Event of Default shall have occurred and be continuing;
(5)Requirements of Law. Neither Administrative Agent nor Buyers shall have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Administrative Agent or any Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Administrative Agent or any Buyer to enter into Transactions with a Pricing Rate based on the Reference Rate.
(6)Representations and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
(7)Electronic Tracking Agreement. To the extent Seller is selling Mortgage Loans which are registered on the MERS System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(8)Material Adverse Change. None of the following shall have occurred and/or be continuing:
(a)1. an event or events shall have occurred in the good faith determination of a Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in such Buyer not being able to finance Purchased Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or
(b)2. an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall have occurred resulting in such Buyer not being able to sell securities backed by mortgage loans at
prices which would have been reasonable prior to such event or events; or
(c)3. there shall have occurred (i) a material change in financial markets, an outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services; or
(d)4. there shall have occurred a material adverse change in the financial condition of a Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of such Buyer to fund its obligations under this Agreement.
(9)Business Purpose Mortgage Loans. Solely with respect to Business Purpose Mortgage Loans:
(a)that are BPL – Holdbacks, Administrative Agent shall have reviewed and approved the escrow arrangements and documentation therefor; and
(b)Administrative Agent shall have received a letter agreement, in form and substance acceptable to Administrative Agent, executed by Administrative Agent, Seller and the applicable Qualified Originator if other than Seller.DE Compare Ratio.
(10)Seller’s DE Compare Ratio is
less than [***]%.
(11)No HUD Suspension. HUD has not suspended
Seller’s ability to originate FHA Loans in any jurisdiction.
(12)Early Buyout Loans. Prior to giving effect to any Transaction with respect to Early Buyout Loans, Seller shall deliver to Administrative Agent a Servicer Notice addressed to the Servicer of the related Early Buyout Loans and agreed to by the Seller and such Servicer, in form and substance acceptable to Administrative Agent, duly executed by the parties thereto.
(13)Designated Mortgage Loans – Purchase Price Incremental 2. With respect to each proposed Transaction the subject of which is a Designated Mortgage Loan which is eligible for Purchase Price-Incremental 2, no Disqualification Event shall have occurred and be continuing.
(14)Collection Account Control Agreement. Within [***], Administrative Agent shall have received the Collection Account
Control Agreement, duly executed and delivered by the Seller, Administrative Agent and Bank, in form and substance acceptable to Administrative Agent.
(15)Agency Title Alternative Mortgage Loans. To the extent an Agency Title Alternative Mortgage Loan is proposed for a Transaction, Seller has provided evidence satisfactory to Administrative Agent that Seller was accepted into the Title Variance Program and the “Title Alternative” (as defined in the Title Variance Program) is delivered to the Custodian as part of the Asset File pursuant to the terms of the Custodial Agreement.
10.Program; Costs
a.Seller shall reimburse Administrative Agent and Buyers for any of Administrative Agent’s and Buyers’ reasonable out-of-pocket costs, including due diligence review costs and reasonable attorney’s fees, incurred by Administrative Agent and Buyers in determining the acceptability to Administrative Agent and Buyers of any Mortgage Loans. Seller shall also pay, or reimburse Administrative Agent and Buyers if Administrative Agent or Buyers shall pay, any termination fee, which may be due any Servicer that is replaced or terminated in accordance with this Agreement. Seller shall pay the reasonable fees and expenses of Administrative Agent’s and Buyers’counsel in connection with the Program Agreements. Reasonable legal fees for any subsequent amendments to this Agreement or related documents shall be borne by Seller. Seller shall pay ongoing custodial fees and expenses as set forth in the related Custodial Agreement, and any other ongoing fees and expenses set forth in any other Program Agreement. Without limiting the foregoing, Seller shall pay all fees as and when required under the Pricing Side Letter.
b.If any Buyer determines that, due to the introduction of, any change in, or the compliance by such Buyer with, after the date of this Agreement (i) any Eurocurrency reserve requirement or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be an increase in the cost to such Buyer in engaging in the present or any future Transactions, then Seller agrees to pay to such Buyer, from time to time, upon demand by such Buyer (with a copy to Custodian) the actual cost of additional amounts as specified by such Buyer to compensate such Buyer for such increased costs.
c.With respect to any Transaction, Administrative Agent and Buyers may conclusively rely upon, and shall incur no liability to Seller in acting upon, any request or other communication that Administrative Agent and Buyers reasonably believe to have been given or made by a person authorized to enter into a Transaction on Seller’s behalf, whether or not such person is listed on the certificate delivered pursuant to Section 10(a)(5) hereof.
d.Notwithstanding the assignment of the Program Agreements with respect to each Purchased Asset to Administrative Agent for the benefit of Buyers, Seller agrees and covenants with Administrative Agent and Buyers to enforce diligently Seller’s rights and remedies set forth in the Program Agreements.
e.(i) Any payments made by Seller to Administrative Agent or a Buyer or a Buyer assignee or participant hereunder or under any Program Agreement shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If Seller shall be required by applicable law (as determined in the good faith discretion of the applicable withholding agent) to deduct or withhold any Tax from any sums payable to Administrative Agent or a Buyer or Buyer assignee or participant, then (i) the Seller shall make such deductions or withholdings and pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law; (ii) to the extent the withheld or deducted Tax is an Indemnified Tax or Other Tax, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 11(e)) Administrative Agent receives an amount equal to the sum it would have received had no such deductions or withholdings been made; and (iii) the Seller shall notify the Administrative Agent of the amount paid and shall provide the original or a certified copy (which may be provided electronically) of a receipt issued by the relevant Governmental Authority evidencing such payment within [***] thereafter. Seller shall otherwise indemnify Administrative Agent and such Buyer, within [***] after demand therefor, for any Indemnified Taxes or Other Taxes imposed on Administrative Agent or such Buyer (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 11(e)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority. Upon the reasonable request of Seller, Administrative Agent or such Buyer will provide Seller with documentation evidencing payments of Indemnified Taxes, Other Taxes and any such expenses, which shall be conclusive absent manifest error.
(ii) Administrative Agent shall and shall cause each Buyer and Buyer assignee and participant to deliver to the Seller, at the time or times reasonably requested by the Seller, such properly completed and executed documentation reasonably requested by the Seller as will permit payments made hereunder to be made without withholding or at a reduced rate of withholding. In addition, Administrative Agent shall and shall cause each Buyer and Buyer assignee and participant, if reasonably requested by Seller, to deliver such other documentation prescribed by applicable law or reasonably requested by the Seller as will enable the Seller to determine whether or not Administrative Agent or such Buyer or Buyer assignee or participant is subject to backup withholding or information reporting requirements. Notwithstanding anything to
the contrary in this Section 11, the completion, execution and submission of such documentation (other than such documentation in Section 11(e)((ii)(A), (B) and (C) below) shall not be required if in a Buyer’s or any Buyer’s assignee’s or participant’s judgment such completion, execution or submission would subject such Buyer or Buyer assignee or participant to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or Buyer assignee or participant. Without limiting the generality of the foregoing, Administrative Agent shall and shall cause a Buyer or Buyer assignee or participant to deliver to the Seller, to the extent legally entitled to do so:
(A)in the case of a Buyer or Buyer assignee or participant which is a “U.S. Person” as defined in section 7701(a)(30) of the Code, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 certifying that it is not subject to U.S. federal backup withholding tax;
(B)in the case of a Buyer or Buyer assignee or participant which is not a “U.S. Person” as defined in Code section 7701(a)(30): (I) a properly completed and executed IRS Form W-8BEN, W-8BEN-E or W-8ECI, as appropriate, evidencing entitlement to a zero percent or reduced rate of U.S. federal income tax withholding on any payments made hereunder, (II) in the case of such non-U.S. Person claiming exemption from the withholding of U.S. federal income tax under Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,” a duly executed certificate (a “U.S. Tax Compliance Certificate”) to the effect that such non-U.S. Person is not (x) a “bank” within the meaning of Code section 881(c)(3)(A), (y) a “10 percent shareholder” of Seller or affiliate thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent such non-U.S. person is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if such non-U.S. person is a partnership and one or more direct or indirect partners of such non-U.S. person are claiming the portfolio interest exemption, such non-U.S. person may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, and (IV) executed originals of any other form or supplementary documentation prescribed by law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by law to permit Seller to determine the withholding or deduction required to be made.
(C)if a payment made to a Buyer or Buyer assignee or participant under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or assignee or participant were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Administrative Agent on behalf of such Buyer or assignee or participant shall deliver to the Seller at the time or times prescribed by law and at such time or times reasonably requested by the Seller
such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Seller as may be necessary for the Seller to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 11(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
The applicable IRS forms referred to above shall be delivered by Administrative Agent on behalf of each applicable Buyer or Buyer assignee or participant on or prior to the date on which such person becomes a Buyer or Buyer assignee or participant under this Agreement, as the case may be, and upon the obsolescence or invalidity of any IRS form previously delivered by it hereunder.
f.Any indemnification payable by Seller to Administrative Agent or a Buyer or Buyer assignee or participant for Indemnified Taxes or Other Taxes that are imposed on Administrative Agent or such Buyer or Buyer assignee or participant, as described in Section 11(e)(i) hereof, shall be paid by Seller [***] after demand therefor from Administrative Agent. A certificate as to the amount of such payment or liability delivered to the Seller by the Administrative Agent on behalf of a Buyer or Buyer assignee or participant shall be conclusive absent manifest error.
g.Each party’s obligations under this Section 11 shall survive any assignment of rights by, or the replacement of, a Buyer or a Buyer assignee or participant, and the repayment, satisfaction or discharge of all obligations under any Program Agreement.
h.Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets, and the Purchased Assets as owned by Seller in the absence of an Event of Default by Seller. Administrative Agent, each Buyer and Seller agree that they will treat and report for all tax purposes the Transactions entered into hereunder as one or more loans from a Buyer to Seller secured by the Purchased Mortgage Loans, unless otherwise prohibited by law or upon a final determination by any taxing authority that the Transactions are not loans for tax purposes.
11.Servicing
a.Seller, on Administrative Agent’s and Buyers’ behalf, shall contract with Servicer to, or if Seller is the Servicer, Seller shall, service the Purchased Mortgage Loans consistent with the degree of skill and care that Seller customarily requires with respect to similar Purchased Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices. The Seller and Servicer shall (i) comply in all material respects with all applicable federal, state and local laws and regulations related to the servicing of such Purchased Mortgage Loans, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) not impair the rights of Administrative Agent or Buyers in any Purchased Mortgage Loans or any
payment thereunder. Administrative Agent may terminate the servicing of any Purchased Mortgage Loans with the then existing Servicer in accordance with Section 12.e hereof.
b.With respect to Mortgage Loans other than BPL – Holdbacks, Seller shall and shall cause the Servicer to hold or cause to be held all escrow funds collected by Seller and Servicer with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected. With respect to BPL – Holdbacks, Seller shall and shall cause the originator or Servicer to hold or cause to be held all Holdback Amounts collected by the Seller or Servicer with respect to any Purchased Assets in the Holdback Account and shall apply the same to improve and rehabilitate the related Mortgaged Property.
c.To the extent Seller engages a third party Servicer, Seller shall cause such Servicer to remit Income to Administrative Agent pursuant to Section 7 above.
d.In the event there is a third party Servicer and upon Administrative Agent’s request, Seller shall provide promptly to Administrative Agent a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans, advising such Servicer of such matters as Administrative Agent may reasonably request, including, without limitation, recognition by the Servicer of Administrative Agent’s and Buyers’ interest in such Purchased Mortgage Loans and the Servicer’s agreement that upon receipt of notice of an Event of Default from Administrative Agent, it will follow theinstructions of Administrative Agent with respect to the Purchased Mortgage Loans and any related Income with respect thereto.
e.Upon the occurrence of an Event of Default hereunder or a material default under the Servicing Agreement, Administrative Agent shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans without payment of any penalty or termination fee. For the avoidance of doubt, such termination by Administrative Agent shall not be subject to any payment requirement under the Servicing Agreement including any reimbursement for Servicer’s expenses, all of which shall remain an obligation of the Seller. Seller and the Servicer shall cooperate in transferring the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Administrative Agent on behalf of Buyers in its sole discretion. For the avoidance of doubt any termination of the Servicer’s rights to service by the Administrative Agent as a result of an Event of Default shall be deemed part of an exercise of the Administrative Agent’s rights to cause the liquidation, termination or acceleration of this Agreement.
f.If Seller should discover that, for any reason whatsoever, Seller or any entity responsible to Seller for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Seller’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans, Seller shall promptly notify Administrative Agent.
g.Reserved.
h.For the avoidance of doubt, the Seller retains no economic rights to the servicing of the Purchased Mortgage Loans other than as set forth herein. As such, the
Seller expressly acknowledges that the Purchased Mortgage Loans are sold to Administrative Agent for the benefit of Buyers on a “servicing released” basis with such servicing retained by the Servicer.
12.Representations and Warranties
a.Seller represents and warrants to Administrative Agent and Buyers as of the date hereof and as of each Purchase Date for any Transaction that:
(1)Seller Existence. Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware.
(2)Licenses. Seller is duly licensed and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted and complies in all material respects with all applicable federal, state or local laws, rules and regulations. Seller has the requisite power and authority and legal right to originate and purchase Mortgage Loans (as applicable) and to own, sell and grant a lien on all of its right, title and interest in and to the Mortgage Loans, and to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of, each Program Agreement and any Transaction Request. Seller is an FHA Approved Mortgagee and, to the extent Seller is originating VA Loans, a VA Approved Lender.
(3)Power. Seller has all requisite corporate or other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted.
(4)Due Authorization. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Agreements, as applicable. Each Program Agreement has been (or, in the case of Program Agreements not yet executed, will be) duly authorized, executed and delivered by Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against Seller in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.
(5)Financial Statements. The Seller has heretofore furnished to Administrative Agent a copy of (a) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the most recent fiscal year-end, and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of a nationally
recognized accounting firm acceptable to Administrative Agent and (b) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the most recent quarterly fiscal period of the Seller and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such quarterly fiscal periods, setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of the Seller and its Subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP (other than with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements) applied on a consistent basis. Since [***], there has been no material adverse change in the consolidated business, operations or financial condition of the Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor is Seller aware of any state of facts which (with notice or the lapse of time) would reasonably be expected to result in any such material adverse change. The Seller has, on the date of the statements delivered pursuant to this Section (the “Statement Date”) no material liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or material liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Seller except as heretofore disclosed to Administrative Agent in writing.
(6)Event of Default. There exists no Event of Default under Section 15(b) hereof, which default gives rise to a right to accelerate indebtedness as referenced in Section 15(b) hereof, under any mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of mortgage loans or securities.
(7)Solvency. Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. Seller does not intend to incur, nor believes that it has incurred, debts beyond its ability to pay such debts as they mature and is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. The amount of consideration being received by Seller upon the sale of the Purchased Assets to Administrative Agent for the benefit of Buyers constitutes reasonably equivalent value and fair consideration for such Purchased Assets. Seller is not transferring any Purchased Assets to Administrative Agent with any intent to hinder, delay or defraud any of its creditors.
(8)No Conflicts. The execution, delivery and performance by Seller of each Program Agreement do not conflict in any material respect with any term or provision of the formation documents or by-laws of Seller. The execution, delivery and performance by Seller of each Program Agreement do not conflict, in any material respect, with any material law, rule, regulation, order, judgment, writ, injunction or decree applicable to Seller of any court, regulatory body, administrative agency or governmental body having jurisdiction over Seller.
(9)True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any Affiliate thereof or any of their officers furnished or to be furnished to Administrative Agent or Buyers in connection with the initial or any ongoing due diligence of Seller or any Affiliate or officer thereof, negotiation, preparation, or delivery of the Program Agreements are true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All financial statements have been prepared in accordance with GAAP (other than solely with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements).
(10)Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority or court is required under applicable law in connection with the execution, delivery and performance by Seller of each Program Agreement.
(11)Litigation. Except as otherwise disclosed to Administrative Agent in writing, there is no action or proceeding pending with respect to which Seller has received service of process or, to the best of Seller’s knowledge threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of any Program Agreement, (B) seeking to prevent the consummation of any of the transactions contemplated any Program Agreement, (C) excluding Ordinary Course Litigation making a claim individually or in an aggregate amount greater than $[***], or (D) which could reasonably be expected to materially and adversely affect the validity of the Purchased Assets or the performance by it of its obligations under, or the validity or enforceability of any Program Agreement.
(12)Material Adverse Change. There has been no Material Adverse Effect since the date set forth in the most recent financial statements supplied to Administrative Agent.
(13)Ownership. Upon payment of the Purchase Price and the filing of the financing statement and delivery of the Asset Files to the Custodian and the Custodian’s receipt of the related Request for Certification,
Administrative Agent shall become the sole owner of the Purchased Assets and related Repurchase Assets for the benefit of the Buyers, free and clear of all liens and encumbrances.
(14)Underwriting Guidelines. The Underwriting Guidelines provided to Administrative Agent are the true and correct Underwriting Guidelines of the Seller.
(15)Taxes. Seller and its Subsidiaries have timely filed all income tax returns and other material tax returns that are required to be filed by them and have paid all taxes prior to delinquency, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of Seller and Seller’s Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Seller, adequate.
(16)Investment Company. Neither Seller nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(17)Chief Executive Office; Jurisdiction of Organization. On the Effective Date, Seller’s chief executive office, is and has been located at 6561 Irvine Center Drive, Irvine, CA 92618. On the Effective Date, Seller’s jurisdiction of organization is Delaware. Except as otherwise disclosed to the Administrative Agent in writing, Seller does not have any trade name. Except as otherwise disclosed to the Administrative Agent in writing, during the preceding five years, Seller has not been known by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has it made any assignments for the benefit of creditors.
(18)Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records relating to the Purchased Assets and the related Repurchase Assets is its chief executive office.
(19)Reserved.
(20)ERISA. Each Plan to which Seller or its Subsidiaries make direct contributions, and, to the knowledge of Seller, each other Plan and each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law.
(21)Adverse Selection. Seller has not selected the Purchased Assets in a manner so as to adversely affect Buyers’ interests.
(22)Agreements. Neither Seller nor any Subsidiary of Seller is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default could reasonably be expected to have a material adverse effect on the business, operations, properties, or financial condition of Seller as a whole.
(23)Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Seller existing on the Effective Date is listed on Exhibit B to the Pricing Side Letter (the “Existing Indebtedness”).
(24)Agency Approvals. With respect to each Agency Security and to the extent necessary, Seller is an FHA Approved Mortgagee, a VA Approved Lender and approved by GNMA as an approved lender. Seller is also approved by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, Seller is in good standing, with no event having occurred or Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the Agency Security or the consummation of the Take-out Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA.
(25)No Reliance. Seller has made its own independent decision to enter into the Program Agreements and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Administrative Agent or Buyers as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(26)Plan Assets. Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR §2510.3 101 as amended by Section 3(42) of ERISA, in Seller’s hands, and transactions by or with Seller are not subject to any state or local statute regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.
(27)No Prohibited Persons. Neither Seller nor any of its Affiliates, officers, directors, partners or members, is an entity or person (or to Seller’s knowledge, 50 percent or greater owned by an entity or person):
(i) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); or (ii) is otherwise the target of sanctions administered by OFAC (any and all parties or persons described in clauses (i) and (ii) above are herein referred to as a “Prohibited Person”).
(28)Servicing. Seller has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices.
b. With respect to every Purchased Asset, Seller represents and warrants to Administrative Agent and Buyers as of the applicable Purchase Date for any Transaction and each date thereafter that each representation and warranty set forth on Schedule 1 is true and correct.
c. The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets to Administrative Agent for the benefit of Buyers and each Buyer and shall continue for so long as the Purchased Assets are subject to this Agreement. Upon discovery by Seller or Administrative Agent of any breach of any of the representations or warranties set forth in this Agreement, the party discovering such breach shall promptly give notice of such discovery to the others. Administrative Agent has the right to require, in its unreviewable discretion, Seller to repurchase within [***] after receipt of notice from Administrative Agent any Purchased Asset for which a breach of one or more of the representations and warranties referenced in Section 13(b) exists and which breach has a material adverse effect on the value of such Purchased Asset or the interests of Administrative Agent or Buyers, and such repurchase shall occur within [***] after receipt of notice from Administrative Agent requesting the same.
13.Covenants
Seller covenants with Administrative Agent and Buyers that, during the term of this facility:
a.Litigation. Seller will promptly, and in any event [***] on any of the following, give to Administrative Agent notice of all litigation, actions, suits, arbitrations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the
validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) excluding Ordinary Course Litigation, makes a claim individually or in an aggregate amount greater than $[***], or (iii) which, individually or in the aggregate could be reasonably likely to have a Material Adverse Effect. Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.
b.Prohibition of Fundamental Changes. Seller shall not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets.
c.Servicing. Seller shall not cause the Purchased Mortgage Loans to be serviced by any Servicer other than a Servicer expressly approved in writing by Administrative Agent on behalf of Buyers, which approval shall be deemed granted by Administrative Agent on behalf of Buyers with respect to Seller with the execution of this Agreement.
d.Insurance. The Seller shall continue to maintain, for Seller and its Subsidiaries, Fidelity Insurance in an aggregate amount acceptable to Fannie Mae, Freddie Mac and GNMA. The Seller shall maintain, for Seller and its Subsidiaries, Fidelity Insurance in respect of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase Assets. The Seller shall notify the Administrative Agent of any material adverse change in the terms of any such Fidelity Insurance.
e.No Adverse Claims. Seller warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Administrative Agent and Buyers in and to all Purchased Assets and the related Repurchase Assets against all adverse claims and demands.
f.Assignment. Except as permitted herein, neither Seller nor any Servicer shall sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any of the Purchased Assets or any interest therein, provided that this Section shall not prevent any transfer of Purchased Assets in accordance with the Program Agreements.
g.Security Interest. Seller shall do all things necessary to preserve the Purchased Assets and the related Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement). Without limiting the foregoing, Seller will comply in all material respects with all rules, regulations and other laws of any Governmental Authority.
h.Records.
(1)Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Assets and Repurchase Assets in accordance with industry custom and practice for assets similar to the Purchased Assets and Repurchase Assets, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in the Seller’s, Custodian’s or Servicer’s possession (in accordance with this Agreement and the Custodial Agreement) unless Administrative Agent otherwise approves. Except in accordance with the Custodial Agreement, Seller will not allow any such papers, records or files that are an original or an only copy to leave the Seller’s, Custodian’s or Servicer’s possession, except for individual items removed in connection with servicing a specific Purchased Mortgage Loan, in which event Seller will obtain or cause to be obtained a receipt from a financially responsible person for any such paper, record or file. Seller or the Servicer of the Purchased Assets will maintain all such Records not in the possession of the Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Assets and preserve them against loss.
(2)For so long as Administrative Agent has an interest in or lien on any Purchased Assets, Seller will hold or cause to be held all related Records in trust for Administrative Agent. Seller shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(3)Upon reasonable advance notice from the Custodian or Administrative Agent, Seller shall (x) make any and all such Records available to the Custodian, Administrative Agent and a Buyer to examine any such Records, either by its own officers or employees, or by agents or contractors who are bound by requirements of confidentiality, or both, and make copies of all or any portion thereof, and (y) permit Administrative Agent or a Buyer or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.
i.Books. Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased Assets to Administrative Agent for the benefit of Buyers.
j.Approvals. Seller shall maintain all material licenses, permits or other approvals necessary for Seller to conduct its business and to perform its obligations under the Program Agreements, and Seller shall conduct its business in accordance in all material respects with applicable law.
k.Material Change in Business. Seller shall not make any material change in the nature of its business as carried on at the date hereof.
l.Underwriting Guidelines. Other than underwriting guidelines of the Agencies, Seller shall not make any amendment or other modification to the Underwriting Guidelines which causes the related Mortgage Loan to [***]. Without limiting the foregoing, in the event that Seller makes any amendment or modification to the Underwriting Guidelines, Seller shall promptly deliver to Administrative Agent a complete copy of the amended or modified Underwriting Guidelines upon request.
m.Distributions. If an Event of Default has occurred and is continuing, Seller shall not pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller, except that, notwithstanding the foregoing, Seller shall be permitted at all times to make Tax Distributions.
n.Applicable Law. Seller shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority.
o.Existence. Seller shall preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises, except for failures to maintain any such rights, privileges licenses and franchises, which, individually or in the aggregate, would not have a Material Adverse Effect.
p.Chief Executive Office; Jurisdiction of Organization. Seller shall not move its chief executive office from the address referred to in Section 13(a)(17) or change its jurisdiction of organization from the jurisdiction referred to in Section 13(a)(17) unless it shall have provided Administrative Agent [***] of such change.
q.Taxes. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.
r.Transactions with Affiliates. Seller will not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) otherwise not prohibited under the Program Agreements and (b) upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate. Nothing herein shall prohibit distributions and dividends that are not prohibited under Section 14(m) hereof.
s.Guarantees. Seller shall not create, incur, assume or suffer to exist any Guarantees, except (i) to the extent reflected in Seller’s financial statements or notes thereto (ii) to the extent the aggregate Guarantees of Seller do not exceed $[***], or (iii) to the extent such Guarantee is otherwise disclosed to Administrative Agent in writing.
t.Indebtedness. Seller shall not incur any additional material Indebtedness, including without limitation, any Indebtedness relating to any mortgage servicing rights or corporate or servicing advances, (other than (i) the Existing Indebtedness in amounts not to exceed the amounts specified on Exhibit B to the Pricing Side Letter and (ii) usual and customary accounts payable for a mortgage company) without providing written notice of the same to the Administrative Agent.
u.HUD and FHA Matters Regarding Income and Accounts with Respect to Early Buyout Loans.
(1)With respect to each Early Buyout Loan that is an FHA Loan, Seller shall list the Servicer as the servicer on FHA Connection System and the Seller to be identified as the mortgagee of record on such system under mortgagee number [***]. With respect to each Early Buyout Loan that is a VA Loan, Seller shall list the Servicer as the servicer on the VALERI system under payee vendor identification number [***]. Seller shall cause Servicer to submit all claims to HUD and VA under such applicable numbers for remittance of amounts to the Clearing Account.
(2)To the extent HUD deducts any amounts owing by (i) Seller or (ii) Servicer that are unrelated to the applicable Early Buyout Loan, in each case, to HUD, Seller shall deposit, or cause Servicer to deposit, within [***] following notice or knowledge of such deduction by HUD, such deducted amounts into the applicable account.
(3)Seller shall maintain HUD and GNMA approvals. Should Seller for any reason, cease to possess a HUD or GNMA approval, Seller shall so notify Administrative Agent immediately in writing.
(4)Seller shall cooperate and do all things deemed necessary or appropriate by Buyer to effectuate the steps as contemplated in this Section 14.u.
v.Hedging. Seller has entered into Interest Rate Protection Agreements or other arrangements with respect to the Purchased Mortgage Loans, having terms with respect to protection against fluctuations in interest rates consistent with the terms of Seller’s hedging program and has notified Administrative Agent of the terms of such Interest Rate Protection Agreements or other arrangements in writing.
w.True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of Seller, any Affiliate thereof or any of their officers furnished to Administrative Agent and/or Buyers hereunder and during Administrative Agent’s and/or Buyers’ diligence of Seller are and will be true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by Seller to Administrative Agent and/or Buyers pursuant to this Agreement shall be prepared in accordance with U.S. GAAP (other than, with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements).
x.Agency Approvals. Seller shall maintain all Agency Approvals necessary for the conduct of its business. Should Seller, for any reason, cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA be required, Seller shall so notify Administrative Agent within [***]. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.
y.Take-out Payments. With respect to each Committed Mortgage Loan, Seller shall arrange that all payments under the related Take-out Commitment shall be paid directly to Administrative Agent at the account set forth in Section 9 hereof, or to an account approved by Administrative Agent in writing prior to such payment. With respect to any Agency Take-out Commitment, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Administrative Agent’s wire instructions or Administrative Agent has approved such wire transfer instructions in writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, shall be identical to the Payee Number that has been identified by Administrative Agent in writing as Administrative Agent’s Payee Number or Administrative Agent shall have previously approved the related Payee Number in writing in its sole discretion; with respect to any Take-out Commitment with an Agency, the applicable agency documents shall list Administrative Agent as sole subscriber, unless otherwise agreed to in writing by Administrative Agent, in Administrative Agent’s sole discretion.
z.No Pledge. Except pursuant to this Agreement, Seller shall not, and shall not cause Servicer to, pledge, transfer or convey any security interest in
the Clearing Account to any Person (other than Administrative Agent) without the express written consent of Administrative Agent.
aa.Plan Assets. Seller shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and Seller shall not use “plan assets” within the meaning of 29 CFR
§2510.3 101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions by or with Seller shall not be subject to any foreign, state or local statute regulating investments of or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.
ab.Reserved.
ac.No Prohibited Persons. Neither Seller nor any of its officers, directors, partners or members, shall be an entity or person (or to the Seller’s knowledge, 50 percent or greater owned by an entity or person): (i) whose name appears on OFAC’s most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); or (ii) shall otherwise be the target of sanctions administered by OFAC (any and all parties or persons described in clauses (i) and (ii) above are herein referred to as a “Prohibited Person”).
ad.Lender Insurance Authority. In the event that Seller has on the date hereof or subsequently receives Lender Insurance Authority, such authority shall not be revoked or suspended.
ae.Quality Control. Seller shall maintain an internal quality control program that verifies, on a regular basis, the existence and accuracy of all legal documents, credit documents, property appraisals, and underwriting decisions related to Purchased Mortgage Loans and shall provide the most recent report on the results of such quality control program in the Officer’s Compliance Certificate provided pursuant to Section 17(b)(3). Such program shall be capable of evaluating and monitoring the overall quality of Seller’s loan production and servicing activities. Such program shall (i) ensure that the Purchased Mortgage Loans are originated and serviced in accordance with prudent mortgage banking practices and accounting principles; (ii) guard against dishonest, fraudulent, or negligent acts; and (iii) guard against errors and omissions by officers, employees, or other authorized persons.
af.Reserved.
ag.MERS. Seller shall comply in all material respects with the rules and procedures of MERS in connection with the servicing of all Purchased Mortgage Loans that are registered with MERS and, with respect to
Purchased Mortgage Loans that are eMortgage Loans, the maintenance of the related eNotes on the MERS eRegistry for as long as such Purchased Mortgage Loans are so registered.
ah.Beneficial Ownership Certification. Seller shall at all times either
(i) ensure that the Seller has delivered to Administrative Agent a Beneficial Ownership Certification, if applicable, and that the information contained therein is true and correct in all respects or (ii) deliver to Administrative Agent an updated Beneficial Ownership Certification if any information contained in any previously delivered Beneficial Ownership Certification ceases to be true and correct in all respects. At all times, Seller shall promptly notify Administrative Agent upon becoming aware that the information provided in the most recent Beneficial Ownership Certification is no longer true and correct and shall deliver an updated Beneficial Ownership Certification to Administrative Agent promptly [***].
ii. Investment Company. Seller shall not become an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act.
aj.Financial Covenants. Seller shall at all times comply with all financial covenants and/or financial ratios set forth in the WHCO Repo Documents.
ak.Chief Executive Office; Jurisdiction of Organization. Seller shall provide Administrative Agent with [***] notice of any change in Seller’s principal office or place of business, legal name or jurisdiction.
14.Events of Default
Each of the following shall constitute an “Event of Default” hereunder:
a.Payment Failure. Failure of Seller to (i) make any payment of Price Differential or Repurchase Price or any other sum which has become due, on a Payment Date or a Repurchase Date or otherwise, whether by acceleration or otherwise, under the terms of this Agreement, (ii) cure any Margin Deficit when due pursuant to Section 6 hereof or (iii) to make any payment when due hereunder, other than such payments described in clauses (i) and (ii) hereof, and such failure continues for [***].
b.Cross Default. Seller or any of Seller’s Affiliates that are party to any Program Agreement shall be in default after the expiration of any grace or cure period to the extent not waived or cured in writing under (i) any Indebtedness, including, without limitation, the WHCO Repo Agreement, in the aggregate, in excess of $[***] with respect to Seller or such Affiliate which default (1) involves the failure to pay a matured obligation, or
(2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (ii) any other contract or contracts, in the aggregate in excess of $[***] to which Seller or such
Affiliate is a party which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract.
c.Assignment. (i) Assignment or attempted assignment by Seller of this Agreement or any rights hereunder without first obtaining the specific written consent of Administrative Agent, or (ii) the granting by Seller of any security interest, lien or other encumbrances on any Purchased Asset to any person other than Administrative Agent and such affected Purchased Asset pursuant to this clause c(ii) has not been repurchased [***].
d.Insolvency. An Act of Insolvency shall have occurred with respect to Seller.
e.Material Adverse Change. The occurrence of a Material Adverse Effect.
f.Breach of Financial Representation or Covenant or Obligation. A breach by Seller of any of the representations, warranties or covenants or obligations set forth in [***] of this Agreement.
g.Breach of Non-Immediate Representation or Covenant. A breach by Seller of any other material representation, warranty or covenant set forth in this Agreement or any other Program Agreement (and not otherwise specified in Section 15(f) above), if such breach is not cured within [***] after Seller’s knowledge thereof (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Asset Value, the existence of a Margin Deficit and the obligation to repurchase such Purchased Mortgage Loan) unless (i) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Administrative Agent in its good faith discretion to be materially false or misleading on a regular basis, or (iii) Administrative Agent, in its good faith discretion, determines that such breach of a material representation, warranty or covenant materially and adversely affects (A) the condition (financial or otherwise) of Seller or an Affiliate of Seller to a Program Agreement; or (B) Administrative Agent’s determination to enter into this Agreement or Transactions with such party, then such breach shall constitute an immediate Event of Default (and Seller shall have no cure right hereunder).
h.Change of Control. The occurrence of a Change in Control shall have occurred without Administrative Agent’s prior written consent.
i.Failure to Transfer. Seller fails to transfer the Purchased Assets to Administrative Agent for the benefit of the applicable Buyer in the manner set forth in the Program Agreements (provided the Administrative Agent on behalf of the applicable Buyer has tendered the related Purchase Price) and such failure continues for [***].
j.Judgment. A final judgment or judgments for the payment of money in excess of $[***] in the aggregate shall be rendered against Seller by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof.
k.Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller, or shall have taken any action to displace the management of Seller or to curtail its authority in the conduct of the business of Seller, or takes any action in the nature of enforcement to remove, limit or restrict the approval of Seller as an issuer, buyer or a seller/servicer of Purchased Asset or securities backed thereby, and such action provided for in this Section 15(k) shall not have been discontinued or stayed within [***].
l.Inability to Perform. An officer of Seller shall admit its inability to, or its intention not to perform any of Seller’s Obligations hereunder.
m.Security Interest. This Agreement shall for any reason cease to create a valid, first priority security interest (except to the extent a security interest may not be perfected by possession, control or filing of a UCC financing statement) in any material portion of the Purchased Assets or other Repurchase Assets purported to be covered hereby.
n.Financial Statements. Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import.
o.Custodian. With respect to Early Buyout Loans, the applicable Custodian fails to maintain its good standing under the GNMA Guide or FHA Regulations and is not replaced or the Seller fails to repurchase such Early Buyout Loans or such breach is not waived by Administrative Agent in writing within [***].
p.Servicer Default. There is a breach by Servicer of the Servicing Agreement and Seller has not appointed a successor servicer acceptable to Administrative Agent or such breach is not waived by Administrative Agent in writing within [***].
An Event of Default shall be deemed to be continuing unless expressly waived by Administrative Agent in writing.
15.Remedies Upon Default
In the event that an Event of Default shall have occurred and is continuing:
a.Administrative Agent may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency of Seller), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Administrative Agent shall (except upon the occurrence of an Act of Insolvency of Seller) give notice to Seller of the exercise of such option as promptly as practicable.
b.If Administrative Agent exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Section, (i) Seller’s obligations in such Transactions to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Section, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Administrative Agent and applied, in Administrative Agent’s sole discretion, in accordance with Section 7.j hereof, and (iii) Seller shall immediately deliver to Administrative Agent the Asset Files relating to any Purchased Mortgage Loans subject to such Transactions then in Seller’s possession or control.
c.Administrative Agent also shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of all Records and files of Seller relating to the Purchased Assets and Repurchase Assets and all documents relating to the Purchased Assets (including, without limitation, any legal, credit or servicing files with respect to the Purchased Assets and Repurchase Assets) which are then or may thereafter come in to the possession of Seller or any third party acting for Seller. To obtain physical possession of any Purchased Assets held by the Custodian, Administrative Agent shall present to the Custodian a Trust Receipt. Without limiting the rights of Administrative Agent hereto to pursue all other legal and equitable rights available to Administrative Agent for Seller’s failure to perform its obligations under this Agreement, Seller acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Administrative Agent shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Administrative Agent from pursuing any other remedies for such breach, including the recovery of monetary damages.
d.Administrative Agent shall have the right to direct all servicers then servicing any Purchased Assets to remit all collections thereon to Administrative Agent, and if any such payments are received by Seller, Seller shall not commingle the amounts received with other funds of Seller and shall promptly pay them over to Administrative Agent. Administrative Agent shall also have the right to terminate any one or all of the servicers then servicing any Purchased Assets with or without cause. In addition, Administrative Agent shall have the right to immediately sell the Purchased Assets and liquidate all Repurchase Assets. Such disposition of Purchased Assets may be, at Administrative Agent’s option, on either a servicing-released or a servicing-retained basis. Administrative Agent shall not be required to give any warranties as to the Purchased Assets with respect to any such disposition thereof. Administrative Agent may specifically disclaim or modify any warranties of title or the like relating to the Purchased Assets. The foregoing procedure for disposition of the Purchased Assets and liquidation of the Repurchase Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Seller agrees that it would not be commercially unreasonable for Administrative Agent to dispose of the Purchased Assets or the Repurchase Assets or any portion thereof by using Internet sites that provide for the auction of assets similar to the Purchased Assets or the Repurchase Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Administrative Agent shall be entitled to place the Purchased Assets in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Administrative Agent shall also be entitled to sell any or all of such Purchased Assets individually for the prevailing price. Administrative Agent shall also be entitled, in its sole good faith discretion to elect, in lieu of selling all or a portion of such Purchased Assets, to give the Seller credit for such Purchased Assets and the Repurchase Assets in an amount equal to the Asset Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller hereunder.
e.Administrative Agent may apply any proceeds from the liquidation of the Purchased Assets and Repurchase Assets to the Repurchase Prices hereunder and all other Obligations in the manner Administrative Agent deems appropriate in its sole discretion subject to the Administration Agreement.
f.Seller recognizes that the market for the Purchased Assets may not be liquid and as a result it may not be possible for Administrative Agent to sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner. In view of the nature of the Purchased Assets, Seller agrees that liquidation of any Purchased Asset may be conducted in a private sale and at such price as Administrative Agent may deem commercially reasonable. In view of the nature of the Mortgage Loans, Seller agrees that liquidation of any Mortgage Loan may be conducted in a
private sale and at such price as Administrative Agent may deem commercially reasonable.
g.Seller shall be liable to Administrative Agent and each Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Administrative Agent and each Buyer) in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel incurred in connection with or as a result of an Event of Default, (ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
h.To the extent permitted by applicable law, Seller shall be liable to Administrative Agent and each Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Administrative Agent’s and Buyers’ rights hereunder. Interest on any sum payable by Seller under this Section 16(h) shall accrue at a rate equal to the Post-Default Rate.
i.Administrative Agent shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
j.Administrative Agent may exercise one or more of the remedies available to Administrative Agent immediately upon the occurrence of an Event of Default and, except to the extent provided in subsections (a) and (d) of this Section, at any time thereafter without notice to Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Administrative Agent may have.
k.Administrative Agent may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Administrative Agent to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
l.Administrative Agent shall have the right to perform reasonable due diligence with respect to Seller, the Purchased Assets, which review shall be at the expense of Seller.
16.Reports
a.Default Notices. Seller shall furnish to Administrative Agent (i) promptly, copies of any material and adverse notices (including, without limitation, notices of defaults, termination events, breaches, potential defaults or potential breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to Seller’s lenders and (ii) immediately after knowledge thereof, notice of the occurrence of any (A) Event of Default hereunder, (B) default or breach by Seller or Servicer of any obligation under any Program Agreement or any material obligation under any material contract or agreement of Seller or Servicer or (C) event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default.
•Financial Notices. Seller shall furnish the following financial information; to Administrative Agent; provided that delivery of such items to the Administrative Agent pursuant to the WHCO Repo Agreement shall be deemed delivery hereunder:
(1)as soon as available and in any event within thirty (30) calendar days after the end of each calendar month (or, with respect to the last month of each fiscal quarter, forty-five (45) calendar days after the end of such month), the unaudited consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries in accordance with GAAP (other than with respect to footnotes, year-end adjustments and cash flow statements) consistently applied, as at the end of, and for, such period;
(2)as soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of Ernst & Young LP or independent certified public accountants of recognized national standing,
which opinion shall not be qualified as to the scope of audit and shall have no “going concern” qualification and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;
q. at the time the Seller furnishes each set of financial statements pursuant to Section 17(b)(1) or (2) above, an Officer’s Compliance Certificate of a Responsible Officer of Seller.
(3)Reserved;
(4)as soon as available and in any event within [***];
(a)such other information regarding the financial condition, operations, or business of the Seller as Administrative Agent may reasonably request; and
(b)the particulars of any Event of Termination in reasonable detail.
(5)Seller shall provide the market value analysis for the valuation of its mortgage servicing rights as by a Third Party Evaluator for each monthly fiscal period, as set forth in the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3);
(6)To the extent it may do so without breaching any confidentiality or other restrictions, Seller shall provide Administrative Agent, as part of the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3) above, a list of all material actions, notices, proceedings or investigations pending with respect to which Seller has received service of process or other form of notice or, to the best of Seller’s knowledge, threatened against it, before any court, administrative or governmental agency or other regulatory body or tribunal as of such date with such information provided as noted in the applicable Schedule to Exhibit A to the Pricing Side Letter; provided, that, if such information is subject to a confidentiality requirement, for as long as such information remains confidential, Seller shall (x) disclose to Buyer any portion of such information that is not confidential, (y) notify Buyer of any material event in a level of specificity that would not violate the confidentiality requirements and (z) promptly seek permission to disclose the information from the necessary parties and shall provide Buyer such information to the extent of such permission;
(7)upon Seller becoming aware of any Control Failure with respect to a Purchased Mortgage Loan that is an eMortgage Loan or any eNote Replacement Failure.
b.Notices of Certain Events. As soon as possible and in any event within [***], Seller shall furnish to Administrative Agent notice of the following events:
(1)Reserved;
(2)Reserved;
(3)any material change in accounting policies or financial reporting practices of Seller or Servicer, other than changes in accordance with GAAP;
(4)with respect to any Purchased Mortgage Loan, that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect materially and adversely the value of such Mortgage Loan;
(5)Reserved;
(6)any material change in the material Indebtedness of the Seller, including, without limitation, any default, renewal, non-renewal, termination, increase in available amount or decrease in available amount related thereto;
(7)Reserved;
(8)any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect with respect to Seller or Servicer; and
(9)the occurrence of any material employment dispute and a description of the strategy for resolving it that has the possibility of resulting in a Material Adverse Effect.
c.Servicing Tape. On the Reporting Date of each calendar month, Seller will furnish to Administrative Agent (i) an electronic Purchased Mortgage Loans performance data, including, without limitation, delinquency reports and volume information, broken down by product (i.e., delinquency, foreclosure and net charge off reports) and (ii) electronically, in a format mutually acceptable to Administrative Agent and Seller, servicing information, including, without limitation, those fields reasonably requested by Administrative Agent from time to time, on a loan by loan basis and in the aggregate, with respect to the Purchased Mortgage Loans serviced by Seller or any Servicer for the month (or any portion thereof) prior to the Reporting Date. In addition to the foregoing information on each Reporting Date, Seller will furnish to Administrative Agent such information upon the occurrence and continuation of an Event of Default.
d.Other Reports. Seller shall deliver to Administrative Agent any other reports or information (including, without limitation, any primary mortgage insurance policy) relating to the Purchased Assets or the business or
operations of Seller and Servicer as reasonably requested by Administrative Agent or as otherwise required pursuant to this Agreement or as set forth in the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3) above.
e.DE Compare Ratio and HUD Reports. Seller shall furnish to Administrative Agent the following notices:
1.In the event Seller’s DE Compare Ratio equals or exceeds [***]%, Seller shall provide Administrative Agent with written notice of such occurrence within [***], which notice shall include a written summary of actions Seller is taking to correct its DE Compare Ratio.
2.In the event Seller receives any inquiry or notice from HUD regarding its DE Compare Ratio, Seller shall provide Administrative Agent with written notice of such inquiry or notice within [***], regardless of Seller’s current DE Compare Ratio.
3.In the event of any action plan with respect to Seller’s DE Compare Ratio is agreed to between Seller and HUD or imposed upon Seller by HUD, Seller shall provide Administrative Agent with a written summary of such agreement or imposition, as applicable, within [***]; provided, that, if such information is subject to a confidentiality requirement, for as long as such information remains confidential, Seller shall (i) disclose to Buyer any portion of such information that is not confidential,
(ii) notify Buyer of any material event in a level of specificity that would not violate the confidentiality requirements and (iii) promptly seek permission to disclose the information from the necessary parties and shall provide Buyer such information to the extent of such permission.
17.Repurchase Transactions
A Buyer may, in its sole election, engage in repurchase transactions (as “seller” thereunder) with any or all of the Purchased Assets and/or Repurchase Assets or pledge, hypothecate, assign, transfer or otherwise convey any or all of the Purchased Assets and/or Repurchase Assets with a counterparty of Buyers’ choice (such transaction, a “Repledge Transaction”); provided that, (i) such Buyer’s obligations under this Agreement shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) Seller shall continue to deal solely and directly with such Buyer in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements. Any Repledge Transaction shall be effected by notice to the Administrative Agent, and shall be reflected on the books and records of the Administrative Agent. No such Repledge Transaction shall relieve such Buyer of its obligations to transfer Purchased Assets and Repurchase Assets to Seller (and not substitutions thereof) pursuant to the terms hereof. In furtherance, and not by limitation of, the foregoing, it is acknowledged that
each counterparty under a Repledge Transaction (a “Repledgee”), is a repledgee as contemplated by Sections 9-207 and 9-623 of the UCC (and the relevant Official Comments thereunder) and such Repledgee may recognize the Transactions as a securitization. Administrative Agent and Buyers are each hereby authorized to share this Agreement, the Program Agreements and any information delivered hereunder with the Repledgee or any potential Repledgee.
18.Single Agreement
Administrative Agent, Buyers and Seller acknowledge they have and will enter into each Transaction hereunder, in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Administrative Agent, Buyers and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder and (ii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. Notwithstanding anything in this Agreement to the contrary, in the event that (a) a Buyer is not an Affiliate of Administrative Agent or another Buyer (a “Non-Affiliate Buyer”), (b) an Event of Default shall have occurred and is continuing and (c) Administrative Agent provides written notice to the Seller to sever each Non-Affiliate Buyer’s Transactions (the “Non-Affiliate Transactions”) and treat such Non-Affiliate Transactions as separate Transactions under this Agreement (a “Severance Notice”), then Administrative Agent, Buyers and Seller acknowledge that each such Non-Affiliate Transaction shall be deemed a separate Transaction under a separate and distinct agreement with the same terms and conditions as set forth herein (each a “Non-Affiliate MRA”), and each such Non-Affiliate Buyer shall be deemed to be the administrative agent with respect to its respective Non-Affiliate Transactions under its respective Non-Affiliate MRA; provided, that Transactions owned by Administrative Agent, a Buyer or any respective Affiliate shall continue to be deemed a single Transaction with Administrative Agent serving as the administrative agent for Buyers or any respective Affiliate, in each case, pursuant to the terms and conditions of this Agreement.
19.Notices and Other Communications
Any and all notices (with the exception of Transaction Requests, which shall be delivered via electronic mail or other electronic medium agreed to by the Administrative Agent and the Seller), statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of
such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.
If to Seller:
loanDepot.com, LLC 6561 Irvine Center Drive Irvine, California 92618
Email: [***]
If to Administrative Agent:
For Transaction Requests:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
Attention: Transaction Request—RMBS Warehouse Lending E-mail: [***]
For the Officer’s Compliance Certificate and related financial statements delivered pursuant to Section 17.b:
E-mail: [***]
Subject: Mortgage Finance Officer Cert / Covenant Report: [LoanDepot.com, LLC] [Seller to Designate Monthly/Quarterly or Annual Reporting Period]
For all other Notices:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
E-mail: [***]
With a copy to:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
E-mail: [***]
20.Entire Agreement; Severability
This Agreement and the Administration Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent
from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
21.Non assignability
a.Assignments. The Program Agreements are not assignable by Seller. Subject to Section 35 hereof (Acknowledgement of Assignment and Administration of Repurchase Agreement), Administrative Agent and Buyers may from time to time join other Buyers hereto and/or assign all or a portion of their rights and obligations under this Agreement and the Program Agreements pursuant to the Administration Agreement with Seller’s prior written consent (such consent not to be unreasonably withheld or delayed); provided, however, such consent shall not be required if Administrative Agent or a Buyer assigns its rights and obligations (i) to an Affiliate thereof, or (ii) after the occurrence of an Event of Default. Administrative Agent shall maintain, solely for this purpose as a non-fiduciary agent of Seller, for review by Seller upon written request, a register of assignees and participants (the “Register”) and a copy of an executed assignment and acceptance by Administrative Agent and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The entries in the Register shall be conclusive absent manifest error, and the Seller, Administrative Agent and Buyers shall treat each Person whose name is recorded in the Register pursuant to the preceding sentence as a Buyer hereunder. Upon such assignment (in accordance with the foregoing provisions of this Section 22)and recordation in the Register,
(a) such assignee shall be a party hereto and to each Program Agreement to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Administrative Agent and Buyers hereunder, as applicable, and (b) Administrative Agent and Buyer, as applicable, shall be released from its obligations hereunder and under the Program Agreements. Any assignment hereunder shall be deemed a joinder of such assignee as a Buyer hereto. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Administrative Agent unless otherwise notified by Administrative Agent in writing. Such assignee may recognize the Transactions as a securitization. Administrative Agent and Buyers may distribute to any prospective or actual assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Seller. Administrative Agent and Buyers may distribute to any prospective or actual assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Seller; provided that any such prospective and actual assignee has agreed to abide by confidentiality obligations substantially similar to those that are applicable to Administrative Agent and/or Buyers.
b.Participations. Any Buyer may sell participations to one (1) or more Persons in or to all or a portion of its rights and obligations under this Agreement and under the Program Agreements; provided, however, that (i) such Buyer’s obligations under this Agreement or in any Transaction under this Agreement and the other Program Agreements shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Administrative Agent and/or Buyers in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements except as provided in Section 11 hereof. Such Participant may recognize the Transactions as a securitization. Administrative
Agent and Buyers may distribute to any prospective or actual participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Seller. Administrative Agent and Buyers may distribute to any prospective or actual participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Seller; provided that any such prospective and actual participant has agreed to abide by confidentiality obligations substantially similar to those that are applicable to Administrative Agent and/or Buyers.
22.Set-off
In addition to any rights and remedies of the Administrative Agent and Buyers hereunder and by law, the Administrative Agent and Buyers shall have the right at any time an Event of Default has occurred and is continuing, without prior notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by applicable law, to set-off and appropriate and apply against any Obligation from Seller to a Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from a Buyer or any Affiliate thereof to or for the credit or the account of the Seller. All such set-offs shall be subject to the priorities set forth in the Administration Agreement. The Administrative Agent and the Buyers each agree promptly to notify the Seller after any such set off and application is made by the Administrative Agent or a Buyer; provided, that, the failure to give such notice shall not affect the validity of such set off and application.
23.Binding Effect; Governing Law; Jurisdiction
a.This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
b.EACH OF SELLER, ADMINISTRATIVE AGENT AND BUYERS HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAMAGREEMENTS IN ANY ACTION OR PROCEEDING. EACH PARTY HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.
24.No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 6(a), 16(a) or otherwise, will not constitute a waiver of any right to do so at a later date.
25.Intent
a.The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended, a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the United States Code, and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Seller, Administrative Agent and Buyers further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).
b.Administrative Agent’s or a Buyer’s right to liquidate the Purchased Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as such term is defined in Bankruptcy Code Section 741(5).
c.The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
d.It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as
defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
e.This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 101(47), Section 555, Section 559 and Section 741 under the Bankruptcy Code.
f.Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which
(i) is between all of the parties and (ii) places each party in the same right and capacity.
26.Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
a.in the case of Transactions in which one of the parties is a broker or dealer registered with the SEC under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the SIPA do not protect the other party with respect to any Transaction hereunder;
b.in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
c.in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
27.Power of Attorney
Seller authorizes Administrative Agent to file such financing statement or statements relating to the Repurchase Assets as Administrative Agent, at its option, may deem appropriate. Seller appoints Administrative Agent as Seller’s agent and attorney-in-fact to execute any such financing statement or statements in Seller’s name and to perform all other acts which Administrative Agent deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase Assets, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, and sign assignments on behalf of Seller as its agent and attorney-in-fact. This agency and power of attorney is coupled with an interest and is irrevocable without Administrative Agent’s consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only during the occurrence and continuance of any Event of Default hereunder. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28. In addition the foregoing, Seller agrees to execute a Power of Attorney, in the form of Exhibit A hereto, to be delivered on the date hereof and the Administrative Agent and the Buyers hereby confirm and agree that such Power of
Attorney may be exercised only during the occurrence and continuance of an Event of Default hereunder.
28.Buyers May Act Through Administrative Agent
Each Buyer has designated the Administrative Agent under the Administration Agreement for the purpose of performing any action hereunder.
29.Indemnification; Obligations
a.Seller agrees to hold Administrative Agent, Buyers and each of their respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is incurred) against all liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of any kind which may be imposed on, incurred by, or asserted against any Indemnified Party relating to or arising out of this Agreement, any Transaction Request, any Program Agreement or any transaction contemplated hereby or thereby (including, without limitation, (i) any such liabilities, losses, damages, judgments, costs and expenses directly arising from any acts or omissions of such party and (ii) any wire fraud or data or systems intrusions which causes Administrative Agent or Buyers to suffer any such direct liability, loss, damage, judgment, cost and/or expense), resulting from anything other than the Indemnified Party’s gross negligence or willful misconduct. Seller also agrees to reimburse each Indemnified Party
for all reasonable expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Seller’s agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Assets. Seller also agrees not to assert any claim against Administrative Agent, each Buyer or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
a.Reserved.
b.Without limiting the provisions of Section 30(a) hereof, if Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Administrative Agent (subject to reimbursement by Seller), in its sole discretion.
30.Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-SIGN, UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service with appropriate document access tracking, electronic signature tracking and document retention as may be approved by the Administrative Agent in its sole discretion.
31.Confidentiality
a.This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, including without limitation information contained in the monthly Officer’s Compliance Certificate, as well as any information conveyed to Administrative Agent and Buyers during the course of any due diligence review, shall be kept confidential and shall not be divulged to any third party without the written consent of such party except for (i) disclosure to potential and actual assignees, Repledgees and Participants (pursuant to Section 22 hereof), (ii) disclosure to a party’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, (iii) disclosure required by law, rule, regulation or order of a court or other regulatory body,(iv) any of such information is in the public domain other than due to a breach of this covenant, or (v) disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that, except as set forth in the first sentence of this clause (a), Seller may not disclose the name of or identifying information with respect to Administrative Agent and Buyers or any pricing terms (including, without limitation, the Purchase Price, Pricing Rate, Purchase Price
Percentage, Asset Value, Maximum Value Amount and any other fees specified in the Pricing Side Letter) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of the Administrative Agent.
b.Notwithstanding anything in this Agreement to the contrary, the Seller shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and/or any applicable terms of this Agreement (the “Confidential Information”). Seller understands that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “Act”), and Seller agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the Act and other applicable federal and state privacy laws. The Seller shall implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the Act) of Administrative Agent and Buyers or any Affiliate of Administrative Agent or Buyers which Seller holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller represents and warrants that it has implemented appropriate measures to meet the objectives of Section 501(b) of the Act and of the applicable standards adopted pursuant thereto, as now or hereafter in effect. Upon request, Seller will provide evidence reasonably satisfactory to allow Administrative Agent and/or Buyers to confirm that the providing party has satisfied its obligations as required under this Section. Without limitation, this may include Administrative Agent’s or Buyers’ review of audits, summaries of test results, and other equivalent evaluations of the Seller. Seller shall notify Administrative Agent immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Administrative Agent, Buyers or any Affiliate of Buyers provided directly to the Seller by Administrative Agent, Buyers or such Affiliate. Seller shall provide such notice to Administrative Agent by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.
32. Recording of Communications
Administrative Agent, Buyers and Seller shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions. Administrative Agent, Buyers and Seller consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement.
33.Conflicts
In the event of any conflict between the terms of this Agreement and any other Program Agreement, the documents shall control in the following order of priority: first, the terms of the Pricing Side Letter shall prevail, then the terms of the Administration Agreement, then the terms of this Agreement shall prevail, and then the terms of the other Program Agreements shall prevail.
34.Acknowledgment of Assignment and Administration of Repurchase Agreement
Pursuant to Section 22 above (Non-assignability) of this Agreement, Administrative Agent may sell, transfer and convey or allocate certain Purchased Assets and the related Repurchase Assets and related Transactions to certain affiliates of Administrative Agent and/or one (1) or more CP Conduits (the “Additional Buyers”) with the prior written consent of Seller; provided that such consent shall not be required to the extent Administrative Agent or Buyers sells, transfers or conveys to
(i) to an Affiliate thereof or (ii) during an Event of Default. Administrative Agent shall notify the Seller promptly after each sale, transfer, conveyance or allocation, provided that the failure to give such notice shall not affect the validity of such sale, transfer, conveyance or allocation. Seller hereby acknowledges and agrees to the joinder of such Additional Buyers and the assignments and the terms and provisions set forth in the Administration Agreement; provided that any Confidential Information provided to an Additional Buyer shall be provided subject to a commercially reasonable non-disclosure agreement. The Administrative Agent shall administer the provisions of this Agreement, subject to the terms of the Administration Agreement for the benefit of the Buyers and any Repledgees, as applicable. For the avoidance of doubt, all payments, notices, communications and agreements pursuant to this Agreement shall be delivered to, and entered into by, the Administrative Agent for the benefit of the Buyers and/or the Repledgees, as applicable. Furthermore, to the extent that the Administrative Agent exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on and/or purchase any of the Repurchase Assets pursuant to Section 16 above (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in this Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer and Repledgees, as applicable. All provisions of this Agreement shall survive the transfers contemplated herein (including any Repledge Transactions) and in the Administration Agreement, except to the extent such provisions are modified by the Administration Agreement. In the event of a conflict between the Administration Agreement and this Agreement, the terms of the Administration Agreement shall control. Notwithstanding that multiple Buyers may purchase individual Purchased Mortgage Loans subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets
shall be security for all of the Obligations hereunder, subject to the priority of payments provisions set forth in the Administration Agreement.
35.Periodic Due Diligence Review
Seller acknowledges that Administrative Agent and Buyers have the right to perform continuing due diligence reviews with respect to Seller, the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, for the purpose of performing quality control review of the Purchased Assets or otherwise, and Seller agrees that upon reasonable (but no less than [***]) prior notice unless an Event of Default shall have occurred and be continuing, in which case no notice is required, to Seller, Administrative Agent, Buyers or their authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Asset Files and any and all documents, data, records, agreements, instruments or information relating to such Purchased Assets (including, without limitation, quality control review) in the possession or under the control of Seller and/or the Custodian. Seller also shall make available to Administrative Agent and Buyers a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Administrative Agent and Buyers may purchase Purchased Assets from Seller based solely upon the information provided by Seller to Administrative Agent and Buyers in the Asset Schedule and the representations, warranties and covenants contained herein, and that Administrative Agent or Buyers, at their option, have the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets purchased in a Transaction, including, without limitation, ordering an Acceptable Valuation, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loans. Administrative Agent or Buyers may underwrite such Purchased Assets itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Administrative Agent, Buyers and any third party underwriter in connection with such underwriting, including, but not limited to, providing Administrative Agent, Buyers and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller. Seller further agrees that Seller shall pay all out-of-pocket costs and expenses incurred by Administrative Agent and Buyers in connection with Administrative Agent’s and Buyers’ activities pursuant to this Section 36.
36.Authorizations
Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller or Administrative Agent to the extent set forth therein, as the case may be, under this Agreement. The Seller may amend Schedule 2 from time to time by delivering a revised Schedule 2 to Administrative Agent and expressly stating that such revised Schedule 2 shall replace the existing Schedule 2.
37.Administration of Repurchase Agreement
To the extent that the Administrative Agent exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on
and/or purchase any of the Repurchase Assets pursuant to Section 16 (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in the Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer and/or the Repledgees. All provisions of the Agreement shall survive the transfers contemplated herein (including any Repledge Transactions) and in the Administration Agreement, except to the extent such provisions are modified by the Administration Agreement. In the event of a conflict between the Administration Agreement and this Agreement, the terms of the Administration Agreement shall control. Notwithstanding that multiple Buyers may purchase individual Mortgage Loans subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets shall be security for all of the Obligations hereunder, subject to the priority of payments provisions set forth in the Administration Agreement.
38.Acknowledgement of Anti-Predatory Lending Policies
Administrative Agent has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.
39.Documents Mutually Drafted
The Seller, Administrative Agent and the Buyers agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
40.General Interpretive Principles
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
a.the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
b.accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
c.references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
d.a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
e.the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
f.the term “include” or “including” shall mean without limitation by reason of enumeration;
g.all times specified herein or in any other Program Agreement (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated;
h.all references herein or in any Program Agreement to "good faith" means good faith as defined in Section 1-201 of the UCC as in effect in the State of New York; and an Event of Default that has been waived in writing shall be deemed not to be continuing.
41.Bankruptcy Non-Petition
The parties hereby agree that they shall not institute against, or join any other person in instituting against, any Buyer that is a CP Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one (1) year and one (1) day after the latest maturing commercial paper note issued by the applicable CP Conduit is paid in full. Nothing in this Section 42 shall preclude any party (i) from filing any claim prior to the expiration of the aforementioned one year and one day period in (A) any insolvency proceeding voluntarily filed or commenced by such CP Conduit or (B) any involuntary insolvency proceeding filed or commenced by a Person other than such party, or (ii) from commencing against such CP Conduit any legal action which is not an insolvency proceeding.
42.Limited Recourse
The obligations of each Buyer under this Agreement or any other Program Agreement are solely the corporate obligations of such Buyer. No recourse shall be had for the payment of any amount owing by any Buyer under this Agreement, or for the payment by any Buyer of any fee in respect hereof or any other obligation or claim of or against such Buyer arising out of or based on this Agreement, against any stockholder, partner, member, employee, officer, director or incorporator or other authorized person of such Buyer. In addition, notwithstanding any other provision of this Agreement, the parties agree that all payment obligations of any Buyer that is a CP Conduit under this Agreement shall be limited recourse obligations of such Buyer, payable solely from the funds of such Buyer available for such purpose in accordance with its commercial paper program documents. Each party waives payment of any amount which such Buyer does not pay pursuant to the operation of the preceding sentence until the day which is at least one (1) year and one (1) day after the payment in full of the latest maturing commercial paper note (and waives any “claim” against such Buyer within the meaning of Section 101(5) of the Bankruptcy Code or any other Debtor Relief Law for any such insufficiency until such date).
43.Pool Subdivisions
The Administrative Agent may from time to time deliver to Seller a Pool Subdivision Notice which notice shall identify a Pool of Purchased Mortgage Loans that shall be treated separately from the remaining Purchased Mortgage Loans (which remaining Purchased Mortgage Loans shall constitute another Pool). The Administrative Agent may modify any such Pool Subdivision Notice from time to time to readjust the composition of the Pools identified therein. Following delivery of a Pool Subdivision Notice, the calculations with respect to Price Differential (and all of the component calculations used in determining such calculation) shall be calculated separately on the basis of the Purchased Mortgage Loans comprising each Pool, which shall result in a separate Price Differential for each Pool. For the avoidance of doubt, a Pool Subdivision Notice shall not (a) modify or otherwise affect the rights and obligations of the parties under the Program Agreements except as expressly contemplated in this Section 44; and (b) shall not be construed as a Severance Notice as contemplated by Section 19 of this Agreement.
44.Nominee
a.Seller, Administrative Agent and the Buyers hereby acknowledge and agree, and Seller hereby appoints, the Nominee as (i) their nominee as mortgagee of record and payee on the FHA Connection System with respect to each Early Buyout Loan, and the Nominee hereby accepts such appointment, and (ii) as nominee and agent of Seller, Administrative Agent and the Buyers as set forth herein, to the extent applicable.
b.Following receipt by Nominee of written notice of the occurrence of an Event of Default, the Nominee agrees to take direction from the Administrative Agent with respect to the FHA Loans, Early Buyout Loans and any related Purchased Mortgage Loans.
c.It is the intent of the Seller, Servicer, Administrative Agent and the Buyers that the Nominee retains bare legal title to the Early Buyout Loans and the related Purchased Mortgage Loans for all purposes including, without limitation, for purposes of Section 541(d) of the Bankruptcy Code and accordingly, Nominee, in their capacity as a nominee, shall have no property right to such Purchased Mortgage Loans.
d.Administrative Agent may, upon notice to the Seller, terminate the Nominee and appoint itself or another person as the successor nominee following an Event of Default that is continuing.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner By:
Name:
Title:
ATLAS SECURITIZED PRODUCTS FUNDING 2, L.P., as a Buyer
By: AASP Management, LP, its investment manager
By: Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to the Master Repurchase Agreement (Atlas-Funding 2/LoanDepot)
LOANDEPOT.COM, LLC, as Seller
By:
Name: David Hayes
Title: Chief Financial Officer
Signature Page to the Master Repurchase Agreement (Atlas-Funding 2/LoanDepot)
SCHEDULE 1-A
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS
As to each Purchased Mortgage Loan subject to any Transaction outstanding on a Purchase Date, the Seller shall be deemed to make the following representations and warranties to the Administrative Agent as of such date and at all times a Purchased Mortgage Loan is subject to a Transaction. With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by such Seller or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty for purposes of determining Asset Value.
(a)Payments Current. Except with respect to a Mortgage Loan that is an Early Buyout Loan or a Non-Performing Mortgage Loan, all payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited -- it being understood that a payment is not required to be made until after the expiration of any applicable grace period. Except with respect to a Mortgage Loan that is an Early Buyout Loan or a Non-Performing Mortgage Loan, no payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent at any time since the origination of the Mortgage Loan (in each case it being understood that payment is delinquent after the expiration of any applicable grace period) and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code is, to the knowledge of Seller, being threatened or commenced with respect to the Co-op Loan. The first Monthly Payment shall be made, or shall have been made, with respect to the Mortgage Loan on its Due Date or within the grace period, all in accordance with the terms of the related Mortgage Note.
(b)No Outstanding Charges. All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither the Seller nor the Qualified Originator from which Seller acquired the Mortgage Loan has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest thereunder.
(c)Original Terms Unmodified. Except with respect to a Mortgage Loan that is an Early Buyout Loan, the terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyers, and which has been delivered to the Custodian and the terms of which are reflected in the Custodial Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected on the Custodial Mortgage Loan Schedule. No Mortgagor in respect of the Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Asset File delivered to the Custodian and the terms of which are reflected in the Custodial Mortgage Loan Schedule.
(d)No Defenses. The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set off, counterclaim or defense has been asserted with respect thereto, and, with respect to a Mortgage Loan other than an Early Buyout Loan and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated. Except with respect to a Mortgage Loan that is an Early Buyout Loan, the Seller has no knowledge nor has it received any notice that any Mortgagor in respect of the Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.
(e)Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming the Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by the Seller. All premiums on such
insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. The Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(f)Environmental Compliance. There does not exist on the Mortgaged Property any hazardous substances, hazardous materials, hazardous wastes, solid wastes or other pollutants, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or other applicable federal, state or local environmental laws including, without limitation, asbestos, in each case in excess of the permitted limits and allowances set forth in such environmental laws to the extent such laws are applicable to the Mortgaged Property. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any applicable environmental law (including, without limitation, asbestos), rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.
(g)Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and the Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Administrative Agent, and shall deliver to Administrative Agent, upon demand, evidence of compliance with all such requirements.
(h)No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Except with respect to a Mortgage Loan that is an Early Buyout Loan,
Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(i)Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State as identified in the Custodial Mortgage Loan Schedule and, other than with respect to a BPL – Long, consists of a single parcel of real property with a detached single family residence erected thereon, or a two to four family dwelling, or an individual condominium unit in a low rise Co-op Project, or an individual unit in a planned unit development or a de minimis planned unit development; provided, however, that any condominium unit, Co-op Unit or planned unit development shall conform with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings or shall conform to underwriting guidelines acceptable to Administrative Agent in its sole discretion and that no residence or dwelling is a mobile home. No portion of the Mortgaged Property is used for commercial purposes; provided, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to underwriting guidelines acceptable to Administrative Agent in its sole discretion.
(j)Validity of Lien. The Mortgage is a valid, subsisting, enforceable and perfected, with respect to each Mortgage Loan other than a Second Lien Mortgage Loan or HELOC, first priority lien and first priority security interest or, with respect to a Second Lien Mortgage Loan or HELOC, a second lien or a second priority security interest, in each case, on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations of mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:
a.the lien of current real property taxes and assessments not yet due
and payable;
b.covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal;
c.other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property;
d.in the case of a Second Lien Mortgage Loan or HELOC, the first lien on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable (a) with respect to Mortgage Loans other than Second Lien Mortgage Loans and HELOCs, first lien and first priority security interest and (b) with respect to Second Lien Mortgage Loans and HELOCs, second lien and second priority interest, in each case, on the property described therein and Seller has full right to pledge and assign the same to Administrative Agent. Except with respect to a Second Lien Mortgage Loan or HELOC, the Mortgaged Property was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.
(k)Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. The Seller has reviewed all of the documents constituting the Asset File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of the Seller’s knowledge, except as disclosed to Administrative Agent in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.
(l)Full Disbursement of Proceeds. Other than with respect to Holdback Amounts in the related Holdback Account and HELOCs, there is no further requirement for future advances under the Mortgage Loan, and, other than with respect to Business Purpose Mortgage Loans, any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with (except with regard to any FHA 203(k) loan, as applicable). All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All broker fees have been properly assessed to the Mortgagor and no claims will arise as to broker fees that are double charged and for which the Mortgagor would be entitled to reimbursement.
(m)Ownership. Seller has full right to sell the Mortgage Loan to Buyers free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyers will own such
Mortgage Loan (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease) free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.
(n)Doing Business. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.
(o)Title Insurance. Unless such Mortgage Loan is a Co-op Loan, a HELOC or, a Second Lien Mortgage Loan or an Agency Title Alternative Mortgage Loan, the Mortgage Loan is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to Fannie Mae, Freddie Mac or GNMA, as applicable, and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae, Freddie Mac or GNMA, as applicable, and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (a), (b), (c) and (d) of paragraph (j) of this Schedule 1-A, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. The Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(p)No Defaults. Other than (i) Mortgage Loans that are Early Buyout Loans or Non-Performing Mortgage Loans, or (ii) Mortgage Loans which have defects that are otherwise disclosed to Administrative Agent in writing, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration; and with respect to each Co-op Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.
(q)No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(r)Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(s)Origination; Payment Terms. The Mortgage Loan was originated by or in conjunction with a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state authority. Other than with respect to HELOCs, principal and interest payments on the Mortgage Loan commenced no more than sixty (60) days after funds were disbursed (or after the interest only period expired, as applicable) in connection with the Mortgage Loan other than a Non-Agency Non-QM Mortgage Loan identified on the Asset Schedule. The Mortgagor contributed from their own funds to the purchase price for the Mortgaged Property, as required by the applicable Agency. Interest on the Mortgage Loan (other than a HELOC) is calculated on the basis of a 360 day year consisting of twelve 30 day months and interest on a HELOC is calculated on the basis of a 365 day (or 366 day year in the case of a leap year) and consisting of the actual number of days in each month. With respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest .125%), subject to the Mortgage Interest Rate Cap. Other than with respect to HELOCs and Business Purpose Mortgage Loans, the
Mortgage Note is payable on the first day of each month in either (x) equal monthly installments of principal and interest or (y) interest only with regard to those Mortgage Loans which have an interest only period, which installments of interest with respect to adjustable rate Mortgage Loans, are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than forty (40) years from commencement of amortization (other than with respect to a Second Lien Mortgage Loan that is originated as a home equity revolving line of credit).
(t)Customary Provisions. The Mortgage Note has a stated maturity. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor or restriction on the Seller which would interfere with the right to sell the Mortgaged Property at a trustee's sale or otherwise or the right to foreclose on the related Mortgage. Except with respect to Business Purpose Mortgage Loans, the Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or GNMA, as applicable.
(u)Occupancy of the Mortgaged Property. Other than with respect to Business Purpose Mortgage Loans, as of the Purchase Date the Mortgaged Property is lawfully occupied under applicable law. Other than with respect to Business Purpose Mortgage Loans, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. The Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material noncompliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. The Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. Other than with respect to Business Purpose Mortgage Loans, with respect to any Mortgage Loan originated with an “owner occupied” Mortgaged Property, the Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.
(v)No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.
(w)Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Administrative Agent to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(x)Transfer of Mortgage Loans. Except with respect to Mortgage Loans intended for purchase by GNMA and for Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.
(y)Due On Sale. Except with respect to Mortgage Loans intended for purchase by GNMA, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.
(z)No Buydown Provisions; No Graduated Payments or Contingent Interests. Except with respect to Agency Mortgage Loans, the Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(aa) Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. With respect to each Mortgage Loan other than a Co-op Loan, a Second Lien Mortgage Loan or, a HELOC or an Agency Title Alternative Mortgage Loan, the lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority with respect to Mortgage Loans, by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae, Freddie Mac or GNMA. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
(bb) No Condemnation Proceeding. There are no current condemnation proceedings with respect to the Mortgaged Property and the Seller has no knowledge of any such proceedings.
(cc) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination and collection practices used by the originator, each servicer of the Mortgage Loan and the Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, the Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and, where required under the applicable Underwriting Guidelines, has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due the Seller have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
(dd) Conversion to Fixed Interest Rate. Except as allowed by Fannie Mae, Freddie Mac or GNMA or otherwise as expressly approved in writing by Administrative Agent, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(ee) Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, private mortgage insurance policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by the Seller or by any officer, director, or employee of the Seller or any designee of the Seller or any corporation in which the Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.
(ff) Servicemembers Civil Relief Act. The Mortgagor has not notified the Seller, and the Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
(gg) Appraisal. The Asset File contains either (i) to the extent permitted by the applicable Agency, a Property Inspection Waiver (as defined in the applicable Agency guidelines), (ii) as required by the applicable Underwriting Guidelines, the valuation waterfall product value for HELOCs and CES or (ii) an appraisal of the related Mortgaged Property signed prior to the funding of the Mortgage Loan by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated; provided that the foregoing requirement shall not apply to Agency Mortgage Loans where the applicable Agency does not so require it. As of the origination date, no appraisal is more than one hundred and twenty (120) days old.
(hh) Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and the Seller maintains such statement in the Asset File.
(ii)Construction or Rehabilitation of Mortgaged Property. Other than with respect to a Business Purpose Mortgage Loan, no Mortgage Loan (other than an FHA 203(k) loan) was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade in or exchange of a Mortgaged Property.
(jj) No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of the Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(kk) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(ll) No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and the Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(mm) Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to the Seller or any Affiliate or correspondent of the Seller, except in connection with a refinanced Mortgage Loan; provided, however, no such refinanced Mortgage Loan shall have been originated pursuant to a streamlined mortgage loan refinancing program.
(nn) Origination Date. (i) With respect to Mortgage Loans other than correspondent loans, Scratch and Dent Mortgage Loans and Early Buyout Loans, the Purchase Date is no more than thirty (30) days following the origination date and (ii) with respect to correspondent loans (other than Early Buyout Loans and Scratch and
Dent Mortgage Loans), the Purchase Date is no more than one-hundred and eighty (180) days following the origination date.
(oo) No Exception. The Custodian has not noted any material exceptions on a Custodial Mortgage Loan Schedule with respect to the Mortgage Loan which would materially adversely affect the Mortgage Loan or Administrative Agent’s or Buyers’ interest in the Mortgage Loan.
(pp) Mortgage Submitted for Recordation. The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.
(qq) Documents Genuine. Such Purchased Mortgage Loan and all accompanying collateral documents are complete and authentic and all signatures thereon are genuine. Except for FHA 203(k) loans or HELOCs, such Purchased Mortgage Loan is a “closed” loan fully funded by Seller and held in Seller’s name.
(rr) Bona Fide Loan. Such Purchased Mortgage Loan arose from a bona fide loan, complying with all applicable State and Federal laws and regulations, to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim.
(ss) Reserved,
(tt) Description. Each Purchased Mortgage Loan conforms to the description thereof as set forth on the related Custodial Mortgage Loan Schedule delivered to the Custodian and Administrative Agent.
(uu) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to a Purchased Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America or the District of Columbia.
(vv) Underwriting Guidelines. Except with respect to Mortgage Loans that are Early Buyout Loans or Scratch and Dent Mortgage Loans, each Purchased Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) previously provided to Administrative Agent.
(ww) Aging. Such Purchased Mortgage Loan has not been subject to a Transaction hereunder for more than the applicable Aging Limit (to the extent there is an applicable Aging Limit for such Mortgage Loan).
(xx) Committed Mortgage Loans. Each Committed Mortgage Loan is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Administrative Agent as covered by such Take-out Commitment) and conforms to the requirements and the specifications set forth in such
Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. Each Take-out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(yy) Reserved.
(zz) Reserved.
(aaa) Predatory Lending Regulations; High Cost Mortgage Loans. No Mortgage Loan is classified as High Cost Mortgage Loans.
(bbb) Credit Score and Reporting. As of the Purchase Date, the Mortgagor’s credit score as listed on the Asset Schedule is no more than one hundred twenty (120) days old. Full, complete and accurate information with respect to the Mortgagor’s credit file was furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
(ccc) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Asset Documents as agent and bailee for Administrative Agent or Administrative Agent’s agent and to promptly forward such Asset Documents in accordance with the provisions of the Custodial Agreement and the Escrow Instruction Letter.
(ddd) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the FHA Loans, the FHA Mortgage Insurance Contract is or eligible to be in full force and effect and there exists no impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With respect to the VA Loans, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein. All necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the FHA and the VA, respectively, to the full extent thereof, without surcharge, set off or defense. Except with respect to a Mortgage Loan that is an Early Buyout Loan, each FHA Loan and VA Loan was originated in accordance with the criteria of an Agency for purchase of such Mortgage Loans.
(eee) Asset Schedule. The information set forth in the related Asset Schedule and all other information or data furnished by, or on behalf of, Seller to Administrative Agent is complete, true and correct in all material respects.
(fff) Qualified Mortgage. Other than with respect to Business Purpose Mortgage Loans or a HELOC, notwithstanding anything to the contrary set forth in this Agreement, on and after January 10, 2014 (or such later date as set forth in the relevant regulations), (i) prior to the origination of each Mortgage Loan, the originator made a reasonable and good faith determination that the Mortgagor had a reasonable ability to repay the loan according to its terms, in accordance with, at a minimum, the eight underwriting factors set forth in 12 CFR 1026.43(c) and (ii) other than Non-Agency Non-QM Mortgage Loans, unless otherwise approved in writing by Administrative Agent or a Buyer, each Mortgage Loan is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e).
(ggg) Co-op Loan: Valid First Lien. With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first priority security interest on the related Co-op Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest. There are no liens against or security interests in the Co-op Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over Seller’s security interest in such Co-op Shares.
(hhh) Co-op Loan: Compliance with Law. With respect to each Co-op Loan, the related Co-op Corporation that owns title to the related Co-op Project is a “cooperative housing corporation” within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property.
(iii)Co-op Loan: No Pledge. With respect to each Co-op Loan, there is no prohibition against pledging the Co-op Shares or assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement. To the extent required by the Take-out Investor with respect to such Co-op Loan, Seller shall also deliver to the Custodian an executed Assignment of Recognition Agreement (as such term is defined in the Custodial Agreement) with respect to such Co-op Loan.
(jjj) Co-op Loan: Acceleration of Payment. With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby. The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.
(kkk) TRID Compliance. Other than with respect to a Business Purpose Mortgage Loan, a HELOC or Second Lien Mortgage Loan, with respect to each Mortgage Loan where the Mortgagor’s loan application for the Mortgage Loan was taken on or after October 3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.
(lll) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Asset Documents as agent and bailee for Administrative Agent or Administrative Agent’s agent and to promptly forward such Asset Documents in accordance with the provisions of the related Custodial Agreement and the Escrow Instruction Letter.
(mmm) eNote Legend. If the Mortgage Loan is an eMortgage Loan, the related eNote contains the Agency-Required eNote Legend.
(nnn) Payment Terms. Each HELOC provides for the initial draw period specified in the Underwriting Guidelines and an initial payment period (the “Revolving HELOC Period”) during which the Mortgagor is required to make monthly payments of interest payable in arrears for a 120-month period and requires repayment of the unpaid principal balance thereof over a period following the Revolving HELOC Period which is not in excess of 240 months.
(ooo) eNotes. With respect to each eMortgage Loan, the related eNote satisfies all of the following criteria:
(i)the eNote bears a digital or electronic signature;
(ii)the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash Value of the eNote as reflected in the eVault;
(iii)there is a single Authoritative Copy of the eNote, as applicable and within the meaning of Section 9-105 of the UCC or Section 16 of the UETA, as applicable, that is held in the eVault;
(iv)the Location status of the eNote on the MERS eRegistry reflects the MERS Org ID of the Custodian;
(v)the Controller status of the eNote on the MERS eRegistry reflects the MERS Org ID of Administrative Agent;
(vi)the Delegatee status of the eNote on the MERS eRegistry reflects the MERS Org ID of Custodian;
(vii)the Master Servicer Field status of the eNote on the MERS eRegistry reflects the MERS Org ID of Servicer or Seller;
(viii)the Subservicer Field status of the eNote on the MERS eRegistry (i) reflects, if there is a third-party subservicer, such subservicer’s MERS Org ID or (ii) if there is not a subservicer, is blank;
(ix)There is no Control Failure, eNote Replacement Failure or Unauthorized Master Servicer or Subservicer Modification with respect to such eNote;
(x)the eNote is a valid and enforceable Transferable Record or comprises “electronic chattel paper” within the meaning of the UCC;
(xi)there is no defect with respect to the eNote that would result in Administrative Agent having less than full rights, benefits and defenses of “Control” (within the meaning of the UETA or the UCC, as applicable) of the Transferable Record; and
(xii)there is no paper copy of the eNote in existence nor has the eNote been papered-out.
(ppp) Type of Loan. With respect to each Business Purpose Mortgage Loan, (i) the Mortgage Loan is primarily for business or commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z) and not primarily for personal, family or household purposes and (ii) the Mortgaged Property securing the related Mortgage is non-owner occupied. Such Business Purpose Mortgage Loan is not subject to the Truth in Lending Act and its implementing regulation, Regulation Z, and the Real Estate Settlement Procedures Act and its implementing regulation, Regulation X. The Mortgagor has executed a business purpose affidavit stating that the Business Purpose Mortgage Loan is for commercial, business or investment purposes only and that the Mortgagor is not and will not occupy or claim the property as a primary or secondary residence.
(qqq) Income/Employment/Assets. With respect to each Business Purpose Mortgage Loan, the originator verified the Mortgagor’s income, employment, and assets in accordance with the Underwriting Guidelines.
(rrr) Source of Loan Payments. With respect to Business Purpose Mortgage Loans, no payments due and payable under the terms of the Mortgage Note and Mortgage, have been paid by any person (other than the Mortgagor and any guarantor) who was involved in, or benefited from, the sale or purchase of the Mortgaged Property or the origination, refinancing, sale, purchase or servicing of the Mortgage Loan.
(sss) Local Law Compliance. With respect to each Business Purpose Mortgage Loan, the terms of the related loan documents require the related Mortgagor to cause the Mortgaged Property to comply in all material respects with all applicable governmental regulations, zoning and building laws.
(ttt) Licenses and Permits. With respect to each Business Purpose Mortgage Loan, each Mortgagor covenants in the loan documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of each related Mortgaged Property in full force and effect, and all such licenses, permits and applicable governmental authorizations are in effect. Seller is not aware of any Mortgagor, guarantor or other obligor on any Mortgage Loan having received notice of any noncompliance with any use or occupancy law, ordinance, regulation, standard, license or certificate with respect to any Mortgaged Property.
(uuu) Mortgage Provisions. With respect to each Business Purpose Mortgage Loan, the Mortgage Note or the Mortgage contain provisions regarding the rights and remedies of the holder thereof for the realization against the related Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure, subject to receivership, bankruptcy, insolvency, moratorium and other laws and principles of equity affecting the rights of creditors, whether considered in a proceeding at law or in equity.
(vvv) General Liability Insurance. With respect to each Business Purpose Mortgage Loans, the related Mortgaged Property is required pursuant to the related Mortgage to be (or the holder of the Mortgage can require that the Mortgaged Property be), and at origination the Seller received evidence that such Mortgaged Property was, insured by a hazard and rental loss insurance policy (as applicable) in amounts as required for similar properties in accordance with the Underwriting Guidelines.
(www) Assignment of Leases and Rents. With respect to each Business Purpose Mortgage Loan, any assignment of leases, rents and profits or similar document or instrument executed by the related Mortgagor in connection with the origination of the related Mortgage Loan, as such document may be amended, modified, renewed or extended from time to time (the “Assignment of Leases and Rents”) was duly executed, acknowledged and delivered and establishes and creates a valid and enforceable first priority collateral assignment of, or lien on, the related Mortgagor’s interest in all leases, sub-leases, licenses or other agreements pursuant to which any person is entitled to occupy, use or possess all or any portion of the real property subject to the related Mortgage, subject to legal limitations of general applicability to mortgage loans similar to
the Mortgage Loan, and the Mortgagor and each assignor of such Assignment of Leases and Rents to the Seller have the full right to assign the same. Each Business Purpose Mortgage Loan contains an Assignment of Leases and Rents, and such Assignment of Leases and Rents is included either in the related Mortgage or in a related separate assignment document. The related assignment of any Assignment of Leases and Rents not included in the related Mortgage has been executed and delivered to the Administrative Agent in blank, is otherwise in recordable form and constitutes a legal, valid and binding assignment, sufficient to convey to the assignee named therein (assuming that the assignee has the capacity to acquire such Assignment of Leases and Rents) all of the assignor’s right, title and interest in, to and under such Assignment of Leases and Rents.
(xxx) Non-conforming Uses. With respect to each Business Purpose Mortgage Loan, if the Mortgaged Property constitutes a legal nonconforming use, the nonconforming improvements may be rebuilt to current density and used and occupied for such nonconforming purposes if damaged or destroyed or ordinance and law endorsement to hazard policy unless otherwise disclosed to Administrative Agent in writing.
(yyy) No Releases. With respect to each Business Purpose Mortgage Loan, no Mortgage Note or Mortgage requires the mortgagee to release all or any material portion of the related Mortgaged Property that was included in the valuation for such Mortgaged Property, and/or generates income, from the lien of the related Mortgage except upon payment in full of all amounts due under the related Business Purpose Mortgage Loan.
(zzz) Credit Limits. With respect to each HELOC, if the Seller has increased a Mortgagor’s Credit Limit, (i) Seller has notified the Administrative Agent in writing of Seller’s decision to increase a Mortgagor’s Credit Limit in accordance with Asset Documents, (ii) such increase has been effected by Seller through modification of the Mortgage Loan with the Mortgagor; (iii) the Seller has delivered to the Administrative Agent an updated Asset Schedule reflecting the modification to the Mortgage Loan and
(iv)the Seller has delivered to the Custodian any modified Asset Documents. Notwithstanding anything to the contrary herein, in no event shall Administrative Agent or Buyers have any obligation to fund any Draws with respect to any HELOC, which obligations shall be retained by the Seller.
(aaaa) Draws In Compliance With Laws. Each Draw under the HELOC has been disbursed in accordance with all applicable laws, rules and regulations, including, without limitation, all state and local licensing requirements.
(bbbb) HELOC Terms. With respect to HELOCs, the related Mortgagor may request advances up to the Credit Limit within the first (1st) ten (10) years following the date of origination.
(cccc) Revolving Term. Each HELOC provides for an initial period (the “Revolving Period”) during which the Mortgagor is required to make monthly payments
of interest payable in arrears and requires repayment of the unpaid principal balance thereof over a period following the Revolving Period (the “Repayment Period”) which is it in excess of one hundred twenty (120) months. As of the Purchase Date no HELOC was in its Repayment Period. The Mortgage Interest Rate on each Mortgage Loan adjusts periodically in accordance with the Credit Line Agreement. On each Interest Rate Adjustment Date the Seller has made interest rate adjustments on the Mortgage Loan which are in compliance with the related Mortgage, Mortgage Note and Credit Line Agreement and applicable law.
(dddd) Access; Utilities; Separate Tax Lots. With respect to each Business Purpose Mortgage Loan, each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road,
(b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and electricity all of which are appropriate for the current use of such Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of such Mortgaged Property or is subject to an endorsement under the related title policy insuring such Mortgaged Property.
SCHEDULE 2 AUTHORIZED REPRESENTATIVES
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Name Title Authorized Signature
[***]
ADMINISTRATIVE AGENT AND BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Administrative Agent and/or Buyers under this Agreement:
Name Title Authorized Signature
[***]
SCHEDULE 3
NON-AFFILIATE JOINT VENTURE COMPANIES
[***]
EXHIBIT A
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that loanDepot.com, LLC (“Seller”) hereby irrevocably constitutes and appoints Atlas Securitized Products, L.P. (“Administrative Agent”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Administrative Agent’s discretion:
(a)in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Administrative Agent on behalf of certain Buyers and/or Repledgees under the Master Repurchase Agreement, dated November 14, 2024 (as the same may be amended, restated, supplemented or otherwise modified from time to time) (the “Assets”), and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;
(b)to pay or discharge taxes and liens levied or placed on or threatened against the Assets;
(c)(i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets;
(vi) to settle, compromise or adjust any suit, action or proceeding described in clause (vii) above and, in connection therewith, to give such discharges or releases as Administrative Agent may deem appropriate; (viii) to cause the mortgagee of record to be changed to Administrative Agent on the FHA or VA system, as applicable; and (ix) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent’s option and Seller’s expense, at any time, and from time to time, all acts and things which Administrative Agent deems necessary to protect, preserve or realize upon the Assets and Administrative Agent’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;
(d)for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Administrative Agent the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Administrative Agent in its sole discretion; and
(e)for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
Seller also authorizes Administrative Agent, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.
The powers conferred on Administrative Agent hereunder are solely to protect Administrative Agent’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Administrative Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND ADMINISTRATIVE AGENT ON ITS OWN BEHALF AND ON BEHALF OF ADMINISTRATIVE AGENT’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES
FOLLOW.]
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and Seller’s seal to be affixed this day of , 20[_].
loanDepot.com, LLC
By:
Name: Title:
STATE OF )
COUNTY OF )
| | | | | | | | | | | | | | |
On | | | before | me, |
| | Notary | Public, | personally |
Appeared , who proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
EXHIBIT B
FORM OF ESCROW INSTRUCTION LETTER
The escrow instruction letter (the “Escrow Instruction Letter”) shall also include the following instruction to the Settlement Agent (the “Escrow Agent”):
Atlas Securitized Products, L.P. (the “Administrative Agent”), has agreed to provide funds (“Escrow Funds”) to loanDepot.com, LLC to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent.
You hereby agree that (a) you shall receive such Escrow Funds from Administrative Agent to be disbursed in connection with this Escrow Instruction Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Administrative Agent until such Escrow Funds are fully disbursed on behalf of Administrative Agent in accordance with the instructions set forth herein, and (c) you will disburse such Escrow Funds on the date specified for closing (the “Closing Date”) only after you have followed the Escrow Instruction Letter’s requirements with respect to the Mortgage Loans. In the event that the Escrow Funds cannot be disbursed on the Closing Date in accordance with the Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the Administrative Agent by re-routing via wire transfer the Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, back to the account specified in Administrative Agent’s incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you will hold all Asset Documents specified in the Escrow Instruction Letter in escrow as agent and bailee for Administrative Agent, and will forward the Asset Documents and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier to the Custodian within five
(5) Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services to be performed pursuant to the Escrow Instruction Letter are to be paid by Seller or its borrowers, and Administrative Agent shall have no liability with respect thereto.
You represent, warrant and covenant that you are not an affiliate of or otherwise controlled by Seller, and that you are acting as an independent contractor and not as an agent of Seller.
The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Administrative Agent. You understand that Administrative Agent shall act in reliance upon the provisions set forth in this Escrow Instruction Letter, and that Administrative Agent on behalf of Buyers and certain Repledgees is an intended third party beneficiary hereof.
Whether or not an Escrow Instruction Letter executed by you is received by the Custodian, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of the Escrow Instruction Letter.
Certain confidential information contained in this document, marked by “[***]”, has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential. Certain schedules (or similar attachments) also marked by “[***]” have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
WHCO FACILITY EXECUTION
Exhibit 10.3
AMENDMENT NO. 3
TO MASTER REPURCHASE AGREEMENT
Amendment No. 3 to Master Repurchase Agreement, dated as of March 25, 2026 (this “Amendment”), among ATLAS SECURITIZED PRODUCTS, L.P. (“Atlas”, the “Administrative Agent” and a “Buyer”), AGF WHCO 1-A3 LP (a “Buyer” and together with Atlas, “Buyers”), and LOANDEPOT.COM, LLC (the “Seller”).
RECITALS
The Administrative Agent, Buyers and the Seller are parties to that certain (a) Master Repurchase Agreement, dated as of November 14, 2024 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Repurchase Agreement”; and as further amended by this Amendment, the “Repurchase Agreement”) and (b) Pricing Side Letter, dated as of November 14, 2024 (as amended, restated, supplemented or otherwise modified from time to time, the “Pricing Side Letter”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement.
The Administrative Agent, Buyers and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement.
Accordingly, the Administrative Agent, Buyers and the Seller hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:
SECTION 1. Amendment to the Existing Repurchase Agreement. Effective as of the Amendment Effective Date, the Existing Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto. The parties hereto further acknowledge and agree that Exhibit A constitutes the Repurchase Agreement as amended and modified by the terms set forth herein.
SECTION 2. Conditions Precedent to Amendment. This Amendment shall become effective as of the date hereof (the “Amendment Effective Date”), subject to the execution and delivery of this Amendment, by all parties hereto.
SECTION 3. Representations and Warranties. Seller hereby represents and warrants to the Administrative Agent and the Buyers that it is in compliance with all the terms
and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Default or Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 13 of the Repurchase Agreement.
SECTION 4. Limited Effect. Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.
SECTION 5. Severability. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
SECTION 6. Counterparts. This Amendment may be executed in one or more counterparts and by different parties hereto on separate counterparts, each of which, when so executed, shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment in a Portable Document Format (PDF) shall be effective as delivery of a manually executed original counterpart of this Amendment. The parties agree that this Amendment, any addendum or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as
Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner
By: /S/ Dominic Obaditch
Name: Dominic Obaditch
Title: Managing Director
Signature Page to Amendment No. 3 to MRA (Atlas-LD/WHCO)
AGF WHCO 1-A3 LP, as a Buyer
By: AASP Management, LP, its investment manager
By: /s/ William B. Kuesel
Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to Amendment No. 3 to MRA (Atlas-LD/WHCO)
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as
Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner
By: Name:
Title:
AGF WHCO 1-A3 LP, as a Buyer
By: AASP Management, LP, its investment manager
By: /s/ William B. Kuesel
Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to Amendment No. 3 to MRA (Atlas-LD/WHCO)
LOANDEPOT.COM, LLC, as Seller
LOANDEPOT.COM, LLC, as Seller
By: /s/ David Hayes
Name: David Hayes
Title: CFO
Signature Page to Amendment No. 3 to MRA (Atlas-LD/WHCO)
Exhibit A REPURCHASE AGREEMENT
(See attached)
Exhibit A
WHCO FACILITY CONFORMED THROUGH AMENDMENT NO. 23
MASTER REPURCHASE AGREEMENT
ATLAS SECURITIZED PRODUCTS, L.P., as administrative agent (“Administrative Agent”) and as a buyer (a “Buyer”),
AGF WHCO 1-A3 LP, as a buyer (a “Buyer”), and other Buyers from time to time (“Buyers”), and
LOANDEPOT.COM, LLC, as seller (“Seller”) Dated November 14, 2024
TABLE OF CONTENTS
Page
1.Applicability 1
2.Definitions 1
3.Program; Initiation of Transactions 31
4.Repurchase 33
5.Price Differential. 34
6.Margin Maintenance; Reallocation of Purchase Price 35
7.Income Payments 36
8.Security Interest 39
9.Payment and Transfer 42
10.Conditions Precedent 42
11.Program; Costs 46
12.Servicing 4950
13.Representations and Warranties 51
14.Covenants 5657
15.Events of Default 6364
16.Remedies Upon Default 66
17.Reports 69
18.Repurchase Transactions 73
19.Single Agreement 7374
20.Notices and Other Communications 74
21.Entire Agreement; Severability 75
22.Non assignability 75
23.Set-off 7677
24.Binding Effect; Governing Law; Jurisdiction 77
25.No Waivers, Etc 77
26.Intent 7778
27.Disclosure Relating to Certain Federal Protections 7879
28.Power of Attorney 79
29.Buyers May Act Through Administrative Agent 79
30.Indemnification; Obligations 7980
31.Counterparts 8081
32.Confidentiality 81
33.Recording of Communications 82
34.Conflicts 82
35.Acknowledgment of Assignment and Administration of Repurchase Agreement 83
36.Periodic Due Diligence Review 83
37.Authorizations 84
38.Administration of Repurchase Agreement 84
39.Acknowledgement of Anti-Predatory Lending Policies 85
40.Documents Mutually Drafted 85
41.General Interpretive Principles 85
42.Bankruptcy Non-Petition 86
43.Limited Recourse 86
44.Pool Subdivisions 87
SCHEDULES
Schedule 1 – Representations and Warranties with Respect to Purchased Mortgage Loans Schedule 2 – Authorized Representatives
Schedule 3 – Non-Affiliate Joint Venture Companies EXHIBITS
Exhibit A Form of Power of Attorney (Seller) Exhibit B Escrow Instruction Letter
This is a MASTER REPURCHASE AGREEMENT, dated as of November 14, 2024, by and between ATLAS SECURITIZED PRODUCTS, L.P. (“Atlas”, the “Administrative Agent” and a “Buyer”) on behalf of Buyers, including but not limited to AGF WHCO 1-A3 LP (“WHCO” and a “Buyer” and together with Atlas, the “Buyers”) and LOANDEPOT.COM, LLC (“Seller”).
1.Applicability
From time to time the parties hereto may enter into transactions in which Seller agrees to transfer to Administrative Agent on behalf of Buyers certain Purchased Assets (as hereinafter defined) on a servicing released basis against the transfer of funds by Administrative Agent, with a simultaneous agreement by Administrative Agent on behalf of Buyers to transfer to Seller such Purchased Assets on a servicing released basis at a date certain or on demand, against the transfer of funds by Seller. Each such transaction shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. For the avoidance of doubt, and for administrative and tracking purposes,
(a) the purchase and sale of each Purchased Mortgage Loan shall be deemed a separate Transaction and (b) with respect to each Designated Mortgage Loan, such Designated Mortgage Loan may, at Buyers’ option, be sold to different Buyers on a pro rata basis, such that one Buyer pays the Purchase Price-Base and other Buyers pay the Purchase Price-Incremental 1 and Purchase Price-Incremental 2, as applicable, and, in which case, the Administrative Agent shall own the Designated Mortgage Loan, for the benefit of the purchasing Buyers, on a pro rata, pari passu basis.
This Agreement is a commitment by Committed Buyer and/or Administrative Agent on behalf of Committed Buyer to engage in the Transactions the subject of which are Purchased Mortgage Loans up to the Maximum Committed Purchase Price. In no event shall the Committed Buyer and/or Administrative Agent on behalf of Committed Buyer have any commitment to enter into any Transaction requested that would result in the aggregate Purchase Price of then-outstanding Transactions to exceed the Maximum Committed Purchase Price. For the avoidance of doubt, Transactions attributed to the Maximum Committed Purchase Price shall solely be attributed to the Committed Buyer and Atlas, in its capacity as a buyer, shall have no commitment hereunder to enter into Transactions.
2.Definitions
Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings; provided that any terms used but not otherwise defined herein shall have the meanings given to them in the Pricing Side Letter:
“1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.
“Acceptable State” means any state acceptable pursuant to Seller’s Underwriting
Guidelines.
“Acceptable Valuation” means, with respect to a Mortgaged Property or an REO Property, (a) on the Purchase Date, a FIRREA Appraisal (including, without limitation, property inspection waivers permitted pursuant to the Fannie Mae Guides and Freddie Mac Guides); (b) on any date after the initial Purchase Date, any other written valuation approved by the Administrative Agent in its sole discretion; and (c) solely with respect to HELOCs and Second Lien Mortgage Loans, an AVM that is FIRREA compliant.
“Accepted Servicing Practices” means, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions (including as set forth in the Fannie Mae Guides, the Freddie Mac Guides, the GNMA Guide, the FHA Regulations and the VA Regulations, if applicable) which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with any applicable Agency servicing practices and procedures for mortgage-backed security pool mortgages as set forth in the applicable Agency guides, including future updates.
“Act of Insolvency” means, with respect to any Person, (a) (i) the filing of a petition by such Person commencing, or authorizing the commencement of any case or proceeding, or the voluntary joining by such Person of any case or proceeding under any bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law relating to the protection of creditors, or
(ii) suffering by such Person of any such petition or proceeding to be commenced by another which is consented to, not timely contested or results in entry of an order for relief, which, in the case of clause (ii) (and solely to the extent not consented to), remains undismissed, unstayed or in effect for a period of [***] days or more; (b) the seeking of the appointment of a receiver, trustee, custodian or similar official for such Person or any substantial part of the property of such Person; (c) the appointment of a receiver, conservator, or manager for such Person by any governmental agency or authority having the jurisdiction to do so; (d) the making or offering by such Person of a composition with its creditors or a general assignment for the benefit of creditors; (e) the admission by a Responsible Officer of such Person of its inability to pay its debts or discharge its obligations as they become due or mature; or (f) that any governmental authority or agency or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the property of such Person, or shall have taken any action to displace the management of such Person or to curtail its authority in the conduct of the business of such Person.
“Additional Buyers” shall have the meaning set forth in Section 35 hereof.
“Additional Collateral” has the meaning set forth in Section 8.a(2) hereof.
“Administration Agreement” means that certain Repo Administration and Allocation Agreement, dated as of the date hereof, by and among Seller, Atlas Securitized Products, L.P. as administrative agent and certain Buyers identified therein, as amended, restated, supplemented or otherwise modified from time to time.
"Administrative Agent” means Atlas Securitized Products, L.P. or any successor thereto under the Administration Agreement.
“Affiliate” means, with respect to any specified entity, any other entity directly or indirectly controlling, or controlled by, or under common control with such entity, provided that no securitization trust or special purpose vehicle that issues non-recourse debt shall be considered an Affiliate; provided that, for the avoidance of doubt, with respect to Administrative Agent and Buyers, “Affiliate” means Atlas Securitized Products, L.P., WHCO Intermediate Holdings L.P., their respective Subsidiaries and any CP Conduit. For the purposes of this definition, “control” means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting equity, by contract or otherwise. For the avoidance of doubt, none of the Permitted Holders, nor any joint venture of which Seller or LD Holdings Group LLC owns less than fifty percent (50%) of the equity interests therein nor any of the joint venture companies listed on Schedule 3 hereto, shall be considered an Affiliate for purposes of this Agreement.
“Agency” means Freddie Mac, Fannie Mae or GNMA, as applicable.
“Agency Approvals” means approval by GNMA as an approved issuer, by FHA as an approved mortgagee, by VA as an approved VA lender, in each case in good standing, by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act.
“Agency Mortgage Loan” means, collectively, Conforming Mortgage Loans, State Agency Program Loans, USDA Loans, FHA Loans and VA Loans (but not Early Buyout Loans).
“Agency Security” means a mortgage-backed security issued by an Agency including a GNMA Security.
“Agency Title Alternative Mortgage Loan” means a Mortgage Loan that is eligible for sale to Fannie Mae which (i) Fannie Mae has agreed to waive the requirement to obtain title insurance and/or an attorney title policy in accordance with the Fannie Mae Guide, as amended, supplemented or otherwise modified by the variance issued to Seller pursuant to the title acceptance pilot program (the “Title Variance Program”); (ii) a “Title Alternative” was received in accordance with and as defined in the Title Variance Program; (iii) the terms of the Mortgage Loan meet the requirements of the Title Variance Program and (iv) Seller has otherwise satisfied all the terms and conditions of the Title Variance Program.
“Agency-Required eNote Legend” means the legend or paragraph required by Fannie Mae, Freddie Mac or GNMA, as applicable, to be set forth in the text of an eNote, which includes the provisions set forth on an exhibit to the Custodial Agreement, as may be amended from time to time by Fannie Mae, Freddie Mac or GNMA, as applicable.
“Aggregate Purchase Price-Base” means, as of any date of determination, the aggregate outstanding Purchase Price-Base for a Purchased Mortgage Loan.
“Aggregate Purchase Price-Incremental 1” means, as of any date of determination, the aggregate outstanding Purchase Price-Incremental 1 for a Purchased Mortgage Loan.
“Aggregate Purchase Price-Incremental 2” means, as of any date of determination, the aggregate outstanding Purchase Price-Incremental 2 for a Purchased Mortgage Loan.
“Aging Limit” has the meaning assigned to such term in the Pricing Side Letter.
“Agreement” means this Master Repurchase Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Allocated Percentage” means, with respect to a Purchased Mortgage Loan, the percentage obtained by (a) with respect to the Purchase Price-Base, the Purchase Price Percentage-Base divided by the Purchase Price Percentage-Total; (b) with respect to the Purchase Price-Incremental 1, the Purchase Price Percentage-Incremental 1 divided by the Purchase Price Percentage-Total and (c) with respect to the Purchase Price-Incremental 2, the Purchase Price Percentage-Incremental 2 divided by the Purchase Price Percentage-Total.
“Appraised Value” means (i) the “as is” value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property, (ii) in the case of property inspection waiver Mortgage Loans, the value accepted by Fannie Mae or Freddie Mac’s automated underwriting system as the value of the Mortgaged Property or (iii) in the case of Second Lien Mortgage Loans and HELOCs, the value set forth in the AVM.
“Approved Product Type” has the meaning assigned to such term in the Pricing Side
Letter.
“Asset Documents” means the documents in the related Asset File to be delivered to the Custodian.
“Asset File” means the Mortgage File.
“Asset Matrix” has the meaning assigned to such term in the Pricing Side Letter.
“Asset Schedule” means, with respect to any Transaction as of any date, an Asset Schedule in the form prescribed by the Custodial Agreement.
“Asset Value” means with respect to any Purchased Mortgage Loan, the sum of the Asset Value-Base, the Asset Value-Incremental 1 and the Asset Value-Incremental 2.
“Asset Value-Base” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Base, and (b) the applicable Maximum Value Amount; provided that the Asset Value-Base of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur. “Asset Value-Incremental 1” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Incremental 1, and (b) the applicable Maximum Value Amount; provided, that, the Asset Value-Incremental 1 of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur.
“Asset Value-Incremental 2” means, with respect to any Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Purchase Price Percentage-Incremental 2, and (b) the applicable Maximum Value Amount; provided, that, the Asset Value-Incremental 2 of a Purchased Mortgage Loan may be reduced to zero by Administrative Agent or a Buyer if any Value Reduction Event shall occur.
"Assignment and Acceptance" has the meaning assigned to such term in Section 22 hereof.
"Assignment of Mortgage" means an assignment of the Mortgage, or notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the assignment and pledge of the Mortgage.
“Assignment of Proprietary Lease” means the specific agreement creating a first lien on and pledge of the Co-op Shares and the appurtenant Proprietary Lease securing a Co-op Loan.
“Authoritative Copy” means, with respect to an eNote, a single authoritative copy of such document that is unique, identifiable and unalterable, is marked as the original and has no indication that it is a non-authoritative copy.
“AVM” means an automated valuation model providing computer-generated home appraisals for mortgages based on comparable sales, title records and other market factors, and having a minimum confidence score of at least 80%.
“Bailee Letter” has the meaning assigned to such term in the applicable Custodial Agreement.
“Bank” means JPMorgan Chase Bank, National Association and any successor or assign.
“Bankruptcy Code” means the United States Bankruptcy Code of 1978, as amended from time to time.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“BPL – Holdback” means a Business Purpose Mortgage Loan with respect to which there exists a Holdback Amount.
“BPL – Long” means a Business Purpose Mortgage Loan with respect to which (a) the related Mortgaged Property consists of (i) [***] or less or (ii) between [***] and [***] and with an original outstanding principal amount less than $[***] and (b) the related maturity date [***] or more from the date of the Mortgage Note. “Business Day” means any day other than (i) a Saturday or Sunday; (ii) a day on which the New York Stock Exchange, the Federal Reserve Bank of New York or the Custodian is authorized or obligated by law or executive order to be closed or (iii) a public or bank holiday in New York City.
“Business Purpose Mortgage Loan” means a Mortgage Loan with respect to which the related Mortgaged Property (a) is non-owner occupied; (b) is primarily used for business or
commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z); and (c) has been originated or acquired in accordance with Underwriting Guidelines.
“Buyer” means Administrative Agent, in its capacity as a buyer, WHCO and each other Buyer which becomes a party hereto pursuant to and in accordance with Section 22 hereof and, with respect to Section 11 hereof, its participants.
“Capital Lease Obligations” means, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of the Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.
“Change in Control” means:
(1)any event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan, other than the Permitted Holders becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of fifty-one percent (51%) of the equity securities of loanDepot, Inc., a Delaware corporation, entitled to vote for members of the board of directors or equivalent governing body of Seller on a fully-diluted basis;
(2)the sale, transfer, or other disposition of all or substantially all of Seller’s assets (excluding any such action taken in connection with any securitization transaction); or
(3)if Seller is a Delaware limited liability company, Seller enters into any transaction or series of transactions to adopt, file, effect or consummate a Division, or otherwise permits any such Division to be adopted, filed, effected or consummated.
“Clearing Account” means the account into which HUD, VA and USDA remit all Income (including, without limitation, claims and proceeds) on account of Early Buyout Loans.
“Code” means the Internal Revenue Code of 1986, as amended.
“Collection Account” means the account described in the Collection Account Control Agreement, into which all collections and proceeds on or in respect of the Purchased Mortgage Loans shall be deposited by Seller or Servicer.
“Collection Account Control Agreement” means that certain collection account control agreement, dated as of the date hereof, among Administrative Agent, Seller and Bank, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Combined Loan to Value Ratio” or “CLTV” means with respect to any Second Lien Mortgage Loan or HELOC, the ratio of (i) the combined amount of the original amount (or the
related credit limit with respect to a HELOC) of the Second Lien Mortgage Loan or HELOC, as applicable, plus all secured loans on the related property that are equal or senior in priority to that Second Lien Mortgage Loan or HELOC, as applicable, the Appraised Value of the Mortgaged Property at origination of the Second Lien Mortgage Loan or HELOC.
“Commitment Fee” has the meaning assigned to such term in the Pricing Side Letter.
“Committed Buyer” means AGF WHCO 1-A3 LP.
“Committed Mortgage Loan” means a Purchased Mortgage Loan which is the subject of a Take-out Commitment with a Take-out Investor.
“Concentration Limit” has the meaning assigned to such term in the Pricing Side Letter.
“Conforming Mortgage Loan” means a first lien Mortgage Loan, including State Agency Program Loans, originated in accordance with the criteria of an Agency for purchase of Mortgage Loans, including, without limitation, conventional Mortgage Loans, as determined by Administrative Agent in its sole good faith discretion.
“Control” means, with respect to an eNote, the “control” of such eNote within the meaning of UETA and/or, as applicable, E-SIGN, which is established by reference to the MERS eRegistry and any party designated therein as the Controller.
“Control Failure” means, with respect to an eNote, the failure of the Controller status of the eNote in the MERS eRegistry to reflect Administrative Agent’s MERS Org ID as a result of an unauthorized Transfer of Control or unauthorized Transfer of Control and Location, in either case, initiated by Custodian or through Custodian’s system, in contravention of the terms of this Agreement; provided that (i) Custodian delivered the most recent Custodial Mortgage Loan Schedule and exception report reflecting the Location status of the eNote as the Custodian’s MERS Org ID and the Controller status of the eNote as Administrative Agent’s MERS Org ID and (ii) the Controller status and Location status of such eNote have not been transferred pursuant to (x) a Request for Release of Documents (as defined in the Custodial Agreement) or (y) Administrative Agent’s written request or instruction.
“Controller” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Controller”, and who in such capacity shall be deemed to be “in control” or to be the “controller” of such eNote within the meaning of UETA or E-SIGN, as applicable.
“Co-op Corporation” means, with respect to any Co-op Loan, the cooperative apartment corporation that holds legal title to the related Co-op Project and grants occupancy rights to units therein to stockholders through Proprietary Leases or similar arrangements.
“Co-op Loan” means a Mortgage Loan secured by the pledge of stock allocated to a Co-op Unit in a Co-op Corporation and collateral assignment of the related Proprietary Lease.
“Co-op Project” means, with respect to any Co-op Loan, all real property and improvements thereto and rights therein and thereto owned by a Co-op Corporation including without limitation the land, separate dwelling units and all common elements.
“Co-op Shares” means, with respect to any Co-op Loan, the shares of stock issued by a Co-op Corporation and allocated to a Co-op Unit and represented by a Stock Certificates.
“Co-op Unit” means, with respect to any Co-op Loan, a specific unit in a Co-op Project.
“CP Conduit” means any Buyer that is an asset-backed commercial paper conduit.
“Credit Limit” means, with respect to each HELOC, the maximum amount permitted under the terms of the related Credit Line Agreement as identified in the related Asset Schedule.
“Credit Line Agreement” means, with respect to each HELOC, the related home equity line of credit agreement, account agreement and promissory note (if any) executed by the related Mortgagor and any amendment or modification thereof.
“Custodial Agreement” means the custodial agreement, dated as of the date hereof, among Seller, Administrative Agent, Buyers and Custodian identified therein, as it may be amended, restated, supplemented or otherwise modified from time to time.
“Custodial Mortgage Loan Schedule” has the meaning assigned to such term in the Custodial Agreement.
“Custodian” means Deutsche Bank National Trust Company or such other party specified by Administrative Agent and agreed to by Seller, which approval shall not be unreasonably withheld.
“Daily Simple SOFR” means, for any day, SOFR, with conventions (including, without limitation, a lookback) established by the Administrative Agent [***] in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR”; provided that, if the Administrative Agent determines that any such convention is not administratively, operationally, or technically feasible for the Administrative Agent, then the Administrative Agent may establish another convention [***].
“DE Compare Ratio” means the Two Year FHA Direct Endorsement Lender Compare Ratio, excluding streamline FHA refinancings, as made publicly available by HUD.
“Debtor Relief Law” means any law, administration, or regulation relating to reorganization, winding up, administration, composition or adjustment of debts or otherwise relating to bankruptcy or insolvency.
“Default” means an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Delegatee” means, with respect to an eNote, the party designated in the MERS eRegistry as the “Delegatee” or “Delegatee for Transfers”, and in such capacity is authorized by the Controller to perform certain MERS eRegistry transactions on behalf of the Controller such as Transfers of Control and Transfers of Control and Location.
“Delinquency Advance” means any advance made by Seller under the Servicing Agreements, to cover due, but uncollected or unavailable as a result of funds not yet being
cleared, principal and interest payments on the Purchased Mortgage Loans included in the portfolio of Purchased Mortgage Loans serviced by Seller pursuant to the Servicing Agreements, including Purchased Mortgage Loans with respect to which the related Mortgaged Property is being held pending liquidation.
“Designated Mortgage Loan” means a Purchased Mortgage Loan that is identified by Administrative Agent as eligible for a Purchase Price-Base, a Purchase Price-Incremental 1 and/or a Purchase Price-Incremental 2.
“Disqualification Event” means, with respect to a Designated Mortgage Loan which has Purchase Price-Incremental 2, the occurrence of any of the following events: (a) a Participant materially breaches the applicable Participation Agreement, (b) an Act of Insolvency occurs with respect to a Participant, (c) the failure of a Participant to purchase the participation interest pursuant to a Participation Agreement with respect to a Designated Mortgage Loan, (d) the Administrative Agent, a Participant or a Buyer shall have determined in its sole good faith discretion that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Administrative Agent, any Participant or any Buyer has made it unlawful, for Administrative Agent, any Participant or any Buyer to purchase Purchased Mortgage Loan or participations in Transactions, or (e) the Administrative Agent determines in its sole discretion, that it will no longer enter into Transactions comprised of Purchase Price-Incremental 2 on account of a Purchased Mortgage Loan.
“Division” means the division of a limited liability company into two or more limited liability companies pursuant to and in accordance with Section 18-217 of Chapter 18 of the Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.
“Dollars” and “$” means dollars in lawful currency of the United States of America.
“Draw” means, with respect to each HELOC, an additional borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
“Due Date” means the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“Early Buyout” means the purchase of a modified or delinquent FHA Loan, VA Loan or USDA Loan by Seller from a pool of mortgage loans backing a GNMA Security.
“Early Buyout Loans” means an FHA Loan, USDA Loan or VA Loan which is subject to an Early Buyout and is a Purchased Mortgage Loan.
“Effective Date” means the date upon which the conditions precedent set forth in Section 10 shall have been satisfied.
“Electronic Agent” means MERSCORP Holdings, Inc., or its successor in interest or assigns.
“Electronic Record” means, as the context requires, (i) “Record” and “Electronic Record,” both as defined in E-SIGN, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, including without limitation, those involving the Warehouse Electronic System, and (ii) with respect to an eMortgage Loan, the related eNote and all other documents comprising the Mortgage File electronically created and that are stored in an electronic format, if any.
“Electronic Tracking Agreement” means one or more Electronic Tracking Agreements with respect to (x) the tracking of changes in the ownership, mortgage servicers and servicing rights ownership of Purchased Mortgage Loans held on the MERS System, and (y) the tracking of the Control of eNotes held on the MERS eRegistry, each in a form acceptable to Administrative Agent.
“eMortgage Loan” means a Mortgage Loan that is a Conforming Mortgage Loan (other than an FHA Loan or VA Loan) with respect to which there is an eNote and as to which some or all of the other documents comprising the related Mortgage File may be created electronically and not by traditional paper documentation with a pen and ink signature.
“eNote” means, with respect to any eMortgage Loan, the electronically created and stored Mortgage Note that is a Transferable Record.
“eNote Delivery Requirements” shall have the meaning set forth in Section 3(c) hereof.
“eNote Replacement Failure” shall have the meaning set forth in the Custodial Agreement.
“eNote Secured Party” means the party designated in the MERS eRegistry as the “Secured Party”.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and administrative rulings issued thereunder.
“ERISA Affiliate” means any corporation or trade or business that, together with Seller is treated as a single employer under Section 414(b) or (c) of the Code or solely for purposes of Section 302 of ERISA and Section 412 of the Code is treated as single employer described in Section 414 of the Code.
“Escrow Agreement” means that certain Fourth Amended and Restated Escrow Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Escrow Instruction Letter” means the Escrow Instruction Letter from Seller to the Settlement Agent, in the form of Exhibit B hereto, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Escrow Payments” means, with respect to any Mortgage Loan, the amounts constituting ground rents, taxes, assessments, water rates, sewer rents, municipal charges,
mortgage insurance premiums, fire and hazard insurance premiums, condominium charges, and any other payments required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“eVault” means an electronic repository established and maintained by an eVault Provider for delivery and storage of eNotes.
“eVault Provider” means Document Systems, Inc. d/b/a DocMagic, or its successor in interest or assigns, or such other entity agreed upon by Custodian or Administrative Agent.
“Event of Default” has the meaning specified in Section 15 hereof.
“Event of Termination” means with respect to Seller (a) with respect to any Plan, a reportable event, as defined in Section 4043 of ERISA, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within [***] days of the occurrence of such event, or (b) the withdrawal of Seller or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (c) the failure by Seller or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code (or Section 430(j) of the Code as amended by the Pension Protection Act) or Section 302(e) of ERISA (or Section 303(j) of ERISA, as amended by the Pension Protection Act), (d) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by Seller or any ERISA Affiliate thereof to terminate any Plan, or (e) the failure to meet requirements of Section 436 of the Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (f) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (g) the receipt by Seller or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (f) has been taken by the PBGC with respect to such Multiemployer Plan, or (h) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412 (b) or 430 (k) of the Code with respect to any Plan.
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Buyer or other recipient of any payment hereunder or required to be withheld or deducted from a payment to such Buyer or such other recipient: (a) Taxes based on (or measured by) net income or net profits, franchise Taxes and branch profits Taxes that are imposed on a Buyer or other recipient of any payment hereunder as a result of (i) being organized under the laws of, or having its principal office or its applicable lending office located in the jurisdiction imposing such Tax (or any political subdivision thereof), or (ii) a present or former connection between such Buyer or other recipient and the jurisdiction of the Governmental Authority imposing such Tax or any political subdivision or taxing authority thereof (other than connections arising from such Buyer or other recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced under this Agreement or any Program Agreement, or sold or assigned an interest in any Purchased Mortgage Loan); (b) any Tax
imposed on a Buyer or other recipient of a payment hereunder that is attributable to such Buyer’s or other recipient’s failure to comply with relevant requirements set forth in Section 11(e)(ii); (c) any withholding Tax that is imposed on amounts payable to or for the account of such Buyer or other recipient of a payment hereunder pursuant to a law in effect on the date such person becomes a party to or under this Agreement, or such person changes its lending office, except in each case to the extent that amounts with respect to Taxes were payable either to such person’s assignor immediately before such person became a party hereto or to such person immediately before it changed its lending office; and (d) any U.S. federal withholding Taxes imposed under FATCA.
“Existing Indebtedness” has the meaning specified in Section 13(a)(23) hereof.
“E-SIGN” means the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. § 7001 et seq.
“Fannie Mae” means the Federal National Mortgage Association or any successor thereto.
“Fannie Mae Guides” means the Fannie Mae Seller’s Guide and Fannie Mae Servicers’ Guide and all amendments or additions thereto, including, but not limited to, future updates thereof.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.
“FDIA” has the meaning set forth in Section 26(c) hereof.
“FDICIA” has the meaning set forth in Section 26(d) hereof.
“FHA” means the Federal Housing Administration, an agency within the HUD, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of HUD where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” means a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA Connection System” means the FHA Connection system, together with any successor FHA electronic access portal.
“FHA Loan” means a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.
“FHA Mortgage Insurance” means, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.
“FHA Mortgage Insurance Contract” means the contractual obligation of the FHA respecting the insurance of a Mortgage Loan.
“FHA Regulations” means the regulations promulgated by the HUD under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other HUD issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” means Fair Isaac & Corporation, or any successor thereto.
“Fidelity Insurance” means insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud in an aggregate amount acceptable to Seller’s regulators.
“Financial Covenants” has the meaning set forth in Section 14.jj hereof.
“FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
“FIRREA Appraisal” means an opinion of the “as is” fair market value of a Mortgaged
Property or an REO Property that (a) is given by a licensed real estate agent or broker in conformity with customary and usual business practices, which includes comparable sales and comparable listings and (b) complies with the criteria set forth in FIRREA for an “appraisal” or if an appraisal is not required by the statute, an “evaluation”.
“Freddie Mac” means the Federal Home Loan Mortgage Corporation or any successor thereto.
“Freddie Mac Guides” means any and all applicable rules, regulations, requirements and guidelines of Freddie Mac, including the Freddie Mac Guide and including any representations and warranties incorporated into any sale contract with Freddie Mac.
“Funding 2 Repo Agreement” means that certain Master Repurchase Agreement, by and among Administrative Agent, Atlas Securitized Products Funding 2, L.P. and Seller, as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time.
“Funding 2 Repo Documents” means the Funding 2 Repo Agreement and the “Program Agreements” as defined in the Funding 2 Repo Agreement.
“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America and applied on a consistent basis.
“GNMA” means the Government National Mortgage Association and any successor thereto.
“GNMA Guide” means the GNMA Mortgage-Backed Securities Guide, Handbook 5500.3, Rev. 1, as amended from time to time, and any related announcements, directives and correspondence issued by GNMA.
“GNMA Haircut Amount” means, with respect to a Simultaneously Funded Early Buyout Loan, an amount equal to (i) the amount due to GNMA to repurchase such Mortgage Loan from GNMA less (ii) the Purchase Price for such Mortgage Loan.
“GNMA Security” means a mortgage-backed security guaranteed by GNMA pursuant to the GNMA Guide.
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, or any entity exercising executive, legislative, judicial, regulatory or administrative functions over Seller, Administrative Agent or any Buyer, as applicable.
“Gross Margin” means, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantee” means, as to any Person, [***]. The terms “Guarantee” and “Guaranteed” used as verbs shall have correlative meanings.
“Hash Value” means, with respect to an eNote, the unique, tamper-evident digital signature of such eNote that is stored with MERS.
“HELOC” means a home equity revolving line of credit secured by a first lien or second lien on the related Mortgaged Property.
“High Cost Mortgage Loan” means a Mortgage Loan (a) classified as a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; (b) classified as a “high cost,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees) or (c) having a percentage listed under the Indicative Loss Severity Column (the column that appears in the S&P Anti-Predatory Lending Law Update Table, included in the then-current S&P’s LEVELS® Glossary of Terms on Appendix E).
“Holdback Account” means an account held by Servicer pursuant to the terms of the applicable Servicing Agreement, if any, in each case, into which any Holdback Amounts with respect to BPL – Holdback may be deposited and held.
“Holdback Amount” means, with respect to a BPL – Holdback, such escrow or holdback amounts that are advanced by the related originator but not disbursed to the related Mortgagor at such Mortgage Loan’s origination date, with such undisbursed amounts being held by the applicable Servicer in the related Holdback Account for funding amounts for the related Mortgagor to improve and rehabilitate the related Mortgaged Property in accordance with the related Servicing Agreement and Asset Documents.
“Hsieh Investors” means [***].
“HUD” means the United States Department of Housing and Urban Development or any successor thereto.
“Income” means, with respect to any Purchased Mortgage Loan, without duplication, all principal and income or dividends or distributions received with respect thereto, including any sale or liquidation premiums, liquidation proceeds, insurance proceeds, dividends or other distributions payable thereon or any fees or payments of any kind received by the related Servicer (net of any servicing fees and advances then due and owing pursuant to the terms of the applicable Servicing Agreement).
“Indebtedness” has the meaning assigned to such term in the Pricing Side Letter.
“Indemnified Party” has the meaning set forth in Section 30 hereof.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Seller hereunder or under any Program Agreement and (b) Other Taxes.
“Index” means, with respect to any adjustable rate Mortgage Loan, the index identified on the Asset Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.
“Intercreditor Agreement” means that certain Fourth Amended and Restated Intercreditor Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Interest Rate Adjustment Date” means the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.
“Interest Rate Protection Agreement” means, with respect to any or all of the Purchased Mortgage Loans, or any short sale of a security issued by the U.S. Department of the Treasury, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Seller.
“Joint Securities Account Control Agreement” means that certain Fourth Amended and Restated Joint Securities Account Control Agreement dated as of August 16, 2016 among [***] and such other parties joined thereto from time to time, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“LD Holdings” means LD Holdings Group LLC, a Delaware limited liability company.
“Lender Insurance Authority” means the permission granted to certain FHA-approved lenders to process single family mortgage applications without first submitting documentation to the United States Department of Housing and Urban Development as set forth in 12 U.S.C.
§1715z-21 and the regulations enacted thereunder set forth in 24 CFR §203.6.
“Lien” means any mortgage, lien, pledge, charge, security interest or similar encumbrance.
“Loan to Value Ratio” or “LTV” means with respect to any Mortgage Loan, the ratio of the original outstanding principal amount (or the related credit limit with respect to a HELOC) of such Mortgage Loan to the Appraised Value of the Mortgaged Property at origination.
“Location” means, with respect to an eNote, the location of such eNote which is established by reference to the MERS eRegistry.
“Margin Call” has the meaning specified in Section 6(a) hereof.
“Margin Deadlines” has the meaning specified in Section 6(b) hereof.
“Margin Deficit” has the meaning specified in Section 6(a) hereof.
“Market Value” has the meaning assigned to such term in the Pricing Side Letter.
“Master Servicer Field” means, with respect to an eNote, the field entitled, “Master Servicer” in the MERS eRegistry.
“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties or condition (financial or otherwise) of Seller or any Affiliate that is a party to any Program Agreement taken as a whole; (b) a material impairment of the ability of Seller or any Affiliate that is a party to any Program Agreement to perform under any Program Agreement and to avoid any Event of Default; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability of any Program Agreement against Seller or any Affiliate that is a party to any Program Agreement, in each case as determined by the Administrative Agent in its good faith discretion.
“Maximum Aggregate Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Available Committed Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Available Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Committed Purchase Price” has the meaning assigned to such term in the Pricing Side Letter.
“Maximum Value Amount” means, on each date of determination, an amount equal to [***].
“MBA Method of Delinquency” means, with respect to Mortgage Loans, the methodology used by the Mortgage Bankers Association for assessing delinquency. For the avoidance of doubt, under the MBA Method of Delinquency, a Mortgage Loan is considered “30 days delinquent” if the Mortgagor fails to make a monthly payment prior to the close of business on the day that immediately precedes the due date on which the next monthly payment is due. For example, a Mortgage Loan will be considered thirty (30) days delinquent if the
Mortgagor fails to make a monthly payment originally due on October 1 by the close of business on October 30.
“MERS” means Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS eDelivery” means the transmission system operated by the Electronic Agent that is used to deliver eNotes, other Electronic Records and data from one MERS eRegistry member to another using a system-to-system interface and conforming to the standards of the MERS eRegistry.
“MERS eRegistry” means the electronic registry operated by the Electronic Agent that acts as the legal system of record that identifies the Controller, Delegatee and Location of the Authoritative Copy of registered eNotes.
“MERS Org ID” means a seven-digit number assigned by MERSCORP Holdings that uniquely identifies a member entity on the MERS eRegistry.
“MERS System” means the mortgage electronic registry system operated by the Electronic Agent that tracks changes in Mortgage ownership, mortgage servicers and servicing rights ownership.
“Monthly Payment” means the scheduled monthly payment of principal and/or interest on a Mortgage Loan.
“Moody’s” means Moody’s Investors Service, Inc. or any successors thereto.
“Mortgage” means each mortgage, assignment of rents, security agreement and fixture filing, or deed of trust, assignment of rents, security agreement and fixture filing, deed to secure debt, assignment of rents, security agreement and fixture filing, or similar instrument creating and evidencing a lien on real property and other property and rights incidental thereto, unless such Mortgage is granted in connection with a Co-op Loan, in which case the first lien position is in the Co-op Shares and in the Proprietary Lease relating to such Co-op Shares.
“Mortgage File” means, with respect to a Mortgage Loan, the documents and instruments relating to such Mortgage Loan and set forth in an exhibit to the Custodial Agreement.
“Mortgage Interest Rate” means the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Interest Rate Cap” means, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgage Loan” means any Approved Product Type which is a fixed or floating rate, one to four family residential mortgage or home equity loan evidenced by a promissory note and secured by a first (or, in the case of Second Lien Mortgage Loans or second lien HELOCs, second) lien mortgage, which satisfies the requirements set forth in the Underwriting Guidelines
and Section 13(b) hereof; provided that Mortgage Loans shall not include any High Cost Mortgage Loans and shall not include home equity conversion loans.
“Mortgage Note” means the promissory note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage, including the Credit Line Agreement in the case of a HELOC.
“Mortgaged Property” means the real property or other Co-op Loan collateral securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” means the obligor or obligors on a Mortgage Note, including any person who has assumed or guaranteed the obligations of the obligor thereunder.
“Multiemployer Plan” means a multiemployer plan defined as such in Section 3(37) of ERISA to which contributions have been or are required to be made by Seller or any ERISA Affiliate and that is covered by Title IV of ERISA.
“Nominee” means Seller, or any successor Nominee appointed by Administrative Agent following the occurrence and during the continuance of an Event of Default.
“Non-Affiliate Buyer” has the meaning specified in Section 19 hereof.
“Non-Affiliate MRA” has the meaning specified in Section 19 hereof.
“Non-Affiliate Transactions” has the meaning specified in Section 19 hereof.
“Non-Agency Mortgage Loan” means a Mortgage Loan other than an Early Buyout Loan that (a) is not a Non-Agency Non-QM Mortgage Loan; (b) either (i) does not meet the criteria for an Agency Mortgage Loan or (ii) is an Agency Mortgage Loan that is aggregated for placement into a private label securitization or for sale to a Take-out Investor other than an Agency; (c) meets all applicable criteria as set forth in the Underwriting Guidelines and (d) is identified as a Non-Agency Mortgage Loan by Administrative Agent and Seller.
“Non-Agency Non-QM Mortgage Loan” a Non-Agency Mortgage Loan that (a) does not meet the criteria for a Qualified Mortgage Loan; (b) meets all applicable criteria as set forth in the Underwriting Guidelines and (c) is otherwise acceptable to Administrative Agent in its sole good faith discretion.
“Non-Performing Mortgage Loan” means (a) any Mortgage Loan for which any payment of principal or interest is [***] or more days past due (according to the MBA Method of Delinquency), (b) any Mortgage Loan with respect to which the related mortgagor is in bankruptcy or (c) any Mortgage Loan with respect to which the related mortgaged property is in foreclosure.
“Obligations” means [***].
“OFAC” has the meaning set forth in Section 13(a)(27) hereof.
“Officer’s Compliance Certificate” has the meaning assigned to such term in the Pricing Side Letter.
“Ordinary Course Litigation” means any litigation or arbitration proceeding commenced by a Mortgagor, or the assertion by a Mortgagor of any common or necessary or compulsory cause of action, defense or counterclaim, seeking to enjoin, hinder, delay, set aside or temporarily restrain a foreclosure proceeding or other enforcement action commenced by the holder or servicer of a Mortgage Loan or real estate owned Property in the ordinary course of its business.
“Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any excise, sales, goods and services or transfer taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Program Agreement.
“Parthenon Investors” means each of [***] and each of their respective affiliates.
“Participant” means any participant as contemplated by Section 22.b of this Agreement which has entered into a Participation Agreement.
“Participation Agreement” means a participation agreement by and among a Participant, the Administrative Agent and the Buyers in form and substance acceptable to Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Payment Date” means, (a) with respect to the payment of Price Differential, the fifth (5th) day of the month and (b) with respect to the payment of all other amounts due hereunder, the twelfth (12th) day of the month; provided, that, in the case of clauses (a) and (b) if any such day is not a Business Day, the Payment Date shall be the next succeeding Business Day and provided, further, the final Payment Date shall be the related Repurchase Date.
“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Pension Protection Act” means the Pension Protection Act of 2006.
“Permitted Holders” means any of the Hsieh Investors and the Parthenon Investors.
“Person” means an individual, partnership, corporation (including a business trust), limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof.
“Plan” means an employee pension benefit or other plan as defined in Section 3(2) of ERISA, established or maintained by Seller or any ERISA Affiliate and covered by Title IV of ERISA, other than a Multiemployer Plan.
“Pool” means a subset of Purchased Mortgage Loans subject to Transactions which shall be identified from time to time by the Administrative Agent.
“Pool Subdivision Notice” means a written notice delivered by Administrative Agent to Seller, which shall identify the discrete Purchased Mortgage Loans which shall be allocated to different Pools.
“Post-Default Rate” means an annual rate of interest equal to the sum of (a) the Pricing Rate plus (b) [***].
“Power of Attorney” means a Power of Attorney substantially in the form of Exhibit A hereto delivered by Seller.
“Price Differential” means, for each Purchased Mortgage Loan, calculated daily on the basis of a 360-day year for the actual number of days during each Pricing Period, the sum of the Price Differential-Base, Price Differential-Incremental 1 and Price Differential-Incremental 2 for such Pricing Period.
“Price Differential-Base” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Base and (b) the Aggregate Purchase Price-Base.
“Price Differential-Incremental 1” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Incremental 1 and (b) the Aggregate Purchase Price-Incremental 1.
“Price Differential-Incremental 2” means, with respect to each Purchased Mortgage Loan as of any date of determination, an amount equal to the product of (a) the applicable Pricing Rate-Incremental 2 and (b) the Aggregate Purchase Price-Incremental 2.
“Pricing Floor” has the meaning assigned to such term in the Pricing Side Letter.
“Pricing Period” means, with respect to each Payment Date, the period commencing on (and including) the date that is the first calendar day of the preceding month and terminating on (and including) the earlier of (i) the Repurchase Date and (ii) last calendar day of the preceding month; provided, that the initial Pricing Period shall commence on the initial Purchase Date.
“Pricing Rate” means with respect to each Purchased Mortgage Loan, the sum of (a) with respect to the Purchase Price-Base, the Pricing Rate-Base; (b) with respect to the Purchase Price-Incremental 1, if any, the Pricing Rate-Incremental 1 and (c) with respect to the Purchase Price-Incremental 2, if any, the Pricing Rate-Incremental 2.
“Pricing Rate-Base” means with respect to the Purchase Price-Base, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Rate-Incremental 1” means with respect to the Purchase Price-Incremental 1, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Rate-Incremental 2” means with respect to the Purchase Price-Incremental 2, the sum of (a) the greater of (i) the Reference Rate and (ii) the Pricing Floor plus (b) the applicable percentage listed in the Asset Matrix.
“Pricing Side Letter” means the letter agreement dated as of the date hereof, among Administrative Agent, Buyers and Seller, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Principal Paydown Payments” means payments of principal, including full and partial prepayments, related to the Purchased Mortgage Loans.
“Program Account” means such account identified by Administrative Agent in writing.
“Program Agreements” means, collectively, this Agreement; the Administration Agreement; Custodial Agreement; the Pricing Side Letter; the Electronic Tracking Agreement; the Collection Account Control Agreement; the Power of Attorney; each Servicing Agreement; each Servicer Notice; when entered into, the Escrow Agreement, the Intercreditor Agreement and the Joint Securities Account Control Agreement.
“Prohibited Person” has the meaning set forth in Section 13(a)(27) hereof.
“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Proprietary Lease” means the lease on a Co-op Unit evidencing the possessory interest of the owner in the Co-op Shares in such Co-op Unit.
“Protective Advance” means any servicing advance (including, but not limited to, any advance made to pay taxes and insurance premiums; any advance to pay the costs of protecting the value of any real property or other security for a mortgage loan; and any advance to pay the costs of realizing on the value of any such security) made by Seller in connection with any Purchased Mortgage Loans that are Early Buyout Loans.
“Purchase Date” means the date on which a Purchased Asset is to be transferred by Seller to Administrative Agent for the benefit of Buyers.
“Purchase Price” means the price at which each Purchased Mortgage Loan is transferred by or contributed to Seller, as applicable, to Administrative Agent for the benefit of Buyers, which shall equal:
(a)on the applicable Purchase Date, the applicable Purchase Price-Base plus the Purchase Price-Incremental 1, if any plus the Purchase Price-Incremental 2, if any; and
(b)on any day after the Purchase Date, except where Administrative Agent for the benefit of Buyers and Seller agree otherwise, the amount determined under the immediately preceding clause (a), (i) increased by the amount of any additional Purchase Price-Incremental 1 and additional Purchase Price-Incremental 2 advanced pursuant to this Agreement and (ii) decreased by
the amount of any cash transferred by Seller and applied to reduce Seller’s Obligations in accordance with this Agreement.
“Purchase Price-Base” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Base, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause (a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price-Incremental 1” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Incremental 1, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause (a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price-Incremental 2” means, with respect to any Purchased Mortgage Loan: (a) on the applicable Purchase Date, the amount remitted by Administrative Agent, on behalf of Buyers, to Seller which shall not exceed the product of (i) the applicable Purchase Price Percentage-Incremental 2, and (ii) the applicable Maximum Value Amount, and (b) on any day after the applicable Purchase Date, the amount determined in the immediately preceding clause
(a) and increased or decreased in accordance with the definition of Purchase Price set forth herein.
“Purchase Price Percentage” means, (a) with respect to the Purchase Price-Base, the Purchase Price Percentage-Base; (b) with respect to the Purchase Price-Incremental 1, if any, the Purchase Price Percentage-Incremental 1 and (c) with respect to the Purchase Price-Incremental 2, if any, the Purchase Price Percentage-Incremental 2.
“Purchase Price Percentage-Base” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 1” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage-Incremental 2” has the meaning set forth in the Asset Matrix.
“Purchase Price Percentage - Total” means, with respect to each Purchased Mortgage Loan, the sum of (a) the Purchase Price Percentage-Base, plus (b) the Purchase Price Percentage-Incremental 1 plus (c) the Purchase Price Percentage-Incremental 2.
“Purchased Assets” means the collective reference to Purchased Mortgage Loans together with the Repurchase Assets related to such Purchased Mortgage Loans transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder and/or listed on the related Asset Schedule attached to the related Transaction Request, which such Asset Files the Custodian has been instructed to hold for the benefit of Administrative Agent pursuant
to the Custodial Agreement until such asset has been repurchased by Seller in accordance with the terms of this Agreement.
“Purchased Mortgage Loans” means each Mortgage Loan and the Servicing Rights and Asset Documents related to such Mortgage Loan transferred by Seller to Administrative Agent for the benefit of Buyers in a Transaction hereunder, listed on the related Asset Schedule attached to the related Transaction Request, which such Mortgage Loans the Custodian has been instructed to hold pursuant to the Custodial Agreement until such asset has been repurchased by Seller in accordance with the terms of this Agreement.
“Qualified Insurer” means an insurance company duly authorized and licensed where required by law to transact insurance business and approved as an insurer by Fannie Mae or Freddie Mac or GNMA, as applicable.
“Qualified Mortgage Loan” means a Mortgage Loan which is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e).
“Qualified Originator” means an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.
“Recognition Agreement” means, an agreement among a Co-op Corporation, a lender and a Mortgagor with respect to a Co-op Loan whereby such parties (i) acknowledge that such lender may make, or intends to make, such Co-op Loan, and (ii) make certain agreements with respect to such Co-op Loan.
“Records” means all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller, Servicer or any other person or entity with respect to a Purchased Asset. Records shall include the Mortgage Notes, any Mortgages, the Asset Files and the credit files, in each case, related to the Purchased Asset and any other instruments necessary to document or service a Purchased Mortgage Loan.
“Reference Rate” means Daily Simple SOFR, or a Successor Rate pursuant to Section 5(c) of this Agreement.
“Register” has the meaning set forth in Section 22 hereof.
“Relevant Governmental Body” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York, or any successor of any of the foregoing.
“Remittance Date” means such date as mutually agreed to by Seller and Administrative Agent.
“Remittance Report Date” means, with respect to each Pricing Period, the close of business on the final day of such Pricing Period, or the next succeeding Business Day, if such calendar day shall not be a Business Day.
“REO Property” means real property acquired through foreclosure of a Purchased Mortgage Loan or by deed in lieu of such foreclosure.
“Repledge Transaction” has the meaning set forth in Section 18 hereof.
“Repledgee” means each Repledgee identified by the Administrative Agent from time to time pursuant to the Administration Agreement.
“Reporting Date” means the fifteenth (15th) calendar day of each month or, if such day is not a Business Day, the next succeeding Business Day.
“Repurchase Assets” has the meaning assigned thereto in Section 8 hereof.
“Repurchase Date” means the earlier of (a) the Termination Date, (b) the date requested pursuant to Section 4 or (c) the date determined by application of Section 16 hereof.
“Repurchase Price” means the price at which Purchased Assets are to be transferred from the Administrative Agent for the benefit of Buyers to Seller upon termination of a Transaction, which will be determined in each case (including Transactions terminable upon demand) as the sum of the Purchase Price for such Purchased Assets and the accrued but unpaid Price Differential relating to such Purchased Assets as of the date of such determination.
“Request for Certification” means a notice sent to the Custodian reflecting the sale of one or more Purchased Mortgage Loans to Administrative Agent for the benefit of Buyers hereunder.
“Requirement of Law” means, with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other governmental authority, applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Responsible Officer” means as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person.
“S&P” means Standard & Poor’s Ratings Services, or any successor thereto.
“Scratch and Dent Mortgage Loan” means [***].
“SEC” means the Securities and Exchange Commission, or any successor thereto.
“Second Lien – Prime” means a Second Lien Mortgage Loan that has (a) a CLTV of [***] or less and (b) a FICO score of [***] or greater.
“Second Lien – Standard” means a Second Lien Mortgage Loan that has (a) a CLTV greater than [***] and not to exceed [***] or (b) a FICO score less than [***].
“Second Lien Mortgage Loan” means a closed-end Mortgage Loan secured by a second lien on the related Mortgaged Property.
“Seller” means loanDepot.com, LLC or its permitted successors and assigns.
“Seller Repurchase Assets” has the meaning assigned thereto in Section 8.a(1) hereof.
“Servicer” means Seller and any other servicer or subservicer approved by Administrative Agent in its sole good faith discretion.
“Servicer Account” means with respect to Purchased Mortgage Loans serviced by any third party Servicer, the account as identified in the related Servicing Agreement into which such Servicer deposits Income and related collections.
“Servicer Advance” means a Delinquency Advance or a Protective Advance.
“Servicer Notice” means the notice acknowledged by Servicer (if Servicer is not Seller) or, with respect Early Buyout Loans, in such form as mutually agreed to by Seller and Administrative Agent, in each case, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Servicing Agreement” means any servicing agreement entered into between Seller and Servicer (if Servicer is not Seller), as the same may be amended from time to time.
“Servicing Rights” means rights of any Person to administer, service or subservice, the Purchased Mortgage Loans or to possess related Records.
“Settlement Agent” means, with respect to any Transaction the subject of which is a Wet-Ink Mortgage Loan, the entity approved by Administrative Agent, in its sole good-faith discretion, which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated. A Settlement Agent is deemed approved unless Administrative Agent notifies Seller otherwise at any time electronically or in writing.
“Severance Notice” has the meaning specified in Section 19 hereof.
“Simultaneously Funded Early Buyout Loan” means an Early Buyout which Seller intends to be repurchased from GNMA substantially concurrently with the funding of the related Transaction hereunder.
“SIPA” means the Securities Investor Protection Act of 1970, as amended from time to time.
“SOFR” means, with respect to any SOFR Business Day, a rate per annum equal to the
secured overnight financing rate for such SOFR Business Day published by the SOFR Administrator on the SOFR Administrator’s Website at approximately [***].
“SOFR Administrator” means the Federal Reserve Bank of New York (or any successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the SOFR Administrator’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.
“SOFR Business Day” means a day on which banks are open for dealing in foreign currency and exchange in London, New York City and Washington, D.C.
“State Agency Program Loan” means a mortgage loan originated or acquired by Seller in accordance with the applicable guidelines of, and in anticipation of sale to, the state housing authorities in Acceptable States and as approved by Administrative Agent in writing in its sole discretion.
“Statement Date” shall have the meaning set forth in Section 13(a)(5) hereof.
“Stock Certificate” means, with respect to a Co-op Loan, the certificates evidencing ownership of the Co-op Shares issued by the Co-op Corporation.
“Stock Power” means, with respect to a Co-op Loan, an assignment of the Stock Certificate or an assignment of the Co-op Shares issued by the Co-op Corporation.
“Subservicer Field” means, with respect to an eNote, the field entitled, “Subservicer” in the MERS eRegistry.
“Subsidiary” means, with respect to any Person, any corporation, limited liability company, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Successor Rate” means a rate determined by Administrative Agent in accordance with Section 5(c) hereof.
“Successor Rate Conforming Changes” means with respect to any proposed Successor Rate, any technical, administrative or operational change (including any change to the timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent decides, [***], may be appropriate to reflect the adoption and implementation of such Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Successor Rate exists, in such other manner of administration as the
Administrative Agent decides, [***], is reasonably necessary in connection with the administration of this Agreement or any other Program Agreement).
“Take-out Commitment” means a commitment of Seller to either (a) sell one or more identified Mortgage Loans to a Take-out Investor or (b) (i) swap one or more identified Mortgage Loans with a Take-out Investor that is an Agency for an Agency Security, and (ii) sell the related Agency Security to a Take-out Investor, and in each case, the corresponding Take-out Investor’s commitment back to Seller to effectuate any of the foregoing, as applicable. With
respect to any Take-out Commitment with an Agency, the applicable agency documents list Administrative Agent or such other Person as required under the Intercreditor Agreement or Joint Securities Account Control Agreement as sole subscriber.
“Take-out Investor” means (a) an Agency or (b) any other institution which has made a Take-out Commitment and has been approved by Administrative Agent for the benefit of Buyers.
“Tax Distributions” means distributions by the Seller for the purpose of enabling LD Holdings to make Tax Distributions, as defined and set forth in the limited liability company agreement of LD Holdings.
“Taxes” means any and all present or future taxes (including social security contributions and value added taxes), levies, imposts, duties (including stamp duties), deductions, charges (including ad valorem charges), withholdings (including backup withholding), assessments, fees or other charges of any nature whatsoever imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Termination Date” has the meaning assigned to such term in the Pricing Side Letter.
“Third Party Evaluator” means an appraiser approved by Administrative Agent in its sole good faith discretion.
“TILA-RESPA Integrated Disclosure Rule” means the Truth-in-Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, adopted by the Consumer Finance Protection Bureau, which is effective for residential mortgage loan applications received on or after October 3, 2015.
“Transaction” has the meaning set forth in Section 1 hereof.
“Transaction Request” means a request via email from Seller to Administrative Agent notifying Administrative Agent that Seller wishes to enter into a Transaction hereunder and that indicates that it is a Transaction Request under this Agreement. For the avoidance of doubt, a Transaction Request may refer to multiple Mortgage Loans; provided that each Mortgage Loan shall be deemed to be subject to its own Transaction.
“Transfer of Control” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller of such eNote.
“Transfer of Control and Location” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller and Location of such eNote.
“Transfer of Location” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Location of such eNote.
“Transfer of Servicing” means, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Master Servicer Field or Subservicer Field of such eNote.
“Transferable Record” means an Electronic Record under E-SIGN and UETA that (i) would be a note under the Uniform Commercial Code if the Electronic Record were in writing,
(ii) the issuer of the Electronic Record has expressly agreed is a “transferable record”, and (iii) for purposes of E-SIGN, relates to a loan secured by real property.
“Trust Receipt” means, with respect to any Transaction as of any date, a receipt in the form attached as an exhibit to the Custodial Agreement.
“UETA” means the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.
“Unauthorized Master Servicer or Subservicer Modification” means, with respect to an eNote, a Transfer of Location, Transfer of Servicing or a change in any other information, status or data, including, without limitation, a change of the Master Servicer Field or Subservicer Field with respect to such eNote on the MERS eRegistry, initiated by the Seller, any Servicer or a vendor.
“Underwriting Guidelines” means the standards, procedures and guidelines of the Seller for underwriting and acquiring Mortgage Loans, which are set forth in the written policies and procedures of the Seller, a copy of which have been provided to Administrative Agent and such other guidelines as are identified to Administrative Agent in writing.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as in effect on the date hereof in the State of New York or the Uniform Commercial Code as in effect in the applicable jurisdiction.
“USDA” means the United States Department of Agriculture or any successor thereto.
“USDA Loan” means a first lien Mortgage Loan guaranteed by and originated in accordance with the criteria established by the USDA pursuant to the USDA Rural Development Guaranteed Housing Loan Program.
“U.S. Tax Compliance Certificate” has the meaning set forth in Section 11(e)(ii)(B) hereof.
“VA” means the U.S. Department of Veterans Affairs, an agency of the United States of
America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Approved Lender” means a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” means a Mortgage Loan which is the subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate, or a Mortgage Loan which is a vender loan sold by the VA.
“VA Loan Guaranty Agreement” means the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.
“VA Regulations” means the regulations promulgated by the U.S. Department of Veterans Affairs and codified in 38 Code of Federal Regulations, and other U.S. Department of Veterans Affairs issuances relating to VA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“Value Reduction Event” has the meaning assigned to such term in the Pricing Side Letter.
“Warehouse Electronic System” means the system utilized by or Administrative Agent either directly, or through its vendors, and which may be accessed by Seller in connection with delivering and obtaining information and requests in connection with the Program Agreements.
“Wet-Ink Delivery Date” has the meaning assigned to such term in the Pricing Side Letter.
“Wet-Ink Documents” means, with respect to any Wet-Ink Mortgage Loan, the (a) Transaction Request and (b) the Asset Schedule.
“Wet-Ink Mortgage Loan” means a Mortgage Loan (other than an Early Buyout Loan) which Seller is selling to Administrative Agent for the benefit of a Buyer simultaneously with the origination thereof.
3.Program; Initiation of Transactions
a.From time to time, in the sole discretion of Buyers, Administrative Agent (for the benefit of Buyers) may facilitate the purchase by Buyers from Seller of certain Mortgage Loans that have been originated and/or purchased by Seller. This Agreement is a commitment by Committed Buyer and Administrative Agent on behalf of Committed Buyer to enter into Transactions with Seller up to an aggregate amount not to exceed the lesser of the Maximum Committed Purchase Price and the Maximum Available Committed Purchase Price. This Agreement is not a commitment by Committed Buyer or Administrative Agent on behalf of Committed Buyer to enter into Transactions with Seller for amounts exceeding the Maximum Committed Purchase Price, Maximum Available Committed Purchase Price or Maximum Available Purchase Price, but rather sets forth the procedures to be used in connection with periodic requests for Buyers or Administrative
Agent on behalf of Buyers to enter into Transactions with Seller. For the avoidance of doubt, Transactions attributed to the Maximum Committed Purchase Price shall solely be attributed to the Committed Buyer and Atlas, in its capacity as a buyer, shall have no commitment hereunder to enter into Transactions. Any Transactions entered into in excess of the Maximum Committed Purchase Price or Maximum Available Committed Purchase Price, as applicable, shall be entered into solely on an uncommitted basis. All Purchased Mortgage Loans shall exceed or meet the Underwriting Guidelines, and shall be serviced by Seller or Servicer, as applicable. The sum of the aggregate outstanding Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 shall not exceed the Maximum Available Purchase Price.
b.Seller shall request that Administrative Agent enter into a Transaction by delivering (i) to Administrative Agent, a Transaction Request [***] for all Mortgage Loans and (ii) to Administrative Agent and Custodian an Asset Schedule in accordance with the Custodial Agreement. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Administrative Agent shall provide written or electronic notice to Seller describing such error and Seller shall correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein.
c.With respect to any eMortgage Loan, Seller shall deliver to Custodian each of Administrative Agent’s and Seller’s MERS Org IDs, and shall cause (i) the Authoritative Copy of the related eNote to be delivered to the eVault via a secure electronic file, (ii) the Controller status of the related eNote to be transferred to Administrative Agent’s MERS Org ID and the eNote Secured Party status of the related eNote is blank, (iii) the Location status of the related eNote to be transferred to Custodian, (iv) the Master Servicer Field status of the related eNote shall reflect the MERS Org ID of Seller, (v) the Subservicer Field status of the related eNote to be (x) if there is a third-party subservicer, such subservicer’s MERS Org ID or (y) if there is not a subservicer, blank and (vi) the Delegatee status of the related eNote to be transferred to Custodian reflects Custodian’s MERS Org ID, in each case using MERS eDelivery and the MERS eRegistry (collectively, the “eNote Delivery Requirements”).
With respect to a Simultaneously Funded Early Buyout Loan for which Seller has submitted a Transaction Request, provided that the GNMA Haircut Amount has been remitted to the Administrative Agent, Administrative Agent shall remit the purchase price due to GNMA for such Simultaneously Funded Early Buyout Loan to the general payment clearing account of Servicer. Within [***] of such remittance, Seller shall cause Servicer to (i) segregate and remit such purchase price to the custodial account held for the Seller and (ii) report to GNMA that such Simultaneously Funded Early Buyout Loan
has been repurchased from GNMA. In the event that Servicer fails to repurchase such Simultaneously Funded Early Buyout Loan, Seller shall cause Servicer to remit the Purchase Price for such Simultaneously Funded Early Buyout Loan to the account set forth in Section 9 within [***] following the related Purchase Date. Notwithstanding the foregoing, when a Simultaneously Funded Early Buyout Loan is repurchased, the Purchase Date hereunder shall be deemed the date of remittance of proceeds by Administrative Agent to Servicer.
d.Upon the satisfaction of the applicable conditions precedent set forth in Section 10 hereof, all of Seller’s interest in the Repurchase Assets shall pass to Administrative Agent on behalf of Buyers on the Purchase Date, against the transfer of the Purchase Price to Seller. Upon transfer of the Purchased Assets to Administrative Agent on behalf of Buyers as set forth in this Section and until termination of any related Transactions as set forth in Sections 4 or 16 of this Agreement, ownership of each Purchased Asset, including each document in the related Asset File and Records, is vested in the Buyers identified under the Administration Agreement; provided that, prior to the recordation, record title shall be retained by the Seller, in trust, for the benefit of Buyers, for the sole purpose of facilitating the servicing and the supervision of the servicing of the Mortgage Loans. For the avoidance of doubt, the parties acknowledge and agree that the Purchased Assets shall be held by the Administrative Agent for the benefit of Buyers, as more particularly set forth in the Administration Agreement.
e.On each Purchase Date, Administrative Agent shall allocate the Purchase Price for such Purchased Mortgage Loan among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 according to the Allocated Percentages attributable thereto.
f.With respect to each Wet-Ink Mortgage Loan, by no later than the Wet-Ink Delivery Date, Seller shall cause the related Settlement Agent to deliver to the applicable Custodian the remaining documents in the Asset File as more particularly set forth in the related Custodial Agreement.
4.Repurchase
a.Seller shall repurchase the related Purchased Assets from Administrative Agent for the benefit of Buyers on each related Repurchase Date. Such obligation to repurchase exists without regard to any prior or intervening liquidation or foreclosure with respect to any Purchased Mortgage Loan (but liquidation or foreclosure proceeds received by Administrative Agent shall be applied to reduce the Repurchase Price for such Purchased Mortgage Loan on each Payment Date except as otherwise provided herein). Seller is obligated to repurchase and take physical possession of the Purchased Assets and related Asset Files from Administrative Agent or its designee (including the Custodian) at Seller’s
expense on the related Repurchase Date. Provided that no Default shall have occurred and is continuing, and Administrative Agent has received the related Repurchase Price (excluding accrued and unpaid Price Differential, which, for the avoidance of doubt, shall be paid on the next succeeding Payment Date) upon repurchase of the Purchased Assets, Administrative Agent and Buyers will each be deemed to have released their respective interests hereunder in the Purchased Assets (and the Repurchase Assets related thereto) at the request of Seller. The Purchased Assets (and the Repurchase Assets related thereto) shall be delivered to Seller free and clear of any lien, encumbrance or claim of Administrative Agent or the Buyers, and the Administrative Agent shall execute and deliver such terminations and releases as the Seller may reasonably request to evidence the foregoing. With respect to payments in full by the related Mortgagor of a Purchased Mortgage Loan, Seller agrees to promptly remit (or cause to be remitted) to Administrative Agent for the benefit of Buyers the Repurchase Price with respect to such Purchased Mortgage Loan. Administrative Agent and Buyers agree to release their respective interests in Purchased Mortgage Loans which have been prepaid in full after receipt of evidence of compliance with the immediately preceding sentence.
b.Prior to an Early Buyout Loan becoming a real estate owned property, Seller shall (i) notify Administrative Agent in writing that such Early Buyout Loan shall become a real estate owned property and (ii) the Asset Value on account of the related Early Buyout Loan shall be decreased to zero and Seller shall immediately repurchase such Early Buyout Loan prior to the conversion of the Early Buyout Loan to a real estate owned property.
c.With respect to any Purchased Mortgage Loan, Administrative Agent shall allocate any Repurchase Price in respect thereof (x) prior to an Event of Default, pro rata among the Purchase Price-Base, Purchase Price-Incremental 1 and Purchase Price-Incremental 2 based upon the Allocated Percentage of each; and (y) on and after an Event of Default, first to the Buyers of the Purchase Price-Base until all Obligations in respect of the Purchase Price-Base are reduced to zero, second to the Purchase Price-Incremental 1 until all Obligations in respect of the Purchase Price-Incremental 1 are reduced to zero and third to the Purchase Price-Incremental 2 until all Obligations in respect of the Purchase Price-Incremental 2 are reduced to zero.
5.Price Differential.
a.On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential for the preceding Pricing Period shall be settled in cash on each related Payment Date. [***], Administrative Agent shall give Seller written or electronic notice of the amount of the Price Differential due on such Payment Date. On the Payment Date, Seller shall pay to Administrative Agent the Price Differential for the benefit of Buyers for such Payment Date
(along with any other amounts then due and owing pursuant to Sections 7 and 36 hereof and Section 3 of the Pricing Side Letter), by wire transfer in immediately available funds. Prior to the occurrence and continuance of an Event of Default, the Administrative Agent shall apply all payments of Price Differential in respect of any Purchased Mortgage Loan pro rata among the Price Differential-Base, the Price Differential-Incremental 1 and the Price Differential-Incremental 2 based upon the Allocated Percentage of each. On and after an Event of Default, any application of Price Differential will first be attributed to the Price Differential-Base then due and owing until reduced to zero, second to the Price Differential-Incremental 1 then due and owing until reduced to zero and third to the Price Differential-Incremental 2 then due and owing until reduced to zero.
b.If Seller fails to pay all or part of the Price Differential [***], with respect to any Purchased Asset, Seller shall be obligated to pay to Administrative Agent for the benefit of Buyers (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Administrative Agent for the benefit of Buyers.
c.If prior to any Payment Date, Administrative Agent determines [***] that, by reason of circumstances affecting the relevant market, (i) adequate and reasonable means do not exist for ascertaining the Reference Rate; (ii) the Reference Rate is no longer in existence; (iii) continued implementation of the Reference Rate is no longer operationally, administratively or technically feasible or no significant market practice for the administration of the Reference Rate exists, (iv) the Reference Rate will not adequately and fairly reflect the cost to Administrative Agent and Buyers of purchasing or maintaining Transactions or (v) the administrator of the Reference Rate or a Governmental Authority having jurisdiction over Administrative Agent has made a public statement identifying a specific date after which the Reference Rate shall no longer be made available or used for determining the interest rate of loans, Administrative Agent may give prompt written notice (which may be delivered via email) thereof to Seller, whereupon the rate for such period that will replace the Reference Rate for such period, and for all subsequent periods until such notice has been withdrawn by Administrative Agent, shall be the greater of (x) an alternative benchmark rate (including any mathematical or other adjustments to the benchmark rate (if any) incorporated therein) and (y) zero, together with any proposed Successor Rate Conforming Changes, as determined by Administrative Agent in its sole good faith discretion (any such rate, a “Successor Rate”).
d.To the extent Administrative Agent implements a Successor Rate and Successor Rate Conforming Changes it will promptly notify Seller of the effectiveness of any such changes. Any determination of a Successor Rate and the adoption of Successor Rate Conforming Changes shall be made by
Buyer in a manner substantially consistent with market practice with respect to similarly situated counterparties with substantially similar assets in similar facilities and any such Successor Rate Conforming Changes will become effective without any further action or consent of Seller to this Agreement or the other Program Agreements.
6.Margin Maintenance; Reallocation of Purchase Price
a.If at any time the outstanding Purchase Price of any Purchased Mortgage Loan subject to a Transaction is greater than the Asset Value of such Purchased Mortgage Loan subject to a Transaction (a “Margin Deficit”), then Administrative Agent may by notice to Seller require Seller to transfer to Administrative Agent for the benefit of Buyers cash in an amount at least equal to the Margin Deficit (such requirement, a “Margin Call”).
b.Notice delivered pursuant to Section 6(a) above may be given by any written or electronic means. Any notice given [***] shall be met, and the related Margin Call satisfied, [***]; notice given after [***]shall be met, and the related Margin Call satisfied, [***] (the foregoing time requirements for satisfaction of a Margin Call are referred to as the “Margin Deadlines”). The failure of Administrative Agent, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions to which this Agreement is subject or limit the right of Administrative Agent to do so at a later date. Seller and Administrative Agent each agree that a failure or delay by Administrative Agent to exercise its rights hereunder shall not limit or waive Administrative Agent’s or Buyers’ rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.
c.In the event that a Margin Deficit exists with respect to any Purchased Asset, Administrative Agent may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Administrative Agent against the related Margin Deficit and (ii) may be applied by Administrative Agent against the Repurchase Price of any Purchased Asset for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, the Administrative Agent retains the right, [***], to make a Margin Call in accordance with the provisions of this Section 6.
7.Income Payments
a.If Income is paid in respect of any Purchased Mortgage Loan during the term of a Transaction, such Income shall be held in trust for the Administrative Agent and Buyers and shall constitute the property of the applicable Buyers except for tax purposes as to which it shall be treated as income and property of Seller.
b.Seller shall and to the extent it engages a third-party Servicer shall cause such Servicer to deposit all Income with respect to Purchased Mortgage Loans into the related Servicer Account, as applicable, in accordance with the applicable Servicing Agreement and Servicer Notice.
c.Provided no Event of Default has occurred and is continuing, and the Price Differential has been paid to Administrative Agent for the benefit of Buyers in accordance with Section 5 hereof, Seller shall be entitled to the remittance of all Income related to Purchased Mortgage Loans to the full extent it would have been so entitled if the Purchased Mortgage Loans had not been sold to Administrative Agent for the benefit of Buyers except to the extent that Seller receives any related Principal Paydown Payments in excess of [***], which Seller shall deposit such Principal Paydown Payments in the Program Account within [***] of receipt. Notwithstanding the preceding, any Income (including Principal Paydown Payments) received by Seller while the related Transaction is outstanding shall be deemed to be held by Seller solely in trust for Administrative Agent for the benefit of Buyers pending the payment of the Repurchase Price in respect of such Transaction and the repurchase of the related Mortgage Loans, and if a Default or an Event of Default has occurred and is continuing, or a Margin Deficit exists that Seller has not satisfied in accordance with the provisions of Section 6, with respect to any Purchased Mortgage Loan, Administrative Agent may direct Seller in writing to deposit into the Collection Account (provided that, to the extent the Collection Account is not opened, to the Program Account): (i) all Income [***] then held by Seller in respect of Purchased Mortgage Loans subject to outstanding Transactions and (ii) all future Income (including [***]) in respect of Purchased Mortgage Loans subject to new or outstanding Transactions when received by Seller, and upon receipt of any such direction, Seller shall immediately cause all such Income [***] then held to be deposited, and all such future Income [***] to be deposited [***] after its receipt by Seller, into the Collection Account or the Program Account as Administrative Agent may direct.
d.Administrative Agent shall immediately apply any such amount received by Buyers or the Administrative Agent to reduce the amount of the Repurchase Price due upon termination of the related Transaction.
e.Provided that no Event of Default has occurred and is continuing, on each Repurchase Date, Administrative Agent shall remit any Income received with respect to the Purchased Mortgage Loans as follows:
i.first, to Administrative Agent, for the benefit of the applicable Buyers, pro rata, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Mortgage Loan up to the amount advanced by Administrative Agent on behalf of Buyers as set forth in Section 4.d hereof;
ii.second, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
iii.third, to the payment of all other Obligations then due and owing to Administrative Agent and Buyers in the order of priority set forth in Section 4.d; and
iv.fourth, to, or at the direction of Seller, any remaining amounts.
f.Provided that no Event of Default has occurred and is continuing, on each Payment Date, Administrative Agent shall remit any Income received with respect to the Purchased Mortgage Loans as follows:
i. first, to Administrative Agent, for the benefit of Buyers, in the order of priority as determined in accordance with Section 5.a hereof, in payment of any accrued and unpaid Price Differential to the extent not paid by Seller to Administrative Agent pursuant to Section 5 hereof;
ii.second, to Administrative Agent, for the benefit of the applicable Buyers, in the order of priority as determined in accordance with Section 4.d, in reduction of the Repurchase Price of any liquidation, pay-off or repurchase of any Purchased Mortgage Loan up to the amount advanced by Administrative Agent on behalf of Buyers;
iii.third, without limiting the rights of Administrative Agent under Section 6 hereof, to Administrative Agent for the benefit of Buyers, in the amount of any unpaid Margin Deficit;
iv.fourth, to the payment of all other Obligations then due and owing to Administrative Agent and Buyers in the order of priority set forth in Section 4.d; and
v.fifth, to, or at the direction of Seller, any remaining amounts.
g.On the Termination Date or upon the occurrence and during the continuation of an Event of Default, all Income received with respect to the Purchased Mortgage Loans shall be allocated as directed by Administrative Agent as follows:
i.first, pro rata, to each Servicer and Custodian in payment of any fees and expenses due and owing to the extent not otherwise paid pursuant to the terms of the applicable Servicing Agreement and Custodial Agreement;
ii.second, to Administrative Agent in payment of any accrued and unpaid Price Differential, to the extent not paid by the Seller to Administrative Agent pursuant to Section 5 and in the order of priority set forth in Section 5;
iii.third, to Administrative Agent, for the benefit of the applicable Buyers, in reduction of the Repurchase Price of all Purchased Assets and in the order of priority set forth in Section 4.d;
iv.fourth, to the payment of all other Obligations until paid in full and in the order of priority set forth in Section 4.d; and
v.fifth, to, or at the direction of Seller, any remaining amounts.
h.To the extent that Administrative Agent receives any funds from a Take-out Investor with respect to the purchase by such Take-out Investor of a Purchased Asset, the Administrative Agent shall promptly apply such funds to the Repurchase Price of the Purchased Asset purchased by such Take-out Investor and shall promptly remit any excess to the applicable Seller.
i.Reserved.
j.With respect to each Early Buyout Loan, the Seller shall be listed as the mortgagee of record and shall deposit all claims submitted on account such Early Buyout Loans into the payee account (the “Clearing Account”) and shall transfer (or cause to be transferred) all such amounts so received [***]. Seller shall remit all such funds from the Clearing Account to the Collection Account (. To the extent HUD deducts any amounts owing by the Seller to HUD, which are not attributable to the Early Buyout Loans, the Seller shall remit, within [***], such deducted amounts into the Collection Account.
k.Provided no Event of Default has occurred and is continuing, on each Payment Date, Seller shall remit to Administrative Agent for the benefit of Buyers an amount equal to the Price Differential in accordance with Section 5 of this Agreement.
8.Security Interest
a.Conveyance; Security Interest.
1.1. On each Purchase Date, Seller hereby sells, assigns and conveys all rights and interests in the Purchased Assets identified
on the related Asset Schedule, including related Servicing Rights and Asset Documents, and the Repurchase Assets to Administrative Agent for the benefit of Buyers. Although the parties intend that all Transactions hereunder be sales and purchases and not loans, in the event any such Transactions are deemed to be loans, and in any event, Seller hereby pledges to Administrative Agent as security for the performance by Seller of the Obligations and hereby grants, assigns and pledges to Administrative Agent a fully perfected first priority security interest (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement) in the Purchased Assets, including related Servicing Rights and Asset Documents related to such Purchased Assets, the Servicer Advances related to such Purchased Assets, all debenture interests payable by HUD on account of any Early Buyout Loan which constitutes a Purchased Asset, any Agency Security or right to receive such Agency Security when issued to the extent backed by any of the Purchased Assets, the Records related to the Purchased Assets, the Program Agreements (to the extent such Program Agreements and Seller’s rights thereunder relate to the Purchased Assets), any related Take-out Commitments related to such Purchased Assets, any Property relating to the Purchased Assets, all insurance policies and insurance proceeds relating to any Purchased Asset or the related Mortgaged Property, including, but not limited to, any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts and VA Loan Guaranty Agreements (if any), Income related to such Purchased Assets, the Collection Account, Interest Rate Protection Agreements related to such Purchased Assets, deposit accounts or securities accounts related to the Purchased Assets (including any interest of Seller in escrow accounts) and any other contract rights, instruments, deposit accounts or securities accounts, payments, rights to payment (including payments of interest or finance charges), general intangibles and other assets, in each case, relating to the Purchased Assets and any proceeds (including the related securitization proceeds) and distributions with respect to any of the foregoing, whether now owned or hereafter acquired, now existing or hereafter created in each case excluding any Take-out Commitments and Interest Rate Protection Agreements to the extent Seller may not, pursuant to the provisions thereof, assign or transfer, or pledge or grant a security interest in, such Take-out Commitments or Interest Rate Protection Agreements without the consent of, or without violating its obligations to, the related Take-out Investor or counterparty to such Interest Rate Protection Agreement, but only to the extent such provisions are not rendered ineffective against the
Administrative Agent under Article 9, Part 4 of the Uniform Commercial Code (collectively, the “Seller Repurchase Assets” and together with the Additional Collateral, the “Repurchase Assets”).
2.2. Administrative Agent and Seller hereby agree that in order to further secure Seller’s Obligations hereunder, Seller hereby grants to Administrative Agent, for the benefit of Buyers, a security interest in (i) any “Repurchase Assets” as such term is defined in the Funding 2 Repo Agreement that are otherwise deliverable to Seller thereunder and to the extent all obligations then due and owing under the Funding 2 Repo Agreement have been paid in full; (ii) Seller’s rights under the Funding 2 Repo Agreement, including, without limitation, any rights to receive payments thereunder or any rights to collateral thereunder whether now owned or hereafter acquired, now existing or hereafter created, and (iii) all collateral however defined or described under the Funding 2 Repo Agreement to the extent not otherwise included under the definition of Repurchase Assets therein, in all instances, whether now owned or hereafter acquired, now existing or hereafter created (collectively, the “Additional Collateral”).
b.Servicing Rights. Seller acknowledges that it has no rights to service the Purchased Mortgage Loans except to the extent set forth in this Agreement, the Servicer Notice or the Servicing Agreement. Without limiting the generality of the foregoing and in the event that Seller is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, Seller grants, assigns and pledges to Administrative Agent a security interest in the Servicing Rights related to the Purchased Assets and proceeds related thereto and in all instances, whether now owned or hereafter acquired, now existing or hereafter created. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
c.Financing Statements. Seller agrees to execute, deliver and/or file such documents and perform such acts as may be reasonably necessary to fully perfect (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement) Administrative Agent’s security interest created hereby. Furthermore, Seller hereby authorizes the Administrative Agent to file financing statements relating to the Seller Repurchase Assets, as the Administrative Agent, at its option, may deem appropriate. The Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 8.
d.Power of Attorney. In addition to the foregoing, Seller agrees to execute a Power of Attorney, in the form of Exhibit A hereto, to be delivered on the date hereof which may be used only in accordance with Section 28 hereof.
e.Intent. The foregoing provisions in Section 8(a) are intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 1001(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
9.Payment and Transfer
Unless otherwise mutually agreed in writing or as otherwise set forth in Section 7 hereof, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent in the Program Account. Seller acknowledges that it has no rights of withdrawal from the Program Account. All Purchased Assets transferred by one party hereto to the other party shall be in the case of a purchase by a Buyer in suitable form for transfer or shall be accompanied by duly executed instruments of transfer or assignment in blank and such other documentation as Administrative Agent may reasonably request. All Purchased Assets shall be evidenced by a Trust Receipt. Any Repurchase Price received by Administrative Agent [***].
10.Conditions Precedent
a.Initial Transaction. As conditions precedent to the initial Transaction, Administrative Agent shall have received on or before the day of such initial Transaction the following, in form and substance satisfactory to Administrative Agent and duly executed by Seller and each other party thereto:
(1)Program Agreements. The Program Agreements (with the exception of the Collection Account Control Agreement pursuant to Section 10.b(14) below) duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(2)Security Interest. Evidence that all other actions necessary or, in the opinion of Administrative Agent, desirable to perfect and protect Administrative Agent’s and Buyers’ interest in the Purchased Assets and other Repurchase Assets have been taken, including, without limitation, duly authorized and filed Uniform Commercial Code financing statements on Form UCC-1.
(3)Organizational Documents. A certificate of the corporate secretary or other authorized person of Seller substantially in form and substance acceptable to Administrative Agent in its sole good faith discretion, attaching certified copies of Seller’s organizational documents and resolutions approving the Program Agreements and transactions thereunder
(either specifically or by general resolution) and all documents evidencing other necessary corporate action or governmental approvals as may be required in connection with the Program Agreements.
(4)Good Standing Certificate. A certified copy of a good standing certificate from the jurisdiction of organization of Seller, dated as of no earlier than the date ten (10) Business Days prior to the Purchase Date with respect to the initial Transaction hereunder.
(5)Incumbency Certificate. An incumbency certificate of the corporate secretary or other authorized person of Seller, certifying the names, true signatures and titles of the representatives duly authorized to request transactions hereunder and to execute the Program Agreements.
(6)Opinion of Counsel. An opinion of Seller’s counsel, as to such matters as Administrative Agent may request and in form and substance acceptable to Administrative Agent in its sole discretion, including, without limitation, with respect to the non-contravention, enforceability and corporate opinions with respect to Seller, including an opinion in form and substance reasonably acceptable to Administrative Agent on behalf of Buyers, indicating that as of the date hereof, Seller is not required to register as an “investment company,” as such term is defined in the Investment Company Act.
(7)Underwriting Guidelines. Other than underwriting guidelines of the Agencies, a true and correct copy of the Underwriting Guidelines certified by an officer of the Seller.
(8)Fees. Payment of any fees due to Administrative Agent and Buyers hereunder.
(9)Insurance. Evidence that Seller has added Administrative Agent as an additional loss payee under the Seller’s Fidelity Insurance.
b.All Transactions. The obligation of Administrative Agent for the benefit of Buyers to enter into each Transaction pursuant to this Agreement is subject to the following conditions precedent:
(1)Due Diligence Review. Without limiting the generality of Section 36 hereof, Administrative Agent and Buyers shall have completed, to their satisfaction, their due diligence review of the related Purchased Assets, Seller and the Servicer.
(2)Required Documents.
(a)With respect to each Purchased Mortgage Loan which is not a Wet-Ink Mortgage Loan, the Asset File has been delivered to
the applicable Custodian in accordance with the applicable Custodial Agreement;
(b)With respect to each Wet-Ink Mortgage Loan, the Wet-Ink Documents have been delivered to Administrative Agent or the applicable Custodian, as the case may be, in accordance with the applicable Custodial Agreement.
(3)Transaction Documents. Administrative Agent or its designee shall have received on or before the day of such Transaction (unless otherwise specified in this Agreement) the following, in form and substance satisfactory to Administrative Agent and (if applicable) duly executed:
(a)A Transaction Request and Asset Schedule delivered by Seller pursuant to Section 3(b) hereof and solely with respect to Transactions attributable to the Maximum Committed Purchase Price, [***].
(b)If not a Wet-Ink Mortgage Loan, the Request for Certification and the related Asset Schedule delivered by Seller, and (i) with respect to Mortgage Loans other than Simultaneously Funded Early Buyout Loans, the Trust Receipt and the Custodial Mortgage Loan Schedule or (ii) with respect to Mortgage Loans that are Simultaneously Funded Early Buyout Loans, a preliminary Custodial Mortgage Loan Schedule, in each case, delivered by the Custodian.
(c)Such certificates, opinions of counsel or other documents as Administrative Agent may reasonably request.
(4)No Default. No Default or Event of Default shall have occurred and be continuing;
(5)Requirements of Law. Neither Administrative Agent nor Buyers shall have determined that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Administrative Agent or any Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Administrative Agent or any Buyer to enter into Transactions with a Pricing Rate based on the Reference Rate.
(6)Representations and Warranties. Both immediately prior to the related Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in each Program Agreement shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).
(7)Electronic Tracking Agreement. To the extent Seller is selling Mortgage Loans which are registered on the MERS System, an Electronic Tracking Agreement entered into, duly executed and delivered by the parties thereto and being in full force and effect, free of any modification, breach or waiver.
(8)Material Adverse Change. None of the following shall have occurred and/or be continuing:
(a)1. an event or events shall have occurred in the good faith determination of a Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by mortgage loans or securities or an event or events shall have occurred resulting in such Buyer not being able to finance Purchased Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or
(b)2. an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by mortgage loans or an event or events shall have occurred resulting in such Buyer not being able to sell securities backed by mortgage loans at prices which would have been reasonable prior to such event or events; or
(c)3. there shall have occurred (i) a material change in financial markets, an outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services; or
(d)4. there shall have occurred a material adverse change in the financial condition of a Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of such Buyer to fund its obligations under this Agreement.
(9)Business Purpose Mortgage Loans. Solely with respect to Business Purpose Mortgage Loans:
(a)that are BPL – Holdbacks, Administrative Agent shall have reviewed and approved the escrow arrangements and documentation therefor; and
(b)Administrative Agent shall have received a letter agreement, in form and substance acceptable to Administrative Agent, executed by Administrative Agent, Seller and the applicable Qualified Originator if other than Seller.
(10)DE Compare Ratio. Seller’s DE Compare Ratio is
less than [***]%.
(11)No HUD Suspension. HUD has not suspended
Seller’s ability to originate FHA Loans in any jurisdiction.
(12)Early Buyout Loans. Prior to giving effect to any Transaction with respect to Early Buyout Loans, Seller shall deliver to Administrative Agent a Servicer Notice addressed to the Servicer of the related Early Buyout Loans and agreed to by the Seller and such Servicer, in form and substance acceptable to Administrative Agent, duly executed by the parties thereto.
(13)Designated Mortgage Loans – Purchase Price Incremental 2. With respect to each proposed Transaction the subject of which is a Designated Mortgage Loan which is eligible for Purchase Price-Incremental 2, no Disqualification Event shall have occurred and be continuing.
(14)Collection Account Control Agreement. Within [***], Administrative Agent shall have received the Collection Account Control Agreement, duly executed and delivered by the Seller, Administrative Agent and Bank, in form and substance acceptable to Administrative Agent.
(15)Agency Title Alternative Mortgage Loans. To the extent an Agency Title Alternative Mortgage Loan is proposed for a Transaction, Seller has provided evidence satisfactory to Administrative Agent that Seller was accepted into the Title Variance Program and the “Title Alternative” (as defined in the Title Variance Program) is delivered to the Custodian as part of the Asset File pursuant to the terms of the Custodial Agreement.
11.Program; Costs
a.Seller shall reimburse Administrative Agent and Buyers for any of Administrative Agent’s and Buyers’ reasonable out-of-pocket costs, including due diligence review costs and reasonable attorney’s fees, incurred by Administrative Agent and Buyers in determining the acceptability to Administrative Agent and Buyers of any Mortgage Loans. Seller shall also pay, or reimburse Administrative Agent and Buyers if Administrative Agent or Buyers shall pay, any termination fee, which may be due any Servicer that is replaced or terminated in accordance with this Agreement. Seller shall pay the reasonable fees and expenses of Administrative Agent’s and Buyers’
counsel in connection with the Program Agreements. Reasonable legal fees for any subsequent amendments to this Agreement or related documents shall be borne by Seller. Seller shall pay ongoing custodial fees and expenses as set forth in the related Custodial Agreement, and any other ongoing fees and expenses set forth in any other Program Agreement. Without limiting the foregoing, Seller shall pay all fees as and when required under the Pricing Side Letter.
b.If any Buyer determines that, due to the introduction of, any change in, or the compliance by such Buyer with, after the date of this Agreement (i) any Eurocurrency reserve requirement or (ii) the interpretation of any law, regulation or any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be an increase in the cost to such Buyer in engaging in the present or any future Transactions, then Seller agrees to pay to such Buyer, from time to time, upon demand by such Buyer (with a copy to Custodian) the actual cost of additional amounts as specified by such Buyer to compensate such Buyer for such increased costs.
c.With respect to any Transaction, Administrative Agent and Buyers may conclusively rely upon, and shall incur no liability to Seller in acting upon, any request or other communication that Administrative Agent and Buyers reasonably believe to have been given or made by a person authorized to enter into a Transaction on Seller’s behalf, whether or not such person is listed on the certificate delivered pursuant to Section 10(a)(5) hereof.
d.Notwithstanding the assignment of the Program Agreements with respect to each Purchased Asset to Administrative Agent for the benefit of Buyers, Seller agrees and covenants with Administrative Agent and Buyers to enforce diligently Seller’s rights and remedies set forth in the Program Agreements.
e.(i) Any payments made by Seller to Administrative Agent or a Buyer or a Buyer assignee or participant hereunder or under any Program Agreement shall be made free and clear of and without deduction or withholding for any Taxes, except as required by applicable law. If Seller shall be required by applicable law (as determined in the good faith discretion of the applicable withholding agent) to deduct or withhold any Tax from any sums payable to Administrative Agent or a Buyer or Buyer assignee or participant, then (i) the Seller shall make such deductions or withholdings and pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law; (ii) to the extent the withheld or deducted Tax is an Indemnified Tax or Other Tax, the sum payable shall be increased as necessary so that after making all required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section 11(e)) Administrative Agent receives an amount equal to
the sum it would have received had no such deductions or withholdings been made; and (iii) the Seller shall notify the Administrative Agent of the amount
paid and shall provide the original or a certified copy (which may be provided electronically) of a receipt issued by the relevant Governmental Authority evidencing such payment within [***] thereafter. Seller shall otherwise indemnify Administrative Agent and such Buyer, within [***] after demand therefor, for any Indemnified Taxes or Other Taxes imposed on Administrative Agent or such Buyer (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 11(e)) and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally asserted by the relevant Governmental Authority. Upon the reasonable request of Seller, Administrative Agent or such Buyer will provide Seller with documentation evidencing payments of Indemnified Taxes, Other Taxes and any such expenses, which shall be conclusive absent manifest error.
(ii) Administrative Agent shall and shall cause each Buyer and Buyer assignee and participant to deliver to the Seller, at the time or times reasonably requested by the Seller, such properly completed and executed documentation reasonably requested by the Seller as will permit payments made hereunder to be made without withholding or at a reduced rate of withholding. In addition, Administrative Agent shall and shall cause each Buyer and Buyer assignee and participant, if reasonably requested by Seller, to deliver such other documentation prescribed by applicable law or reasonably requested by the Seller as will enable the Seller to determine whether or not Administrative Agent or such Buyer or Buyer assignee or participant is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in this Section 11, the completion, execution and submission of such documentation (other than such documentation in Section 11(e)((ii)(A), (B) and (C) below) shall not be required if in a Buyer’s or any Buyer’s assignee’s or participant’s judgment such completion, execution or submission would subject such Buyer or Buyer assignee or participant to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Buyer or Buyer assignee or participant. Without limiting the generality of the foregoing, Administrative Agent shall and shall cause a Buyer or Buyer assignee or participant to deliver to the Seller, to the extent legally entitled to do so:
(A) in the case of a Buyer or Buyer assignee or participant which is a “U.S. Person” as defined in section 7701(a)(30) of the Code, a properly completed and executed Internal Revenue Service (“IRS”) Form W-9 certifying that it is not subject to U.S. federal backup withholding tax;
(B) in the case of a Buyer or Buyer assignee or participant which is not a “U.S. Person” as defined in Code section 7701(a)(30): (I) a properly completed and executed IRS Form W-8BEN, W-8BEN-E or W-8ECI, as appropriate, evidencing entitlement to a zero percent or reduced rate of U.S. federal income
tax withholding on any payments made hereunder, (II) in the case of such non-U.S. Person claiming exemption from the withholding of U.S. federal income tax under Code sections 871(h) or 881(c) with respect to payments of “portfolio interest,” a duly executed certificate (a “U.S. Tax Compliance Certificate”) to the
effect that such non-U.S. Person is not (x) a “bank” within the meaning of Code section 881(c)(3)(A), (y) a “10 percent shareholder” of Seller or affiliate thereof, within the meaning of Code section 881(c)(3)(B), or (z) a “controlled foreign corporation” described in Code section 881(c)(3)(C), (III) to the extent such non-U.S. person is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if such non-U.S. person is a partnership and one or more direct or indirect partners of such non-U.S. person are claiming the portfolio interest exemption, such non-U.S. person may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner, and (IV) executed originals of any other form or supplementary documentation prescribed by law as a basis for claiming exemption from or a reduction in United States federal withholding tax together with such supplementary documentation as may be prescribed by law to permit Seller to determine the withholding or deduction required to be made.
(C) if a payment made to a Buyer or Buyer assignee or participant under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Buyer or assignee or participant were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), Administrative Agent on behalf of such Buyer or assignee or participant shall deliver to the Seller at the time or times prescribed by law and at such time or times reasonably requested by the Seller such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Seller as may be necessary for the Seller to comply with their obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 11(e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
The applicable IRS forms referred to above shall be delivered by Administrative Agent on behalf of each applicable Buyer or Buyer assignee or participant on or prior to the date on which such person becomes a Buyer or Buyer assignee or participant under this Agreement, as the case may be, and upon the obsolescence or invalidity of any IRS form previously delivered by it hereunder.
f.Any indemnification payable by Seller to Administrative Agent or a Buyer or Buyer assignee or participant for Indemnified Taxes or Other Taxes that are
imposed on Administrative Agent or such Buyer or Buyer assignee or participant, as described in Section 11(e)(i) hereof, shall be paid by Seller [***] after demand therefor from Administrative Agent. A certificate as to the amount of such payment or liability delivered to the Seller by the Administrative Agent on behalf of a Buyer or Buyer assignee or participant shall be conclusive absent manifest error.
g. Each party’s obligations under this Section 11 shall survive any assignment of rights by, or the replacement of, a Buyer or a Buyer assignee or participant,
and the repayment, satisfaction or discharge of all obligations under any Program Agreement.
h.Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal, state and local income and franchise taxes to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets, and the Purchased Assets as owned by Seller in the absence of an Event of Default by Seller. Administrative Agent, each Buyer and Seller agree that they will treat and report for all tax purposes the Transactions entered into hereunder as one or more loans from a Buyer to Seller secured by the Purchased Mortgage Loans, unless otherwise prohibited by law or upon a final determination by any taxing authority that the Transactions are not loans for tax purposes.
12.Servicing
a.Seller, on Administrative Agent’s and Buyers’ behalf, shall contract with Servicer to, or if Seller is the Servicer, Seller shall, service the Purchased Mortgage Loans consistent with the degree of skill and care that Seller customarily requires with respect to similar Purchased Mortgage Loans owned or managed by it and in accordance with Accepted Servicing Practices. The Seller and Servicer shall (i) comply in all material respects with all applicable federal, state and local laws and regulations related to the servicing of such Purchased Mortgage Loans, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities hereunder and (iii) not impair the rights of Administrative Agent or Buyers in any Purchased Mortgage Loans or any payment thereunder. Administrative Agent may terminate the servicing of any Purchased Mortgage Loans with the then existing Servicer in accordance with Section 12.e hereof.
b.With respect to Mortgage Loans other than BPL – Holdbacks, Seller shall and shall cause the Servicer to hold or cause to be held all escrow funds collected by Seller and Servicer with respect to any Purchased Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected. With respect to BPL – Holdbacks, Seller shall and shall cause the originator or Servicer to hold or cause to be held all Holdback Amounts collected by the Seller or Servicer with respect to any Purchased Assets in the Holdback
Account and shall apply the same to improve and rehabilitate the related Mortgaged Property.
c.To the extent Seller engages a third party Servicer, Seller shall cause such Servicer to remit Income to Administrative Agent pursuant to Section 7 above.
d.In the event there is a third party Servicer and upon Administrative Agent’s request, Seller shall provide promptly to Administrative Agent a Servicer Notice addressed to and agreed to by the Servicer of the related Purchased Mortgage Loans, advising such Servicer of such matters as Administrative Agent may reasonably request, including, without limitation, recognition by the Servicer of Administrative Agent’s and Buyers’ interest in such Purchased Mortgage Loans and the Servicer’s agreement that upon receipt of notice of an Event of Default from Administrative Agent, it will follow the instructions of Administrative Agent with respect to the Purchased Mortgage Loans and any related Income with respect thereto.
e.Upon the occurrence of an Event of Default hereunder or a material default under the Servicing Agreement, Administrative Agent shall have the right to immediately terminate the Servicer’s right to service the Purchased Mortgage Loans without payment of any penalty or termination fee. For the avoidance of doubt, such termination by Administrative Agent shall not be subject to any payment requirement under the Servicing Agreement including any reimbursement for Servicer’s expenses, all of which shall remain an obligation of the Seller. Seller and the Servicer shall cooperate in transferring the servicing of the Purchased Mortgage Loans to a successor servicer appointed by Administrative Agent on behalf of Buyers in its sole discretion. For the avoidance of doubt any termination of the Servicer’s rights to service by the Administrative Agent as a result of an Event of Default shall be deemed part of an exercise of the Administrative Agent’s rights to cause the liquidation, termination or acceleration of this Agreement.
f.If Seller should discover that, for any reason whatsoever, Seller or any entity responsible to Seller for managing or servicing any such Purchased Mortgage Loan has failed to perform fully Seller’s obligations under the Program Agreements or any of the obligations of such entities with respect to the Purchased Mortgage Loans, Seller shall promptly notify Administrative Agent.
g.Reserved.
h.For the avoidance of doubt, the Seller retains no economic rights to the servicing of the Purchased Mortgage Loans other than as set forth herein. As such, the Seller expressly acknowledges that the Purchased Mortgage Loans are sold to Administrative Agent for the benefit of Buyers on a “servicing released” basis with such servicing retained by the Servicer.
13.Representations and Warranties
a.Seller represents and warrants to Administrative Agent and Buyers as of the date hereof and as of each Purchase Date for any Transaction that:
(1)Seller Existence. Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware.
(2)Licenses. Seller is duly licensed and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted and complies in all material respects with all applicable federal, state or local laws, rules and regulations. Seller has the requisite power and authority and legal right to originate and purchase Mortgage Loans (as applicable) and to own, sell and grant a lien on all of its right, title and interest in and to the Mortgage Loans, and to execute and deliver, engage in the transactions contemplated by, and perform and observe the terms and conditions of, each Program Agreement and any Transaction Request. Seller is an FHA Approved Mortgagee and, to the extent Seller is originating VA Loans, a VA Approved Lender.
(3)Power. Seller has all requisite corporate or other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted.
(4)Due Authorization. Seller has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Program Agreements, as applicable. Each Program Agreement has been (or, in the case of Program Agreements not yet executed, will be) duly authorized, executed and delivered by Seller, all requisite or other corporate action having been taken, and each is valid, binding and enforceable against Seller in accordance with its terms except as such enforcement may be affected by bankruptcy, by other insolvency laws, or by general principles of equity.
(5)Financial Statements. The Seller has heretofore furnished to Administrative Agent a copy of (a) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the most recent fiscal year-end, and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such fiscal year, setting forth in each case in comparative form the figures for the previous year, with the opinion thereon of a nationally recognized accounting firm acceptable to Administrative Agent and (b) its consolidated balance sheet and the consolidated balance sheets of its consolidated Subsidiaries for the most recent quarterly fiscal period of the Seller and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such
quarterly fiscal periods, setting forth in each case in comparative form the figures for the previous year. All such financial statements are complete and correct and fairly present, in all material respects, the consolidated financial condition of the Seller and its Subsidiaries and the consolidated results of their operations as at such dates and for such fiscal periods, all in accordance with GAAP (other than with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements) applied on a consistent basis. Since [***], there has been no material adverse change in the consolidated business, operations or financial condition of the Seller and its consolidated Subsidiaries taken as a whole from that set forth in said financial statements nor is Seller aware of any state of facts which (with notice or the lapse of time) would reasonably be expected to result in any such material adverse change. The Seller has, on the date of the statements delivered pursuant to this Section (the “Statement Date”) no material liabilities, direct or indirect, fixed or contingent, matured or unmatured, known or unknown, or material liabilities for taxes, long-term leases or unusual forward or long-term commitments not disclosed by, or reserved against in, said balance sheet and related statements, and at the present time there are no material unrealized or anticipated losses from any loans, advances or other commitments of Seller except as heretofore disclosed to Administrative Agent in writing.
(6)Event of Default. There exists no Event of Default under Section 15(b) hereof, which default gives rise to a right to accelerate indebtedness as referenced in Section 15(b) hereof, under any mortgage, borrowing agreement or other instrument or agreement pertaining to indebtedness for borrowed money or to the repurchase of mortgage loans or securities.
(7)Solvency. Seller is solvent and will not be rendered insolvent by any Transaction and, after giving effect to such Transaction, will not be left with an unreasonably small amount of capital with which to engage in its business. Seller does not intend to incur, nor believes that it has incurred, debts beyond its ability to pay such debts as they mature and is not contemplating the commencement of insolvency, bankruptcy, liquidation or consolidation proceedings or the appointment of a receiver, liquidator, conservator, trustee or similar official in respect of such entity or any of its assets. The amount of consideration being received by Seller upon the sale of the Purchased Assets to Administrative Agent for the benefit of Buyers constitutes reasonably equivalent value and fair consideration for such Purchased Assets. Seller is not transferring any Purchased Assets to Administrative Agent with any intent to hinder, delay or defraud any of its creditors.
(8)No Conflicts. The execution, delivery and performance by Seller of each Program Agreement do not conflict in any material respect with any term or provision of the formation documents or by-laws of Seller. The execution, delivery and performance by Seller of each Program
Agreement do not conflict, in any material respect, with any material law, rule, regulation, order, judgment, writ, injunction or decree applicable to Seller of any court, regulatory body, administrative agency or governmental body having jurisdiction over Seller.
(9)True and Complete Disclosure. All information, reports, exhibits, schedules, financial statements or certificates of Seller or any Affiliate thereof or any of their officers furnished or to be furnished to Administrative Agent or Buyers in connection with the initial or any ongoing due diligence of Seller or any Affiliate or officer thereof, negotiation, preparation, or delivery of the Program Agreements are true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All financial statements have been prepared in accordance with GAAP (other than solely with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements).
(10)Approvals. No consent, approval, authorization or order of, registration or filing with, or notice to any governmental authority or court is required under applicable law in connection with the execution, delivery and performance by Seller of each Program Agreement.
(11)Litigation. Except as otherwise disclosed to Administrative Agent in writing, there is no action or proceeding pending with respect to which Seller has received service of process or, to the best of Seller’s knowledge threatened against it before any court, administrative agency or other tribunal (A) asserting the invalidity of any Program Agreement,
(B) seeking to prevent the consummation of any of the transactions contemplated any Program Agreement, (C) excluding Ordinary Course Litigation making a claim individually or in an aggregate amount greater than
$[***], or (D) which could reasonably be expected to materially and adversely affect the validity of the Purchased Assets or the performance by it of its obligations under, or the validity or enforceability of any Program Agreement.
(12)Material Adverse Change. There has been no Material Adverse Effect since the date set forth in the most recent financial statements supplied to Administrative Agent.
(13)Ownership. Upon payment of the Purchase Price and the filing of the financing statement and delivery of the Asset Files to the Custodian and the Custodian’s receipt of the related Request for Certification, Administrative Agent shall become the sole owner of the Purchased Assets
and related Repurchase Assets for the benefit of the Buyers, free and clear of all liens and encumbrances.
(14)Underwriting Guidelines. The Underwriting Guidelines provided to Administrative Agent are the true and correct Underwriting Guidelines of the Seller.
(15)Taxes. Seller and its Subsidiaries have timely filed all income tax returns and other material tax returns that are required to be filed by them and have paid all taxes prior to delinquency, except for any such taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. The charges, accruals and reserves on the books of Seller and Seller’s Subsidiaries in respect of taxes and other governmental charges are, in the opinion of Seller, adequate.
(16)Investment Company. Neither Seller nor any of its Subsidiaries is an “investment company”, or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(17)Chief Executive Office; Jurisdiction of Organization. On the Effective Date, Seller’s chief executive office, is and has been located at 6561 Irvine Center Drive, Irvine, CA 92618. On the Effective Date, Seller’s jurisdiction of organization is Delaware. Except as otherwise disclosed to the Administrative Agent in writing, Seller does not have any trade name. Except as otherwise disclosed to the Administrative Agent in writing, during the preceding five years, Seller has not been known by or done business under any other name, corporate or fictitious, and has not filed or had filed against it any bankruptcy receivership or similar petitions nor has it made any assignments for the benefit of creditors.
(18)Location of Books and Records. The location where Seller keeps its books and records, including all computer tapes and records relating to the Purchased Assets and the related Repurchase Assets is its chief executive office.
(19)Reserved.
(20)ERISA. Each Plan to which Seller or its Subsidiaries make direct contributions, and, to the knowledge of Seller, each other Plan and each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law.
(21)Adverse Selection. Seller has not selected the Purchased Assets in a manner so as to adversely affect Buyers’ interests.
(22)Agreements. Neither Seller nor any Subsidiary of Seller is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement, instrument, or indenture which default could reasonably be expected to have a material adverse effect on the business, operations, properties, or financial condition of Seller as a whole.
(23)Other Indebtedness. All Indebtedness (other than Indebtedness evidenced by this Agreement) of Seller existing on the Effective Date is listed on Exhibit B to the Pricing Side Letter (the “Existing Indebtedness”).
(24)Agency Approvals. With respect to each Agency Security and to the extent necessary, Seller is an FHA Approved Mortgagee, a VA Approved Lender and approved by GNMA as an approved lender. Seller is also approved by Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, and, to the extent necessary, approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act. In each such case, Seller is in good standing, with no event having occurred or Seller having any reason whatsoever to believe or suspect will occur prior to the issuance of the Agency Security or the consummation of the Take-out Commitment, as the case may be, including, without limitation, a change in insurance coverage which would either make Seller unable to comply with the eligibility requirements for maintaining all such applicable approvals or require notification to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA.
(25)No Reliance. Seller has made its own independent decision to enter into the Program Agreements and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Seller is not relying upon any advice from Administrative Agent or Buyers as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(26)Plan Assets. Seller is not an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, and the Purchased Assets are not “plan assets” within the meaning of 29 CFR §2510.3 101 as amended by Section 3(42) of ERISA, in Seller’s hands, and transactions by or with Seller are not subject to any state or local statute regulating investments or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.
(27)No Prohibited Persons. Neither Seller nor any of its Affiliates, officers, directors, partners or members, is an entity or person (or to Seller’s knowledge, 50 percent or greater owned by an entity or person):
(i) whose name appears on the United States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); or (ii) is otherwise the target of sanctions administered by OFAC (any and all parties or persons described in clauses (i) and (ii) above are herein referred to as a “Prohibited Person”).
(28)Servicing. Seller has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices.
b.With respect to every Purchased Asset, Seller represents and warrants to Administrative Agent and Buyers as of the applicable Purchase Date for any Transaction and each date thereafter that each representation and warranty set forth on Schedule 1 is true and correct.
c.The representations and warranties set forth in this Agreement shall survive transfer of the Purchased Assets to Administrative Agent for the benefit of Buyers and each Buyer and shall continue for so long as the Purchased Assets are subject to this Agreement. Upon discovery by Seller or Administrative Agent of any breach of any of the representations or warranties set forth in this Agreement, the party discovering such breach shall promptly give notice of such discovery to the others. Administrative Agent has the right to require, in its unreviewable discretion, Seller to repurchase within [***] after receipt of notice from Administrative Agent any Purchased Asset for which a breach of one or more of the representations and warranties referenced in Section 13(b) exists and which breach has a material adverse effect on the value of such Purchased Asset or the interests of Administrative Agent or Buyers, and such repurchase shall occur within [***] after receipt of notice from Administrative Agent requesting the same.
14.Covenants
Seller covenants with Administrative Agent and Buyers that, during the term of this facility:
a.Litigation. Seller will promptly, and in any event [***] on any of the following, give to Administrative Agent notice of all litigation, actions, suits, arbitrations (including, without limitation, any of the foregoing which are threatened or pending) or other legal or arbitrable proceedings affecting Seller or any of its Subsidiaries or affecting any of the Property of any of
them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Program Agreements or any action to be taken in connection with the transactions contemplated hereby, (ii) excluding Ordinary Course Litigation, makes a claim individually or in an aggregate amount greater than
$[***], or (iii) which, individually or in the aggregate could be reasonably likely to have a Material Adverse Effect. Seller will promptly provide notice of any judgment, which with the passage of time, could cause an Event of Default hereunder.
b.Prohibition of Fundamental Changes. Seller shall not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation, winding up or dissolution) or sell all or substantially all of its assets.
c.Servicing. Seller shall not cause the Purchased Mortgage Loans to be serviced by any Servicer other than a Servicer expressly approved in writing by Administrative Agent on behalf of Buyers, which approval shall be deemed granted by Administrative Agent on behalf of Buyers with respect to Seller with the execution of this Agreement.
d.Insurance. The Seller shall continue to maintain, for Seller and its Subsidiaries, Fidelity Insurance in an aggregate amount acceptable to Fannie Mae, Freddie Mac and GNMA. The Seller shall maintain, for Seller and its Subsidiaries, Fidelity Insurance in respect of its officers, employees and agents, with respect to any claims made in connection with all or any portion of the Repurchase Assets. The Seller shall notify the Administrative Agent of any material adverse change in the terms of any such Fidelity Insurance.
e.No Adverse Claims. Seller warrants and will defend, and shall cause any Servicer to defend, the right, title and interest of Administrative Agent and Buyers in and to all Purchased Assets and the related Repurchase Assets against all adverse claims and demands.
f.Assignment. Except as permitted herein, neither Seller nor any Servicer shall sell, assign, transfer or otherwise dispose of, or grant any option with respect to, or pledge, hypothecate or grant a security interest in or lien on or otherwise encumber (except pursuant to the Program Agreements), any of the Purchased Assets or any interest therein, provided that this Section shall not prevent any transfer of Purchased Assets in accordance with the Program Agreements.
g.Security Interest. Seller shall do all things necessary to preserve the Purchased Assets and the related Repurchase Assets so that they remain subject to a first priority perfected security interest hereunder (in each case, to the extent a security interest may be perfected by possession, control or filing of a UCC financing statement). Without limiting the foregoing, Seller will
comply in all material respects with all rules, regulations and other laws of any Governmental Authority.
h.Records.
(1)Seller shall collect and maintain or cause to be collected and maintained all Records relating to the Purchased Assets and Repurchase Assets in accordance with industry custom and practice for assets similar to the Purchased Assets and Repurchase Assets, including those maintained pursuant to the preceding subparagraph, and all such Records shall be in the Seller’s, Custodian’s or Servicer’s possession (in accordance with this Agreement and the Custodial Agreement) unless Administrative Agent otherwise approves. Except in accordance with the Custodial Agreement, Seller will not allow any such papers, records or files that are an original or an only copy to leave the Seller’s, Custodian’s or Servicer’s possession, except for individual items removed in connection with servicing a specific Purchased Mortgage Loan, in which event Seller will obtain or cause to be obtained a receipt from a financially responsible person for any such paper, record or file. Seller or the Servicer of the Purchased Assets will maintain all such Records not in the possession of the Custodian in good and complete condition in accordance with industry practices for assets similar to the Purchased Assets and preserve them against loss.
(2)For so long as Administrative Agent has an interest in or lien on any Purchased Assets, Seller will hold or cause to be held all related Records in trust for Administrative Agent. Seller shall notify, or cause to be notified, every other party holding any such Records of the interests and liens in favor of Administrative Agent granted hereby.
(3)Upon reasonable advance notice from the Custodian or Administrative Agent, Seller shall (x) make any and all such Records available to the Custodian, Administrative Agent and a Buyer to examine any such Records, either by its own officers or employees, or by agents or contractors who are bound by requirements of confidentiality, or both, and make copies of all or any portion thereof, and (y) permit Administrative Agent or a Buyer or its authorized agents to discuss the affairs, finances and accounts of Seller with its chief operating officer and chief financial officer and to discuss the affairs, finances and accounts of Seller with its independent certified public accountants.
i.Books. Seller shall keep or cause to be kept in reasonable detail books and records of account of its assets and business and shall clearly reflect therein the transfer of Purchased Assets to Administrative Agent for the benefit of Buyers.
j.Approvals. Seller shall maintain all material licenses, permits or other approvals necessary for Seller to conduct its business and to perform its
obligations under the Program Agreements, and Seller shall conduct its business in accordance in all material respects with applicable law.
k.Material Change in Business. Seller shall not make any material change in the nature of its business as carried on at the date hereof.
l.Underwriting Guidelines. Other than underwriting guidelines of the Agencies, Seller shall not make any amendment or other modification to the Underwriting Guidelines which causes the related Mortgage Loan to [***]. Without limiting the foregoing, in the event that Seller makes any amendment or modification to the Underwriting Guidelines, Seller shall promptly deliver to Administrative Agent a complete copy of the amended or modified Underwriting Guidelines upon request.
m.Distributions. If an Event of Default has occurred and is continuing, Seller shall not pay any dividends with respect to any capital stock or other equity interests in such entity, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller, except that, notwithstanding the foregoing, Seller shall be permitted at all times to make Tax Distributions.
n.Applicable Law. Seller shall comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority.
o.Existence. Seller shall preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises, except for failures to maintain any such rights, privileges licenses and franchises, which, individually or in the aggregate, would not have a Material Adverse Effect.
p.Chief Executive Office; Jurisdiction of Organization. Seller shall not move its chief executive office from the address referred to in Section 13(a)(17) or change its jurisdiction of organization from the jurisdiction referred to in Section 13(a)(17) unless it shall have provided Administrative Agent [***] of such change.
q.Taxes. Seller shall timely file all tax returns that are required to be filed by it and shall timely pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained.
r.Transactions with Affiliates. Seller will not enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of property or the rendering of any service, with any Affiliate unless such transaction is (a) otherwise not prohibited under the Program Agreements and
(b) upon fair and reasonable terms no less favorable to Seller than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate. Nothing herein shall prohibit distributions and dividends that are not prohibited under Section 14(m) hereof.
s.Guarantees. Seller shall not create, incur, assume or suffer to exist any Guarantees, except (i) to the extent reflected in Seller’s financial statements or notes thereto (ii) to the extent the aggregate Guarantees of Seller do not exceed $[***], or (iii) to the extent such Guarantee is otherwise disclosed to Administrative Agent in writing.
t.Indebtedness. Seller shall not incur any additional material Indebtedness, including without limitation, any Indebtedness relating to any mortgage servicing rights or corporate or servicing advances, (other than (i) the Existing Indebtedness in amounts not to exceed the amounts specified on Exhibit B to the Pricing Side Letter and (ii) usual and customary accounts payable for a mortgage company) without providing written notice of the same to the Administrative Agent.
u.HUD and FHA Matters Regarding Income and Accounts with Respect to Early Buyout Loans.
(1)With respect to each Early Buyout Loan that is an FHA Loan, Seller shall list the Servicer as the servicer on FHA Connection System and the Seller to be identified as the mortgagee of record on such system under mortgagee number [***]. With respect to each Early Buyout Loan that is a VA Loan, Seller shall list the Servicer as the servicer on the VALERI system under payee vendor identification number [***]. Seller shall cause Servicer to submit all claims to HUD and VA under such applicable numbers for remittance of amounts to the Clearing Account.
(2)To the extent HUD deducts any amounts owing by (i) Seller or (ii) Servicer that are unrelated to the applicable Early Buyout Loan, in each case, to HUD, Seller shall deposit, or cause Servicer to deposit, within [***] following notice or knowledge of such deduction by HUD, such deducted amounts into the applicable account.
(3)Seller shall maintain HUD and GNMA approvals. Should Seller for any reason, cease to possess a HUD or GNMA approval, Seller shall so notify Administrative Agent immediately in writing.
(4)Seller shall cooperate and do all things deemed necessary or appropriate by Buyer to effectuate the steps as contemplated in this Section 14.u.
v.Hedging. Seller has entered into Interest Rate Protection Agreements or other arrangements with respect to the Purchased Mortgage Loans, having terms with respect to protection against fluctuations in interest rates consistent
with the terms of Seller’s hedging program and has notified Administrative Agent of the terms of such Interest Rate Protection Agreements or other arrangements in writing.
w.True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of Seller, any Affiliate thereof or any of their officers furnished to Administrative Agent and/or Buyers hereunder and during Administrative Agent’s and/or Buyers’ diligence of Seller are and will be true and complete in all material respects and do not omit to disclose any material facts necessary to make the statements herein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by Seller to Administrative Agent and/or Buyers pursuant to this Agreement shall be prepared in accordance with U.S. GAAP (other than, with respect to unaudited financial statements, footnotes, year-end adjustments and cash flow statements).
x.Agency Approvals. Seller shall maintain all Agency Approvals necessary for the conduct of its business. Should Seller, for any reason, cease to possess all such applicable Agency Approvals, or should notification to the relevant Agency or to the Department of Housing and Urban Development, FHA or VA be required, Seller shall so notify Administrative Agent within [***]. Notwithstanding the preceding sentence, Seller shall take all necessary action to maintain all of its applicable Agency Approvals at all times during the term of this Agreement and each outstanding Transaction.
y.Take-out Payments. With respect to each Committed Mortgage Loan, Seller shall arrange that all payments under the related Take-out Commitment shall be paid directly to Administrative Agent at the account set forth in Section 9 hereof, or to an account approved by Administrative Agent in writing prior to such payment. With respect to any Agency Take-out Commitment, if applicable, (1) with respect to the wire transfer instructions as set forth in Freddie Mac Form 987 (Wire Transfer Authorization for a Cash Warehouse Delivery) such wire transfer instructions are identical to Administrative Agent’s wire instructions or Administrative Agent has approved such wire transfer instructions in writing in its sole discretion, or (2) the Payee Number set forth on Fannie Mae Form 1068 (Fixed-Rate, Graduated-Payment, or Growing-Equity Mortgage Loan Schedule) or Fannie Mae Form 1069 (Adjustable-Rate Mortgage Loan Schedule), as applicable, shall be identical to the Payee Number that has been identified by Administrative Agent in writing as Administrative Agent’s Payee Number or Administrative Agent shall have previously approved the related Payee Number in writing in its sole discretion; with respect to any Take-out Commitment with an Agency, the applicable agency documents shall list Administrative Agent as sole subscriber, unless otherwise agreed to in writing by Administrative Agent, in Administrative Agent’s sole discretion.
z.No Pledge. Except pursuant to this Agreement, Seller shall not, and shall not cause Servicer to, pledge, transfer or convey any security interest in the Clearing Account to any Person (other than Administrative Agent) without the express written consent of Administrative Agent.
aa.Plan Assets. Seller shall not be an employee benefit plan as defined in Section 3 of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code and Seller shall not use “plan assets” within the meaning of 29 CFR
§2510.3 101, as amended by Section 3(42) of ERISA to engage in this Agreement or any Transaction hereunder. Transactions by or with Seller shall not be subject to any foreign, state or local statute regulating investments of or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA or church plans within the meaning of Section 3(33) of ERISA.
ab.Reserved.
ac.No Prohibited Persons. Neither Seller nor any of its officers, directors, partners or members, shall be an entity or person (or to the Seller’s knowledge, 50 percent or greater owned by an entity or person): (i) whose name appears on OFAC’s most current list of “Specifically Designated National and Blocked Persons” (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf); or (ii) shall otherwise be the target of sanctions administered by OFAC (any and all parties or persons described in clauses (i) and (ii) above are herein referred to as a “Prohibited Person”).
ad.Lender Insurance Authority. In the event that Seller has on the date hereof or subsequently receives Lender Insurance Authority, such authority shall not be revoked or suspended.
ae.Quality Control. Seller shall maintain an internal quality control program that verifies, on a regular basis, the existence and accuracy of all legal documents, credit documents, property appraisals, and underwriting decisions related to Purchased Mortgage Loans and shall provide the most recent report on the results of such quality control program in the Officer’s Compliance Certificate provided pursuant to Section 17(b)(3). Such program shall be capable of evaluating and monitoring the overall quality of Seller’s loan production and servicing activities. Such program shall (i) ensure that the Purchased Mortgage Loans are originated and serviced in accordance with prudent mortgage banking practices and accounting principles; (ii) guard against dishonest, fraudulent, or negligent acts; and (iii) guard against errors and omissions by officers, employees, or other authorized persons.
af.Reserved.
ag.MERS. Seller shall comply in all material respects with the rules and procedures of MERS in connection with the servicing of all Purchased Mortgage Loans that are registered with MERS and, with respect to Purchased Mortgage Loans that are eMortgage Loans, the maintenance of the related eNotes on the MERS eRegistry for as long as such Purchased Mortgage Loans are so registered.
ah.Beneficial Ownership Certification. Seller shall at all times either
(i) ensure that the Seller has delivered to Administrative Agent a Beneficial Ownership Certification, if applicable, and that the information contained therein is true and correct in all respects or (ii) deliver to Administrative Agent an updated Beneficial Ownership Certification if any information contained in any previously delivered Beneficial Ownership Certification ceases to be true and correct in all respects. At all times, Seller shall promptly notify Administrative Agent upon becoming aware that the information provided in the most recent Beneficial Ownership Certification is no longer true and correct and shall deliver an updated Beneficial Ownership Certification to Administrative Agent promptly [***].
ii. Investment Company. Seller shall not become an “investment company”, or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act.
aj.Financial Covenants. Seller shall at all times comply with all financial covenants and/or financial ratios set forth in Section 2 of the Pricing Side Letter (the “Financial Covenants”).
ak.Chief Executive Office; Jurisdiction of Organization. Seller shall provide Administrative Agent with [***] notice of any change in Seller’s principal office or place of business, legal name or jurisdiction.
15.Events of Default
Each of the following shall constitute an “Event of Default” hereunder:
a.Payment Failure. Failure of Seller to (i) make any payment of Price Differential or Repurchase Price or any other sum which has become due, on a Payment Date or a Repurchase Date or otherwise, whether by acceleration or otherwise, under the terms of this Agreement, (ii) cure any Margin Deficit when due pursuant to Section 6 hereof or (iii) to make any payment when due hereunder, other than such payments described in clauses (i) and (ii) hereof, and such failure continues for [***].
b.Cross Default. Seller or any of Seller’s Affiliates that are party to any Program Agreement shall be in default after the expiration of any grace or cure period to the extent not waived or cured in writing under (i) any Indebtedness, including, without limitation, the Funding 2 Repo Agreement,
in the aggregate, in excess of $[***] with respect to Seller or such Affiliate which default (1) involves the failure to pay a matured obligation, or
(2) permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such Indebtedness, or (ii) any other contract or contracts, in the aggregate in excess of $[***] to which Seller or such Affiliate is a party which default (1) involves the failure to pay a matured obligation, or (2) permits the acceleration of the maturity of obligations by any other party to or beneficiary of such contract.
c.Assignment. (i) Assignment or attempted assignment by Seller of this Agreement or any rights hereunder without first obtaining the specific written consent of Administrative Agent, or (ii) the granting by Seller of any security interest, lien or other encumbrances on any Purchased Asset to any person other than Administrative Agent and such affected Purchased Asset pursuant to this clause c(ii) has not been repurchased [***].
d.Insolvency. An Act of Insolvency shall have occurred with respect to Seller.
e.Material Adverse Change. The occurrence of a Material Adverse Effect.
f.Breach of Financial Representation or Covenant or Obligation. A breach by Seller of any of the representations, warranties or covenants or obligations set forth in [***] of this Agreement.
g.Breach of Non-Immediate Representation or Covenant. A breach by Seller of any other material representation, warranty or covenant set forth in this Agreement or any other Program Agreement (and not otherwise specified in Section 15(f) above), if such breach is not cured within [***] after Seller’s knowledge thereof (other than the representations and warranties set forth in Schedule 1, which shall be considered solely for the purpose of determining the Asset Value, the existence of a Margin Deficit and the obligation to repurchase such Purchased Mortgage Loan) unless (i) such party shall have made any such representations and warranties with knowledge that they were materially false or misleading at the time made, (ii) any such representations and warranties have been determined by Administrative Agent in its good faith discretion to be materially false or misleading on a regular basis, or (iii) Administrative Agent, in its good faith discretion, determines that such breach of a material representation, warranty or covenant materially and adversely affects (A) the condition (financial or otherwise) of Seller or an Affiliate of Seller to a Program Agreement; or (B) Administrative Agent’s determination to enter into this Agreement or Transactions with such party, then such breach shall constitute an immediate Event of Default (and Seller shall have no cure right hereunder).
h.Change of Control. The occurrence of a Change in Control shall have occurred without Administrative Agent’s prior written consent.
i.Failure to Transfer. Seller fails to transfer the Purchased Assets to Administrative Agent for the benefit of the applicable Buyer in the manner set forth in the Program Agreements (provided the Administrative Agent on behalf of the applicable Buyer has tendered the related Purchase Price) and such failure continues for [***].
j.Judgment. A final judgment or judgments for the payment of money in excess of $[***] in the aggregate shall be rendered against Seller by one or more courts, administrative tribunals or other bodies having jurisdiction and the same shall not be satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof shall not be procured, within [***] from the date of entry thereof.
k.Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under governmental authority shall have taken any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller, or shall have taken any action to displace the management of Seller or to curtail its authority in the conduct of the business of Seller, or takes any action in the nature of enforcement to remove, limit or restrict the approval of Seller as an issuer, buyer or a seller/servicer of Purchased Asset or securities backed thereby, and such action provided for in this Section 15(k) shall not have been discontinued or stayed within [***].
l.Inability to Perform. An officer of Seller shall admit its inability to, or its intention not to perform any of Seller’s Obligations hereunder.
m.Security Interest. This Agreement shall for any reason cease to create a valid, first priority security interest (except to the extent a security interest may not be perfected by possession, control or filing of a UCC financing statement) in any material portion of the Purchased Assets or other Repurchase Assets purported to be covered hereby.
n.Financial Statements. Seller’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein shall be qualified or limited by reference to the status of Seller as a “going concern” or a reference of similar import.
o.Custodian. With respect to Early Buyout Loans, the applicable Custodian fails to maintain its good standing under the GNMA Guide or FHA Regulations and is not replaced or the Seller fails to repurchase such Early Buyout Loans or such breach is not waived by Administrative Agent in writing within [***].
p.Servicer Default. There is a breach by Servicer of the Servicing Agreement and Seller has not appointed a successor servicer acceptable to Administrative Agent or such breach is not waived by Administrative Agent in writing within [***].
An Event of Default shall be deemed to be continuing unless expressly waived by Administrative Agent in writing.
16.Remedies Upon Default
In the event that an Event of Default shall have occurred and is continuing:
a.Administrative Agent may, at its option (which option shall be deemed to have been exercised immediately upon the occurrence of an Act of Insolvency of Seller), declare an Event of Default to have occurred hereunder and, upon the exercise or deemed exercise of such option, the Repurchase Date for each Transaction hereunder shall, if it has not already occurred, be deemed immediately to occur (except that, in the event that the Purchase Date for any Transaction has not yet occurred as of the date of such exercise or deemed exercise, such Transaction shall be deemed immediately canceled). Administrative Agent shall (except upon the occurrence of an Act of Insolvency of Seller) give notice to Seller of the exercise of such option as promptly as practicable.
b.If Administrative Agent exercises or is deemed to have exercised the option referred to in subparagraph (a) of this Section, (i) Seller’s obligations in such Transactions to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date determined in accordance with subparagraph (a) of this Section, shall thereupon become immediately due and payable, (ii) all Income paid after such exercise or deemed exercise shall be retained by Administrative Agent and applied, in Administrative Agent’s sole discretion, in accordance with Section 7.j hereof, and (iii) Seller shall immediately deliver to Administrative Agent the Asset Files relating to any Purchased Mortgage Loans subject to such Transactions then in Seller’s possession or control.
c.Administrative Agent also shall have the right to obtain physical possession, and to commence an action to obtain physical possession, of all Records and files of Seller relating to the Purchased Assets and Repurchase Assets and all documents relating to the Purchased Assets (including, without limitation, any legal, credit or servicing files with respect to the Purchased Assets and Repurchase Assets) which are then or may thereafter come in to the possession of Seller or any third party acting for Seller. To obtain physical possession of any Purchased Assets held by the Custodian, Administrative Agent shall present to the Custodian a Trust Receipt. Without limiting the rights of Administrative Agent hereto to pursue all other legal and equitable rights available to Administrative Agent for Seller’s failure to perform its obligations under this Agreement, Seller acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Administrative Agent shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any
such failure. The availability of these remedies shall not prohibit Administrative Agent from pursuing any other remedies for such breach, including the recovery of monetary damages.
d.Administrative Agent shall have the right to direct all servicers then servicing any Purchased Assets to remit all collections thereon to Administrative Agent, and if any such payments are received by Seller, Seller shall not commingle the amounts received with other funds of Seller and shall promptly pay them over to Administrative Agent. Administrative Agent shall also have the right to terminate any one or all of the servicers then servicing any Purchased Assets with or without cause. In addition, Administrative Agent shall have the right to immediately sell the Purchased Assets and liquidate all Repurchase Assets. Such disposition of Purchased Assets may be, at Administrative Agent’s option, on either a servicing-released or a servicing-retained basis. Administrative Agent shall not be required to give any warranties as to the Purchased Assets with respect to any such disposition thereof. Administrative Agent may specifically disclaim or modify any warranties of title or the like relating to the Purchased Assets. The foregoing procedure for disposition of the Purchased Assets and liquidation of the Repurchase Assets shall not be considered to adversely affect the commercial reasonableness of any sale thereof. Seller agrees that it would not be commercially unreasonable for Administrative Agent to dispose of the Purchased Assets or the Repurchase Assets or any portion thereof by using Internet sites that provide for the auction of assets similar to the Purchased Assets or the Repurchase Assets, or that have the reasonable capability of doing so, or that match buyers and sellers of assets. Administrative Agent shall be entitled to place the Purchased Assets in a pool for issuance of mortgage-backed securities at the then-prevailing price for such securities and to sell such securities for such prevailing price in the open market. Administrative Agent shall also be entitled to sell any or all of such Purchased Assets individually for the prevailing price. Administrative Agent shall also be entitled, in its sole good faith discretion to elect, in lieu of selling all or a portion of such Purchased Assets, to give the Seller credit for such Purchased Assets and the Repurchase Assets in an amount equal to the Asset Value of the Purchased Assets against the aggregate unpaid Repurchase Price and any other amounts owing by the Seller hereunder.
e.Administrative Agent may apply any proceeds from the liquidation of the Purchased Assets and Repurchase Assets to the Repurchase Prices hereunder and all other Obligations in the manner Administrative Agent deems appropriate in its sole discretion subject to the Administration Agreement.
f.Seller recognizes that the market for the Purchased Assets may not be liquid and as a result it may not be possible for Administrative Agent to sell all of the Purchased Assets on a particular Business Day, or in a transaction with the same purchaser, or in the same manner. In view of the nature of the
Purchased Assets, Seller agrees that liquidation of any Purchased Asset may be conducted in a private sale and at such price as Administrative Agent may
deem commercially reasonable. In view of the nature of the Mortgage Loans, Seller agrees that liquidation of any Mortgage Loan may be conducted in a private sale and at such price as Administrative Agent may deem commercially reasonable.
g.Seller shall be liable to Administrative Agent and each Buyer for (i) the amount of all reasonable legal or other expenses (including, without limitation, all costs and expenses of Administrative Agent and each Buyer) in connection with the enforcement of this Agreement or any other agreement evidencing a Transaction, whether in action, suit or litigation or bankruptcy, insolvency or other similar proceeding affecting creditors’ rights generally, further including, without limitation, the reasonable fees and expenses of counsel incurred in connection with or as a result of an Event of Default,
(ii) damages in an amount equal to the cost (including all fees, expenses and commissions) of entering into or terminating hedge transactions in connection with or as a result of an Event of Default, and (iii) any other loss, damage, cost or expense directly arising or resulting from the occurrence of an Event of Default in respect of a Transaction.
h.To the extent permitted by applicable law, Seller shall be liable to Administrative Agent and each Buyer for interest on any amounts owing by Seller hereunder, from the date Seller becomes liable for such amounts hereunder until such amounts are (i) paid in full by Seller or (ii) satisfied in full by the exercise of Administrative Agent’s and Buyers’ rights hereunder. Interest on any sum payable by Seller under this Section 16(h) shall accrue at a rate equal to the Post-Default Rate.
i.Administrative Agent shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
j.Administrative Agent may exercise one or more of the remedies available to Administrative Agent immediately upon the occurrence of an Event of Default and, except to the extent provided in subsections (a) and (d) of this Section, at any time thereafter without notice to Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Administrative Agent may have.
k.Administrative Agent may enforce its rights and remedies hereunder without prior judicial process or hearing, and Seller hereby expressly waives any defenses Seller might otherwise have to require Administrative Agent to enforce its rights by judicial process. Seller also waives any defense (other than a defense of payment or performance) Seller might otherwise have
arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets, or from any other election of remedies. Seller recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
l.Administrative Agent shall have the right to perform reasonable due diligence with respect to Seller, the Purchased Assets, which review shall be at the expense of Seller.
17.Reports
a.Default Notices. Seller shall furnish to Administrative Agent (i) promptly, copies of any material and adverse notices (including, without limitation, notices of defaults, termination events, breaches, potential defaults or potential breaches) and any material financial information that is not otherwise required to be provided by Seller hereunder which is given to Seller’s lenders and (ii) immediately after knowledge thereof, notice of the occurrence of any (A) Event of Default hereunder, (B) default or breach by Seller or Servicer of any obligation under any Program Agreement or any material obligation under any material contract or agreement of Seller or Servicer or (C) event or circumstance that such party reasonably expects has resulted in, or will, with the passage of time, result in, a Material Adverse Effect or an Event of Default.
b.Financial Notices. Seller shall furnish to Administrative Agent:
(1)as soon as available and in any event within thirty (30) calendar days after the end of each calendar month (or, with respect to the last month of each fiscal quarter, forty-five (45) calendar days after the end of such month), the unaudited consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such period and the related unaudited consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such period and the portion of the fiscal year through the end of such period, accompanied by a certificate of a Responsible Officer of Seller, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Seller and its consolidated Subsidiaries in accordance with GAAP (other than with respect to footnotes, year-end adjustments and cash flow statements) consistently applied, as at the end of, and for, such period;
(2)as soon as available and in any event within ninety (90) days after the end of each fiscal year of Seller, the consolidated balance sheets of Seller and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and of cash flows for the Seller and its consolidated Subsidiaries for such year, setting forth in each case in comparative form the figures for the previous
year, accompanied by an opinion thereon of Ernst & Young LP or independent certified public accountants of recognized national standing, which opinion shall not be qualified as to the scope of audit and shall have no “going concern” qualification and shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Seller and its respective consolidated Subsidiaries as at the end of, and for, such fiscal year in accordance with GAAP;
(3)at the time the Seller furnishes each set of financial statements pursuant to Section 17(b)(1) or (2) above, an Officer’s Compliance Certificate of a Responsible Officer of Seller in the form attached as Exhibit A to the Pricing Side Letter.
(4)Reserved;
(5)as soon as available and in any event within [***];
(a)such other information regarding the financial condition, operations, or business of the Seller as Administrative Agent may reasonably request; and
(b)the particulars of any Event of Termination in reasonable detail.
(6)Seller shall provide the market value analysis for the valuation of its mortgage servicing rights as by a Third Party Evaluator for each monthly fiscal period, as set forth in the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3);
(7)To the extent it may do so without breaching any confidentiality or other restrictions, Seller shall provide Administrative Agent, as part of the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3) above, a list of all material actions, notices, proceedings or investigations pending with respect to which Seller has received service of process or other form of notice or, to the best of Seller’s knowledge, threatened against it, before any court, administrative or governmental agency or other regulatory body or tribunal as of such date with such information provided as noted in the applicable Schedule to Exhibit A to the Pricing Side Letter; provided, that, if such information is subject to a confidentiality requirement, for as long as such information remains confidential, Seller shall
(x) disclose to Buyer any portion of such information that is not confidential,
(y) notify Buyer of any material event in a level of specificity that would not violate the confidentiality requirements and (z) promptly seek permission to disclose the information from the necessary parties and shall provide Buyer such information to the extent of such permission;
(8)upon Seller becoming aware of any Control Failure with respect to a Purchased Mortgage Loan that is an eMortgage Loan or any eNote Replacement Failure.
c.Notices of Certain Events. As soon as possible and in any event within [***], Seller shall furnish to Administrative Agent notice of the following events:
(1)Reserved;
(2)Reserved;
(3)any material change in accounting policies or financial reporting practices of Seller or Servicer, other than changes in accordance with GAAP;
(4)with respect to any Purchased Mortgage Loan, that the underlying Mortgaged Property has been damaged by waste, fire, earthquake or earth movement, windstorm, flood, tornado or other casualty, or otherwise damaged so as to affect materially and adversely the value of such Mortgage Loan;
(5)Reserved;
(6)any material change in the material Indebtedness of the Seller, including, without limitation, any default, renewal, non-renewal, termination, increase in available amount or decrease in available amount related thereto;
(7)Reserved;
(8)any other event, circumstance or condition that has resulted, or has a possibility of resulting, in a Material Adverse Effect with respect to Seller or Servicer; and
(9)the occurrence of any material employment dispute and a description of the strategy for resolving it that has the possibility of resulting in a Material Adverse Effect.
d.Servicing Tape. On the Reporting Date of each calendar month, Seller will furnish to Administrative Agent (i) an electronic Purchased Mortgage Loans performance data, including, without limitation, delinquency reports and volume information, broken down by product (i.e., delinquency, foreclosure and net charge off reports) and (ii) electronically, in a format mutually acceptable to Administrative Agent and Seller, servicing information, including, without limitation, those fields reasonably requested by Administrative Agent from time to time, on a loan by loan basis and in the aggregate, with respect to the Purchased Mortgage Loans serviced by Seller
or any Servicer for the month (or any portion thereof) prior to the Reporting Date. In addition to the foregoing information on each Reporting Date, Seller
will furnish to Administrative Agent such information upon the occurrence and continuation of an Event of Default.
e.Other Reports. Seller shall deliver to Administrative Agent any other reports or information (including, without limitation, any primary mortgage insurance policy) relating to the Purchased Assets or the business or operations of Seller and Servicer as reasonably requested by Administrative Agent or as otherwise required pursuant to this Agreement or as set forth in the Officer’s Compliance Certificate delivered pursuant to Section 17(b)(3) above.
f.DE Compare Ratio and HUD Reports. Seller shall furnish to Administrative Agent the following notices:
1.In the event Seller’s DE Compare Ratio equals or exceeds [***]%, Seller shall provide Administrative Agent with written notice of such occurrence within [***], which notice shall include a written summary of actions Seller is taking to correct its DE Compare Ratio.
2.In the event Seller receives any inquiry or notice from HUD regarding its DE Compare Ratio, Seller shall provide Administrative Agent with written notice of such inquiry or notice within [***], regardless of Seller’s current DE Compare Ratio.
3.In the event of any action plan with respect to Seller’s DE Compare Ratio is agreed to between Seller and HUD or imposed upon Seller by HUD, Seller shall provide Administrative Agent with a written summary of such agreement or imposition, as applicable, within [***]; provided, that, if such information is subject to a confidentiality requirement, for as long as such information remains confidential, Seller shall (i) disclose to Buyer any portion of such information that is not confidential,
(ii) notify Buyer of any material event in a level of specificity that would not violate the confidentiality requirements and (iii) promptly seek permission to disclose the information from the necessary parties and shall provide Buyer such information to the extent of such permission.
18.Repurchase Transactions
A Buyer may, in its sole election, engage in repurchase transactions (as “seller” thereunder) with any or all of the Purchased Assets and/or Repurchase Assets or pledge, hypothecate, assign, transfer or otherwise convey any or all of the Purchased Assets and/or
Repurchase Assets with a counterparty of Buyers’ choice (such transaction, a “Repledge Transaction”); provided that, (i) such Buyer’s obligations under this Agreement shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations, and (iii) Seller shall continue to deal solely and directly with such Buyer in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements. Any Repledge Transaction shall be effected by notice to the Administrative Agent, and shall be reflected on the books and records of the Administrative Agent. No such Repledge Transaction shall relieve such Buyer of its obligations to transfer Purchased Assets and Repurchase Assets to Seller (and not substitutions thereof) pursuant to the terms hereof. In furtherance, and not by limitation of, the foregoing, it is acknowledged that each counterparty under a Repledge Transaction (a “Repledgee”), is a repledgee as contemplated by Sections 9-207 and 9-623 of the UCC (and the relevant Official Comments thereunder) and such Repledgee may recognize the Transactions as a securitization. Administrative Agent and Buyers are each hereby authorized to share this Agreement, the Program Agreements and any information delivered hereunder with the Repledgee or any potential Repledgee.
19.Single Agreement
Administrative Agent, Buyers and Seller acknowledge they have and will enter into each Transaction hereunder, in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and have been made in consideration of each other. Accordingly, each of Administrative Agent, Buyers and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder and (ii) that payments, deliveries and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries and other transfers may be applied against each other and netted. Notwithstanding anything in this Agreement to the contrary, in the event that (a) a Buyer is not an Affiliate of Administrative Agent or another Buyer (a “Non-Affiliate Buyer”), (b) an Event of Default shall have occurred and is continuing and (c) Administrative Agent provides written notice to the Seller to sever each Non-Affiliate Buyer’s Transactions (the “Non-Affiliate Transactions”) and treat such Non-Affiliate Transactions as separate Transactions under this Agreement (a “Severance Notice”), then Administrative Agent, Buyers and Seller acknowledge that each such Non-Affiliate Transaction shall be deemed a separate Transaction under a separate and distinct agreement with the same terms and conditions as set forth herein (each a “Non-Affiliate MRA”), and each such Non-Affiliate Buyer shall be deemed to be the administrative agent with respect to its respective Non-Affiliate Transactions under its respective Non-Affiliate MRA; provided, that Transactions owned by Administrative Agent, a Buyer or any respective Affiliate shall continue to be deemed a single Transaction with Administrative Agent serving as the administrative agent for Buyers or any respective Affiliate, in each case, pursuant to the terms and conditions of this Agreement.
20.Notices and Other Communications
Any and all notices (with the exception of Transaction Requests, which shall be delivered via electronic mail or other electronic medium agreed to by the Administrative Agent and the Seller), statements, demands or other communications hereunder may be given by a party to the other by mail, email, facsimile, messenger or otherwise to the address specified below, or so sent to such party at any other place specified in a notice of change of address hereafter received by the other. All notices, demands and requests hereunder may be made orally, to be confirmed promptly in writing, or by other communication as specified in the preceding sentence. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person.
If to Seller:
loanDepot.com, LLC 6561 Irvine Center Drive Irvine, California 92618
Email: [***]
If to Administrative Agent:
For Transaction Requests:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
Attention: Transaction Request—RMBS Warehouse Lending E-mail: [***]
For the Officer’s Compliance Certificate and related financial statements delivered pursuant to Section 17.b:
E-mail: [***]
Subject: Mortgage Finance Officer Cert / Covenant Report: [LoanDepot.com, LLC] [Seller to Designate Monthly/Quarterly or Annual Reporting Period]
For all other Notices:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
E-mail: [***]
With a copy to:
Atlas Securitized Products, L.P. 151 West 42nd Street, 5th Floor New York, NY 10036
E-mail: [***]
21.Entire Agreement; Severability
This Agreement and the Administration Agreement shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
22.Non assignability
a.Assignments. The Program Agreements are not assignable by Seller. Subject to Section 35 hereof (Acknowledgement of Assignment and Administration of Repurchase Agreement), Administrative Agent and Buyers may from time to time join other Buyers hereto and/or assign all or a portion of their rights and obligations under this Agreement and the Program Agreements pursuant to the Administration Agreement with Seller’s prior written consent (such consent not to be unreasonably withheld or delayed); provided, however, such consent shall not be required if Administrative Agent or a Buyer assigns its rights and obligations (i) to an Affiliate thereof, or (ii) after the occurrence of an Event of Default. Administrative Agent shall maintain, solely for this purpose as a non-fiduciary agent of Seller, for review by Seller upon written request, a register of assignees and participants (the “Register”) and a copy of an executed assignment and acceptance by Administrative Agent and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned. The entries in the Register shall be conclusive absent manifest error, and the Seller, Administrative Agent and Buyers shall treat each Person whose name is recorded in the Register pursuant to the preceding sentence as a Buyer hereunder. Upon such assignment (in accordance with the foregoing provisions of this Section 22)and recordation in the Register, (a) such assignee shall be a party hereto and to each Program Agreement to the extent of the
percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Administrative Agent and Buyers hereunder, as applicable, and (b) Administrative Agent and Buyer, as applicable, shall be released from its obligations hereunder and under the Program Agreements. Any assignment hereunder shall be deemed a joinder of such assignee as a Buyer hereto. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Administrative Agent unless otherwise notified by Administrative Agent in writing. Such assignee may recognize the Transactions as a securitization. Administrative Agent and Buyers may distribute to any prospective or actual assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Seller. Administrative Agent and Buyers may distribute to any prospective or actual assignee this Agreement, the other Program Agreements, any document or other information delivered to Administrative Agent and/or Buyers by Seller; provided that any such prospective and actual assignee has agreed to abide by confidentiality obligations substantially similar to those that are applicable to Administrative Agent and/or Buyers.
b.Participations. Any Buyer may sell participations to one (1) or more Persons in or to all or a portion of its rights and obligations under this Agreement and under the Program Agreements; provided, however, that (i) such Buyer’s obligations under this Agreement or in any Transaction under this Agreement and the other Program Agreements shall remain unchanged, (ii) such Buyer shall remain solely responsible to the other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Administrative Agent and/or Buyers in connection with such Buyer’s rights and obligations under this Agreement and the other Program Agreements except as provided in Section 11 hereof. Such Participant may recognize the Transactions as a securitization. Administrative Agent and Buyers may distribute to any prospective or actual participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Seller. Administrative Agent and Buyers may distribute to any prospective or actual participant this Agreement, the other Program Agreements any document or other information delivered to Administrative Agent and/or Buyers by Seller; provided that any such prospective and actual participant has agreed to abide by confidentiality obligations substantially similar to those that are applicable to Administrative Agent and/or Buyers.
23.Set-off
In addition to any rights and remedies of the Administrative Agent and Buyers hereunder and by law, the Administrative Agent and Buyers shall have the right at any time an Event of Default has occurred and is continuing, without prior notice to the Seller, any such notice being expressly waived by the Seller to the extent permitted by applicable law, to set-off and appropriate and apply against any Obligation from Seller to a Buyer or any of its Affiliates any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from a Buyer or any Affiliate thereof to or for the credit or the account of the Seller. All such set-offs shall be subject to the priorities set forth in the Administration Agreement. The Administrative Agent and the Buyers each agree promptly to notify the Seller after any such set off and application is made by the Administrative Agent or a Buyer; provided, that, the failure to give such notice shall not affect the validity of such set off and application.
24.Binding Effect; Governing Law; Jurisdiction
a.This Agreement shall be binding and inure to the benefit of the parties hereto and their respective successors and permitted assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
b.EACH OF SELLER, ADMINISTRATIVE AGENT AND BUYERS HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS IN ANY ACTION OR PROCEEDING. EACH PARTY HEREBY SUBMITS TO, AND WAIVES ANY OBJECTION IT MAY HAVE TO, EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM AGREEMENTS.
25.No Waivers, Etc.
No express or implied waiver of any Event of Default by either party shall constitute a waiver of any other Event of Default and no exercise of any remedy hereunder by any party shall constitute a waiver of its right to exercise any other remedy hereunder. No modification or waiver of any provision of this Agreement and no consent by any party to a departure herefrom shall be effective unless and until such shall be in writing and duly executed by both of the parties hereto. Without limitation on any of the foregoing, the failure to give a notice pursuant to Section 6(a), 16(a) or otherwise, will not constitute a waiver of any right to do so at a later date.
26.Intent
a.The parties recognize that each Transaction is a “repurchase agreement” as that term is defined in Section 101 of Title 11 of the United States Code, as amended, a “securities contract” as that term is defined in Section 741 of Title 11 of the United States Code, as amended, and a “master netting agreement” as that
term is defined in Section 101(38A)(A) of the Bankruptcy Code, that all payments hereunder are deemed “margin payments” or “settlement payments” as defined in Title 11 of the United States Code, and that the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” the Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Seller, Administrative Agent and Buyers further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).
b.Administrative Agent’s or a Buyer’s right to liquidate the Purchased Assets delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 555, 559 and 561; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” as such term is defined in Bankruptcy Code Section 741(5).
c.The parties agree and acknowledge that if a party hereto is an “insured depository institution,” as such term is defined in the Federal Deposit Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a “qualified financial contract,” as that term is defined in FDIA and any rules, orders or policy statements thereunder (except insofar as the type of assets subject to such Transaction would render such definition inapplicable).
d.It is understood that this Agreement constitutes a “netting contract” as defined in and subject to Title IV of the Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment obligation under any Transaction hereunder shall constitute a “covered contractual payment entitlement” or “covered contractual payment obligation”, respectively, as defined in and subject to FDICIA (except insofar as one or both of the parties is not a “financial institution” as that term is defined in FDICIA).
e.This Agreement is intended to be a “repurchase agreement” and a “securities contract,” within the meaning of Section 101(47), Section 555, Section 559 and Section 741 under the Bankruptcy Code.
f.Each party agrees that this Agreement is intended to create mutuality of obligations among the parties, and as such, the Agreement constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.
27.Disclosure Relating to Certain Federal Protections
The parties acknowledge that they have been advised that:
a.in the case of Transactions in which one of the parties is a broker or dealer registered with the SEC under Section 15 of the 1934 Act, the Securities Investor Protection Corporation has taken the position that the provisions of the SIPA do not protect the other party with respect to any Transaction hereunder;
b.in the case of Transactions in which one of the parties is a government securities broker or a government securities dealer registered with the SEC under Section 15C of the 1934 Act, SIPA will not provide protection to the other party with respect to any Transaction hereunder; and
c.in the case of Transactions in which one of the parties is a financial institution, funds held by the financial institution pursuant to a Transaction hereunder are not a deposit and therefore are not insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, as applicable.
28.Power of Attorney
Seller authorizes Administrative Agent to file such financing statement or statements relating to the Repurchase Assets as Administrative Agent, at its option, may deem appropriate. Seller appoints Administrative Agent as Seller’s agent and attorney-in-fact to execute any such financing statement or statements in Seller’s name and to perform all other acts which Administrative Agent deems appropriate to perfect and continue its ownership interest in and/or the security interest granted hereby, if applicable, and to protect, preserve and realize upon the Repurchase Assets, including, but not limited to, the right to endorse notes, complete blanks in documents, transfer servicing, and sign assignments on behalf of Seller as its agent and attorney-in-fact. This agency and power of attorney is coupled with an interest and is irrevocable without Administrative Agent’s consent. Notwithstanding the foregoing, the power of attorney hereby granted may be exercised only during the occurrence and continuance of any Event of Default hereunder. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 28. In addition the foregoing, Seller agrees to execute a Power of Attorney, in the form of Exhibit A hereto, to be delivered on the date hereof and the Administrative Agent and the Buyers hereby confirm and agree that such Power of Attorney may be exercised only during the occurrence and continuance of an Event of Default hereunder.
29.Buyers May Act Through Administrative Agent
Each Buyer has designated the Administrative Agent under the Administration Agreement for the purpose of performing any action hereunder.
30.Indemnification; Obligations
a.Seller agrees to hold Administrative Agent, Buyers and each of their respective Affiliates and their officers, directors, employees, agents and advisors (each, an “Indemnified Party”) harmless from and indemnify each Indemnified Party (and will reimburse each Indemnified Party as the same is
incurred) against all liabilities, losses, damages, judgments, costs and expenses (including, without limitation, reasonable fees and expenses of counsel) of any kind which may be imposed on, incurred by, or asserted against any Indemnified Party relating to or arising out of this Agreement, any Transaction Request, any Program Agreement or any transaction contemplated hereby or thereby (including, without limitation, (i) any such liabilities, losses, damages, judgments, costs and expenses directly arising from any acts or omissions of such party and (ii) any wire fraud or data or systems intrusions which causes Administrative Agent or Buyers to suffer any such direct liability, loss, damage, judgment, cost and/or expense), resulting from anything other than the Indemnified Party’s gross negligence or willful misconduct. Seller also agrees to reimburse each Indemnified Party for all reasonable expenses in connection with the enforcement of this Agreement and the exercise of any right or remedy provided for herein, any Transaction Request and any Program Agreement, including, without limitation, the reasonable fees and disbursements of counsel. Seller’s agreements in this Section 30 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Purchased Assets. Seller also agrees not to assert any claim against Administrative Agent, each Buyer or any of its Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
b.Reserved.
c.Without limiting the provisions of Section 30(a) hereof, if Seller fails to pay when due any costs, expenses or other amounts payable by it under this Agreement, including, without limitation, fees and expenses of counsel and indemnities, such amount may be paid on behalf of Seller by Administrative Agent (subject to reimbursement by Seller), in its sole discretion.
31.Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Agreement in a Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually
executed original counterpart of this Agreement. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transactions contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-SIGN, UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service with appropriate document access tracking, electronic signature tracking and document retention as may be approved by the Administrative Agent in its sole discretion.
32.Confidentiality
a.This Agreement and its terms, provisions, supplements and amendments, and notices hereunder, including without limitation information contained in the monthly Officer’s Compliance Certificate, as well as any information conveyed to Administrative Agent and Buyers during the course of any due diligence review, shall be kept confidential and shall not be divulged to any third party without the written consent of such party except for (i) disclosure to potential and actual assignees, Repledgees and Participants (pursuant to Section 22 hereof), (ii) disclosure to a party’s direct and indirect Affiliates and Subsidiaries, attorneys or accountants, but only to the extent such disclosure is necessary and such parties agree to hold all information in strict confidence, (iii) disclosure required by law, rule, regulation or order of a court or other regulatory body, (iv) any of such information is in the public domain other than due to a breach of this covenant, or (v) disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Program Agreement, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment of the Transactions, any fact relevant to understanding the federal, state and local tax treatment of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment; provided that, except as set forth in the first sentence of this clause (a), Seller may not disclose the name of or identifying information with respect to Administrative Agent and Buyers or any pricing terms (including, without limitation, the Purchase Price, Pricing Rate, Purchase Price Percentage, Asset Value, Maximum Value Amount and any other fees specified in the Pricing Side Letter) or other nonpublic business or financial information (including any sublimits and financial covenants) that is unrelated to the federal, state and local tax treatment of the Transactions and is not relevant to understanding the federal, state and local tax treatment of the Transactions, without the prior written consent of the Administrative Agent.
b.Notwithstanding anything in this Agreement to the contrary, the Seller shall comply with all applicable local, state and federal laws, including, without limitation, all privacy and data protection law, rules and regulations that are applicable to the Purchased Assets and/or any applicable terms of this Agreement
(the “Confidential Information”). Seller understands that the Confidential Information may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “Act”), and Seller agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the Act and other applicable federal and state privacy laws. The Seller shall implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in the Act) of Administrative Agent and Buyers or any Affiliate of Administrative Agent or Buyers which Seller holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Seller represents and warrants that it has implemented appropriate measures to meet the objectives of Section 501(b) of the Act and of the applicable standards adopted pursuant thereto, as now or hereafter in effect. Upon request, Seller will provide evidence reasonably satisfactory to allow Administrative Agent and/or Buyers to confirm that the providing party has satisfied its obligations as required under this Section. Without limitation, this may include Administrative Agent’s or Buyers’ review of audits, summaries of test results, and other equivalent evaluations of the Seller. Seller shall notify Administrative Agent immediately following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of Administrative Agent, Buyers or any Affiliate of Buyers provided directly to the Seller by Administrative Agent, Buyers or such Affiliate. Seller shall provide such notice to Administrative Agent by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual.
33.Recording of Communications
Administrative Agent, Buyers and Seller shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions. Administrative Agent, Buyers and Seller consent to the admissibility of such tape recordings in any court, arbitration, or other proceedings. The parties agree that a duly authenticated transcript of such a tape recording shall be deemed to be a writing conclusively evidencing the parties’ agreement.
34.Conflicts
In the event of any conflict between the terms of this Agreement and any other Program Agreement, the documents shall control in the following order of priority: first, the terms of the Pricing Side Letter shall prevail, then the terms of the Administration Agreement, then the terms of this Agreement shall prevail, and then the terms of the other Program Agreements shall prevail.
35.Acknowledgment of Assignment and Administration of Repurchase Agreement
Pursuant to Section 22 above (Non-assignability) of this Agreement, Administrative Agent may sell, transfer and convey or allocate certain Purchased Assets and the related Repurchase Assets and related Transactions to certain affiliates of Administrative Agent and/or one (1) or more CP Conduits (the “Additional Buyers”) with the prior written consent of Seller; provided that such consent shall not be required to the extent Administrative Agent or Buyers sells, transfers or conveys to (i) to an Affiliate thereof or (ii) during an Event of Default. Administrative Agent shall notify the Seller promptly after each sale, transfer, conveyance or allocation, provided that the failure to give such notice shall not affect the validity of such sale, transfer, conveyance or allocation. Seller hereby acknowledges and agrees to the joinder of such Additional Buyers and the assignments and the terms and provisions set forth in the Administration Agreement; provided that any Confidential Information provided to an Additional Buyer shall be provided subject to a commercially reasonable non-disclosure agreement. The Administrative Agent shall administer the provisions of this Agreement, subject to the terms of the Administration Agreement for the benefit of the Buyers and any Repledgees, as applicable. For the avoidance of doubt, all payments, notices, communications and agreements pursuant to this Agreement shall be delivered to, and entered into by, the Administrative Agent for the benefit of the Buyers and/or the Repledgees, as applicable. Furthermore, to the extent that the Administrative Agent exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on and/or purchase any of the Repurchase Assets pursuant to Section 16 above (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in this Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer and Repledgees, as applicable. All provisions of this Agreement shall survive the transfers contemplated herein (including any Repledge Transactions) and in the Administration Agreement, except to the extent such provisions are modified by the Administration Agreement. In the event of a conflict between the Administration Agreement and this Agreement, the terms of the Administration Agreement shall control. Notwithstanding that multiple Buyers may purchase individual Purchased Mortgage Loans subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets shall be security for all of the Obligations hereunder, subject to the priority of payments provisions set forth in the Administration Agreement.
36.Periodic Due Diligence Review
Seller acknowledges that Administrative Agent and Buyers have the right to perform continuing due diligence reviews with respect to Seller, the Purchased Assets, for purposes of verifying compliance with the representations, warranties and specifications made hereunder, for the purpose of performing quality control review of the Purchased Assets or otherwise, and Seller agrees that upon reasonable (but no less than [***]) prior notice unless an Event of Default shall have occurred and be continuing, in which case no notice is required, to Seller, Administrative Agent, Buyers or their authorized representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of, the Asset Files and any and all documents, data, records, agreements, instruments or information relating to such Purchased Assets (including, without limitation, quality control review) in the possession or under the control of Seller and/or the Custodian. Seller also shall make available to
Administrative Agent and Buyers a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Asset Files and the Purchased Assets. Without limiting the generality of the foregoing, Seller acknowledges that Administrative Agent and Buyers may purchase Purchased Assets from Seller based solely upon the information provided by Seller to Administrative Agent and Buyers in the Asset Schedule and the representations, warranties and covenants contained herein, and that Administrative Agent or Buyers, at their option, have the right at any time to conduct a partial or complete due diligence review on some or all of the Purchased Assets purchased in a Transaction, including, without limitation, ordering an Acceptable Valuation, new credit reports and new appraisals on the related Mortgaged Properties and otherwise re-generating the information used to originate such Mortgage Loans. Administrative Agent or Buyers may underwrite such Purchased Assets itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Seller agrees to cooperate with Administrative Agent, Buyers and any third party underwriter in connection with such underwriting, including, but not limited to, providing Administrative Agent, Buyers and any third party underwriter with access to any and all documents, records, agreements, instruments or information relating to such Purchased Assets in the possession, or under the control, of Seller. Seller further agrees that Seller shall pay all out-of-pocket costs and expenses incurred by Administrative Agent and Buyers in connection with Administrative Agent’s and Buyers’ activities pursuant to this Section 36.
37.Authorizations
Any of the persons whose signatures and titles appear on Schedule 2 are authorized, acting singly, to act for Seller or Administrative Agent to the extent set forth therein, as the case may be, under this Agreement. The Seller may amend Schedule 2 from time to time by delivering a revised Schedule 2 to Administrative Agent and expressly stating that such revised Schedule 2 shall replace the existing Schedule 2.
38.Administration of Repurchase Agreement
To the extent that the Administrative Agent exercises remedies pursuant to this Agreement, any of the Administrative Agent and/or any Buyer will have the right to bid on and/or purchase any of the Repurchase Assets pursuant to Section 16 (Remedies Upon Default). The benefit of all representations, rights, remedies and covenants set forth in the Agreement shall inure to the benefit of the Administrative Agent on behalf of each Buyer and/or the Repledgees. All provisions of the Agreement shall survive the transfers contemplated herein (including any Repledge Transactions) and in the Administration Agreement, except to the extent such provisions are modified by the Administration Agreement. In the event of a conflict between the Administration Agreement and this Agreement, the terms of the Administration Agreement shall control. Notwithstanding that multiple Buyers may purchase individual Mortgage Loans subject to Transactions entered into under this Agreement, all Transactions shall continue to be deemed a single Transaction and all of the Repurchase Assets shall be security for all of the Obligations hereunder, subject to the priority of payments provisions set forth in the Administration Agreement.
39.Acknowledgement of Anti-Predatory Lending Policies
Administrative Agent has in place internal policies and procedures that expressly prohibit its purchase of any High Cost Mortgage Loan.
40.Documents Mutually Drafted
The Seller, Administrative Agent and the Buyers agree that this Agreement and each other Program Agreement prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
41.General Interpretive Principles
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
a.the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
b.accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
c.references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
d.a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
e.the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
f.the term “include” or “including” shall mean without limitation by reason of enumeration;
g.all times specified herein or in any other Program Agreement (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated;
h.all references herein or in any Program Agreement to "good faith" means good faith as defined in Section 1-201 of the UCC as in effect in the State of New York; and an Event of Default that has been waived in writing shall be deemed not to be continuing.
42.Bankruptcy Non-Petition
The parties hereby agree that they shall not institute against, or join any other person in instituting against, any Buyer that is a CP Conduit any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other proceeding under any federal or state bankruptcy or similar law, for one (1) year and one (1) day after the latest maturing commercial paper note issued by the applicable CP Conduit is paid in full. Nothing in this Section 42 shall preclude any party (i) from filing any claim prior to the expiration of the aforementioned one year and one day period in (A) any insolvency proceeding voluntarily filed or commenced by such CP Conduit or (B) any involuntary insolvency proceeding filed or commenced by a Person other than such party, or (ii) from commencing against such CP Conduit any legal action which is not an insolvency proceeding.
43.Limited Recourse
The obligations of each Buyer under this Agreement or any other Program Agreement are solely the corporate obligations of such Buyer. No recourse shall be had for the payment of any amount owing by any Buyer under this Agreement, or for the payment by any Buyer of any fee in respect hereof or any other obligation or claim of or against such Buyer arising out of or based on this Agreement, against any stockholder, partner, member, employee, officer, director or incorporator or other authorized person of such Buyer. In addition, notwithstanding any other provision of this Agreement, the parties agree that all payment obligations of any Buyer that is a CP Conduit under this Agreement shall be limited recourse obligations of such Buyer, payable solely from the funds of such Buyer available for such purpose in accordance with its commercial paper program documents. Each party waives payment of any amount which such Buyer does not pay pursuant to the operation of the preceding sentence until the day which is at least one (1) year and one (1) day after the payment in full of the latest maturing commercial paper note (and waives any “claim” against such Buyer within the meaning of Section 101(5) of the Bankruptcy Code or any other Debtor Relief Law for any such insufficiency until such date).
44.Pool Subdivisions
The Administrative Agent may from time to time deliver to Seller a Pool Subdivision Notice which notice shall identify a Pool of Purchased Mortgage Loans that shall be treated separately from the remaining Purchased Mortgage Loans (which remaining Purchased Mortgage Loans shall constitute another Pool). The Administrative Agent may modify any such Pool Subdivision Notice from time to time to readjust the composition of the Pools identified therein. Following delivery of a Pool Subdivision Notice, the calculations with respect to Price Differential (and all of the component calculations used in determining such calculation) shall be calculated separately on the basis of the Purchased Mortgage Loans comprising each Pool, which shall result in a separate Price Differential for each Pool. For the avoidance of doubt, a Pool Subdivision Notice shall not (a) modify or otherwise affect the rights and obligations of the parties under the Program Agreements except as expressly contemplated in this Section 44; and (b) shall not be construed as a Severance Notice as contemplated by Section 19 of this Agreement.
45.Nominee
a.Seller, Administrative Agent and the Buyers hereby acknowledge and agree, and Seller hereby appoints, the Nominee as (i) their nominee as mortgagee of record and payee on the FHA Connection System with respect to each Early Buyout Loan, and the Nominee hereby accepts such appointment, and (ii) as nominee and agent of Seller, Administrative Agent and the Buyers as set forth herein, to the extent applicable.
b.Following receipt by Nominee of written notice of the occurrence of an Event of Default, the Nominee agrees to take direction from the Administrative Agent with respect to the FHA Loans, Early Buyout Loans and any related Purchased Mortgage Loans.
c.It is the intent of the Seller, Servicer, Administrative Agent and the Buyers that the Nominee retains bare legal title to the Early Buyout Loans and the related Purchased Mortgage Loans for all purposes including, without limitation, for purposes of Section 541(d) of the Bankruptcy Code and accordingly, Nominee, in their capacity as a nominee, shall have no property right to such Purchased Mortgage Loans.
d.Administrative Agent may, upon notice to the Seller, terminate the Nominee and appoint itself or another person as the successor nominee following an Event of Default that is continuing.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed as of the date first above written.
ATLAS SECURITIZED PRODUCTS, L.P., as Administrative Agent and a Buyer
By: Atlas Securitized Products GP, LLC, its general partner By:
Name:
Title:
AGF WHCO 1-A3 LP, as a Buyer
By: AASP Management, LP, its investment manager
By: Name: William B. Kuesel
Title: Vice President and AGM General Counsel, Americas
Signature Page to the Master Repurchase Agreement (Atlas-WHCO/loanDepot)
LOANDEPOT.COM, LLC, as Seller
By:
Name: David Hayes
Title: Chief Financial Officer
Signature Page to the Master Repurchase Agreement (Atlas-WHCO/loanDepot)
SCHEDULE 1-A
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO PURCHASED MORTGAGE LOANS
As to each Purchased Mortgage Loan subject to any Transaction outstanding on a Purchase Date, the Seller shall be deemed to make the following representations and warranties to the Administrative Agent as of such date and at all times a Purchased Mortgage Loan is subject to a Transaction. With respect to those representations and warranties which are made to the best of Seller’s knowledge, if it is discovered by such Seller or Administrative Agent that the substance of such representation and warranty is inaccurate, notwithstanding such Seller’s lack of knowledge with respect to the substance of such representation and warranty, such inaccuracy shall be deemed a breach of the applicable representation and warranty for purposes of determining Asset Value.
(a)Payments Current. Except with respect to a Mortgage Loan that is an Early Buyout Loan or a Non-Performing Mortgage Loan, all payments required to be made up to the Purchase Date for the Mortgage Loan under the terms of the Mortgage Note have been made and credited -- it being understood that a payment is not required to be made until after the expiration of any applicable grace period. Except with respect to a Mortgage Loan that is an Early Buyout Loan or a Non-Performing Mortgage Loan, no payment required under the Mortgage Loan is delinquent nor has any payment under the Mortgage Loan been delinquent at any time since the origination of the Mortgage Loan (in each case it being understood that payment is delinquent after the expiration of any applicable grace period) and, if the Mortgage Loan is a Co-op Loan, no foreclosure action or private or public sale under the Uniform Commercial Code is, to the knowledge of Seller, being threatened or commenced with respect to the Co-op Loan. The first Monthly Payment shall be made, or shall have been made, with respect to the Mortgage Loan on its Due Date or within the grace period, all in accordance with the terms of the related Mortgage Note.
(b)No Outstanding Charges. All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither the Seller nor the Qualified Originator from which Seller acquired the Mortgage Loan has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Mortgage Loan, whichever is earlier, to the day which precedes by one month the Due Date of the first installment of principal and interest thereunder.
(c)Original Terms Unmodified. Except with respect to a Mortgage Loan that is an Early Buyout Loan, the terms of the Mortgage Note (and the Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyers, and which has been delivered to the Custodian and the terms of which are reflected in the Custodial Mortgage Loan Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected on the Custodial Mortgage Loan Schedule. No Mortgagor in respect of the Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Asset File delivered to the Custodian and the terms of which are reflected in the Custodial Mortgage Loan Schedule.
(d)No Defenses. The Mortgage Loan (and the Assignment of Proprietary Lease related to each Co-op Loan) is not subject to any right of rescission, set off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set off, counterclaim or defense has been asserted with respect thereto, and, with respect to a Mortgage Loan other than an Early Buyout Loan and no Mortgagor in respect of the Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Mortgage Loan was originated. Except with respect to a Mortgage Loan that is an Early Buyout Loan, the Seller has no knowledge nor has it received any notice that any Mortgagor in respect of the Mortgage Loan is a debtor in any state or federal bankruptcy or insolvency proceeding.
(e)Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a Qualified Insurer, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Seller as of the date of origination consistent with the Underwriting Guidelines. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Mortgage Loan (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1973. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming the Seller, its successors and assigns (including, without limitation, subsequent owners of the Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by the Seller. All premiums on such
insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the insurer and is in full force and effect. The Seller has not engaged in, and has no knowledge of the Mortgagor’s having engaged in, any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(f)Environmental Compliance. There does not exist on the Mortgaged Property any hazardous substances, hazardous materials, hazardous wastes, solid wastes or other pollutants, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. 9601 et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., or other applicable federal, state or local environmental laws including, without limitation, asbestos, in each case in excess of the permitted limits and allowances set forth in such environmental laws to the extent such laws are applicable to the Mortgaged Property. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any applicable environmental law (including, without limitation, asbestos), rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of said property.
(g)Compliance with Applicable Laws. Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and the Seller shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Administrative Agent, and shall deliver to Administrative Agent, upon demand, evidence of compliance with all such requirements.
(h)No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination or rescission. Except with respect to a Mortgage Loan that is an Early Buyout Loan,
Seller has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Mortgage Loan to be in default, nor has Seller waived any default resulting from any action or inaction by the Mortgagor.
(i)Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State as identified in the Custodial Mortgage Loan Schedule and, other than with respect to a BPL – Long, consists of a single parcel of real property with a detached single family residence erected thereon, or a two to four family dwelling, or an individual condominium unit in a low rise Co-op Project, or an individual unit in a planned unit development or a de minimis planned unit development; provided, however, that any condominium unit, Co-op Unit or planned unit development shall conform with the applicable Fannie Mae and Freddie Mac requirements regarding such dwellings or shall conform to underwriting guidelines acceptable to Administrative Agent in its sole discretion and that no residence or dwelling is a mobile home. No portion of the Mortgaged Property is used for commercial purposes; provided, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to underwriting guidelines acceptable to Administrative Agent in its sole discretion.
(j)Validity of Lien. The Mortgage is a valid, subsisting, enforceable and perfected, with respect to each Mortgage Loan other than a Second Lien Mortgage Loan or HELOC, first priority lien and first priority security interest or, with respect to a Second Lien Mortgage Loan or HELOC, a second lien or a second priority security interest, in each case, on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations of mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:
a.the lien of current real property taxes and assessments not yet due
and payable;
b.covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in lender’s title insurance policy delivered to the originator of the Mortgage Loan and (a) referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal;
c.other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property;
d.in the case of a Second Lien Mortgage Loan or HELOC, the first lien on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting and enforceable (a) with respect to Mortgage Loans other than Second Lien Mortgage Loans and HELOCs, first lien and first priority security interest and (b) with respect to Second Lien Mortgage Loans and HELOCs, second lien and second priority interest, in each case, on the property described therein and Seller has full right to pledge and assign the same to Administrative Agent. Except with respect to a Second Lien Mortgage Loan or HELOC, the Mortgaged Property was not, as of the date of origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage.
(k)Validity of Mortgage Documents. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with a Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to a Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan. The Seller has reviewed all of the documents constituting the Asset File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. To the best of the Seller’s knowledge, except as disclosed to Administrative Agent in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.
(l)Full Disbursement of Proceeds. Other than with respect to Holdback Amounts in the related Holdback Account and HELOCs, there is no further requirement for future advances under the Mortgage Loan, and, other than with respect to Business Purpose Mortgage Loans, any and all requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with (except with regard to any FHA 203(k) loan, as applicable). All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage. All broker fees have been properly assessed to the Mortgagor and no claims will arise as to broker fees that are double charged and for which the Mortgagor would be entitled to reimbursement.
(m)Ownership. Seller has full right to sell the Mortgage Loan to Buyers free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell each Mortgage Loan pursuant to this Agreement and following the sale of each Mortgage Loan, Buyers will own such
Mortgage Loan (and with respect to any Co-op Loan, the sole owner of the related Assignment of Proprietary Lease) free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement.
(n)Doing Business. All parties which have had any interest in the Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.
(o)Title Insurance. Unless such Mortgage Loan is a Co-op Loan, a HELOC or, a Second Lien Mortgage Loan or an Agency Title Alternative Mortgage Loan, the Mortgage Loan is covered by either (i) an attorney’s opinion of title and abstract of title, the form and substance of which is acceptable to prudent mortgage lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender’s title insurance policy or other generally acceptable form of policy or insurance acceptable to Fannie Mae, Freddie Mac or GNMA, as applicable, and each such title insurance policy is issued by a title insurer acceptable to Fannie Mae, Freddie Mac or GNMA, as applicable, and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (a), (b), (c) and (d) of paragraph (j) of this Schedule 1-A, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. The Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by the Seller.
(p)No Defaults. Other than (i) Mortgage Loans that are Early Buyout Loans or Non-Performing Mortgage Loans, or (ii) Mortgage Loans which have defects that are otherwise disclosed to Administrative Agent in writing, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Seller nor its predecessors have waived any default, breach, violation or event of acceleration; and with respect to each Co-op Loan, there is no default in complying with the terms of the Mortgage Note, the Assignment of Proprietary Lease and the Proprietary Lease and all maintenance charges and assessments (including assessments payable in the future installments, which previously became due and owing) have been paid, and Seller has the right under the terms of the Mortgage Note, Assignment of Proprietary Lease and Recognition Agreement to pay any maintenance charges or assessments owed by the Mortgagor.
(q)No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(r)Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(s)Origination; Payment Terms. The Mortgage Loan was originated by or in conjunction with a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar banking institution which is supervised and examined by a federal or state authority. Other than with respect to HELOCs, principal and interest payments on the Mortgage Loan commenced no more than sixty (60) days after funds were disbursed (or after the interest only period expired, as applicable) in connection with the Mortgage Loan other than a Non-Agency Non-QM Mortgage Loan identified on the Asset Schedule. The Mortgagor contributed from their own funds to the purchase price for the Mortgaged Property, as required by the applicable Agency. Interest on the Mortgage Loan (other than a HELOC) is calculated on the basis of a 360 day year consisting of twelve 30 day months and interest on a HELOC is calculated on the basis of a 365 day (or 366 day year in the case of a leap year) and consisting of the actual number of days in each month. With respect to adjustable rate Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest .125%), subject to the Mortgage Interest Rate Cap. Other than with respect to HELOCs and Business Purpose Mortgage Loans, the
Mortgage Note is payable on the first day of each month in either (x) equal monthly installments of principal and interest or (y) interest only with regard to those Mortgage Loans which have an interest only period, which installments of interest with respect to adjustable rate Mortgage Loans, are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than forty (40) years from commencement of amortization (other than with respect to a Second Lien Mortgage Loan that is originated as a home equity revolving line of credit).
(t)Customary Provisions. The Mortgage Note has a stated maturity. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the Mortgaged Property. There is no homestead or other exemption available to the Mortgagor or restriction on the Seller which would interfere with the right to sell the Mortgaged Property at a trustee's sale or otherwise or the right to foreclose on the related Mortgage. Except with respect to Business Purpose Mortgage Loans, the Mortgage Note and Mortgage are on forms acceptable to Freddie Mac, Fannie Mae or GNMA, as applicable.
(u)Occupancy of the Mortgaged Property. Other than with respect to Business Purpose Mortgage Loans, as of the Purchase Date the Mortgaged Property is lawfully occupied under applicable law. Other than with respect to Business Purpose Mortgage Loans, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. The Seller has not received notification from any Governmental Authority that the Mortgaged Property is in material noncompliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. The Seller has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or certificate. Other than with respect to Business Purpose Mortgage Loans, with respect to any Mortgage Loan originated with an “owner occupied” Mortgaged Property, the Mortgagor represented at the time of origination of the Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.
(v)No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (j) above.
(w)Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Administrative Agent to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(x)Transfer of Mortgage Loans. Except with respect to Mortgage Loans intended for purchase by GNMA and for Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located.
(y)Due On Sale. Except with respect to Mortgage Loans intended for purchase by GNMA, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.
(z)No Buydown Provisions; No Graduated Payments or Contingent Interests. Except with respect to Agency Mortgage Loans, the Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(aa) Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. With respect to each Mortgage Loan other than a Co-op Loan, a Second Lien Mortgage Loan or, a HELOC or an Agency Title Alternative Mortgage Loan, the lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority with respect to Mortgage Loans, by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to Fannie Mae, Freddie Mac or GNMA. The consolidated principal amount does not exceed the original principal amount of the Mortgage Loan.
(bb) No Condemnation Proceeding. There are no current condemnation proceedings with respect to the Mortgaged Property and the Seller has no knowledge of any such proceedings.
(cc) Collection Practices; Escrow Deposits; Interest Rate Adjustments. The origination and collection practices used by the originator, each servicer of the Mortgage Loan and the Seller with respect to the Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments, all such payments are in the possession of, or under the control of, the Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and, where required under the applicable Underwriting Guidelines, has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due the Seller have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
(dd) Conversion to Fixed Interest Rate. Except as allowed by Fannie Mae, Freddie Mac or GNMA or otherwise as expressly approved in writing by Administrative Agent, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(ee) Other Insurance Policies. No action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, private mortgage insurance policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by the Seller or by any officer, director, or employee of the Seller or any designee of the Seller or any corporation in which the Seller or any officer, director, or employee had a financial interest at the time of placement of such insurance.
(ff) Servicemembers Civil Relief Act. The Mortgagor has not notified the Seller, and the Seller has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
(gg) Appraisal. The Asset File contains either (i) to the extent permitted by the applicable Agency, a Property Inspection Waiver (as defined in the applicable Agency guidelines), (ii) as required by the applicable Underwriting Guidelines, the valuation waterfall product value for HELOCs and CES or (ii) an appraisal of the related Mortgaged Property signed prior to the funding of the Mortgage Loan by a qualified appraiser, duly appointed by Seller, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of Fannie Mae or Freddie Mac and Title XI of the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated; provided that the foregoing requirement shall not apply to Agency Mortgage Loans where the applicable Agency does not so require it. As of the origination date, no appraisal is more than one hundred and twenty (120) days old.
(hh) Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and the Seller maintains such statement in the Asset File.
(ii)Construction or Rehabilitation of Mortgaged Property. Other than with respect to a Business Purpose Mortgage Loan, no Mortgage Loan (other than an FHA 203(k) loan) was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade in or exchange of a Mortgaged Property.
(jj) No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Seller on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of the Seller, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(kk) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(ll) No Equity Participation. No document relating to the Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and the Seller has not financed nor does it own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(mm) Proceeds of Mortgage Loan. The proceeds of the Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to the Seller or any Affiliate or correspondent of the Seller, except in connection with a refinanced Mortgage Loan; provided, however, no such refinanced Mortgage Loan shall have been originated pursuant to a streamlined mortgage loan refinancing program.
(nn) Origination Date. (i) With respect to Mortgage Loans other than correspondent loans, Scratch and Dent Mortgage Loans and Early Buyout Loans, the Purchase Date is no more than thirty (30) days following the origination date and (ii) with respect to correspondent loans (other than Early Buyout Loans and Scratch and
Dent Mortgage Loans), the Purchase Date is no more than one-hundred and eighty (180) days following the origination date.
(oo) No Exception. The Custodian has not noted any material exceptions on a Custodial Mortgage Loan Schedule with respect to the Mortgage Loan which would materially adversely affect the Mortgage Loan or Administrative Agent’s or Buyers’ interest in the Mortgage Loan.
(pp) Mortgage Submitted for Recordation. The Mortgage either has been or will promptly be submitted for recordation in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.
(qq) Documents Genuine. Such Purchased Mortgage Loan and all accompanying collateral documents are complete and authentic and all signatures thereon are genuine. Except for FHA 203(k) loans or HELOCs, such Purchased Mortgage Loan is a “closed” loan fully funded by Seller and held in Seller’s name.
(rr) Bona Fide Loan. Such Purchased Mortgage Loan arose from a bona fide loan, complying with all applicable State and Federal laws and regulations, to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim.
(ss) Reserved,
(tt) Description. Each Purchased Mortgage Loan conforms to the description thereof as set forth on the related Custodial Mortgage Loan Schedule delivered to the Custodian and Administrative Agent.
(uu) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to a Purchased Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America or the District of Columbia.
(vv) Underwriting Guidelines. Except with respect to Mortgage Loans that are Early Buyout Loans or Scratch and Dent Mortgage Loans, each Purchased Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) previously provided to Administrative Agent.
(ww) Aging. Such Purchased Mortgage Loan has not been subject to a Transaction hereunder for more than the applicable Aging Limit (to the extent there is an applicable Aging Limit for such Mortgage Loan).
(xx) Committed Mortgage Loans. Each Committed Mortgage Loan is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Administrative Agent as covered by such Take-out Commitment) and conforms to the requirements and the specifications set forth in such
Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. Each Take-out Commitment is a legal, valid and binding obligation of Seller enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(yy) Reserved.
(zz) Reserved.
(aaa) Predatory Lending Regulations; High Cost Mortgage Loans. No Mortgage Loan is classified as High Cost Mortgage Loans.
(bbb) Credit Score and Reporting. As of the Purchase Date, the Mortgagor’s credit score as listed on the Asset Schedule is no more than one hundred twenty (120) days old. Full, complete and accurate information with respect to the Mortgagor’s credit file was furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
(ccc) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Asset Documents as agent and bailee for Administrative Agent or Administrative Agent’s agent and to promptly forward such Asset Documents in accordance with the provisions of the Custodial Agreement and the Escrow Instruction Letter.
(ddd) FHA Mortgage Insurance; VA Loan Guaranty. With respect to the FHA Loans, the FHA Mortgage Insurance Contract is or eligible to be in full force and effect and there exists no impairment to full recovery without indemnity to the Department of Housing and Urban Development or the FHA under FHA Mortgage Insurance. With respect to the VA Loans, the VA Loan Guaranty Agreement is in full force and effect to the maximum extent stated therein. All necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the FHA and the VA, respectively, to the full extent thereof, without surcharge, set off or defense. Except with respect to a Mortgage Loan that is an Early Buyout Loan, each FHA Loan and VA Loan was originated in accordance with the criteria of an Agency for purchase of such Mortgage Loans.
(eee) Asset Schedule. The information set forth in the related Asset Schedule and all other information or data furnished by, or on behalf of, Seller to Administrative Agent is complete, true and correct in all material respects.
(fff) Qualified Mortgage. Other than with respect to Business Purpose Mortgage Loans or a HELOC, notwithstanding anything to the contrary set forth in this Agreement, on and after January 10, 2014 (or such later date as set forth in the relevant regulations), (i) prior to the origination of each Mortgage Loan, the originator made a reasonable and good faith determination that the Mortgagor had a reasonable ability to repay the loan according to its terms, in accordance with, at a minimum, the eight underwriting factors set forth in 12 CFR 1026.43(c) and (ii) other than Non-Agency Non-QM Mortgage Loans, unless otherwise approved in writing by Administrative Agent or a Buyer, each Mortgage Loan is a “Qualified Mortgage” as defined in 12 CFR 1026.43(e).
(ggg) Co-op Loan: Valid First Lien. With respect to each Co-op Loan, the related Mortgage is a valid, enforceable and subsisting first priority security interest on the related Co-op Shares securing the related Proprietary Lease, subject only to (a) liens of the Co-op Corporation for unpaid assessments representing the Mortgagor’s pro rata share of the Co-op Corporation’s payments for its blanket mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (b) other matters to which like collateral is commonly subject which do not materially interfere with the benefits of the security intended to be provided by the security interest. There are no liens against or security interests in the Co-op Shares relating to each Co-op Loan (except for unpaid maintenance, assessments and other amounts owed to the related cooperative which individually or in the aggregate will not have a material adverse effect on such Co-op Loan), which have priority equal to or over Seller’s security interest in such Co-op Shares.
(hhh) Co-op Loan: Compliance with Law. With respect to each Co-op Loan, the related Co-op Corporation that owns title to the related Co-op Project is a “cooperative housing corporation” within the meaning of Section 216 of the Internal Revenue Code, and is in material compliance with applicable federal, state and local laws which, if not complied with, could have a material adverse effect on the Mortgaged Property.
(iii)Co-op Loan: No Pledge. With respect to each Co-op Loan, there is no prohibition against pledging the Co-op Shares or assigning the Proprietary Lease. With respect to each Co-op Loan, (i) the term of the related Proprietary Lease is longer than the term of the Co-op Loan, (ii) there is no provision in any Proprietary Lease which requires the Mortgagor to offer for sale the Co-op Shares owned by such Mortgagor first to the Co-op Corporation, (iii) there is no prohibition in any Proprietary Lease against pledging the Co-op Shares or assigning the Proprietary Lease and (iv) the Recognition Agreement is on a form of agreement published by Aztech Document Systems, Inc. as of the date hereof or includes provisions which are no less favorable to the lender than those contained in such agreement. To the extent required by the Take-out Investor with respect to such Co-op Loan, Seller shall also deliver to the Custodian an executed Assignment of Recognition Agreement (as such term is defined in the Custodial Agreement) with respect to such Co-op Loan.
(jjj) Co-op Loan: Acceleration of Payment. With respect to each Co-op Loan, each Assignment of Proprietary Lease contains enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization of the material benefits of the security provided thereby. The Assignment of Proprietary Lease contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Mortgage Note in the event the Co-op Unit is transferred or sold without the consent of the holder thereof.
(kkk) TRID Compliance. Other than with respect to a Business Purpose Mortgage Loan, a HELOC or Second Lien Mortgage Loan, with respect to each Mortgage Loan where the Mortgagor’s loan application for the Mortgage Loan was taken on or after October 3, 2015, such Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.
(lll) Wet-Ink Mortgage Loans. With respect to each Mortgage Loan that is a Wet-Ink Mortgage Loan, the Settlement Agent has been instructed in writing by Seller to hold the related Asset Documents as agent and bailee for Administrative Agent or Administrative Agent’s agent and to promptly forward such Asset Documents in accordance with the provisions of the related Custodial Agreement and the Escrow Instruction Letter.
(mmm) eNote Legend. If the Mortgage Loan is an eMortgage Loan, the related eNote contains the Agency-Required eNote Legend.
(nnn) Payment Terms. Each HELOC provides for the initial draw period specified in the Underwriting Guidelines and an initial payment period (the “Revolving HELOC Period”) during which the Mortgagor is required to make monthly payments of interest payable in arrears for a 120-month period and requires repayment of the unpaid principal balance thereof over a period following the Revolving HELOC Period which is not in excess of 240 months.
(ooo) eNotes. With respect to each eMortgage Loan, the related eNote satisfies all of the following criteria:
(i)the eNote bears a digital or electronic signature;
(ii)the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash Value of the eNote as reflected in the eVault;
(iii)there is a single Authoritative Copy of the eNote, as applicable and within the meaning of Section 9-105 of the UCC or Section 16 of the UETA, as applicable, that is held in the eVault;
(iv)the Location status of the eNote on the MERS eRegistry reflects the MERS Org ID of the Custodian;
(v)the Controller status of the eNote on the MERS eRegistry reflects the MERS Org ID of Administrative Agent;
(vi)the Delegatee status of the eNote on the MERS eRegistry reflects the MERS Org ID of Custodian;
(vii)the Master Servicer Field status of the eNote on the MERS eRegistry reflects the MERS Org ID of Servicer or Seller;
(viii)the Subservicer Field status of the eNote on the MERS eRegistry (i) reflects, if there is a third-party subservicer, such subservicer’s MERS Org ID or (ii) if there is not a subservicer, is blank;
(ix)There is no Control Failure, eNote Replacement Failure or Unauthorized Master Servicer or Subservicer Modification with respect to such eNote;
(x)the eNote is a valid and enforceable Transferable Record or comprises “electronic chattel paper” within the meaning of the UCC;
(xi)there is no defect with respect to the eNote that would result in Administrative Agent having less than full rights, benefits and defenses of “Control” (within the meaning of the UETA or the UCC, as applicable) of the Transferable Record; and
(xii)there is no paper copy of the eNote in existence nor has the eNote been papered-out.
(ppp) Type of Loan. With respect to each Business Purpose Mortgage Loan, (i) the Mortgage Loan is primarily for business or commercial purposes (as referenced in the Truth and Lending Act and its implementing regulation, Regulation Z) and not primarily for personal, family or household purposes and (ii) the Mortgaged Property securing the related Mortgage is non-owner occupied. Such Business Purpose Mortgage Loan is not subject to the Truth in Lending Act and its implementing regulation, Regulation Z, and the Real Estate Settlement Procedures Act and its implementing regulation, Regulation X. The Mortgagor has executed a business purpose affidavit stating that the Business Purpose Mortgage Loan is for commercial, business or investment purposes only and that the Mortgagor is not and will not occupy or claim the property as a primary or secondary residence.
(qqq) Income/Employment/Assets. With respect to each Business Purpose Mortgage Loan, the originator verified the Mortgagor’s income, employment, and assets in accordance with the Underwriting Guidelines.
(rrr) Source of Loan Payments. With respect to Business Purpose Mortgage Loans, no payments due and payable under the terms of the Mortgage Note andMortgage, have been paid by any person (other than the Mortgagor and any guarantor) who was involved in, or benefited from, the sale or purchase of the Mortgaged Property or the origination, refinancing, sale, purchase or servicing of the Mortgage Loan.
(sss) Local Law Compliance. With respect to each Business Purpose Mortgage Loan, the terms of the related loan documents require the related Mortgagor to cause the Mortgaged Property to comply in all material respects with all applicable governmental regulations, zoning and building laws.
(ttt) Licenses and Permits. With respect to each Business Purpose Mortgage Loan, each Mortgagor covenants in the loan documents that it shall keep all material licenses, permits and applicable governmental authorizations necessary for its operation of each related Mortgaged Property in full force and effect, and all such licenses, permits and applicable governmental authorizations are in effect. Seller is not aware of any Mortgagor, guarantor or other obligor on any Mortgage Loan having received notice of any noncompliance with any use or occupancy law, ordinance, regulation, standard, license or certificate with respect to any Mortgaged Property.
(uuu) Mortgage Provisions. With respect to each Business Purpose Mortgage Loan, the Mortgage Note or the Mortgage contain provisions regarding the rights and remedies of the holder thereof for the realization against the related Mortgaged Property of the principal benefits of the security intended to be provided thereby, including realization by judicial or, if applicable, non-judicial foreclosure, subject to receivership, bankruptcy, insolvency, moratorium and other laws and principles of equity affecting the rights of creditors, whether considered in a proceeding at law or in equity.
(vvv) General Liability Insurance. With respect to each Business Purpose Mortgage Loans, the related Mortgaged Property is required pursuant to the related Mortgage to be (or the holder of the Mortgage can require that the Mortgaged Property be), and at origination the Seller received evidence that such Mortgaged Property was, insured by a hazard and rental loss insurance policy (as applicable) in amounts as required for similar properties in accordance with the Underwriting Guidelines.
(www) Assignment of Leases and Rents. With respect to each Business Purpose Mortgage Loan, any assignment of leases, rents and profits or similar document or instrument executed by the related Mortgagor in connection with the origination of the related Mortgage Loan, as such document may be amended, modified, renewed or extended from time to time (the “Assignment of Leases and Rents”) was duly executed, acknowledged and delivered and establishes and creates a valid and enforceable first priority collateral assignment of, or lien on, the related Mortgagor’s interest in all leases, sub-leases, licenses or other agreements pursuant to which any person is entitled to occupy, use or possess all or any portion of the real property subject to the related Mortgage, subject to legal limitations of general applicability to mortgage loans similar to
the Mortgage Loan, and the Mortgagor and each assignor of such Assignment of Leases and Rents to the Seller have the full right to assign the same. Each Business Purpose Mortgage Loan contains an Assignment of Leases and Rents, and such Assignment of Leases and Rents is included either in the related Mortgage or in a related separate assignment document. The related assignment of any Assignment of Leases and Rents not included in the related Mortgage has been executed and delivered to the Administrative Agent in blank, is otherwise in recordable form and constitutes a legal, valid and binding assignment, sufficient to convey to the assignee named therein (assuming that the assignee has the capacity to acquire such Assignment of Leases and Rents) all of the assignor’s right, title and interest in, to and under such Assignment of Leases and Rents.
(xxx) Non-conforming Uses. With respect to each Business Purpose Mortgage Loan, if the Mortgaged Property constitutes a legal nonconforming use, the nonconforming improvements may be rebuilt to current density and used and occupied for such nonconforming purposes if damaged or destroyed or ordinance and law endorsement to hazard policy unless otherwise disclosed to Administrative Agent in writing.
(yyy) No Releases. With respect to each Business Purpose Mortgage Loan, no Mortgage Note or Mortgage requires the mortgagee to release all or any material portion of the related Mortgaged Property that was included in the valuation for such Mortgaged Property, and/or generates income, from the lien of the related Mortgage except upon payment in full of all amounts due under the related Business Purpose Mortgage Loan.
(zzz) Credit Limits. With respect to each HELOC, if the Seller has increased a Mortgagor’s Credit Limit, (i) Seller has notified the Administrative Agent in writing of Seller’s decision to increase a Mortgagor’s Credit Limit in accordance with Asset Documents, (ii) such increase has been effected by Seller through modification of the Mortgage Loan with the Mortgagor; (iii) the Seller has delivered to the Administrative Agent an updated Asset Schedule reflecting the modification to the Mortgage Loan and
(iv)the Seller has delivered to the Custodian any modified Asset Documents. Notwithstanding anything to the contrary herein, in no event shall Administrative Agent or Buyers have any obligation to fund any Draws with respect to any HELOC, which obligations shall be retained by the Seller.
(aaaa) Draws In Compliance With Laws. Each Draw under the HELOC has been disbursed in accordance with all applicable laws, rules and regulations, including, without limitation, all state and local licensing requirements.
(bbbb) HELOC Terms. With respect to HELOCs, the related Mortgagor may request advances up to the Credit Limit within the first (1st) ten (10) years following the date of origination.
(cccc) Revolving Term. Each HELOC provides for an initial period (the “Revolving Period”) during which the Mortgagor is required to make monthly payments
of interest payable in arrears and requires repayment of the unpaid principal balance thereof over a period following the Revolving Period (the “Repayment Period”) which is it in excess of one hundred twenty (120) months. As of the Purchase Date no HELOC was in its Repayment Period. The Mortgage Interest Rate on each Mortgage Loan adjusts periodically in accordance with the Credit Line Agreement. On each Interest Rate Adjustment Date the Seller has made interest rate adjustments on the Mortgage Loan which are in compliance with the related Mortgage, Mortgage Note and Credit Line Agreement and applicable law.
(dddd) Access; Utilities; Separate Tax Lots. With respect to each Business Purpose Mortgage Loan, each Mortgaged Property (a) is located on or adjacent to a public road and has direct legal access to such road, or has access via an irrevocable easement or irrevocable right of way permitting ingress and egress to/from a public road,
(b) is served by or has uninhibited access rights to public or private water and sewer (or well and septic) and electricity all of which are appropriate for the current use of such Mortgaged Property, and (c) constitutes one or more separate tax parcels which do not include any property which is not part of such Mortgaged Property or is subject to an endorsement under the related title policy insuring such Mortgaged Property.
SCHEDULE 2 AUTHORIZED REPRESENTATIVES
SELLER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below are authorized, acting singly, to act for Seller under this Agreement:
Name Title Authorized Signature
[***]
Schedule 2 (Master Repurchase Agreement)(LoanDepot)
ADMINISTRATIVE AGENT AND BUYER AUTHORIZATIONS
Any of the persons whose signatures and titles appear below, including any other authorized officers, are authorized, acting singly, to act for Administrative Agent and/or Buyers under this Agreement:
Name Title Authorized Signature
[***]
Schedule 2 (Master Repurchase Agreement)(LoanDepot)
SCHEDULE 3
NON-AFFILIATE JOINT VENTURE COMPANIES
[***]
EXHIBIT A
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that loanDepot.com, LLC (“Seller”) hereby irrevocably constitutes and appoints Atlas Securitized Products, L.P. (“Administrative Agent”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from time to time in Administrative Agent’s discretion:
(a)in the name of Seller, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Administrative Agent on behalf of certain Buyers and/or Repledgees under the Master Repurchase Agreement, dated November 14, 2024 (as the same may be amended, restated, supplemented or otherwise modified from time to time) (the “Assets”), and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Administrative Agent for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;
(b)to pay or discharge taxes and liens levied or placed on or threatened against the Assets;
(c)(i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Administrative Agent or as Administrative Agent shall direct; (ii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iii) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (iv) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (v) to defend any suit, action or proceeding brought against Seller with respect to any Assets;
(vi) to settle, compromise or adjust any suit, action or proceeding described in clause (vii) above and, in connection therewith, to give such discharges or releases as Administrative Agent may deem appropriate; (viii) to cause the mortgagee of record to be changed to Administrative Agent on the FHA or VA system, as applicable; and (ix) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Administrative Agent were the absolute owner thereof for all purposes, and to do, at Administrative Agent’s option and Seller’s expense, at any time, and from time to time, all acts and things which Administrative Agent deems necessary to protect, preserve or realize upon the Assets and Administrative Agent’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller might do;
(d)for the purpose of carrying out the transfer of servicing with respect to the Assets from Seller to a successor servicer appointed by Administrative Agent in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the generality of the foregoing, Seller hereby gives Administrative Agent the power and right, on behalf of Seller, without assent by Seller, to, in the name of Seller or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Administrative Agent in its sole discretion; and
(e)for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.
Seller hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
Seller also authorizes Administrative Agent, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.
The powers conferred on Administrative Agent hereunder are solely to protect Administrative Agent’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Administrative Agent shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, SELLER HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND ADMINISTRATIVE AGENT ON ITS OWN BEHALF AND ON BEHALF OF ADMINISTRATIVE AGENT’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES
FOLLOW.]
IN WITNESS WHEREOF Seller has caused this Power of Attorney to be executed and Seller’s seal to be affixed this day of , 20[_].
loanDepot.com, LLC
By:
Name: Title:
STATE OF )
COUNTY OF )
| | | | | | | | | | | | | | |
On | | | before | me, |
| | Notary | Public, | personally |
Appeared , who proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
EXHIBIT B
FORM OF ESCROW INSTRUCTION LETTER
The escrow instruction letter (the “Escrow Instruction Letter”) shall also include the following instruction to the Settlement Agent (the “Escrow Agent”):
Atlas Securitized Products, L.P. (the “Administrative Agent”), has agreed to provide funds (“Escrow Funds”) to loanDepot.com, LLC to finance certain mortgage loans (the “Mortgage Loans”) for which you are acting as Escrow Agent.
You hereby agree that (a) you shall receive such Escrow Funds from Administrative Agent to be disbursed in connection with this Escrow Instruction Letter, (b) you will hold such Escrow Funds in trust, without deduction, set-off or counterclaim for the sole and exclusive benefit of Administrative Agent until such Escrow Funds are fully disbursed on behalf of Administrative Agent in accordance with the instructions set forth herein, and (c) you will disburse such Escrow Funds on the date specified for closing (the “Closing Date”) only after you have followed the Escrow Instruction Letter’s requirements with respect to the Mortgage Loans. In the event that the Escrow Funds cannot be disbursed on the Closing Date in accordance with the Escrow Instruction Letter, you agree to promptly remit the Escrow Funds to the Administrative Agent by re-routing via wire transfer the Escrow Funds in immediately available funds, without deduction, set-off or counterclaim, back to the account specified in Administrative Agent’s incoming wire transfer.
You further agree that, upon disbursement of the Escrow Funds, you will hold all Asset Documents specified in the Escrow Instruction Letter in escrow as agent and bailee for Administrative Agent, and will forward the Asset Documents and original Escrow Instruction Letter in connection with such Mortgage Loans by overnight courier to the Custodian within five
(5) Business Days following the date of origination.
You agree that all fees, charges and expenses regarding your services to be performed pursuant to the Escrow Instruction Letter are to be paid by Seller or its borrowers, and Administrative Agent shall have no liability with respect thereto.
You represent, warrant and covenant that you are not an affiliate of or otherwise controlled by Seller, and that you are acting as an independent contractor and not as an agent of Seller.
The provisions of this Escrow Instruction Letter may not be modified, amended or altered, except by written instrument, executed by the parties hereto and Administrative Agent. You understand that Administrative Agent shall act in reliance upon the provisions set forth in this Escrow Instruction Letter, and that Administrative Agent on behalf of Buyers and certain Repledgees is an intended third party beneficiary hereof.
Whether or not an Escrow Instruction Letter executed by you is received by the Custodian, your acceptance of the Escrow Funds shall be deemed to constitute your acceptance of the Escrow Instruction Letter.
Certain confidential information contained in this document, marked by “[***]”, has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential. Certain schedules (or similar attachments) also marked by “[***]” have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
EXECUTION
Exhibit 10.4
AMENDMENT NUMBER 2 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACTTHIS AMENDMENT NUMBER 2 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of April 28, 2026 (this “Amendment”), is by and among LOANDEPOT.COM, LLC, a Delaware limited liability company (“Guarantor”), LOANDEPOT BMO WAREHOUSE, LLC, a Delaware limited liability company (“Seller”) and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch (“Buyer”). Unless otherwise defined herein, capitalized terms used in this Amendment have the meanings assigned to such terms in the Amended and Restated Master Repurchase Agreement and Securities Contract, dated as of April 25, 2025 (as amended, restated, supplemented or otherwise modified to the date hereof and by this Amendment, the “Repurchase Agreement”), among the Guarantor, the Seller and the Buyer.
RECITALS
WHEREAS, the Buyer, the Guarantor and the Seller have agreed, subject to the terms and conditions of this Amendment, that the Repurchase Agreement be amended to reflect certain agreed upon changes;
NOW, THEREFORE, in consideration of the mutual covenants made herein, and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Repurchase Agreement. Effective as of the date hereof, the Repurchase Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in Exhibit A hereto.
SECTION 2. Agreement in Full Force and Effect as Amended. As specifically amended hereby, the Repurchase Agreement and each of the other Facility Documents remains in full force and effect. All references to the Repurchase Agreement or any other Facility Document shall be deemed to mean the Repurchase Agreement or such Facility Document as supplemented and amended pursuant to this Amendment. This Amendment shall not constitute a novation of the Repurchase Agreement or any other Facility Document, but is a supplement thereto. The parties hereto agree to be bound by the terms and conditions of the Repurchase Agreement and Facility Documents, each as amended or supplemented by this Amendment, to the same effect as if such terms and conditions were set forth herein verbatim.
SECTION 3. Conditions to Effectiveness of this Amendment. This Amendment shall become effective on the day when the Buyer has received a copy of this Amendment, duly executed by each of the parties hereto.
SECTION 4. Miscellaneous.
(i) This Amendment may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. The parties agree that this Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Amendment by signing any such counterpart. Counterparts may be delivered electronically. The parties agree that this Amendment or any other document necessary for the consummation of the transaction contemplated by this Amendment may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
(ii) The descriptive headings of the various sections of this Amendment are inserted for convenience of reference only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.
(iii) This Amendment may not be amended or otherwise modified other than by an agreement in writing signed by each of the parties hereto.
(iv) THIS AMENDMENT AND ANY CLAIM, DISPUTE OR CONTROVERSY ARISING UNDER OR RELATED TO THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.
(The remainder of this page is intentionally blank.)
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed as of the date first above written.
GUARANTOR:
LOANDEPOT.COM, LLC
By:/s/ David Hayes
Name: David Hayes
Title: CFO
SELLER:
LOANDEPOT BMO WAREHOUSE, LLC
By: /s/ David Hayes
Name: David Hayes
Title: President
ACKNOWLEDGED AND AGREED TO:
BUYER:
BANK OF MONTREAL
By: /s/ Ari Lash
Name: Ari Lash
Title: Managing Director
[BMO/loanDepot – Amendment No. 2 to A&R MRA]
EXHIBIT A
CONFORMED REPURCHASE AGREEMENT
[See Attached]
CONFORMED VERSION through:
Amendment No. 1, dated September 15, 2025; and Amendment No.2, dated April 28, 2026
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND
SECURITIES CONTRACT
among
BANK OF MONTREAL,
as Buyer
LOANDEPOT BMO WAREHOUSE, LLC,
as Seller,
and
LOANDEPOT.COM, LLC,
as Guarantor,
Dated as of April 25, 2025
TABLE OF CONTENTS
Page(s)
SCHEDULE 1-A REPRESENTATIONS AND WARRANTIES RE: UNDERLYING MORTGAGE LOANS
SCHEDULE 1-B REPRESENTATIONS AND WARRANTIES RE: POOLED MORTGAGE LOANS
SCHEDULE 1-C REPRESENTATIONS AND WARRANTIES RE: PARTICIPATION INTERESTS
SCHEDULE 1-D REPRESENTATIONS AND WARRANTIES RE: PARTICIPATION CERTIFICATE
SCHEDULE 2 [RESERVED]
SCHEDULE 3 [RESERVED]
EXHIBIT A [RESERVED]
EXHIBIT B [RESERVED]
EXHIBIT C [RESERVED]
EXHIBIT D FORM OF SECTION 8 CERTIFICATE
EXHIBIT E ASSET SCHEDULE FIELDS
EXHIBIT F FORM OF POWER OF ATTORNEY
EXHIBIT G [RESERVED]
EXHIBIT H FORM OF SECURITY RELEASE CERTIFICATION
AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT
This is an AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT AND SECURITIES CONTRACT, dated as of April 25, 2025, among LOANDEPOT BMO WAREHOUSE, LLC (“Seller”), LOANDEPOT.COM, LLC, a Delaware limited liability company (“Guarantor”), and BANK OF MONTREAL, a Canadian Chartered bank acting through its Chicago Branch (“Buyer”).
Section 1. Applicability; Transaction Overview. From time to time, upon the terms and conditions set forth herein, the parties hereto may enter into transactions, on an uncommitted basis, in which Seller agrees to transfer to Buyer all right, title and interest in and to the Purchased Assets backed by Underlying Mortgage Loans (including the Servicing Rights (as hereinafter defined)) owned by the Guarantor against the transfer of funds by Buyer, with a simultaneous agreement by Buyer to transfer to Seller such Purchased Assets against the transfer of funds by Seller. Guarantor owns the bare legal title to the Underlying Mortgage Loans and issues Participation Interests in each such Underlying Mortgage Loans to the Seller. All of the Participation Interests issued to the Seller shall be evidenced by a Participation Certificate. On the Restatement Date, Buyer shall purchase the Participation Certificate from Seller. After the Restatement Date, as part of separate transactions, Seller may request and Buyer may fund, subject to the terms and conditions herein, a Purchase Price Increase for the Purchased Assets based upon the origination or acquisition of additional Underlying Mortgage Loans by Guarantor and allocation thereof to one or more Participation Interests to be owned by the Seller. From time to time, the Seller may request release of some or all of the Purchased Assets from the Buyer in conjunction with an optional repurchase. Each such transaction involving the transfer of Purchased Assets to Guarantor, resulting in an increase or decrease in the value of the Purchased Assets and funding of a Purchase Price Increase shall be referred to herein as a “Transaction” and, unless otherwise agreed in writing, shall be governed by this Agreement, including any supplemental terms or conditions contained in any annexes identified herein, as applicable hereunder. This Agreement is not a commitment by Buyer to engage in the Transactions, but sets forth the requirements under which Buyer would consider entering into Transactions set forth herein.
As additional credit enhancement in connection with the Transactions hereunder and as a condition precedent to Buyer entering into further Transactions hereunder, Guarantor shall (i) deliver a guaranty in favor of Buyer and (ii) pledge to Buyer a first priority security interest in and to the Repurchase Assets and the related Residual Collateral pursuant to the terms hereof. The Guarantor is the 100% owner of the equity interests of the Seller and is receiving a benefit either directly or indirectly from the Seller for entering into the Guaranty.
Guarantor and Buyer are parties to that certain Master Repurchase Agreement and Securities Contract, dated as of September 23, 2021 (as amended, supplemented and otherwise modified from time to time, the “Existing Agreement”) and agree to amend and restate the terms and conditions of the Existing Agreement in its entirety as follows subject to the terms and conditions herein contained.
Section 2. Definitions. As used herein, the following terms shall have the following meanings.
“Accelerated Repurchase Date” shall have the meaning set forth in Section 16(a)(i) hereof.
“Acceptable State” shall mean any state acceptable pursuant to the Underwriting Guidelines in which Guarantor is licensed to originate Mortgage Loans.
“Accepted Servicing Practices” shall mean, with respect to any Mortgage Loan, those mortgage servicing practices of prudent mortgage lending institutions which service mortgage loans (a) of the same type as each Underlying Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, (b) with respect to Agency Eligible Mortgage Loans, serviced in accordance with Fannie Mae, Freddie Mac, or Government Agency servicing practices and procedures, as applicable, (c) in accordance with the terms of the related Mortgage Note and Mortgage, and (d) in accordance with applicable law and regulations, including the servicing standards promulgated by the Consumer Financial Protection Bureau.
“Adjusted Tangible Net Worth” shall have the meaning set forth in the Pricing Side Letter.
“Affiliate” shall mean with respect to any specified entity, any other entity controlling or controlled by or under common control with such specified entity. For the purposes of this definition, “control” when used with respect to a specified entity means the power to direct the management and policies of such entity, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” having meanings correlative to the foregoing. For removal of doubt none of the Permitted Holders, MTH Mortgage, LLC, MSC Mortgage, LLC, Ridgeland Mortgage, LLC, NHC Mortgage, LLC, Farm Bureau Mortgage, LLC, LGI Mortgage Solutions LLC, Henlopen Mortgage, LLC, BRP Home Mortgage, LLC, Heartwood Mortgage, LLC, ONX X+ Mortgage, LLC, Commercial Agency USA, LLC, or any joint venture formed by Guarantor after the date hereof shall be considered an Affiliate for purposes of this Agreement or any other Facility Document.
“Agency” shall mean Freddie Mac, Fannie Mae or Ginnie Mae, as applicable.
“Agency Approvals” shall have the meaning set forth in Section 13(ff) hereof.
“Agency Eligible Mortgage Loan” shall mean a Mortgage Loan that is in compliance with the eligibility requirements for swap or purchase by an Agency, under the applicable Agency guidelines and/or Agency Program.
“Agency Program” shall mean the specific mortgage-backed securities swap program under the applicable Agency guidelines or as otherwise approved by an Agency pursuant to which the Agency Security is to be issued.
“Agency-Required eNote Legend” shall mean the legend or paragraph required by Fannie Mae, Freddie Mac or Ginnie Mae, as applicable, to be set forth in the text of an eNote, which includes the provisions set forth on the appropriate exhibit to the Custodial and Disbursement Agreement, or such provisions as may otherwise be required by Fannie Mae, Freddie Mac or Ginnie Mae, as applicable, in each case as may be amended from time to time by Fannie Mae, Freddie Mac or Ginnie Mae, as applicable.
“Agency Security” shall mean a mortgage-backed security issued by an Agency.
“Agency Title Alternative Mortgage Loan” shall mean a Mortgage Loan that is eligible for sale to Fannie Mae which (i) Fannie Mae has agreed to waive the requirement to obtain title insurance and/or an attorney title policy in accordance with the Fannie Mae Guide, as amended, supplemented or otherwise modified by the variance issued to Seller pursuant to the title acceptance pilot program (the “Title Variance Program”); (ii) a “Title Alternative” was received in accordance with and as defined in the Title Variance Program; (iii) the terms of the Mortgage Loan meet the requirements of the Title Variance Program and (iv) Seller has otherwise satisfied all the terms and conditions of the Title Variance Program.
“Aggregate Facility Purchase Price” shall mean, as of any date of determination, the sum of the Purchase Prices (as of such date of determination) of all Purchased Assets (including the beneficial interests in the related Underlying Mortgage Loans then subject to a Transaction).
“Agreement” shall mean this Amended and Restated Master Repurchase Agreement and Securities Contract among Buyer, Guarantor and Seller, dated as of the date hereof as the same may be amended, restated, supplemented or otherwise modified in accordance with the terms hereof.
“Anti-Corruption Laws” shall have the meaning set forth in Section 13(cc) hereof.
“Anti-Money Laundering Laws” shall have the meaning set forth in Section 13(aa) hereof.
“Appraised Value” shall mean (i) the value set forth in an appraisal made in connection with the origination of the related Mortgage Loan as the value of the Mortgaged Property, (ii) in the case of property inspection waiver Mortgage Loans, the value accepted by Fannie Mae or Freddie Mac’s automated underwriting system as the value of the Mortgaged Property or (iii) in the case of a Second Lien Mortgage Loan, the value obtained using another valuation type permitted by the applicable Underwriting Guidelines.
“Asset Schedule” shall mean with respect to any Transaction as of any date, an asset schedule in the form of a computer tape or other electronic medium (including an Excel spreadsheet) generated by Seller or Guarantor and delivered to Buyer and the Custodian, which provides information (including, without limitation, the information set forth on Exhibit E attached hereto) relating to the Underlying Mortgage Loans in a format reasonably acceptable to Buyer.
“Asset Value” shall mean (A) with respect to any Underlying Mortgage Loan that is a Jumbo Mortgage Loan, Non-QM Mortgage Loan, Second Lien Mortgage Loan or a Scratch and Dent Mortgage Loan, as of any date of determination, an amount equal to the product of (i) the Purchase Price Percentage for the applicable Underlying Mortgage Loan and (ii) the lesser of (a) the outstanding principal balance of such Underlying Mortgage Loan, or (b) the Market Value of such Underlying Mortgage Loan; or (B) with respect to any Underlying Mortgage Loan that is a Government Mortgage Loan, as of any date of determination, an amount equal to the lesser of (i) the outstanding principal balance of such Underlying Mortgage Loan, or (ii) the product of (a) the Purchase Price Percentage for the applicable Underlying Mortgage Loan, and (b) the Market Value of such Underlying Mortgage Loan. Without limiting the generality of the foregoing, Seller acknowledges that the Asset Value of an Underlying Mortgage Loan may be reduced to zero by Buyer if:
(i) such Underlying Mortgage Loan is a Wet-Ink Mortgage Loan, for which the proceeds of such Underlying Mortgage Loan were wired to a Closing Agent with respect to which Buyer has notified the Seller or Guarantor at any time that such Closing Agent is not satisfactory;
(ii) an Underlying Mortgage Loan Issue has occurred and such Underlying Mortgage Loan has not been removed from allocation to the Participation Certificate by Seller or Guarantor;
(iii) the related Mortgage File has been released from the possession of the Custodian under the Custodial and Disbursement Agreement for a period in excess of the time permitted therefor under the Custodial and Disbursement Agreement;
(iv) such Underlying Mortgage Loan has been subject to a Transaction hereunder for a period of greater than the Maximum Transaction Duration identified on the Pricing Side Letter for such Underlying Mortgage Loan;
(v) Buyer has determined in its good faith discretion that such Underlying Mortgage Loan (other than with respect to a Scratch and Dent Mortgage Loan) is not eligible for whole loan sale or securitization in a transaction consistent with the prevailing sale and securitization industry;
(vi) such Underlying Mortgage Loan is a Wet-Ink Mortgage Loan for which the Mortgage File has not been delivered to the Custodian on or prior to the Wet-Ink Mortgage Loan Document Receipt Date;
(vii) when the Purchase Price for such Underlying Mortgage Loan is added to the Purchase Price for all Underlying Mortgage Loans, the aggregate Purchase Price of any loan type exceeds the applicable Concentration Limit;
(viii) a Security Issuance Failure has occurred with respect to such Underlying Mortgage Loan; or
(ix) when the Purchase Price of such Underlying Mortgage Loan is added to other Underlying Mortgage Loans, the Aggregate Facility Purchase Price exceeds the Maximum Aggregate Purchase Price.
“Assignment and Acceptance” shall have the meaning set forth in Section 21 hereof.
“Assignment of Mortgage” shall mean an assignment of the Mortgage, notice of transfer or equivalent instrument in recordable form, sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect the sale of the Mortgage.
“Authoritative Copy” shall mean, with respect to an eNote, the single, unique, identifiable and legally controlling copy of such eNote meeting the requirements of Section 16(c) of the UETA and Section 7201(c) of E-SIGN, and that is registered on the MERS eRegistry and stored, at all times, in an eVault that complies with applicable eCommerce Laws, that is within the Control of the Controller.
“Authorized Representative” shall mean, for the purposes of this Agreement only, an agent or Responsible Officer of Seller, Guarantor and Buyer listed on Exhibit B to the Pricing Side Letter, as such Exhibit B may be amended from time to time.
“Bailee Letter” shall mean a bailee letter substantially in the form prescribed by the Custodial and Disbursement Agreement or otherwise approved in writing by Buyer, in its reasonable discretion.
“Bankruptcy Code” shall mean the United States Bankruptcy Code of 1978, as amended from time to time.
“Benchmark Replacement” shall mean the sum of: (a) the alternate benchmark rate that has been selected by Buyer giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to Term SOFR for U.S. dollar-denominated syndicated or bilateral credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of Term SOFR with an Unadjusted Benchmark Replacement for each applicable Price Differential Collection Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Buyer giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of Term SOFR with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the
replacement of Term SOFR with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated or bilateral credit facilities at such time.
“Benchmark Replacement Conforming Changes” shall mean, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to timing and frequency of determining rates and making payments of Price Differential, prepayment provisions, and other administrative matters) that Buyer decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Buyer in a manner substantially consistent with market practice (or, if Buyer decides that adoption of any portion of such market practice is not administratively feasible or if Buyer determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Buyer decides is reasonably necessary in connection with the administration of this Agreement).
“Benchmark Replacement Date” shall mean the earlier to occur of the following events with respect to Term SOFR:
(a) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of the date of the public statement or publication of information referenced therein and (b) the date on which the Term SOFR Administrator permanently or indefinitely ceases to provide Term SOFR; or
(b) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to Term SOFR:
(1) a public statement or publication of information by or on behalf of the Term SOFR Administrator announcing that such administrator has ceased or will cease to provide Term SOFR, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide Term SOFR;
(2) a public statement or publication of information by the regulatory supervisor for the Term SOFR Administrator, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the Term SOFR Administrator, a resolution authority with jurisdiction over the Term SOFR Administrator or a court or an entity with similar insolvency or resolution authority over the Term SOFR Administrator, which states that the Term SOFR Administrator has ceased or will cease to provide Term SOFR permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide Term SOFR; or
(3) a public statement or publication of information by the regulatory supervisor for the Term SOFR Administrator announcing that Term SOFR is no longer representative.
“Benchmark Transition Start Date” shall mean (a) in the case of a Benchmark Transition Event, the earlier of (i) the applicable Benchmark Replacement Date and (ii) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the [***] prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than [***] after such statement or publication, the date of such statement or publication) and (b) in the case of an Early Opt-in Election, the date specified by notice to Seller and Guarantor.
“Benchmark Unavailability Period” shall mean, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to Term SOFR and solely to the extent that Term SOFR has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced Term SOFR for all purposes hereunder in accordance with this Agreement and (y) ending at the time that a Benchmark Replacement has replaced Term SOFR for all purposes hereunder pursuant to this Agreement.
“BHC Act Affiliate” shall have the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).
“Business Day” shall mean a day other than (i) a Saturday or Sunday, (ii) any day on which banking institutions are authorized or required by law, executive order or governmental decree to be closed in the State of Illinois, the State of California or the State of New York or (iii) any day on which the U.S. Federal Reserve System is closed.
“Buyer” shall mean Bank of Montreal, its successors in interest and permitted assigns, and with respect to Section 8, its participants.
“Capital Lease” shall mean, with respect to any Person, any lease of, or other arrangement conveying the right to use, any Property by such Person as lessee that has been or should be accounted for as a capital lease on a balance sheet of such Person prepared in accordance with GAAP.
“Capital Lease Obligations” shall mean, at any time, with respect to any Capital Lease, any lease entered into as part of any sale leaseback transaction of any Person or any synthetic lease, the amount of all obligations of such Person that is (or that would be, if such synthetic lease or other lease were accounted for as a Capital Lease) capitalized on a balance sheet of such Person prepared in accordance with GAAP.
“Capital Stock” shall mean, as to any Person, any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent equity ownership interests in a Person which is not a corporation, including, without limitation, any and all member or other equivalent interests in any limited liability company, limited partnership, trust, and any and all warrants or options to purchase any of the foregoing, in each case, designated as “securities” (as defined in Section 8-102 of the Uniform Commercial Code) in such Person, including, without limitation, all rights to participate in the operation or management of such Person and all rights to such Person’s properties, assets, interests and
distributions under the related organizational documents in respect of such Person. “Capital Stock” also includes (i) all accounts receivable arising out of the related organizational documents of such Person; (ii) all general intangibles arising out of the related organizational documents of such Person; and (iii) to the extent not otherwise included, all proceeds of any and all of the foregoing (including within proceeds, whether or not otherwise included therein, any and all contractual rights under any revenue sharing or similar agreement to receive all or any portion of the revenues or profits of such Person).
“Change in Control” shall mean:
(a) the sale, transfer, or other disposition (each, a “Disposition”) of all or substantially all of Guarantor’s assets (other than any Disposition permitted under this Agreement);
(b) any transaction or event as a result of which Guarantor ceases to directly or indirectly own 100% of the Capital Stock of Seller;
(c) the acquisition by any Person or group (within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules of the Securities and Exchange Commission thereunder), but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Permitted Holders or their Affiliates becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 51% or more of the equity securities of loanDepot, Inc., a Delaware corporation, entitled to vote for members of the board of directors or equivalent governing body of Guarantor on a fully-diluted basis; or
(d) the consummation of a merger or consolidation of Seller or Guarantor with or into another entity or any other corporate reorganization (in one transaction or in a series of transactions), if more than 50% of the combined voting power of the continuing or surviving entity’s Capital Stock outstanding immediately after such merger, consolidation or such other reorganization is owned by persons who were not owners of Seller or Guarantor, as applicable, immediately prior to such merger, consolidation or other reorganization.
“Closed-End Second Lien Mortgage Loan” shall mean a Mortgage Loan that is subject to a senior first lien on the related Mortgaged Property and which has a fixed term that requires no additional funding.
“Closing Agent” shall mean, with respect to any Wet-Ink Transaction, an entity reasonably satisfactory to Buyer (which may be a title company, escrow company or attorney in accordance with local law and practice in the jurisdiction where the related Wet-Ink Mortgage Loan is being originated) to which the proceeds of such Wet-Ink Transaction are to be wired pursuant to the instructions of Guarantor. Unless Buyer notifies Guarantor (electronically or in writing) that a Closing Agent is unsatisfactory, each Closing Agent utilized by Guarantor shall be deemed satisfactory.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
“Committed Mortgage Loan” shall mean an Underlying Mortgage Loan which is the subject of a Take-out Commitment with a Take-out Investor.
“Concentration Limit” shall have the meaning set forth in the Pricing Side Letter.
“Confidential Information” shall have the meaning set forth in Section 32(a) hereof.
“Conforming Mortgage Loan” shall mean a Mortgage Loan originated in accordance with the applicable published underwriting and eligibility criteria of Fannie Mae or Freddie Mac or, solely with respect to eMortgage Loans and solely to the extent that Guarantor has complied with the applicable requirements of the Ginnie Mae Guide, Ginnie Mae, for purchase of mortgage loans.
“Connection Income Taxes” shall mean Taxes imposed as a result of a present or former connection between the Buyer and the jurisdiction imposing such Tax unless such Taxes are imposed as a result of Buyer having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Facility Documents, that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profit Taxes.
“Control” shall mean, with respect to an eNote, the “control” of such eNote within the meaning of UETA and/or, as applicable, E-Sign, which is established by reference to the MERS eRegistry and any party designated therein as the Controller.
“Control Failure” shall mean, with respect to an eNote, (i) the failure of the Controller status of the eNote to reflect (x) other than with respect to a Ginnie Mae eNote Pooled Loan, Buyer’s MERS Org ID or (y) with respect to a Ginnie Mae eNote Pooled Loan, Guarantor’s MERS Org ID, in either case other than permitted pursuant to the Custodial Agreement, (ii) Buyer shall otherwise not be designated as the Controller of such eNote in the MERS eRegistry (other than pursuant to a Bailee Letter), (iii) if the eVault shall have released the Authoritative Copy of an eNote in contravention of the requirements of the Custodial and Disbursement Agreement, or (iv) if the Custodian initiated any changes on the MERS eRegistry in contravention of the terms of the Custodial and Disbursement Agreement.
“Controller” shall mean, with respect to an eNote, the party designated in the MERS eRegistry as the “Controller”, and who in such capacity shall be deemed to be “in control” or to be the “controller” of the Authoritative Copy of such eNote within the meaning of UETA or E-Sign, as applicable.
“Contractual Obligations” shall mean, as to any Person, any provision of any security (whether in the nature of Capital Stock, or otherwise) issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement (other than a Facility Document) to which such Person is a party or by which it or any of its Property is bound or to which any of its Property is subject.
“Correspondent Mortgage Loan” shall mean a Mortgage Loan which is (i) originated by a Correspondent Seller and underwritten in accordance with the Underwriting Guidelines and (ii) acquired by the Guarantor from a Correspondent Seller in the ordinary course of business, for sale to the Buyer pursuant to this Agreement.
“Correspondent Seller” shall mean a mortgage loan originator that sells Mortgage Loans originated by it to Guarantor as a “correspondent” client.
“Costs” shall have the meaning set forth in Section 17(a) hereof.
“Credit Limit” shall mean, with respect to each HELOC, the maximum amount permitted under the terms of the related Credit Line Agreement.
“Credit Line Agreement” shall mean, with respect to each HELOC, the related home equity line of credit agreement, account agreement and promissory note (if any) executed by the related Mortgagor and any amendment or modification thereof.
“Custodial and Disbursement Agreement” shall mean, that certain Amended and Restated Custodial and Disbursement Agreement dated as of the date hereof, among Seller, Guarantor, Buyer, Custodian and Disbursement Agent, as may be amended, restated, supplemented and otherwise modified from time to time.
“Custodian” shall mean Deutsche Bank National Trust Company, and any successor thereto under the Custodial and Disbursement Agreement.
“Custodian’s General MERS Org ID” shall mean the MERS Org ID of Custodian for the custody of Ginnie Mae eNote Pooled Loans.
“Cut-off Date” shall mean, with respect to Pooled Mortgage Loans, the first calendar day of the month in which the related Settlement Date is to occur.
“Cut-off Date Principal Balance” shall mean, with respect to Pooled Mortgage Loans, the outstanding principal balance of such Pooled Mortgage Loans on the Cut-off Date after giving effect to payments of principal and interest due on or prior to the Cut-off Date whether or not such payments are received.
“Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.
“Default Right” shall have the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“Defaulting Party” shall have the meaning set forth in Section 31(b) hereof.
“Delegatee” shall mean, with respect to an eNote, the party designated in the MERS eRegistry as the “Delegatee” or “Delegatee for Transfers”, who in such capacity is authorized by
the Controller to perform certain MERS eRegistry transactions on behalf of the Controller such as Transfers of Control and Transfers of Control and Location.
“Delinquent” shall have the meaning set forth in Schedule 1-A(a) hereof.
“Disbursement Agent” shall mean Deutsche Bank National Trust Company, and any successor thereto under the Custodial and Disbursement Agreement.
“Dollars” and “$” shall mean lawful money of the United States of America.
“Draw” shall mean, with respect to each HELOC, an additional borrowing by the Mortgagor in accordance with the related Credit Line Agreement.
“DU Refi Plus” shall mean the Fannie Mae DU Refi Plus program.
“Due Date” shall mean the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
“Due Diligence Documents” shall have the meaning set forth in Section 20 hereof.
“Early Opt-in Election” shall mean the occurrence of:
(1) a determination by Buyer that at least three currently outstanding U.S. dollar- denominated syndicated or bilateral credit facilities at such time contain (as a result of amendment or as originally executed) as a benchmark interest rate, in lieu of Term SOFR, a new benchmark interest rate to replace Term SOFR, and
(2) the election by Buyer to declare that an Early Opt-in Election has occurred and the provision by Buyer of written notice of such election to Seller and Guarantor.
“Effective Date” shall mean the date upon which the conditions precedent set forth in Section 3(a) shall have been satisfied.
“Electronic Agent” shall mean MERSCORP Holdings, Inc., or its successor in interest or assigns.
“Electronic Record” shall mean, as the context requires, (i) “Record” and “Electronic Record,” both as defined in E-Sign, and shall include but not be limited to, recorded telephone conversations, fax copies or electronic transmissions, and (ii) with respect to an eMortgage Loan, the related eNote and all other documents comprising the Mortgage File electronically created and that are stored in an electronic format, if any.
“Electronic Tracking Agreement” shall mean an Electronic Tracking Agreement that is entered into among Buyer, Seller, Guarantor, MERS and MERSCORP Holdings, Inc., to the extent applicable as the same may be amended, restated, supplemented or otherwise modified from time to time with respect to (x) the tracking of changes in the ownership, mortgage servicers and servicing rights ownership of Underlying Mortgage Loans held on the MERS
System and (y) the tracking of the Control of eNotes held on the MERS eRegistry, in a form acceptable to Buyer.
“Eligible Mortgage Loan” shall mean an Underlying Mortgage Loan which:
(a) has been approved by Buyer in its sole and absolute discretion on the related Purchase Date; and
(b) complies with the representations and warranties set forth on Schedule 1-A; and
(c) with respect to each Pooled Mortgage Loan, complies with the representations and warranties set forth on Schedule 1-B.
“Eligible Participation Certificate” shall mean a Participation Certificate that satisfies the applicable representations and warranties set forth on Schedule 1-D with respect thereto at all times.
“Eligible Participation Interest” shall mean a Participation Interest that satisfies the applicable representations and warranties set forth on Schedule 1-C with respect thereto at all times.
“eMortgage Loan” shall mean an Underlying Mortgage Loan that is a Conforming Mortgage Loan with respect to which there is an eNote and as to which some or all of the other documents comprising the related Mortgage File may be created electronically and not by traditional paper documentation with a pen and ink signature.
“eNote” shall mean, with respect to any eMortgage Loan, the electronically created and stored Mortgage Note that is a Transferable Record.
“eNote Delivery Requirement” shall have the meaning set forth in Section 3(c) hereof.
“eNote Replacement Failure” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“Environmental Issue” shall mean any material environmental issue with respect to any Mortgaged Property, as determined by Buyer in its good faith discretion, including without limitation, the violation of any Environmental Laws.
“Environmental Laws” shall mean any federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or hazardous substances, materials or other pollutants, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq.; the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6901 et seq.; the
Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. § 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq.; and any state and local or foreign analogues, counterparts or equivalents, in each case as amended from time to time.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and any successor thereto, and the regulations promulgated and rulings issued thereunder.
“ERISA Affiliate” shall mean any Person, whether or not incorporated, that is a member of any group of organizations described in Section 414(b), (c), (m) or (o) of the Code of which the Seller or Guarantor is a member.
“Errors and Omissions Insurance Policy” shall mean an errors and omissions insurance policy to be maintained by the Guarantor.
“E-Sign” shall mean the federal Electronic Signatures in Global and National Commerce Act, as amended from time to time.
“Escrow Payments” shall mean, with respect to any Mortgage Loan, the amounts, if any, required to be escrowed by the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
“eVault” shall mean an electronic repository established and maintained by an eVault Provider for delivery and storage of eNotes.
“eVault Provider” shall mean Document Systems, Inc. d/b/a DocMagic, or its successor in interest or assigns, or such other entity agreed upon by Guarantor, Custodian and Buyer.
“Event of Default” shall have the meaning set forth in Section 15 hereof.
“Event of ERISA Termination” shall mean (i) with respect to any Plan, a Reportable Event, as to which the PBGC has not by regulation waived the reporting of the occurrence of such event, or (ii) the withdrawal of Seller, Guarantor or any ERISA Affiliate thereof from a Plan during a plan year in which it is a substantial employer, as defined in Section 4001(a)(2) of ERISA, or (iii) the failure by Seller, Guarantor or any ERISA Affiliate thereof to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA with respect to any Plan, including, without limitation, the failure to make on or before its due date a required installment under Section 430(j) of the Code or Section 303(j) of ERISA, or (iv) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by Seller, Guarantor or any ERISA Affiliate thereof to terminate any Plan, or (v) the determination that any Plan is or is expected to be in “at-risk” status, within the meaning of Section 430 of the Code or Section 303 of ERISA or (vi) the failure to meet the requirements of Section 436 of the
Code resulting in the loss of qualified status under Section 401(a)(29) of the Code, or (vii) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or (viii) the receipt by Seller, Guarantor or any ERISA Affiliate thereof of a notice from a Multiemployer Plan that action of the type described in the previous clause (vii) has been taken by the PBGC with respect to such Multiemployer Plan, or a determination that a Multiemployer Plan is, or is expected to be “insolvent” (within the meaning of Section 4245 of ERISA) or in “endangered” or “critical status” (within the meaning of Section 432 of the Code or Section 305 of ERISA); or (ix) the imposition of any Lien in favor of the PBGC or a Plan shall arise on the assets of Seller, Guarantor or any ERISA Affiliate thereof or (x) any event or circumstance exists which may reasonably be expected to constitute grounds for Seller, Guarantor or any ERISA Affiliate thereof to incur liability under Title IV of ERISA or under Sections 412(b) or 430 (k) of the Code with respect to any Plan.
“Exception Report” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“Excluded Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Executive Order” shall mean the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 (66 Fed. Reg. 49079).
“Expense Cap” shall have the meaning set forth in the Pricing Side Letter.
“Facility Documents” shall mean this Agreement, the Pricing Side Letter, the Guaranty, the Custodial and Disbursement Agreement, the Joint Securities Account Control Agreement, the Intercreditor Agreement, any Electronic Tracking Agreement, the Reserve Account Control Agreement, the Participation Agreement, each Servicing Agreement, each Servicer Side Letter, each Power of Attorney and any and all other agreements executed and delivered by Seller or Guarantor in connection with this Agreement or any Transactions hereunder, as the same may be amended, restated or otherwise modified from time to time.
“Fannie Mae” shall mean the Federal National Mortgage Association or any successor thereto.
“Fannie Mae Guide” shall mean the Fannie Mae MBS Selling and Servicing Guide, as the same may hereafter from time to time be amended.
“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
“Federal Reserve Bank of New York’s Website” shall mean the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
“FHA” shall mean the Federal Housing Administration, an agency within the United States Department of Housing and Urban Development, or any successor thereto, and including the Federal Housing Commissioner and the Secretary of Housing and Urban Development where appropriate under the FHA Regulations.
“FHA Approved Mortgagee” shall mean a corporation or institution approved as a mortgagee by the FHA under the National Housing Act, as amended from time to time, and applicable FHA Regulations, and eligible to own and service mortgage loans such as the FHA Loans.
“FHA Loan” shall mean a Mortgage Loan which is the subject of an FHA Mortgage Insurance Contract.
“FHA Mortgage Insurance” shall mean, mortgage insurance authorized under the National Housing Act, as amended from time to time, and provided by the FHA.
“FHA Mortgage Insurance Contract” shall mean the contractual obligation of the FHA respecting the insurance of an FHA Mortgage Loan.
“FHA Regulations” shall mean the regulations promulgated by the Department of Housing and Urban Development under the National Housing Act, as amended from time to time and codified in 24 Code of Federal Regulations, and other Department of Housing and Urban Development issuances relating to FHA Loans, including the related handbooks, circulars, notices and mortgagee letters.
“FICO” shall mean Fair Isaac & Co., or any successor thereto.
“Fidelity Insurance Policy” shall mean insurance coverage with respect to employee errors, omissions, dishonesty, forgery, theft, disappearance and destruction, robbery and safe burglary, property (other than money and securities) and computer fraud.
“First Lien HELOC” shall mean a home equity revolving line of credit secured by a mortgage, deed of trust or other instrument creating a first lien on the related Mortgaged Property, which lien secures the related line of credit and that is underwritten in accordance with the Underwriting Guidelines.
“Freddie Mac” shall mean the Federal Home Loan Mortgage Corporation or any successor thereto.
“GAAP” shall mean generally accepted accounting principles in the United States of America, applied on a consistent basis and applied to both classification of items and amounts, and shall include, without limitation, the official interpretations thereof by the Financial Accounting Standards Board, its predecessors and successors.
“Ginnie Mae” shall mean the Government National Mortgage Association and any successor thereto.
“Ginnie Mae eNote Pooled Loan” means an eMortgage Loan that is placed into the Ginnie Mae Mortgage-Backed Securities Program, as described in the Ginnie Mae Guide.
“Ginnie Mae Guide” shall mean the Ginnie Mae Mortgage-Backed Securities Guide I or II, as such guide may hereafter from time to time be amended.
“GLB Act” shall have the meaning set forth in Section 32(b) hereof.
“Government Agency” shall mean Ginnie Mae, Fannie Mae, Freddie Mac, USDA, FHA, VA or other Governmental Authority governing such Government Mortgage Loan.
“Government Mortgage Loan” shall mean any of a Conforming Mortgage Loan, FHA Loan, USDA Mortgage Loan or VA Loan.
“Governmental Authority” shall mean any nation, sovereign or government, any state or other political subdivision thereof, any agency, authority or instrumentality thereof and any entity or authority exercising executive, legislative, taxing, judicial, regulatory or administrative functions of or pertaining to government, including any central bank, stock exchange, regulatory body, arbitrator, public sector entity, supra-national entity (including the European Union and the European Central Bank) and any self-regulatory organization (including the National Association of Insurance Commissioners).
“Gross Margin” shall mean, with respect to each adjustable rate Mortgage Loan, the fixed percentage amount set forth in the related Mortgage Note.
“Guarantor” shall mean loanDepot.com, LLC, and its successors in interest and assigns.
“Guarantor Event of Default” shall have the meaning set forth in the Guaranty.
“Guarantor Insureds” shall have the meaning set forth in Section 14(m) hereof.
“Guaranty” shall mean that certain Guaranty, dated as of April 25, 2025, made by Guarantor for the benefit of the Buyer, as the same may be further amended, restated, supplemented or otherwise modified from time to time.
“Haircut Amount” shall mean, with respect to an Eligible Mortgage Loan proposed for a Transaction hereunder, the difference, if any, between (a) with respect to (i) a Wet-Ink Mortgage Loan, the amount required to be sent to the Closing Agent and (ii) a Mortgage Loan other than a Wet-Ink Mortgage Loan, the amount required by the related warehouse lender to release its security interest therein less (b) the related Purchase Price.
“Hash Value” shall mean, with respect to an eNote, the unique, tamper-evident digital signature of such eNote that is stored with MERS.
“HELOC” shall mean a First Lien HELOC and/or a Second Lien HELOC, as the context requires.
“High Cost Mortgage Loan” shall mean a mortgage loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act of 1994; or (b) a “high cost,” “high risk,” “high rate,” “threshold,” “covered,” or “predatory” loan under any other applicable state, federal or local law (or a similarly classified loan using different terminology under a law, regulation or ordinance imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees).
“Hsieh Investors” shall mean each of [***] and each of their respective affiliates.
“HUD” shall mean the United States Department of Housing and Urban Development.
“Income” shall mean, with respect to any Underlying Mortgage Loan, without duplication, all principal and interest or dividends or distributions or other amounts received with respect to such Underlying Mortgage Loan, including any insurance proceeds or interest payable thereon or any fees or payments of any kind, or other amounts received.
“Indebtedness” shall have the meaning set forth in the Pricing Side Letter.
“Indemnified Party” shall have the meaning set forth in Section 17(a) hereof.
“Independent Director” shall mean, with respect to any corporation or limited liability company, an individual who: (i) is provided by CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Global Securitization Services, LLC, or, if none of those companies is then providing professional independent directors, another nationally-recognized company reasonably approved by Buyer, in each case that is not an Affiliate of such corporation or limited liability company and that provides professional independent directors and other corporate services in the ordinary course of its business; (ii) is duly appointed as a member of the board of directors of such corporation or as an independent manager, member of the board of managers, or special member of such limited liability company; and (iii) is not, and has never been, and will not while serving as Independent Director be (a) a member (other than an independent, non-economic “springing” member), partner, equityholder, manager, director, officer or employee of such corporation or limited liability company or any of its equityholders or affiliates (other than an affiliate that is not in the direct chain of ownership of such corporation or limited liability company and that is a single-purpose entity; provided that the fees such individual earns from serving as an Independent Director of such affiliates in any given year constitute in the aggregate less than 5% of such individual’s annual income for that year); (b) a creditor, supplier or service provider (including provider of professional services) to such corporation or limited liability company or any of its equityholders or affiliates (other than a nationally recognized company that routinely provides professional independent managers or directors and that also provides lien search and other similar services to such corporation or limited liability company or any of its equityholders or affiliates in the ordinary course of business); (c) a family member of any such member, partner, equityholder,
manager, director, officer, employee, creditor, supplier or service provider; or (d) a Person that controls (whether directly, indirectly or otherwise) any of clauses (i) or (ii) above.
“Index” shall mean, with respect to any adjustable rate Mortgage Loan, the index identified on the Asset Schedule and set forth in the related Mortgage Note for the purpose of calculating the applicable Mortgage Interest Rate.
“Insolvency Event” shall mean, for any Person:
(a) that such Person or any Affiliate shall discontinue or abandon operation of its mortgage origination business; or
(b) that such Person or any Affiliate shall fail generally to, or admit in writing its inability to, pay its debts as they become due; or
(c) an involuntary proceeding shall have been instituted in a court having jurisdiction in the premises seeking a decree or order for relief in respect of such Person or any Affiliate in an involuntary case under any applicable bankruptcy, insolvency, liquidation, reorganization or other similar law now or hereafter in effect, or for the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person or any Affiliate, or for any substantial part of its property, or for the winding-up or liquidation of its affairs and, in each case, (w) such proceeding is not stayed within [***] after the proceeding has been instituted and any such stay is not lifted, or (x) such proceeding is not released, vacated or dismissed within [***] after the proceeding has been instituted, or (y) an order, judgment or decree approving or ordering any of the foregoing shall be entered and is not stayed, released or vacated within [***] after entry, or (z) an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code; or
(d) the commencement by such Person or any Affiliate of a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such Person’s or any Affiliate’s consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, conservator or other similar official of such Person, or for any substantial part of its property, or any general assignment for the benefit of creditors; or
(e) that such Person or any Affiliate shall become “insolvent” as such term is defined in Section 101(32)(A) of the Bankruptcy Code; or
(f) such Person shall take any action in furtherance of, or the action of which would result in any of the actions set forth in the preceding clauses (a), (b), (c), (d) or (e).
“Intellectual Property” shall mean all rights, title and interests in or relating to intellectual property and industrial property arising under any Requirement of Law.
“Intercreditor Agreement” shall mean that certain Fourth Amended and Restated Intercreditor Agreement, dated as of August 16, 2016, by and among Guarantor, Buyer and the other parties thereto, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Interest Only Adjustment Date” shall mean, with respect to each Interest Only Mortgage Loan, the date, specified in the related Mortgage Note on which the Monthly Payment will be adjusted to include principal as well as interest.
“Interest Only Mortgage Loan” shall mean a Mortgage Loan which only requires payments of interest for a period of time specified in the related Mortgage Note.
“Interest Rate Adjustment Date” shall mean the date on which an adjustment to the Mortgage Interest Rate with respect to each Mortgage Loan becomes effective.
“Interest Rate Protection Agreement” shall mean, with respect to any or all of the Underlying Mortgage Loans, any short sale of a US Treasury Security, or futures contract, or mortgage related security, or Eurodollar futures contract, or options related contract, or interest rate swap, cap or collar agreement, or similar arrangement providing for protection against fluctuations in interest rates or the exchange of nominal interest obligations, either generally or under specific contingencies, entered into by Guarantor.
“Investment Company Act” shall mean the Investment Company Act of 1940, as amended from time to time.
“Joint Securities Account Control Agreement” shall mean that certain Fourth Amended and Restated Joint Securities Account Control Agreement, dated as of August 16, 2016 by and among Guarantor, Buyer and the other parties thereto, as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof.
“Jumbo Mortgage Loan” shall mean a Mortgage Loan where the original outstanding principal amount of such Mortgage Loan exceeds the eligibility limits for purchases by Freddie Mac or Fannie Mae.
“LD Holdings” shall mean LD Holdings Group LLC, a Delaware limited liability company.
“Lien” shall mean any lien, claim, charge, restriction, pledge, security interest, mortgage, deed of trust or other encumbrance.
“Litigation Threshold” shall have the meaning assigned thereto in the Pricing Side Letter.
“Loan Program Authority” shall mean, with respect to Government Mortgage Loans, the applicable Government Agency, and with respect to Jumbo Mortgage Loans, Non-QM Mortgage Loans and Second Lien Mortgage Loans, the applicable Take-out Investor.
“Location” shall mean, with respect to an eNote, the location of such eNote which is established by reference to the MERS eRegistry.
“Manufactured Home” shall mean any dwelling unit built on a permanent chassis and attached to a permanent foundation system.
“Margin Call” shall have the meaning assigned thereto in Section 7(a) hereof.
“Margin Deficit” shall have the meaning assigned thereto in Section 7(a) hereof.
“Margin Payment” shall have the meaning assigned thereto in Section 7(a) hereof.
“Market Value” shall mean, as of any date of determination, for each Underlying Mortgage Loan, the whole-loan servicing released fair market value of such Underlying Mortgage Loan as determined by Buyer (or an Affiliate thereof) [***] (which determination may be performed on a daily basis, at Buyer’s discretion and may take into account such factors as Buyer deems appropriate).
“Master Collection Account” shall mean the following account:
[***]
“Master Servicer Field” shall mean, with respect to an eNote, the field entitled, “Master Servicer” in the MERS eRegistry.
“Material Adverse Effect” shall mean (a) a material adverse change in, or a material adverse effect upon, the Property, business, operations or condition of Seller or Guarantor (financial or otherwise), (b) a material impairment of the ability of Seller or Guarantor to perform its obligations under any of the Facility Documents to which it is a party and to avoid any Event of Default, (c) a material adverse effect upon the validity or enforceability of any of the Facility Documents, or (d) a material adverse effect upon the rights and remedies of Buyer under any of the Facility Documents; in each case as determined by Buyer in its reasonable discretion.
“Maximum Aggregate Purchase Price” shall have the meaning assigned thereto in the Pricing Side Letter.
“Maximum Transaction Duration” shall mean the number of days that an Underlying Mortgage Loan can be subject to a Transaction as set forth in the Pricing Side Letter.
“MERS” shall mean Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
“MERS Designated Mortgage Loan” shall mean any Mortgage Loan registered with MERS on the MERS System.
“MERS eDelivery” shall mean the transmission system operated by the Electronic Agent that is used to deliver eNotes, other Electronic Records and data from one MERS eRegistry member to another using a system-to-system interface and conforming to the standards of the MERS eRegistry.
“MERS eRegistry” shall mean the electronic registry operated by the Electronic Agent that acts as the legal system of record that identifies certain fields including, without limitation, the Controller, Delegatee and Location of the Authoritative Copy of registered eNotes.
“MERS Org ID” shall mean a number assigned by the Electronic Agent that uniquely identifies MERS members, or, in the case of a MERS Org ID that is a “Secured Party Org ID”, uniquely identifies MERS eRegistry members, which assigned numbers for each of Buyer, Guarantor and Custodian have been provided to the parties hereto.
“MERS System” shall mean the system of recording transfers of mortgages electronically maintained by MERS.
“Minimum Margin Threshold” shall mean $[***].
“MOM Mortgage Loan” shall mean any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such Mortgage Loan and its successors and assigns.
“Monthly Payment” shall mean the scheduled monthly payment of principal and interest on a Mortgage Loan.
“Moody’s” shall mean Moody’s Investors Service, Inc. or any successors thereto.
“Mortgage” shall mean each mortgage, or deed of trust, security agreement and fixture filing, deed to secure debt, or similar instrument creating and evidencing a first Lien (or, in the case of Second Lien Mortgage Loans, a second Lien) on real property and other property and rights incidental thereto.
“Mortgage File” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“Mortgage Interest Rate” shall mean the rate of interest borne on a Mortgage Loan from time to time in accordance with the terms of the related Mortgage Note.
“Mortgage Interest Rate Cap” shall mean, with respect to an adjustable rate Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth in the related Mortgage Note.
“Mortgage Loan” shall mean any first lien (or, in the case of Second Lien Mortgage Loans, a second Lien) closed Government Mortgage Loan, Jumbo Mortgage Loan, Second Lien Mortgage Loan, Non-QM Mortgage Loan, Scratch and Dent Mortgage Loan or First Lien HELOC which is a fixed or floating-rate, one-to-four-family residential loan evidenced by a Mortgage Note and secured by a Mortgage.
“Mortgage Note” shall mean the promissory note (including, with respect to an eMortgage Loan, the related eNote), or, in the case of a HELOC, the related Credit Line Agreement, or other evidence of the indebtedness of a Mortgagor secured by a Mortgage.
“Mortgaged Property” shall mean the real property securing repayment of the debt evidenced by a Mortgage Note.
“Mortgagor” shall mean the obligor or obligors on a Mortgage Note, including any Person who has assumed or guaranteed the obligations of the obligor thereunder.
“Multiemployer Plan” shall mean a “multiemployer plan” as defined in Section 3(37) of ERISA as to which Seller, Guarantor or any ERISA Affiliate thereof, has made contributions during the current year or the immediately preceding [***] or is required to make contributions or has any actual or potential liability.
“Negative Amortization” shall mean the portion of interest accrued at the Mortgage Interest Rate in any month which exceeds the Monthly Payment on the related Mortgage Loan for such month and which, pursuant to the terms of the Mortgage Note, is added to the principal balance of the Mortgage Loan.
“Net Worth” shall have the meaning set forth in the Pricing Side Letter.
“Nondefaulting Party” shall have the meaning set forth in Section 31(b) hereof.
“Non-Excluded Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Non-QM Mortgage Loan” shall mean a Mortgage Loan that meets the requirements of Buyer’s published Non-QM Mortgage Loan guidelines, as may be amended from time to time by Buyer in its sole discretion, and was originated on or after January 10, 2014, which does not (i) meet the requirements of Section 1026.43(e)(1)(i) of Regulation Z and (ii) is not a “qualified residential mortgage” as each such term is defined under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as amended, and any regulations, rulings, interpretations or orders promulgated by any Governmental Authority having jurisdiction thereunder including, without limitation, the Consumer Financial Protection Bureau.
“Obligations” shall mean (a) Seller’s obligation to pay the Repurchase Price on the Repurchase Date and other obligations and liabilities of Seller to Buyer, arising under, or in connection with, the Facility Documents, whether now existing or hereafter arising; (b) any and all reasonable third-party out-of-pocket sums paid by Buyer pursuant to the Facility Documents in order to preserve any Repurchase Assets or its interest therein; (c) in the event of any
proceeding for the collection or enforcement of any of Seller’s Indebtedness, obligations or liabilities referred to in clause (a), the reasonable third-party out-of-pocket expenses of retaking, holding, collecting, preparing for sale, selling or otherwise disposing of or realizing on any Repurchase Asset, or of any exercise by Buyer or any Affiliate of Buyer of its rights under the Facility Documents, including without limitation, reasonable and documented attorneys’ fees and disbursements and court costs; and (d) all of Seller’s fees and indemnity obligations to Buyer pursuant to the Facility Documents.
“OFAC” shall have the meaning set forth in Section 13(bb) hereof.
“Officer’s Compliance Certificate” shall mean a certificate of a Responsible Officer of Guarantor in the form of Exhibit E to the Pricing Side Letter.
“Original Closing Date” shall mean September 23, 2021.
“Other Taxes” shall have the meaning set forth in Section 8(b) hereof.
“Parthenon Investors” shall mean each of [***] each of their respective affiliates.
“Participation Agreement” shall mean that certain Master Participation Agreement, dated as of the date hereof, between Guarantor, as the company, and Seller, as the participant, as may be amended, restated, supplemented or otherwise modified from time to time.
“Participation Certificate” shall mean the original participation certificate that is executed and delivered in connection with Participation Interests.
“Participation Interests” shall mean, with respect to an Underlying Mortgage Loan, all of the economic, beneficial and equitable ownership interests (together with the related Servicing Rights) therein that are issued by Guarantor to Seller pursuant to the Participation Agreement, which Participation Interests shall be evidenced by the Participation Certificate.
“Permitted Holders” shall mean any of the Hsieh Investors and the Parthenon Investors.
“PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.
“Permits” shall mean, with respect to any Person, any permit, approval, authorization, license, registration, certificate, concession, grant, franchise, variance or permission from, and any other Contractual Obligations with, any Governmental Authority, in each case having the force of law and applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, limited liability company, trust, unincorporated association or government (or any agency, instrumentality or political subdivision thereof.)
“Plan” shall mean an employee benefit plan as defined in Section 3(3) of ERISA (other than a Multiemployer Plan) that is subject to the provisions of Title IV of ERISA or Section 412 of the Code that is or was at any time during the current year or immediately preceding [***] established, maintained or contributed to by Seller, Guarantor or any ERISA Affiliate thereof or with respect to which Seller, Guarantor or any ERISA Affiliate thereof has any actual or potential liability.
“Pooled Mortgage Loan” shall mean any (a) Mortgage Loan that is subject to a Transaction hereunder and is part of a pool of Mortgage Loans certified by the Custodian to an Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of guidelines issued by such Agency and (b) any Agency Security to the extent received in exchange for, and backed by a pool of, Mortgage Loans subject to a Transaction hereunder.
“Pooling Documents” shall mean each of the schedules, forms and other documents (other than the Mortgage Note) required to be delivered by or on behalf of Seller or Guarantor with respect to a Pooled Mortgage Loan to an Agency and/or Buyer and/or Custodian, as further described in the Custodial and Disbursement Agreement.
“Post-Default Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Power of Attorney” shall mean a power of attorney in the form of Exhibit F hereto delivered by each of Seller and Guarantor.
“Price Differential” shall mean, with respect to any Underlying Mortgage Loan as of any date, the aggregate amount obtained by daily application of the applicable Pricing Rate (or, during the continuation of an Event of Default, by daily application of the Post-Default Rate) for the related Underlying Mortgage Loan to the Purchase Price for such Underlying Mortgage Loan on a 360 day per year basis for the actual number of days during the period commencing on (and including) the Purchase Date for such Underlying Mortgage Loan and ending on (but excluding) the Repurchase Date for such Underlying Mortgage Loan.
“Price Differential Collection Period” shall mean, with respect to each Underlying Mortgage Loan and Price Differential Payment Date (except for the initial Price Differential Payment Date for such Underlying Mortgage Loan), the period that commences on the first (1st) day of the preceding month and ends on the last day of such month. The Price Differential Collection Period with respect to the initial Price Differential Payment Date for an Underlying Mortgage Loan shall be the period that commences on the applicable Purchase Date and ends on the last day of such month.
“Price Differential Payment Date” shall mean (i) the [***] of the month, or the next succeeding Business Day, if such calendar day shall not be a Business Day and (ii) the Termination Date.
“Pricing Rate” shall have the meaning assigned thereto in the Pricing Side Letter.
“Pricing Side Letter” shall mean that certain fifteenth amended and restated letter agreement between Buyer, Guarantor and Seller, dated as of the Restatement Date, as the same may be amended, restated, supplemented or otherwise modified from time to time.
“Professional Liability Insurance Policy” shall mean a professional liability insurance policy to be maintained by the Guarantor.
“Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.
“Purchase Date” shall mean either (i) the date on which the Participation Certificate and initial Participation Interests (including the Underlying Mortgage Loans represented thereby) are transferred by Seller to Buyer or its designee, (ii) or the date on which there is a Purchase Price Increase with respect to the Participation Certificate in connection with the conveyance by the Guarantor of one (1) or more Underlying Mortgage Loans and issuance of additional Participation Interests therein.
“Purchase Price” shall mean, with respect to each Participation Certificate, the price at which each Underlying Mortgage Loan is allocated to such Participation Certificate, which shall equal:
(a) on the initial Purchase Date, the Asset Value of each Underlying Mortgage Loan as of the Purchase Date;
(b) on any day after the related Purchase Date, the amount determined under the immediately preceding clause (a), (i) increased by the amount of any Purchase Price Increase related to the conveyance to the Guarantor of additional Underlying Mortgage Loans and issuance to Seller of Participation Interests therein, and (ii) decreased by the amount of any cash previously transferred by the Seller to Buyer and applied to reduce the Purchase Price of such Underlying Mortgage Loan and (b) increased or decreased, as applicable, in connection with the implementation or cessation of a Purchase Price Percentage Election.
“Purchase Price Decrease” shall mean a decrease in the Purchase Price by an amount equal to the related Purchase Price of any Underlying Mortgage Loan that is removed in accordance with this Agreement.
“Purchase Price Decrease Date” shall mean, with respect to any Underlying Mortgage Loan, the earlier to occur of (i) any date on which the Asset Value of such Underlying Mortgage Loan is reduced to zero, and (ii) any date determined by application of the respective Maximum Transaction Duration.
“Purchase Price Increase” shall mean an increase in the Purchase Price for the Purchased Assets equal to the amount of the related Purchase Price of each Underlying Mortgage Loan conveyed by the Guarantor to the Participation Interests, as requested by Seller pursuant to Section 3(c) hereof.
“Purchase Price Percentage” shall have the meaning assigned thereto in the Pricing Side Letter.
“Purchase Price Percentage Election” shall have the meaning assigned thereto in the Pricing Side Letter.
“Purchased Assets” means the collective references to the Participation Certificate and related Participation Interests (representing the beneficial interest in the Underlying Mortgage Loans) sold by Seller to Buyer in a Transaction hereunder.
“Qualified Originator” shall mean an originator of Mortgage Loans which is acceptable under the Underwriting Guidelines.
“Rating Agency” shall mean, each of Fitch, Inc., Moody’s and S&P, as applicable.
“Records” shall mean all instruments, agreements and other books, records, and reports and data generated by other media for the storage of information maintained by Seller, Guarantor or any other Person or entity with respect to a Mortgage Loan. Records shall include the Mortgage Notes, any Mortgages, the Mortgage Files, the credit files related to the Mortgage Loan and any other instruments necessary to document or service a Mortgage Loan.
“Register” shall have the meaning set forth in Section 22(b) hereof.
“Regulations T, U and X” shall mean Regulations T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.
“Release Notice” shall have the meaning provided in Section 4(c) hereof.
“Relevant Governmental Body” shall mean the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.
“Reportable Event” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty day notice period is waived under PBGC Reg. § 4043.
“Representation Issue” shall mean Buyer’s determination that there is a breach of a representation and warranty with respect to an Underlying Mortgage Loan or Purchased Asset (including a breach of any representation set forth on Schedule 1-A, Schedule 1-B Schedule 1-C, or Schedule 1-D hereof, as applicable), which breach adversely affects the value of such Underlying Mortgage Loan or Buyer’s interest therein, as determined by Buyer in its sole good faith discretion.
“Repurchase Assets” shall have the meaning provided in Section 9(a) hereof.
“Repurchase Date” shall mean the earliest of (x) the Termination Date, (y) any date determined by application of the respective Maximum Transaction Duration, (z) the date on which Seller is to repurchase a Purchased Asset subject to a Transaction (and obtain the release of the Buyer’s security interest in the Underlying Mortgage Loan) on a date requested pursuant to Section 4 hereof, including any date determined by application of the provisions of Sections 3 or 4 or 15 hereof.
“Repurchase Price” shall mean, the price at which a Purchased Asset is to be transferred from Buyer to Seller (and/or the Underlying Mortgage Loan is to be released from the Participation Certificate), which with respect to any Underlying Mortgage Loan as of any date of determination, shall be equal to an amount equal to the applicable Purchase Price (plus any Purchase Price Increases) minus (A) any payments made by or on behalf of Seller in reduction of the outstanding Repurchase Price in each case before or as of such determination date with respect to such Underlying Mortgage Loan plus (B) (i) any accrued and unpaid Price Differential, and (ii) any other amounts due and payable under this Agreement with respect to such Underlying Mortgage Loan, including if applicable, any fee due pursuant to the Pricing Side Letter.
“Required Insurance Policy” shall mean any Fidelity Insurance Policy, Errors and Omissions Insurance Policy, and Professional Liability Insurance Policy.
“Requirement of Law” shall mean with respect to any Person, any law, treaty, rule or regulation or determination of an arbitrator, a court or other Governmental Authority, applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
“Reserve Account” shall mean a segregated account established at the Reserve Account Bank, in the name of Seller or Guarantor and subject to a Reserve Account Control Agreement with Buyer which shall at all times contain a balance at least equal to the Reserve Account Threshold, as such amount may be subject to set off by Buyer with respect to any Obligations.
“Reserve Account Bank” shall mean BMO Bank N.A., and any successor thereto under the Reserve Account Control Agreement.
“Reserve Account Control Agreement” shall mean a blocked account control agreement providing the Buyer with control at all times over the Reserve Account.
“Reserve Account Threshold” shall have the meaning set forth in the Pricing Side Letter.
“Residual Collateral” means all now existing and hereafter arising right, title and interest of Guarantor in, under and to the following:
(i) all Underlying Mortgage Loans;
(ii) all Mortgage Files, including without limitation all promissory notes, and all servicing records, and any other collateral pledged or otherwise relating to such Underlying
Mortgage Loans, together with all related files, documents, instruments, surveys, certificates, correspondence, appraisals, computer programs, computer storage media, accounting records and other books and records relating thereto, including electronic records;
(iii) all rights of Guarantor to receive from any third party or to take delivery of any servicing records or other documents which constitute a part of the Mortgage File or servicing file, all rights of Guarantor to receive from any third party or to take delivery of any Records or other documents which constitute a part of the Mortgage File;
(iv) all mortgage guaranties and insurance (issued by governmental agencies or otherwise) and any mortgage insurance certificate or other document evidencing such mortgage guaranties or insurance relating to any Underlying Mortgage Loan and all claims and payments thereunder;
(v) all other insurance policies and insurance proceeds relating to any Underlying Mortgage Loan or any related Mortgaged Property;
(vi) all Interest Rate Protection Agreements, relating to or constituting any and all of the foregoing;
(vii) all Income with respect to the Underlying Mortgage Loans;
(viii) each Servicing Agreement related to the Underlying Mortgage Loans;
(ix) all “accounts,” “chattel paper,” “commercial tort claims,” “deposit accounts,” “documents,” “equipment,” “general intangibles,” “goods,” “instruments,” “inventory,” “investment property,” “letter of credit rights,” and “securities’ accounts” as each of those terms is defined in the Uniform Commercial Code and all cash and Cash Equivalents and all products and proceeds relating to or constituting any or all of the foregoing; and
(x) any and all replacements, substitutions, distributions on or proceeds of any and all of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created.
“Responsible Officer” (a) as to any Person, the chief executive officer or, with respect to financial matters, the chief financial officer of such Person, and (b) as to Seller and Guarantor, any Chief Financial Officer or President.
“Restatement Date” shall mean April 25, 2025.
“S&P” shall mean Standard & Poor’s Ratings Services, or any successor thereto.
“Sanctioned Country” shall have the meaning set forth in Section 13(bb) hereof.
“Sanctions” shall have the meaning set forth in Section 13(bb) hereof.
“Scratch and Dent Mortgage Loan” shall mean [***].
“SDN List” shall have the meaning set forth in Section 13(bb) hereof.
“Second Lien HELOC” shall mean a HELOC home equity revolving line of credit secured by a mortgage, deed of trust or other instrument creating a second lien on the related Mortgaged Property, which lien secures the related line of credit and that is underwritten in accordance with the Underwriting Guidelines.
“Second Lien Mortgage Loan” shall mean Closed-End Second Lien Mortgage Loans and Second Lien HELOCs.
“Section 4402” shall have the meaning set forth in Section 31 hereof.
“Section 8 Certificate” shall have the meaning set forth in Section 8(e)(ii) hereof.
“Securities Issuance Failure” shall mean the failure of a pool of Pooled Mortgage Loans to back the issuance of an Agency Security.
“Security Release Certification” shall have the meaning set forth in Section 3(b)(xxi) hereof.
“Seller” shall mean loanDepot BMO Warehouse, LLC.
“Servicer” shall mean any servicer or subservicer approved by Buyer in its sole discretion, which may be Guarantor.
“Servicer Side Letter” shall have the meaning set forth in Section 18(d) hereof.
“Servicer Termination Event” shall mean (i) an Event of Default hereunder or (ii) with respect to any Servicer (1) an event of default which continues without cure or waiver after the application of any grace period under the related Servicing Agreement, (2) such Servicer shall become the subject of an Insolvency Event, (3) such Servicer shall admit its inability to, or its intention not to, perform any of its obligations under the Facility Documents, or (4) the failure of such Servicer perform its obligations in any material respect under the Servicer Side Letter, if any, or the related Servicing Agreement, including, without limitation, the failure of such Servicer to remit funds in accordance with Section 5(a)(i) hereof and failure continues unremedied for a period of [***] after the earlier of written notice of such failure or the date upon which the Servicer obtained actual knowledge of such failure
“Servicing Agreement” with respect to any Underlying Mortgage Loan serviced by a Servicer, shall mean the servicing agreement, if any, entered into among such Servicer, Guarantor and any other related parties thereto, which form and substance has been reasonably approved by Buyer, as the same may be amended from time to time of which Buyer shall be an intended third party beneficiary.
“Servicing Rights” shall mean rights of any Person to administer, manage, service or subservice, the Underlying Mortgage Loans or to possess related Records.
“Settlement Date” shall mean, with respect to Pooled Mortgage Loans subject to a Transaction, that date specified as the contractual delivery and settlement date in the related Take-out Commitment pursuant to which Buyer or its designee under the Joint Securities Account Control Agreement has the right to deliver Agency Securities to the Take-out Investor.
“SOFR” shall mean, with respect to any day, the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York’s Website.
“Subservicer Field” shall mean, with respect to an eNote, the field entitled, “Subservicer” in the MERS eRegistry.
“Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.
“Take-out Commitment” shall mean a commitment of Guarantor to sell one or more Underlying Mortgage Loans to a Take-out Investor in an arms-length, all cash transaction, and the corresponding Take-out Investor’s commitment back to Guarantor to effectuate the foregoing.
“Take-out Investor” shall mean any Person (other than an Affiliate of Seller or Guarantor) that has entered into a Take-out Commitment; provided that Buyer shall not have notified Guarantor that such Person is disapproved.
“Taxes” shall have the meaning set forth in Section 8(a) hereof.
“Tax Distributions” shall mean distributions by the Guarantor for the purpose of enabling LD Holdings to make Tax Distributions, as defined and set forth in the limited liability company agreement of LD Holdings.
“Term SOFR” shall mean, with respect to any Transaction for any day, the Term SOFR Reference Rate for a one month tenor, as such rate is published by the Term SOFR Administrator for such day at [***]; provided, however, that if as of [***] the Term SOFR Reference Rate for the foregoing tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to Term SOFR has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator.
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Buyer [***]).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Termination Date” shall have the meaning assigned thereto in the Pricing Side Letter.
“Transaction” shall have the meaning set forth in Section 1 hereof.
“Transaction Notice” shall mean a request from Seller to Buyer, which may be by electronic means (including e-mail), to enter into a Transaction.
“Transfer of Control” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller of such eNote.
“Transfer of Control and Location” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Controller and Location of such eNote.
“Transfer of Location” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Location of such eNote.
“Transferable Record” shall mean an Electronic Record under E-Sign and UETA that (i) would be a note under the Uniform Commercial Code if the Electronic Record were in writing, (ii) the issuer of the Electronic Record has expressly agreed is a “transferable record”, and (iii) for purposes of E-Sign, relates to a loan secured by real property.
“Transfer of Servicing” shall mean, with respect to an eNote, a MERS eRegistry transfer transaction used to request a change to the current Master Servicer Field or Subservicer Field of such eNote.
“Trust Receipt” shall have the meaning set forth in the Custodial and Disbursement Agreement.
“UETA” shall mean the Official Text of the Uniform Electronic Transactions Act as approved by the National Conference of Commissioners on Uniform State Laws at its Annual Conference on July 29, 1999.
“Unadjusted Benchmark Replacement” shall mean the Benchmark Replacement excluding the Benchmark Replacement Adjustment.
“Unauthorized Master Servicer or Subservicer Modification” shall mean, with respect to an eNote, an unauthorized Transfer of Location, an unauthorized Transfer of Servicing or any unauthorized change in any other information, status or data, including, without limitation, a change of the Master Servicer Field or Subservicer Field with respect to such eNote on the MERS eRegistry, initiated by the Seller, Guarantor, any Servicer or a vendor.
“Underlying Mortgage Loan” shall mean any reference to any Eligible Mortgage Loan, the bare legal title of which is held by Guarantor and 100% of the economic, beneficial and equitable ownership interests in which are evidenced by the Participation Interests issued to the Seller and represented by the Participation Certificate, which is subject to a Transaction pursuant to this Agreement and listed on the Asset Schedule attached to the related Transaction Notice (as Appendix I or otherwise), including the related Mortgage File for which the Custodian has been instructed to hold pursuant to the Custodial and Disbursement Agreement.
“Underlying Mortgage Loan Issue” shall mean[***].
“Underwriting Guidelines” shall mean the standards, procedures and guidelines of Guarantor for underwriting and acquiring Mortgage Loans, as updated from time to time and [***].
“Underwriting Package” shall mean with respect to any proposed Underlying Mortgage Loan, the Asset Schedule listing such proposed Underlying Mortgage Loan and such other computer readable file or other information requested by Buyer during the course of its due diligence and delivered prior to the date of a Transaction for such proposed Underlying Mortgage Loan containing, with respect to the related proposed Underlying Mortgage Loan, [***].
“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the security interest in any Repurchase Assets or the continuation, renewal or enforcement thereof is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“U.S. Special Resolution Regime” shall mean each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.
“USA Patriot Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended.
“USDA” shall mean the United States Department of Agriculture.
“USDA Mortgage Loan” shall mean a Mortgage Loan that is guaranteed by the USDA’s Guaranteed Rural Housing Loan Program.
“VA” shall mean the U.S. Department of Veterans Affairs, an agency of the United States of America, or any successor thereto including the Secretary of Veterans Affairs.
“VA Approved Lender” shall mean a lender which is approved by the VA to act as a lender in connection with the origination of VA Loans.
“VA Loan” shall mean a Mortgage Loan which is subject of a VA Loan Guaranty Agreement as evidenced by a loan guaranty certificate.
“VA Loan Guaranty Agreement” shall mean the obligation of the United States to pay a specific percentage of a Mortgage Loan (subject to a maximum amount) upon default of the Mortgagor pursuant to the Servicemen’s Readjustment Act, as amended.
“Wet-Ink Mortgage Loan Document Receipt Date” shall mean (a) the [***] following the applicable Purchase Date with respect to a Wet-Ink Mortgage Loan that is not an eMortgage Loan, and (b) the [***] following the applicable Purchase Date with respect to a Wet-Ink Mortgage Loan that is an eMortgage Loan.
“Wet-Ink Mortgage Loan” shall mean a Mortgage Loan as to which Buyer purchases a Participation Interest with respect to an Underlying Mortgage Loan which is originated by Guarantor in a transaction table-funded by Buyer, which origination or table funding is financed in part or in whole with proceeds of Transactions and as to which the Custodian has not yet received the related Mortgage File. A Mortgage Loan shall cease to be a Wet-Ink Mortgage Loan on the date on which Buyer has received a Trust Receipt and Exception Report from the Custodian with respect to such Mortgage Loan confirming that the Custodian has physical possession of the related Mortgage File (as defined in the Custodial and Disbursement Agreement) and that there are no Exceptions (as defined in the Custodial and Disbursement Agreement) with respect to such Mortgage Loan. No Mortgage Loan that is table-funded by Guarantor or any third party shall be eligible as a Wet-Ink Mortgage Loan under this Agreement.
“Wet-Ink Transaction” shall mean a Transaction in which a Wet-Ink Mortgage Loan is the Underlying Mortgage Loan. A Wet-Ink Transaction shall cease to be a Wet-Ink Transaction on the date that the underlying Wet-Ink Mortgage Loan ceases to be a Wet-Ink Mortgage Loan (in accordance with the definition thereof).
Section 3. No Commitment; Initiation.
Prior to the occurrence of an Event of Default and subject to the terms and conditions set forth herein, Buyer agrees that it may, in its sole discretion, enter into Transactions with Seller from time to time in an aggregate principal amount that will not cause the Aggregate Facility Purchase Price for all Purchased Assets subject to then outstanding Transactions under this Agreement, together with any Eligible Mortgage Loans that are being offered by Seller for allocation to the Participation Certificate in connection with such Transaction to exceed, as of any date determination, the Maximum Aggregate Purchase Price. Within the foregoing limits and subject to the terms and conditions set forth herein, Seller and Buyer may enter into Transactions with respect to (i) the Participation Certificate on the initial Purchase Date or (ii) a
Purchase Price Increase in respect of the issuance of additional Participation Interests to Seller in respect of additional Underlying Mortgage Loans proposed to be originated or purchased by the Guarantor during the period from the Restatement Date to and excluding the Termination Date. This Agreement is not a commitment by Buyer to enter into Transactions with Seller but sets forth the requirements under which Buyer would consider entering into Transactions as set forth herein. For the sake of clarity, Seller hereby acknowledges that Buyer is under no obligation to agree to enter into, or to enter into, any Transaction pursuant to this Agreement.
(a) Conditions Precedent to Initial Transaction. Buyer’s agreement (if any) to enter into the initial Transaction hereunder is subject to the satisfaction, immediately prior to or concurrently with the making of such Transaction, of the conditions precedent that Buyer shall have received from Seller any fees and expenses due and payable hereunder, and all of the following documents, each of which shall be satisfactory to Buyer and its counsel in form and substance:
(i) Facility Documents. The Facility Documents, duly executed by the parties thereto;
(ii) Opinions of Counsel. (A) An opinion or opinions of counsel to Seller and Guarantor covering security interest creation and perfection, general corporate matters (including under the laws of the jurisdiction of formation of the Seller and the Guarantor), the Investment Company Act, enforceability of the Facility Documents and under federal laws and the laws of the State of New York and laws of the jurisdiction of formation of the Seller and Guarantor in connection with the execution and delivery of the Facility Documents by Seller and Guarantor; and (B) a Bankruptcy Code opinion of outside counsel to Seller and Guarantor with respect to matters outlined in Section 33, each of which shall be in a form acceptable to Buyer in its sole discretion;
(iii) Organizational Documents. A certificate of existence of Seller and Guarantor delivered to Buyer prior to the Restatement Date and copies of the organizational documents of Seller and Guarantor and evidence of all corporate or other authority for Seller and Guarantor with respect to the execution, delivery and performance of the Facility Documents to which it is a party and each other document to be delivered by Seller and Guarantor from time to time in connection herewith;
(iv) Good Standing Certificates. A certified copy of a good standing certificate from the jurisdiction of organization of Seller and Guarantor, dated as of no earlier than the date that is fifteen (15) Business Days prior to the date hereof;
(v) Incumbency Certificates. An incumbency certificate of the manager, member, director, secretary or other similar officer of Seller and Guarantor certifying the names, true signatures and titles of the representatives
duly authorized to request transactions hereunder and to execute the Facility Documents to which it is a party;
(vi) Security Interest. (A) Evidence that all other actions necessary to perfect and protect the sale, transfer, conveyance and assignment by Seller (or, if applicable, the Guarantor) to Buyer or its designee (i) of all of the Guarantor’s right, title and interest it may have in and to the Residual Collateral and other items pledged under Section 9(a) and (ii) subject to the terms of this Agreement, of all of Seller’s right, title and interest it may have in and to the Underlying Mortgage Loans, the Repurchase Assets, and other items pledged under Section 9(a) together with all right, title and interest in and to the proceeds of any related Repurchase Assets have been taken, including in each case performing UCC searches and duly authorized and filing Uniform Commercial Code financing statements on Form UCC-1; (B) evidence that all other actions necessary to perfect and protect the sale, transfer, conveyance and assignment by Guarantor to Buyer or its designee (i) of all of Guarantor’s right, title and interest it may have in and to the Residual Collateral and other items pledged under Section 9(a) and (ii) subject to the terms of the Guaranty, of all of Guarantor’s right, title and interest it may have in and to the Repurchase Assets and other items pledged under the Guaranty together with all right, title and interest in and to the proceeds of any related Repurchase Assets have been taken, including in each case performing UCC searches and duly authorized and filing Uniform Commercial Code financing statements on Form UCC-1, and (C) evidence that the Participation Certificate is evidenced by a certificate in registered form and that such Participation Certificate constitutes and remains “securities” (as defined in Section 8-102 of the Uniform Commercial Code:
(vii) Insurance. Evidence that the Guarantor has added Buyer as an additional loss payee under the Guarantor’s Fidelity Insurance Policy and as a direct loss payee with right of action under the Errors and Omissions Insurance Policy or Professional Liability Insurance Policy, copies of which are attached to the Pricing Side Letter as Exhibit D;
(viii) [Reserved];
(ix) Reserve Account. Evidence that the Reserve Account has been established, per the terms of this Agreement, and contains at least the Reserve Account Threshold;
(x) Other Documents. Such other documents as Buyer may reasonably request, in form and substance reasonably acceptable to Buyer; and
(xi) Delivery of Participation Certificate. Seller shall have delivered to the Buyer the original Participation Certificate registered in the name of the Buyer.
(b) Conditions Precedent to all Transactions. Upon satisfaction of the conditions set forth in Section 3(a) hereof, and subject to the limitations set forth in the first paragraph of Section 3, Buyer may, in its sole discretion, enter into a Transaction with Seller. Buyer’s entering into each Transaction (including the initial Transaction) is subject to the satisfaction of the following further conditions precedent, both immediately prior to entering into such Transaction and also after giving effect thereto to the intended use thereof:
(i) Due Diligence Review. Without limiting the generality of Section 20 hereof, Buyer shall have completed, to its satisfaction, its due diligence review of the related Purchased Assets, Guarantor, Seller and the Servicer;
(ii) No Default. No Default or Event of Default shall have occurred and be continuing under the Facility Documents;
(iii) Representations and Warranties; Eligible Mortgage Loans. Both immediately prior to the Transaction and also after giving effect thereto and to the intended use thereof, the representations and warranties made by Seller in Section 13 hereof and on Schedule 1-A, Schedule 1-B, Schedule 1-C, and Schedule 1-D hereto, as applicable, in respect of the related Underlying Mortgage Loan, Participation Certificate and Participation Interests shall be true, correct and complete on and as of such Purchase Date in all material respects with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);
(iv) Maximum Purchase Price. After giving effect to the requested Transaction, the Aggregate Facility Purchase Price subject to then outstanding Transactions under this Agreement shall not exceed the Maximum Aggregate Purchase Price;
(v) No Underlying Mortgage Loan Issue; No Margin Deficit. As of the related Purchase Date, (A) Seller shall not have failed to remove any Underlying Mortgage Loan from allocation to a Participation Certificate pursuant to a repurchase request by Buyer pursuant to Section 4 hereof following the occurrence of an Underlying Mortgage Loan Issue with respect to such Underlying Mortgage Loan, and (B) no Margin Deficit shall have occurred and be continuing with respect to any Underlying Mortgage Loans. Additionally, after giving effect to the requested Transaction, no Underlying Mortgage Loan Issue or Margin Deficit shall have occurred or be continuing with respect to the related Underlying Mortgage Loans;
(vi) Transaction Notice. Seller shall have delivered to Buyer (a) a Transaction Notice and (b) an Asset Schedule;
(vii) Delivery of Mortgage File. Seller or Guarantor shall have delivered to the Custodian the Mortgage File with respect to each Mortgage Loan that is not a Wet-Ink Mortgage Loan and that is subject to the proposed Transaction, and the Custodian shall have issued a Trust Receipt showing no exceptions with respect to each such Mortgage Loan to Buyer as of the related Purchase Date all subject to and in accordance with the Custodial and Disbursement Agreement;
(viii) [Reserved];
(ix) Approval of Servicing Agreement. To the extent applicable and not previously delivered and approved, Buyer shall have, in its sole discretion, approved each Servicing Agreement pursuant to which any Underlying Mortgage Loan that is subject to such Transaction is to be serviced during the term of such Transaction;
(x) Servicer Side Letter. To the extent the related Underlying Mortgage Loans are to be serviced or sub-serviced by a Servicer other than Guarantor, Buyer shall have received a Servicer Side Letter with respect to such Underlying Mortgage Loans;
(xi) Fees and Expenses. Buyer shall have received all fees and expenses due and payable to Buyer as of the related Purchase Date, including, but not limited to, all fees due under the Pricing Side Letter and all fees and expenses of counsel to Buyer and due diligence vendors as contemplated by Sections 17(b) and 20 which amounts, at Buyer’s option, may be withheld from the proceeds remitted by Buyer to Seller pursuant to any Transaction hereunder;
(xii) Requirements of Law. Buyer shall not have determined in good faith that the introduction of or a change in any Requirement of Law or in the interpretation or administration of any Requirement of Law applicable to Buyer has made it unlawful, and no Governmental Authority shall have asserted that it is unlawful, for Buyer to enter into Transactions hereunder;
(xiii) No Material Adverse Change. None of the following shall have occurred and be continuing:
(A) an event or events shall have occurred in the good faith determination of Buyer resulting in the effective absence of a “repo market” or comparable “lending market” for financing debt obligations secured by securities or an event or events shall have occurred resulting in Buyer not being able to finance Mortgage Loans through the “repo market” or “lending market” with traditional counterparties at rates which would have been reasonable prior to the occurrence of such event or events; or
(B) an event or events shall have occurred resulting in the effective absence of a “securities market” for securities backed by Mortgage Loans or an event or events shall have occurred resulting in Buyer not being able to sell securities backed by Mortgage Loans at prices which would have been reasonable prior to such event or events; or
(C) there shall have occurred a material adverse change in the financial condition of Buyer which affects (or can reasonably be expected to affect) materially and adversely the ability of Buyer to fund its obligations under this Agreement; or
(D) there shall have occurred (i) a material change in financial markets, a material outbreak or escalation of hostilities or a material change in national or international political, financial or economic conditions; (ii) a general suspension of trading on major stock exchanges; or (iii) a disruption in or moratorium on commercial banking activities or securities settlement services;
(xiv) Certification. Each Transaction Notice delivered by Seller hereunder shall constitute a certification by Seller that all the conditions set forth in this Section 3(b) (other than clauses (xii) and (xiii)) have been, or will be on the related Purchase Date, satisfied (both as of the date of such notice or request and as of Purchase Date);
(xv) Repurchase Date. The Repurchase Date for each Transaction shall not be later than the then current Termination Date;
(xvi) Reserve Account. Evidence that the Reserve Account contains at least the Reserve Account Threshold.
(xvii) [Reserved].
(xviii) Correspondent Seller. With respect to each Correspondent Mortgage Loan, (i) the related Correspondent Seller shall be approved by Buyer on or prior to the Purchase Date, (ii) Seller shall not have received notice from Buyer that such Correspondent Seller is no longer approved and (iii) if requested, Buyer has received a Bailee Letter from such Correspondent Seller or its designee.
(xix) Pooled Mortgage Loans. Prior to giving effect to any Transaction with respect to any Pooled Mortgage Loans, to the extent not already a party thereto, Buyer shall be added as a party to (i) the Intercreditor Agreement and (ii) the Joint Securities Account Control Agreement, in each case, duly executed and delivered by the parties thereto.
(xx) Other Documents. Such other documents as Buyer may reasonably request, consistent with market practices, in form and substance reasonably acceptable to Buyer.
(xxi) Security Release Certification. With respect to each Underlying Mortgage Loan that is subject to a security interest (including any precautionary security interest) immediately prior to the Purchase Date, Buyer shall have received a Security Release Certification substantially in form attached hereto as Exhibit H or in such form and substance reasonably approved by the Buyer (a “Security Release Certification”) for such Underlying Mortgage Loan that is duly executed by the related secured party and Guarantor. If necessary, such secured party shall have filed UCC termination statements in respect of any UCC filings made in respect of such Underlying Mortgage Loan, and each such release and UCC termination statement has been delivered to Buyer prior to each Transaction and to the Custodian as part of the Mortgage File.
(c) Initiation (Transactions other than Wet-Ink Transactions).
(i) Unless otherwise agreed, Seller may request that Buyer enter into a Transaction with respect to (i) the Participation Certificate, on the initial Purchase Date, or (ii) a Purchase Price Increase in respect of the issuance of additional Participation Interests to Seller in respect of additional Underlying Mortgage Loans proposed to be originated or purchased by the Guarantor during the period from the Restatement Date to and excluding the Termination Date, by delivering(i) to Buyer (x) a Transaction Notice, with a copy to the Custodian, which Transaction notice must be received by Buyer prior to [***] on the requested Purchase Date, and (y) to Buyer an Asset Schedule, with a copy to the Custodian, which Asset Schedule must be received by the Buyer prior to [***]prior to the related Purchase Date. Delivery of such Transaction Notice shall be deemed a representation and warranty that Seller has no actual knowledge of any material information concerning such Eligible Mortgage Loan which is not reflected in such Asset Schedule or Transaction Notice or other information or otherwise disclosed to Buyer in writing. Buyer shall have the right to review the information set forth on the Transaction Notice and accompanying Asset Schedule proposed to be subject to a Transaction as Buyer determines during normal business hours. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields,
Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.
(ii) Upon Seller’s request to enter into a Transaction pursuant to Section 3(c)(i) and assuming all conditions precedent set forth in this Section 3 and have been met and provided that no Default or Event of Default shall have occurred and be continuing, on the requested Purchase Date, Buyer may, in its sole discretion (i) purchase the Participation Certificate on the initial Purchase Date or (ii) direct or cause the allocation of additional Underlying Mortgage Loans to the Guarantor to be added to the Participation Certificate on the related Purchase Date therefor, subject to the transfer of the Purchase Price Increase to Seller in an amount equal to the related Purchase Price for such Underlying Mortgage Loans included in the related Transaction Notice pursuant to the terms of this Agreement. In connection with entering into such Transaction, the Seller shall remit to Buyer or its designated agent the applicable Haircut Amount and Buyer shall send, or cause to be sent, the Purchase Price and Haircut Amount to the applicable warehouse lender or the Guarantor as directed by Seller.
(iii) Each Transaction Notice together with this Agreement, shall be conclusive evidence of the terms of the Transaction(s) covered thereby.
(iv) Subject to the terms and conditions of this Agreement, during such period Participation Interests in Underlying Mortgage Loans may be allocated to, removed from and relocated to the Participation Certificate held by Buyer hereunder.
(v) Seller or Guarantor shall deliver to the Custodian, in accordance with the terms of the Custodial and Disbursement Agreement, the Mortgage File pertaining to each Mortgage Loan to be made subject to a Transaction hereunder on the requested Purchase Date; provided that with respect to any eMortgage Loan, Seller or Guarantor shall deliver to Custodian each of Buyer’s and Guarantor’s MERS Org IDs, and shall use MERS eDelivery and the MERS eRegistry to cause (i) the Authoritative Copy of the related eNote to be delivered to the eVault via a secure electronic file, (ii) the Controller status of the related eNote to reflect the MERS Org ID of Buyer, (iii) the Location status of the related eNote to reflect the MERS Org ID of Custodian, (iv) the Delegatee status of the related eNote to reflect the MERS Org ID of Custodian, (v) the Master Servicer Field status of the related eNote to reflect the MERS Org ID of Guarantor and (vi) the Subservicer Field status of the related eNote to reflect (x) if there is a third-party subservicer, such subservicer’s MERS Org ID or (y) if there is not a subservicer, a blank field (individually, the “eNote Delivery Requirement”, and collectively, the “eNote Delivery Requirements”). Upon Buyer’s receipt of the Trust Receipt in accordance with the Custodial and Disbursement Agreement and subject to the provisions of this Section 3, to the extent that Buyer agrees in its sole discretion to fund the related Purchase Price on the Purchase Date, such
aggregate Purchase Price for the related Transaction shall then be made available to Seller by Buyer transferring, via wire transfer, in the aggregate amount of such Purchase Prices in funds immediately available in accordance with Section 10(b).
(vi) On the Purchase Date for the Participation Certificate, subject to Section 3(a) of this Agreement, Seller shall deliver to Buyer the original Participation Certificate, registered in the name of Buyer, and any other documents or instruments necessary in the opinion of Buyer to effect and perfect a legally valid delivery of the Participation Certificate to Buyer. Delivery of the Participation Certificate shall be made to Buyer in accordance with Buyer’s instructions. The delivery of the Participation Certificate in accordance with this Section 3(c), or any other method acceptable to Buyer in its reasonable discretion, shall be effected in a manner sufficient to cause Buyer to be the “entitlement holder” (as defined in Section 8-102(a)(7) of the UCC) with respect to the Participation Certificate and, if the Transaction is recharacterized as a secured financing, to have a perfected first priority security interest therein.
(vii) Upon the sale and transfer of the Participation Certificate to Buyer as set forth in Section 3(c)(vii) and until the termination of the related Transaction and payment of the related Repurchase Price, legal title and control of the Participation Certificate shall vest exclusively in Buyer. The Participation Certificate purchased by Buyer hereunder shall be held by Buyer so long as ownership thereof vests in Buyer.
(viii) Seller hereby agrees to pay any and all costs and expenses incurred by any party (including reasonable attorneys’ fees and expenses) in connection with any registration of the Participation Certificate purchased by Buyer in a Transaction hereunder in the name of Buyer and any ultimate re-registration or assignment of the Participation Certificate in the name of Seller or its designee.
(ix) With respect to each HELOC, if a Mortgagor requests an increase in the related Credit Limit, the Guarantor, shall, in its sole discretion, either accept or reject the Mortgagor’s request in accordance with Underwriting Guidelines and notify the Buyer in writing of Guarantor’s decision. If the request for a Credit Limit increase is accepted by the Guarantor, the increase will be effected by the Guarantor through modification of the Mortgage Loan with the Mortgagor. Guarantor shall deliver to the Buyer an updated Asset Schedule reflecting the modification to the Mortgage Loan and shall deliver any modified Mortgage Loan documents to the related Custodian. Notwithstanding anything to the contrary herein, in no event shall Buyer have any obligation to fund any Draws with respect to any HELOC, which obligations shall be retained by the Guarantor.
(d) Initiation (Wet-Ink Transactions).
(i) Seller may request a Wet-Ink Transaction hereunder, on any Business Day during the period from the Restatement Date to and excluding the
Termination Date, by delivering to Buyer, with a copy to the Custodian, no more than [***] transmissions, which transmissions shall attach a Transaction Notice and Asset Schedule with respect to the related Mortgage Loans; provided that following delivery of a Disbursement Agent Termination Notice (as defined in the Custodial and Disbursement Agreement), Seller may deliver more than [***] transmissions. The latest transmission must be received by the Buyer no later [***], on such Purchase Date. Such Transaction Notice shall specify the requested Purchase Date. In the event the Asset Schedule provided by Seller contains erroneous computer data, is not formatted properly or the computer fields are otherwise improperly aligned, Buyer shall provide written or electronic notice to Seller describing such error and Seller may either (a) give Buyer written or electronic authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields or (b) correct the computer data, reformat or properly align the computer fields itself and resubmit the Asset Schedule as required herein. In the event that Seller gives Buyer authority to correct the computer data, reformat the Asset Schedule or properly align the computer fields, Seller shall hold Buyer harmless for such correction, reformatting or realigning, as applicable, except as otherwise expressly provided herein.
(ii) Seller shall deliver (or cause to be delivered) and release to the Custodian the Mortgage File pertaining to such Wet-Ink Mortgage Loans on the [***] following receipt of such Mortgage File by Seller, but in any event no later than the Wet-Ink Mortgage Loan Document Receipt Date in accordance with the terms and conditions of the Custodial and Disbursement Agreement. On the applicable Purchase Date and on each Business Day following the applicable Purchase Date, no later than [***], pursuant to the Custodial and Disbursement Agreement, the Custodian shall deliver to Buyer a schedule listing each Wet-Ink Mortgage Loan with respect to which the complete Mortgage File has not been received by the Custodian (the “Wet-Aged Report”). Buyer may confirm that the information in the Wet-Aged Report is consistent with the information provided to the Buyer pursuant to Section 3(d)(i).
(iii) Upon the Seller’s request for a Transaction pursuant to Section 3(d)(i), the Buyer may, upon satisfaction of all conditions precedent set forth in Sections 3(a) and 3(b) hereof, and provided that no Default or Event of Default shall have occurred and be continuing, enter into a Transaction with Seller on the requested Purchase Date, in the amount so requested.
(iv) Upon notice from the Closing Agent to Seller or Guarantor that a Wet-Ink Mortgage Loan was not originated, such Wet-Ink Mortgage Loan shall be removed from the list of Eligible Mortgage Loans, and the Closing Agent shall return the funds via wire transfer directly to the Master Collection Account of Buyer within [***]. The Seller shall notify Buyer in writing if a Wet-Ink Mortgage Loan was not originated and has been removed from the list of Eligible Mortgage Loans. In connection with entering into such Transaction, the Seller
shall remit to Buyer or its designated agent the applicable Haircut Amount and Buyer shall send, or cause to be sent, the Purchase Price and Haircut Amount to the Closing Agent as directed by Seller.
Section 4. Repurchases.
(a) Seller shall repurchase the related Purchased Assets (or shall cause the release of particular Underlying Mortgage Loans from the Participation Certificate) from Buyer without penalty or premium on each related Repurchase Date. On the Repurchase Date for any Transaction, termination of such Transaction will be effected by reassignment to Guarantor or its designee of the Underlying Mortgage Loans subject to such Transaction against the simultaneous transfer of the Repurchase Price (excluding the amounts identified in clauses (B)(i) and (ii) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the Master Collection Account of Buyer. Buyer shall instruct the Custodian to release the Mortgage Files with respect to each repurchased Underlying Mortgage Loan to Guarantor or its designee at Seller's expense on the related Repurchase Date, and in the case of a repurchased Underlying Mortgage Loan that is an eMortgage Loan, Buyer shall initiate a Transfer of Location and update to Delegatee status with respect thereto as may be directed by Seller.
(b) So long as no Default or Event of Default has occurred and is continuing, Seller may effect a release of an Underlying Mortgage Loan from allocation to a Participation Certificate in connection with the sale or disposition of Underlying Mortgage Loans to a Take-out Investor or other applicable buyer; provided that Seller shall not be permitted to release any Underlying Mortgage Loan if the release of such Underlying Mortgage Loan would result in a Margin Deficit unless such Margin Deficit is simultaneously cured by Seller in connection with such release by payment by Seller. If Seller intends to make such a release of an Underlying Mortgage Loan from allocation to a Participation Certificate, by no later than [***] on the desired Repurchase Date, Seller or Guarantor shall cause the Take-out Investor or other applicable buyer to (i) provide Buyer with a notice identifying the Underlying Mortgage Loan(s) being released and the related take-out price(s), and (ii) make payment directly to the Master Collection Account of Buyer in an amount equal to the aggregate net proceeds to be received by Seller or Guarantor in connection with the related sale. Buyer shall promptly apply such funds to the Repurchase Price of the related Underlying Mortgage Loans and shall promptly remit any excess to Seller; provided, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Underlying Mortgage Loans to which such payments correspond, in which case Buyer shall promptly notify Seller that it is unable to identify such Underlying Mortgage Loan.
(c) Without limiting Buyer’s rights and remedies under Section 7 hereof or otherwise, if at any time there has occurred an Underlying Mortgage Loan Issue
with respect to any Underlying Mortgage Loan, Buyer may, at its option, by written notice to Seller (as such notice is more particularly set forth below, a “Release Notice”), require Seller or its designee to remove the Participation Interest in such Underlying Mortgage Loan from the Participation Certificate held by Buyer by remitting the related Repurchase Price (excluding the amounts identified in clause (B) of the definition of Repurchase Price, which, for the avoidance of doubt, shall be paid on the next succeeding Price Differential Payment Date) to the Master Collection Account of Buyer as soon as is practicable but, in any case, not more than [***] after Buyer has delivered such Release Notice to Seller.
(d) Buyer’s election, in its sole and absolute discretion, not to send a Release Notice at any time an Underlying Mortgage Loan is no longer an Eligible Mortgage Loan shall not in any way limit or impair its right to send a Release Notice at a later time.
(e) The fact that Buyer has conducted or has failed to conduct any partial or complete due diligence investigation in connection with its purchase of any Purchased Asset shall not affect Buyer’s right to demand repurchase or any other remedy as permitted under this Agreement.
(f) Seller shall, on the Purchase Price Decrease Date for each Underlying Mortgage Loan, cause the remittance to Buyer of the portion of the Repurchase Price allocable to such Underlying Mortgage Loan in accordance with wire instructions provided to Seller by Buyer from time to time. Upon receipt of such repurchase price amount, Buyer shall apply such portion of the Repurchase Price to reduce the related Purchase Price with respect to such Underlying Mortgage Loan. In addition, provided that no Event of Default shall have occurred and be continuing, Buyer shall be deemed to have simultaneously released its security interest in such Underlying Mortgage Loan and shall authorize custodian to release to the Seller or Guarantor, as applicable, or their designee the collateral documents for such Underlying Mortgage Loan and Seller shall take, or cause the Guarantor to take, physical possession of such Underlying Mortgage Loan from Buyer or its designee (including the Custodian) at Seller’s expense.
(g) If, on any date, an Underlying Mortgage Loan is discovered by Buyer, Seller or Guarantor to have an Underlying Mortgage Loan Issue, or such Underlying Mortgage Loan no longer qualifies as an Eligible Mortgage Loan, or any Underlying Mortgage Loan was not an Eligible Mortgage Loan as of the related Purchase Date, or a Purchased Asset is no longer an Eligible Participation Certificate or Eligible Participation Interest, as applicable, Seller shall, in each case, at Buyer’s option and upon notice from Buyer, repurchase the affected Purchased Asset, or release the Participation Interest in the related Underlying Mortgage Loan from the Participation Certificate held by Buyer, at the related Purchase Price. Buyer’s election, in its sole and absolute discretion, not to send a notice described in this Section 4(g) shall not in any way limit or impair its right to send such a notice at a later time.
Section 5. Income Payments; Price Differential.
(a) Income Payments.
(i) If Income is paid in respect of any Purchased Assets during the term of a Transaction, such Income shall be the property of Buyer and shall be clearly marked as payable to the buyer in Seller’s records. Upon the occurrence and during the continuance of an Event of Default, Seller shall, and shall cause the Servicer to deposit such Income on receipt into the Master Collection Account (or as otherwise directed by Buyer).
(ii) [***] prior to the Payment Date, Buyer shall give Seller written or electronic notice of the amount of the Price Differential and all other amounts due on such Payment Date. On or prior to the related Payment Date, either (1) Seller shall remit all such amounts due to Buyer or (2) Seller shall, or shall cause Servicer to forward all collected Income to Buyer, which amounts shall then be applied by Buyer in the following order:
(x) prior to the occurrence and continuance of an Event of Default:
(A) First, to Buyer for the payment of any unpaid Price Differential with respect to all Underlying Mortgage Loans then due and owing by Seller under this Agreement;
(B) Second, to Buyer for the payment of related costs and expenses and any other amounts then due and owing under this Agreement, including fees and expenses of Buyer’s agents and counsel, and all reasonable expenses, liabilities and advances made or incurred by or on behalf of Buyer in connection therewith;
(C) Third, to Buyer to reduce the outstanding Purchase Price with respect to all Underlying Mortgage Loans by an amount sufficient to eliminate any outstanding Margin Deficit and Seller’s obligation to satisfy such Margin Deficit (without limiting Seller’s obligation to satisfy such Margin Deficit in a timely manner as required by Section 7 to the extent not otherwise satisfied); and
(D) Fourth, to Seller, any remainder.
provided, if funds remitted to Buyer are not sufficient to pay all or part of the amounts due pursuant to the foregoing Sections 5(a)(ii)(x)(A)-(C) on the related Payment Date, Seller shall pay to Buyer in immediately available funds all, or the applicable portion, of such amounts due on such Payment Date; and
(y) following the occurrence and during the continuance of an Event of Default:
(E) First, to Buyer for the payment of any unpaid Price Differential with respect to all Underlying Mortgage Loans then due and owing by Seller under this Agreement;
(F) Second, to Buyer for the payment of related costs and expenses and any other amounts then due and owing under this Agreement, including fees and expenses of Buyer’s agents and counsel, and all reasonable expenses, liabilities and advances made or incurred by or on behalf of Buyer in connection therewith;
(G) Third, to Buyer to reduce the outstanding Purchase Price for all Underlying Mortgage Loans to zero as determined by Buyer in its sole discretion;
(H) Fourth, to Buyer to reduce any and all outstanding Obligations to zero as determined by Buyer in its sole discretion; and
(I) Fifth, to Seller, any remainder.
provided, if funds remitted to Buyer are not sufficient to pay all or part of the amounts due pursuant to the foregoing Sections 5(a)(ii)(y)(A)-(D), Seller shall pay to Buyer in immediately available funds all, or the applicable portion, of such amounts.
(iii) Notwithstanding any provision to the contrary in this Section 5, within [***] of receipt by Seller or Servicer of any prepayment of principal in full, with respect to an Underlying Mortgage Loan, Seller shall or shall cause Servicer to remit such amount directly to the Master Collection Account of Buyer and Buyer shall immediately apply any such amount received to reduce the amount of the Repurchase Price due upon termination of the related Transaction and shall promptly remit any excess to Seller; provided, that Buyer shall have no obligation to apply payments in the event that it is unable to identify the Underlying Mortgage Loans to which such payments correspond, in which case Buyer shall promptly notify Seller that it is unable to identify such Underlying Mortgage Loan.
(b) Price Differential.
(i) On each Business Day that a Transaction is outstanding, the Pricing Rate shall be reset and, unless otherwise agreed, the accrued and unpaid Price Differential for each Price Differential Collection Period shall be settled in cash on the following Price Differential Payment Date pursuant to Section 5(a)(ii). [***] prior to the Price Differential Payment Date, Buyer shall give
Seller electronic notice of the amount of the Price Differential due on such Price Differential Payment Date. On the Price Differential Payment Date, with respect to any Underlying Mortgage Loans, Seller shall pay to Buyer the Price Differential, if any, for such Price Differential Payment Date (along with any other amounts then due from Seller under this Agreement or any other Facility Document), pursuant to Section 5(a)(ii).
(ii) If Seller fails to pay all or part of the Price [***] on the related Price Differential Payment Date, with respect to any Underlying Mortgage Loans, Seller shall be obligated to pay to Buyer (in addition to, and together with, the amount of such Price Differential) interest on the unpaid Repurchase Price at a rate per annum equal to the Post-Default Rate until the Price Differential is received in full by Buyer. For the avoidance of doubt, Seller’s obligation to pay any Price Differential to Buyer shall not be deemed to be satisfied (and such Price Differential shall not deemed to be paid to Buyer) until the amount of such Price Differential is actually received by Buyer in the Master Collection Account (and not any other account).
Section 6. Requirements of Law.
(a) If any Requirement of Law or any change in the interpretation or application thereof or compliance by Buyer with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject Buyer to any Tax or increased Tax of any kind whatsoever with respect to this Agreement or any Transaction or change the basis of taxation of payments to Buyer in respect thereof (other than Non-Excluded Taxes, Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and Connection Income Taxes); or
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, or other extensions of credit by, or any other acquisition of funds by, any office of Buyer which is not otherwise included in the determination of Term SOFR hereunder;
and the result of any of the foregoing is to increase the cost to Buyer, by an amount which Buyer reasonably deems to be material, of entering, continuing or maintaining any Transaction or to reduce any amount due or owing hereunder in respect thereof, then, in any such case, Seller shall promptly pay Buyer such additional amount or amounts as calculated by Buyer in good faith as will compensate Buyer for such increased cost or reduced amount receivable.
(b) If Buyer shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by Buyer or any corporation controlling Buyer with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on Buyer’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which Buyer or such corporation could have achieved but for such adoption, change or compliance (taking into consideration Buyer’s or such corporation’s policies with respect to capital adequacy) by an amount reasonably deemed by Buyer to be material, then from time to time, Seller shall promptly pay to Buyer such additional amount or amounts as will compensate Buyer for such reduction.
(c) If Buyer becomes entitled to claim any additional amounts pursuant to this Section, it shall promptly notify Seller of the event by reason of which it has become so entitled.
Section 7. Margin Maintenance.
(a) If at any time the Aggregate Facility Purchase Price is greater than the aggregate Asset Value of all Underlying Mortgage Loans subject to Transactions (the positive amount of such difference, a “Margin Deficit”), and such Margin Deficit is greater than the Minimum Margin Threshold, then Buyer may by written notice to Seller (as such notice is more particularly set forth below, a “Margin Call”), require Seller to transfer to Buyer cash in an amount at least equal to the Margin Deficit (such amount, a “Margin Payment”); provided, that, notwithstanding the foregoing, Buyer may determine the Asset Value and any related Margin Deficit on an individual loan basis for any Underlying Mortgage Loan, in which event it shall, upon receipt, apply all amounts received with respect to any individual Underlying Mortgage Loans against the Purchase Price thereof.
(b) If Buyer delivers a Margin Call to Seller on or prior to [***],then Seller shall transfer the Margin Payment to Buyer or its designee no later than [***]. In the event Buyer delivers a Margin Call to Seller after [***], Seller shall be required to transfer the Margin Payment no later than [***].
(c) Seller shall transfer any Margin Payment to the Master Collection Account.
(d) In the event that a Margin Deficit exists with respect to any Underlying Mortgage Loans, Buyer may retain any funds received by it to which the Seller would otherwise be entitled hereunder, which funds (i) shall be held by Buyer against the related Margin Deficit and (ii) may be applied by Buyer against the Repurchase Price of any Underlying Mortgage Loan for which the related Margin Deficit remains otherwise unsatisfied. Notwithstanding the foregoing, Buyer retains
the right, in its sole discretion, to make a Margin Call in accordance with the provisions of this Section 7.
(e) The failure of Buyer, on any one or more occasions, to exercise its rights hereunder, shall not change or alter the terms and conditions of this Agreement or limit the right of Buyer to do so at a later date. Seller and Buyer each agree that a failure or delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer’s rights under this Agreement or otherwise existing by law or in any way create additional rights for Seller.
Section 8. Taxes.
(a) Any and all payments by Seller or Guarantor under or in respect of this Agreement or any other Facility Documents to which Seller or Guarantor is a party shall be made free and clear of, and without deduction or withholding for or on account of, any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities (including penalties, interest and additions to tax) with respect thereto, whether now or hereafter imposed, levied, collected, withheld or assessed by any taxation authority or other Governmental Authority (collectively, “Taxes”), unless required by law. If Seller or Guarantor shall be required under any applicable Requirement of Law to deduct or withhold any Taxes from or in respect of any sum payable under or in respect of this Agreement or any of the other Facility Documents to Buyer, (i) Seller or Guarantor, as applicable, shall make all such deductions and withholdings in respect of Taxes, (ii) Seller or Guarantor, as applicable, shall pay the full amount deducted or withheld in respect of Taxes to the relevant taxation authority or other Governmental Authority in accordance with any applicable Requirement of Law, and (iii) the sum payable by Seller or Guarantor shall be increased as may be necessary so that after Seller or Guarantor, as applicable, has made all required deductions and withholdings (including deductions and withholdings applicable to additional amounts payable under this Section 8) Buyer receives an amount equal to the sum it would have received had no such deductions or withholdings been made in respect of Non-Excluded Taxes. For purposes of this Agreement (i) the term “Non-Excluded Taxes” are (a) Taxes other than Excluded Taxes and (b) to the extent not otherwise described in (a), Other Taxes, and (ii) the term “Excluded Taxes” are, in the case of Buyer, (a) Taxes that are imposed on its overall net income (and franchise taxes and branch profits taxes imposed in lieu thereof) by the jurisdiction under the laws of which Buyer is organized or of its applicable lending office, or any political subdivision thereof, or that are Taxes imposed as a result of a present or former connection between the Buyer and the jurisdiction imposing such Tax unless such Taxes are imposed as a result of Buyer having executed, delivered or performed its obligations or received payments under, or enforced, this Agreement or any of the other Facility Documents (in which case such Taxes will be treated as Non-Excluded Taxes), (b) Taxes imposed on amounts payable to or for the account of Buyer with respect to an applicable interest in a Facility Document pursuant to a law in effect on the date on which Buyer acquires
such interest in a Facility Document other than amounts with respect to such Taxes that were payable to such Buyer's assignor immediately before such Buyer became a party hereto, (c) Taxes attributable to a Buyer’s failure to provide Seller or Guarantor with the appropriate form, certificate or other document described in subsection (e) of this Section 8, and (d) any withholding Taxes imposed under FATCA.
(b) In addition, each of Seller and Guarantor, as applicable, hereby agrees to pay any present or future stamp, recording, documentary, excise, property or value-added taxes, or similar taxes, charges or levies that arise from any payment made under or in respect of this Agreement or any other Facility Document or from the execution, delivery or registration of, any performance under, or otherwise with respect to, this Agreement or any other Facility Document (collectively, “Other Taxes”).
(c) Each of Seller and Guarantor hereby agrees to indemnify Buyer for, and to hold it harmless against, the full amount of Non-Excluded Taxes, and the full amount of Non-Excluded Taxes imposed on amounts payable by Seller or Guarantor under this Section 8 imposed on or paid by Buyer and any liability (including penalties, additions to tax, interest and reasonable expenses) arising therefrom or with respect thereto. The indemnity by each of Seller and Guarantor provided for in this Section 8(c) shall apply and be made whether or not the Non-Excluded Taxes for which indemnification hereunder is sought have been correctly or legally imposed or asserted. Amounts payable by each of Seller and Guarantor under the indemnity set forth in this Section 8(c) shall be paid within [***] from the date on which Buyer makes written demand therefor.
(d) Within [***] after the date of any payment of Taxes, Seller or Guarantor (or any Person making such payment on behalf of Seller or Guarantor) shall furnish to Buyer for its own account evidence reasonably satisfactory to Buyer payment thereof.
(e) For purposes of subsection (e) of this Section 8, the terms “United States” and “United States person” shall have the meanings specified in section 7701 of the Code. Each Buyer (including for avoidance of doubt any assignee, successor or participant) shall deliver or cause to be delivered to Seller or Guarantor the following properly completed and duly executed documents:
(i) in the case of a Buyer that is not a United States person, or is a foreign disregarded entity for U.S. federal income tax purposes that is entitled to provide such form, a complete and executed copy of (x) U.S. Internal Revenue Form W-8BEN or U.S. Internal Revenue Form W-8BEN-E in which Buyer claims the benefits of a tax treaty with the United States, if applicable, providing for a zero or reduced rate of withholding (or any successor forms thereto), including all appropriate attachments or (y) a U.S. Internal Revenue Service Form W-8ECI (or any successor forms thereto); or
(ii) in the case of an individual, (x) a complete and executed copy of U.S. Internal Revenue Service Form W-8BEN (or any successor forms thereto) and, if applicable, a certificate substantially in the form of Exhibit D (a “Section 8 Certificate”) or (y) a complete and executed copy of U.S. Internal Revenue Service Form W-9 (or any successor forms thereto); or
(iii) in the case of a Buyer that is organized under the laws of the United States, any State thereof, or the District of Columbia, a complete and executed copy of U.S. Internal Revenue Service Form W-9 (or any successor forms thereto), including all appropriate attachments; or
(iv) in the case of a Buyer that (x) is not organized under the laws of the United States, any State thereof, or the District of Columbia and (y) is treated as a corporation for U.S. federal income tax purposes, a complete and executed copy of U.S. Internal Revenue Service Form W-8BEN-E (or any successor forms thereto) and, if applicable, a Section 8 Certificate; or
(v) in the case of a Buyer that (A) is treated as a partnership or other non-corporate entity, and (B) is not organized under the laws of the United States, any State thereof, or the District of Columbia, (x)(i) a complete and executed copy of U.S. Internal Revenue Service Form W-8IMY (or any successor forms thereto) (including all required documents and attachments) and (ii) if applicable, a Section 8 Certificate, and (y) without duplication, with respect to each of its beneficial owners and the beneficial owners of such beneficial owners looking through chains of owners to individuals or entities that are treated as corporations for U.S. federal income tax purposes (all such owners, “beneficial owners”), the documents that would be provided by each such beneficial owner pursuant to this Section if such beneficial owner were Buyer;
(vi) in the case of a Buyer that is disregarded from its sole beneficial owner for U.S. federal income tax purposes, the document that would be provided by its beneficial owner pursuant to this Section if such beneficial owner were Buyer; or
(vii) in the case of a Buyer that (A) is not a United States person and (B) is acting in the capacity as an “intermediary” (as defined in U.S. Treasury Regulations), (x)(i) a copy of U.S. Internal Revenue Service Form W-8IMY (or any successor form thereto) (including all required documents and attachments) and (ii) if applicable, a Section 8 Certificate, and (y) if the intermediary is a “non-qualified intermediary” (as defined in U.S. Treasury Regulations), from each person upon whose behalf the “non-qualified intermediary” is acting the documents that would be provided by each such person pursuant to this Section if each such person were Buyer; or
(viii) if a payment made to Buyer under any Facility Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Buyer
were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Buyer shall deliver to the Seller or Guarantor at the time or times prescribed by law and at such time or times reasonably requested by Seller or Guarantor such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Seller or Guarantor as may be necessary for Seller or Guarantor to comply with its obligations under FATCA and to determine that such Buyer has complied with its obligations under FATCA or to determine the amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (e)(viii), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(f) Should a Buyer become subject to Non-Excluded Taxes because of its failure to deliver a form, certificate or other document required hereunder, Seller and Guarantor shall take such steps as Buyer shall reasonably request and at such Buyer’s sole cost and expense, to assist Buyer in recovering such Non-Excluded Taxes.
(g) If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h) Without prejudice to the survival of any other agreement of Seller or Guarantor hereunder, the agreements and obligations of Seller and Guarantor contained in this Section 8 shall survive the termination of this Agreement. Nothing
contained in this Section 8 shall require Buyer to make available any of its tax returns or any other information that it deems to be confidential or proprietary.
Section 9. Security Interest; Buyer’s Appointment as Attorney-in-Fact.
(a) Security Interest. On each Purchase Date, Seller hereby sells, assigns and conveys to Buyer all right, title and interest in the Purchased Assets listed on the related Asset Schedule to the extent of its rights therein, although the parties intend that all Transactions hereunder be sales and purchases and not loans (in each case, other than for accounting and tax purposes), in the event any such Transactions are deemed to be loans, and in any event, Seller, to the extent of its rights therein, hereby pledges to Buyer as security for the performance of the Obligations and hereby grants, assigns and pledges to Buyer a first priority security interest in Seller’s rights, title and interest in:
(i) the Purchased Assets, the Underlying Mortgage Loans, the Records related to the Underlying Mortgage Loans, all Servicing Rights related to the Underlying Mortgage Loans, all Agency Securities related to Pooled Mortgage Loans that are Underlying Mortgage Loans or right to receive any such Agency Security when issued to the extent backed by any of the Underlying Mortgage Loans, the Facility Documents (to the extent such Facility Documents and Seller’s rights thereunder relate to the Underlying Mortgage Loans), any related Take-out Commitments related to such Underlying Mortgage Loans, any Property relating to any Underlying Mortgage Loan or the related Mortgaged Property, all insurance policies and insurance proceeds relating to any Underlying Mortgage Loan or any related Mortgaged Property, including but not limited to any payments or proceeds under any related primary insurance, hazard insurance and FHA Mortgage Insurance Contracts (if any) and VA Loan Guaranty Agreements (if any), any Income relating to any Underlying Mortgage Loan, Interest Rate Protection Agreements related to such Underlying Mortgage Loans, the Reserve Account and all amounts deposited therein, each Servicing Agreement and any other contract rights, accounts (including any interest of Seller in escrow accounts maintained by Servicer) and any other payments, rights to payment (including payments of interest or finance charges) and general intangibles to the extent that the foregoing relates to any Underlying Mortgage Loans and any other assets relating to the Underlying Mortgage Loans (including, without limitation, any other accounts) or any interest in the Underlying Mortgage Loans and any proceeds and distributions and any other property, rights, title or interests as are specified on a Trust Receipt and Exception Report with respect to any of the foregoing, in all instances, whether now owned or hereafter acquired, now existing or hereafter created in each case excluding any Take-out Commitments and Interest Rate Protection Agreements to the extent Seller or Guarantor may not, pursuant to the provisions thereof, assign or transfer, or pledge or grant a security interest in, such Take-out Commitments or Interest Rate Protection Agreements without the consent of, or without violating its obligations
to, the related Take-out Investor or counterparty to such Interest Rate Protection Agreement, but only to the extent such provisions are not rendered ineffective against the Buyer under Article 9, Part 4 of the Uniform Commercial Code (collectively, the “Repurchase Assets”).
(ii) As security for the performance of all of Guarantor’s obligations hereunder and as a precautionary measure in the event that the conveyance of any Purchased Asset by Guarantor to Seller is determined not to be a true sale or contribution or the separate existence of Seller from Guarantor is otherwise disregarded at any point, Guarantor hereby pledges, assigns and grants to Buyer a continuing first priority security interest in and lien upon the Purchased Assets and related Residual Collateral and Buyer shall have all the rights and remedies of a “secured party” under the Uniform Commercial Code with respect to the Purchased Assets and related Residual Collateral. Possession of any promissory notes, instruments or documents by Custodian shall constitute possession on behalf of Buyer.
(iii) Each of the foregoing paragraphs (i) and (ii) is intended to constitute a security agreement or other arrangement or other credit enhancement related to the Agreement and transactions hereunder as defined under Section 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
(b) Servicing Rights. Without limiting the generality of the foregoing and in the event that Seller or Guarantor is deemed to retain any residual Servicing Rights, and for the avoidance of doubt, each of Seller and Guarantor grants, assigns and pledges to Buyer a first priority security interest in the Servicing Rights and proceeds related thereto and all of its contractual rights under the Servicing Agreement in respect of the servicing thereunder and in all instances, whether now owned or hereafter acquired, now existing or hereafter created, including all of Servicing Rights related to the Underlying Mortgage Loans. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
(c) Financing Statements. Seller hereby authorizes Buyer to file such financing statement or statements relating to the Repurchase Assets as Buyer, at its option, may deem reasonable and appropriate to protect Buyer’s interest therein. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 9. Guarantor hereby authorizes Buyer to file such financing statement or statements relating to the Residual Collateral as Buyer, at its option, may deem reasonable and appropriate to protect Buyer’s interest therein. Seller shall pay the filing costs for any financing statement or statements prepared pursuant to this Section 9.
(d) Buyer’s Appointment as Attorney in Fact. Each of Seller and Guarantor hereby irrevocably constitutes and appoints Buyer and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Seller or Guarantor, as applicable, and in the name of Seller or Guarantor, as applicable, or in its own name, from time to time in Buyer’s discretion, for the purpose, following the occurrence of an Event of Default, of carrying out the terms of this Agreement and to take any and all appropriate action and to execute any and all documents and instruments which may be reasonably necessary or desirable to accomplish the purposes of this Agreement, in each case, subject to the terms of this Agreement. Without limiting the generality of the foregoing, each of Seller or Guarantor, as applicable, hereby gives Buyer the power and right, on behalf of Seller or Guarantor, as applicable, without assent by, Seller or Guarantor, as applicable, if an Event of Default shall have occurred and be continuing, to do the following:
(i) in the name of Seller or Guarantor, as applicable, or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any Repurchase Assets and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any Repurchase Assets whenever payable;
(ii) to pay or discharge taxes and Liens levied or placed on or threatened against the Repurchase Assets; and
(iii) (A) to direct any party liable for any payment under any Repurchase Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct, including, without limitation, any payment agent with respect to any Repurchase Asset; (B) to send “goodbye” letters on behalf of Seller or Guarantor, as applicable, and Servicer and Section 404 Notices; (C) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Repurchase Assets; (D) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Repurchase Assets; (E) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Repurchase Assets or any proceeds thereof and to enforce any other right in respect of any Repurchase Assets; (F) to defend any suit, action or proceeding brought against Seller or Guarantor, as applicable, with respect to any Repurchase Assets; (G) to settle, compromise or adjust any suit, action or proceeding described in clause (F) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate and (H) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Repurchase Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and Seller’s expense, at any time, and from time to time, all acts and things
which Buyer deems necessary to protect, preserve or realize upon the Repurchase Assets and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as Seller or Guarantor, as applicable, might do.
Each of Seller and Guarantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable. In addition to the foregoing, each of Seller and Guarantor agrees to execute a Power of Attorney, the form of Exhibit F hereto, to be delivered on the date hereof. Seller, Guarantor and Buyer acknowledge that the Power of Attorney shall terminate on the Termination Date and satisfaction in full of the Obligations.
Each of Seller and Guarantor also authorizes Buyer, if an Event of Default shall have occurred and is continuing, to execute, in connection with any sale provided for in Section 16 hereof, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Repurchase Assets.
The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Repurchase Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to Seller or Guarantor, as applicable, for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
(e) Matters Regarding the Underlying Mortgage Loans and Participation Certificates.
Each of Seller and Guarantor acknowledges that it has no rights to the Servicing Rights or the Participation Interests in the Servicing Rights related to any Underlying Mortgage Loan. Without limiting the generality of the foregoing and for the avoidance of doubt, if any determination is made that the Participation Interests in the Servicing Rights related to such Underlying Mortgage Loan were not sold by Seller to Buyer or that the Participation Interests in the Servicing Rights are not an interest in such Underlying Mortgage Loans and are severable from the Underlying Mortgage Loans despite Buyer’s, Seller’s and Guarantor’s express intent herein to treat them as included in the purchase and sale transaction, Guarantor hereby pledges, assigns and grants to Buyer a continuing first priority security interest in and lien upon the Servicing Rights related to such Underlying Mortgage Loans and Seller hereby pledges, assigns and grants to Buyer a continuing first priority security interest in and lien upon the Participation Interests in the Servicing Rights related to such Underlying Mortgage Loans, and Buyer shall have all the rights and remedies of a “secured party” under the Uniform Commercial Code with respect thereto. In addition, each of Seller and Guarantor, as applicable, further grants, assigns and pledges to Buyer a first priority security interest in and lien upon (i) all documentation and rights to receive documentation related to such Servicing Rights and the Participation Interests in the Servicing Rights and the servicing of each of the Underlying Mortgage Loans, (ii) all Income related to the Purchased Assets and Underlying Mortgage Loans received by Seller and Guarantor, (iii) all rights to receive such Income, (iv) all other Purchased Assets and Underlying Mortgage Loans, (v) the Residual Collateral and (vi) all products, proceeds and distributions
relating to or constituting any or all of the foregoing (collectively, and together with the pledge of the Servicing Rights and the Participation Interests in the Servicing Rights in the immediately preceding sentence, the “Related Credit Enhancement”). The Related Credit Enhancement is hereby pledged as further security for the Obligations and any other obligations of Seller or Guarantor to Buyer hereunder. The foregoing provision is intended to constitute a security agreement or other arrangement or other credit enhancement related to this Agreement and Transactions hereunder as defined under Sections 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code.
The parties (i) acknowledge and agree that the Participation Certificates shall constitute and remain “securities” as defined in Section 8-102 of the Uniform Commercial Code and (ii) covenant and agree that such Participation Certificates are not and will not be dealt in or traded on securities exchanges or securities markets. Each of Seller and Guarantor covenants and agrees such Participation Certificate is not and will not be investment company securities within the meaning of Section 8-103 of the Uniform Commercial Code. Seller shall, at its sole cost and expense, take all steps as may be necessary in connection with the indorsement, transfer, delivery and pledge of the Participation Certificates that are Purchased Assets to Buyer.
If, as a result of ownership of the Participation Interests, Seller shall become entitled to receive or shall receive any certificate (if any) evidencing any such Participation Interest any option rights whether in addition to, in substitution for, as a conversion of, or in exchange for such Participation Interests, or otherwise in respect thereof, Seller shall accept the same as the Buyer’s agent, hold the same in trust for Buyer and deliver the same forthwith to the Buyer in the exact form received, duly indorsed by Seller, to Buyer, if required, together with an undated transfer power, if required, covering such certificate duly executed in blank, to be held by Buyer subject to the terms hereof as additional security for the Obligations. If following the occurrence and during the continuation of an Event of Default any sums of money or property so paid or distributed in respect of such Participation Interests shall be received by Seller, Seller shall, until such money or property is paid or delivered to Buyer, hold such money or property in trust for Buyer segregated from other funds of Seller, as additional security for the Obligations.
Subject to this Section, Buyer, as the holder, has the right, but not the obligation, to exercise all voting and member rights with respect to the Participation Interests. Notwithstanding the foregoing, so long as no Default or Event of Default has occurred and is continuing, Seller shall be permitted to exercise all voting and member rights with respect to the Participation Interests and Buyer shall exercise any such rights on behalf of Seller under this paragraph solely in accordance with Seller’s written instructions; provided, however, that no vote shall be cast or member right exercised or other action taken that would impair the Participation Interests that would be inconsistent with or result in a violation of any provision of this Agreement or result in a Material Adverse Effect. Without the prior consent of the Buyer, Seller shall not (a) vote to enable, or take any other action to permit Seller to issue any interests of any nature or to issue any other interests convertible into or granting the right to purchase or exchange for any interests of such entity, or (b) sell, assign, transfer, exchange or otherwise dispose of, or grant any option with respect to the Participation Interests or (c) create, incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, the
Seller’s interest in the Participation Interest except for the Lien provided for by this Agreement, or (d) except as provided in this Agreement, enter into any agreement or undertaking restricting the right or ability of Seller to sell, assign or transfer the Participation Interests.
The parties acknowledge that the Participation Interests have been sold by Guarantor to Seller pursuant to a Participation Agreement. Notwithstanding the foregoing, each of Seller and Guarantor acknowledges and agrees that their respective rights with respect to the Purchased Assets, Repurchase Assets and Residual Collateral (including without limitation its security interest in the Repurchase Assets and Residual Collateral) are and shall continue to be at all times junior and subordinate to the rights of Buyer under this Agreement. The parties further acknowledge that the Buyer shall enter into Transactions and Purchase Price Increases hereunder with respect to Purchased Assets, Repurchase Assets and Residual Collateral, free and clear of any obligations under the Participation Agreement and that such Participation Agreement shall not confer any obligations or liabilities on Buyer to either Seller or Guarantor. For the sake of clarity, if Buyer releases its security interest granted by Seller to Buyer hereunder in any Purchased Assets or other Repurchase Assets in accordance with the terms hereof, Buyer’s security interest in the related Underlying Mortgage Loans and related Residual Collateral granted by Guarantor to Buyer hereunder shall be released concurrently therewith.
Section 10. Payment, Transfer and Remittance.
(a) Payments and Transfers of Funds. Unless otherwise mutually agreed in writing, all transfers of funds to be made by Seller hereunder shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Buyer at the Master Collection Account, not later than [***], on the date on which such payment shall become due (and each such payment made after such time shall be deemed to have been made on the [***]). Seller acknowledges that it has no rights of withdrawal from the foregoing account.
(b) Remittance of Purchase Price. On the Purchase Date for each Transaction, ownership of the related Purchased Assets shall be transferred to Buyer or its designee against the simultaneous transfer of the Purchase Price to the account (or accounts) designated by Seller to Buyer simultaneously with the delivery to Buyer of the Purchased Assets relating to such Transaction.
Section 11. Hypothecation or Pledge of Purchased Assets. Title to all Purchased Assets shall pass to Buyer on the Purchase Date and Buyer shall have free and unrestricted use of all Purchased Assets, subject to the terms of this Agreement. Buyer may engage in repurchase transactions with the Purchased Assets, Repurchase Assets and/or the related interest in the Underlying Mortgage Loans or otherwise engage in pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets, Repurchase Assets and/or the related interest in the Underlying Mortgage Loans, with the written consent of Seller; provided, however that if Buyer engages in repurchase transactions with the Purchased Assets, Repurchase Assets and/or the related interest in the Underlying Mortgage Loans or otherwise engages in pledging, repledging, transferring, hypothecating, or rehypothecating the Purchased Assets, Repurchase Assets and/or the related interest in the Underlying Mortgage Loans with an Affiliate of Buyer, no such consent of Seller shall be required. Nothing contained in this Agreement shall obligate Buyer to segregate any Purchased Assets delivered to Buyer by Seller.
Section 12. Fees. Seller shall pay to Buyer in immediately available funds, all amounts due and owing as set forth in Section 2 of the Pricing Side Letter.
Section 13. Representations. Each of Seller and Guarantor, as applicable, represents and warrants as to itself to Buyer that as of the Purchase Date of any Purchased Assets by Buyer from Seller and as of the date of this Agreement and any Transaction hereunder and at all times while this Agreement and any Transaction hereunder is in full force and effect:
(a) Acting as Principal. Seller will engage in such Transactions as principal (or, if agreed in writing in advance of any Transaction by the other party hereto, as agent for a disclosed principal).
(b) Intellectual Property. Each of Seller and Guarantor, as applicable, owns, or is licensed to use, all Intellectual Property necessary to conduct its business as currently conducted except for such Intellectual Property the failure of which to own or license would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. To the knowledge of each of Seller and Guarantor, (a) the conduct and operations of the businesses of each of Seller and Guarantor does not infringe, misappropriate, dilute or violate any Intellectual Property owned by any other Person and (b) no other Person has contested any right, title or interest of each of Seller and Guarantor and its Subsidiaries in, or relating to, any Intellectual Property, other than, in each case, as would not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
(c) Solvency. Neither the Facility Documents nor any Transaction thereunder are entered into in contemplation of insolvency or with intent to hinder, delay or defraud any of Seller’s or Guarantor’s creditors. The transfer of the Purchased Assets and any Underlying Mortgage Loans subject hereto is not undertaken with the intent to hinder, delay or defraud any of Seller’s or Guarantor’s creditors. Neither Seller nor the Guarantor is insolvent within the meaning of 11 U.S.C. Section 101(32) and the transfer of the Purchased Assets pursuant hereto (i) will not cause Seller or Guarantor to become insolvent, (ii) will not result in any
property remaining with Seller or Guarantor to be unreasonably small capital with which to engage in its business, and (iii) will not result in debts that would be beyond Seller’s or Guarantor’s ability to pay as same mature. Seller has received reasonably equivalent value in exchange for the transfer of the Underlying Mortgage Loans subject to Transactions hereto.
(d) No Broker. Neither Seller nor Guarantor has dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of the Purchased Assets or pledge of the Underlying Mortgage Loans pursuant to this Agreement.
(e) Ability to Perform. Neither Seller nor Guarantor believes, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in the Facility Documents to which it is a party on its part to be performed.
(f) Existence. Each of Seller and Guarantor (a) is a limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable; (b) has the power and authority and all governmental licenses, authorizations, permits, consents and approvals to (i) own its assets and carry on its business as now being or as proposed to be conducted, except where the lack of such licenses, authorizations, permits, consents and approvals would not be reasonably likely to have a Material Adverse Effect and (ii) execute, deliver, and perform its obligations under the Facility Documents to which it is a party; (c) is duly qualified as a foreign corporation, limited liability company or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except where failure to so qualify would not be reasonably likely (either individually or in the aggregate) to have a Material Adverse Effect; and (d) is in compliance with all Requirements of Law, except where failure to so comply would not be reasonably likely to have a Material Adverse Effect.
(g) Environmental Matters. Each of Seller and Guarantor is and has been in compliance with all applicable Environmental Laws, including obtaining and maintaining all Permits required by any applicable Environmental Law, except where failure so to comply would not be reasonably likely to have a Material Adverse Effect.
(h) No Breach. Neither (a) the execution and delivery of the Facility Documents to which it is a party nor (b) the consummation of the transactions therein contemplated to be entered into by Seller or Guarantor, as applicable, in compliance with the terms and provisions thereof will conflict with or result in (i) a breach of the organizational documents of Seller or Guarantor, as applicable, or (ii) a breach of any applicable law, rule or regulation, or (iii) a breach of any order, writ, injunction or decree of any Governmental Authority, or (iv) a breach of or default under other material agreement or instrument to which Seller or Guarantor, as applicable, is a
party or by which Seller or Guarantor, as applicable, or their respective Properties is bound or to which Seller or Guarantor, as applicable, is subject, or (v) the creation or imposition of any Lien (except for the Liens created pursuant to the Facility Documents) upon any Property of Seller or Guarantor, as applicable, pursuant to the terms of any such agreement or instrument.
(i) Action. Each of Seller and Guarantor has all necessary corporate or other power, authority and legal right to execute, deliver and perform its obligations under each of the Facility Documents to which it is a party; the execution, delivery and performance by each of Seller and Guarantor of each of the Facility Documents to which it is a party have been duly authorized by all necessary corporate or other action on its part; and each Facility Document to which it is a party has been duly and validly executed and delivered by each of Seller and Guarantor.
(j) Approvals. No authorizations, approvals, exemptions or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by each of Seller and Guarantor of the Facility Documents to which it is a party or for the legality, validity or enforceability thereof, except for filings and recordings in respect of the Liens created pursuant to the Facility Documents.
(k) Enforceability. This Agreement and all of the other Facility Documents executed and delivered by Seller and Guarantor, as applicable, in connection herewith are legal, valid and binding obligations of Seller and Guarantor, as applicable, are enforceable against Seller and Guarantor, as applicable, in accordance with their terms except as such enforceability may be limited by (i) the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity.
(l) Indebtedness. As of the Restatement Date, Guarantor’s Indebtedness is as set forth on Exhibit C to the Pricing Side Letter. Seller has no other Indebtedness except for this Agreement.
(m) Labor Relations. There are no strikes, work stoppages, slowdowns or lockouts existing, pending (or, to the knowledge of each of Guarantor or Seller, threatened) against or involving Seller or Guarantor, except for those that would not, in the aggregate, reasonably be expected to have a Material Adverse Effect. There is (a) no collective bargaining or similar agreement with any union, labor organization, works council or similar representative covering any employee of Seller or Guarantor, (b) no petition for certification or election of any such representative is existing or pending with respect to any employee of Seller or Guarantor and (c) no such representative has sought certification or recognition with respect to any employee of Seller or Guarantor.
(n) No Default. No Default or Event of Default has occurred and is continuing.
(o) Litigation. There are no actions, suits, arbitrations, investigations (including, without limitation, any of the foregoing which are pending or, to the knowledge of Seller or Guarantor threatened) or other legal or arbitrable proceedings affecting Seller or Guarantor or affecting any of the Property of any of them before any Governmental Authority that (i) questions or challenges the validity or enforceability of any of the Facility Documents or any action to be taken in connection with the transactions contemplated hereby, (ii) makes a claim in an aggregate amount greater than the Litigation Threshold in the case of the Seller or the Guarantor, or (iii) which, individually or in the aggregate, if not cured or if adversely determined, could be reasonably likely to have a Material Adverse Effect or constitute an Event of Default.
(p) Margin Regulations. The use of all funds acquired by Seller under this Agreement will not conflict with or contravene any of Regulations T, U or X promulgated by the Board of Governors of the Federal Reserve System as the same may from time to time be amended, supplemented or otherwise modified.
(q) Taxes. Each of Seller and Guarantor have timely filed all federal income tax returns and all other material tax returns that are required to be filed by it and has timely paid all federal income Taxes and all other material amounts of Taxes, in each case, prior to becoming delinquent, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided. There are no Liens for Taxes, except for statutory Liens for Taxes not yet due and payable.
(r) Investment Company Act. Neither Seller, Guarantor nor any of their Subsidiaries is an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(s) Underlying Mortgage Loans.
(i) Each of Seller and Guarantor has not assigned, pledged, or otherwise conveyed or encumbered any Underlying Mortgage Loan to any Person other than Buyer, except for Liens to be released simultaneously with the transfer of Underlying Mortgage Loans pursuant to a Transaction hereunder.
(ii) Immediately prior to the application of an Underlying Mortgage Loan to a Transaction hereunder, Guarantor was the sole owner of such Underlying Mortgage Loan and had good and marketable title thereto, free and clear of all Liens, in each case except for (A) Liens to be released simultaneously with the application of an Underlying Mortgage Loans pursuant to a Transaction hereunder and (B) Liens in the first position solely with respect to any Second Lien Mortgage Loan.
(iii) The provisions of this Agreement are effective to either constitute a sale of the Purchased Assets to Buyer or to create in favor of Buyer a valid security interest in all right, title and interest of Seller in, to and under any Repurchase Assets owned by Seller and all Residual Collateral of the Guarantor.
(t) Chief Executive Office/Jurisdiction of Organization. On the Effective Date, Seller’s chief executive office, is, and has been located at 6561 Irvine Center Drive, Irvine, California 92618. On the Effective Date, Seller’s jurisdiction of organization is Delaware. On the Effective Date, Guarantor’s chief executive office, is, and has been located at 6561 Irvine Center Drive, Irvine, California 92618. On the Effective Date, Guarantor’s jurisdiction of organization is Delaware.
(u) Location of Books and Records. The location where each of Seller and Guarantor keep their respective books and records, including all computer tapes and records related to the Repurchase Assets is its chief executive office.
(v) True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of Seller and Guarantor to Buyer in connection with the negotiation, preparation or delivery of this Agreement and the other Facility Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by or on behalf of Seller and Guarantor to Buyer in connection with this Agreement and the other Facility Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to a Responsible Officer of Seller or Guarantor, after due inquiry, that could reasonably be expected to have a Material Adverse Effect that has not been disclosed herein, in the other Facility Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to Buyer for use in connection with the transactions contemplated hereby or thereby.
(w) ERISA.
(i) During the immediately preceding [***] period, (x) each Plan has complied in all material respects with the applicable provisions of the Code and ERISA, (y) Seller, Guarantor and any ERISA Affiliate thereof has complied with its minimum funding requirements with respect to each Plan and Multiemployer Plan and (z) no Event of ERISA Termination has occurred resulting in any liability other than as would not reasonably be expected to have a Material Adverse Effect.
(ii) Neither Seller nor Guarantor is currently or reasonably expects to be subject to any liability for a complete or partial withdrawal from a Multiemployer Plan.
(iii) Guarantor provides medical or health benefits to former employees as required by the Consolidated Omnibus Budget Reconciliation Act, as amended, or similar state or local law (collectively, “COBRA”) at no cost to the employer.
(iv) Neither Seller nor Guarantor, nor any ERISA Affiliate of the Seller or Guarantor thereof has incurred a tax liability under Chapter 43 of the Code or a penalty under Section 502(i) of ERISA which has not been paid in full, except where the incurrence of such tax or penalty would not result in a Material Adverse Effect.
(v) The execution and delivery of, and performance under, the Facility Documents to which it is a party (including, without limitation, the Buyer’s exercise of its rights and remedies under the Facility Documents) will not constitute or otherwise result in a nonexempt “prohibited transaction” (as defined in Section 406 of ERISA and Section 4975 of the Code).
(x) Material Adverse Effect. Since the date set forth in the most recent financial statements supplied to Buyer, there has been no development or event nor, to Seller’s or Guarantor’s knowledge, any prospective development or event, which has had or could reasonably be expected to have a Material Adverse Effect.
(y) No Reliance. Each of Seller and Guarantor has made its own independent decisions to enter into the Facility Documents to which it is a party and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary. Neither Seller nor Guarantor is relying upon any advice from Buyer as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(z) Plan Assets. Neither Seller nor Guarantor is an employee benefit plan as defined in Section 3(3) of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code, or an entity deemed to hold “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, and neither Seller nor Guarantor is acting on behalf of any of the foregoing. Neither Seller nor Guarantor is subject to any state or local statute regulating investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA, and the Underlying Mortgage Loans and Residual Collateral are not “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA.
(aa) Anti-Money Laundering Laws. Each of Seller and Guarantor and each Subsidiary of Seller and Guarantor is in compliance with all U.S. laws related to terrorism or money laundering (“Anti-Money Laundering Laws”) including: (i) all applicable requirements of the Currency and Foreign Transactions Reporting Act of 1970 (31 U.S.C. 5311 et. seq., (the Bank Secrecy Act)), as amended by Title III of the USA Patriot Act, (ii) the Trading with the Enemy Act, (iii) Executive Order, any other enabling legislation, executive order or regulations issued pursuant or relating thereto and (iv) other applicable federal or state laws relating to “know your customer” or anti-money laundering rules and regulations. No action, suit or proceeding by or before any court or Governmental Authority with respect to compliance with such Anti-Money Laundering Laws is pending or threatened involving the Seller, Guarantor or any of their respective Subsidiaries to the knowledge of Seller or Guarantor and each Subsidiary of Seller and Guarantor.
(bb) Sanctions. Each of Seller, Guarantor and each Subsidiary of Seller and Guarantor is in compliance in all material respects with all U.S. economic sanctions laws, the Executive Order, any other executive orders and implementing regulations (“Sanctions”) as administered by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) and the U.S. State Department. None of Seller, Guarantor, nor any Subsidiary of Seller or Guarantor (i) is a Person on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”), (ii) is a person who is otherwise the target of U.S. economic sanctions laws such that a U.S. person cannot deal or otherwise engage in business transactions with such person, (iii) is a Person organized or resident in a country or territory subject to comprehensive Sanctions (a “Sanctioned Country”), or (iv) is owned or controlled by (including by virtue of such Person being a director or owning voting shares or interests), or acts, directly or indirectly, for or on behalf of, any Person on the SDN List or a government of a Sanctioned Country such that the entry into, or performance under, this Agreement or any other Facility Document would be prohibited by U.S. law. Seller, Guarantor and each Subsidiary of Seller and Guarantor has instituted and will continue to maintain policies and procedures designed to ensure compliance by Seller, Guarantor, their respective Subsidiaries and their respective directors, officers, employees and agents with Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.
(cc) FCPA. Seller, Guarantor and each Subsidiary of Seller and Guarantor is in compliance in all material respects with all applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”) and the U.K. Bribery Act 2010 (“Anti-Corruption Laws”). None of Seller, nor Guarantor nor any Subsidiary of Seller or Guarantor, nor to the knowledge of Seller or Guarantor, any director, officer, agent, employee, or other person acting on behalf of Seller, Guarantor or any Subsidiary of Seller or Guarantor, has taken any action, directly or indirectly, that would result in a violation of applicable Anti-Corruption Laws.
(dd) Brokers’ Fees; Transaction Fees. Neither Seller nor Guarantor has dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of the Purchased Assets or pledge of the Underlying Mortgage Loans pursuant to Transactions in connection with this Agreement; provided, that if Seller or Guarantor has dealt with any broker, investment banker, agent, or other person, except for Buyer, who may be entitled to any commission or compensation in connection with the sale of the Purchased Assets or pledge transfer of Underlying Mortgage Loans pursuant to Transactions in connection with this Agreement, such commission or compensation shall have been paid in full by Seller or Guarantor.
(ee) [Reserved].
(ff) Agency Approvals. To the extent required by applicable law and/or necessary to issue an Agency Security, Guarantor or Servicer (if not Guarantor) is (i) an FHA Approved Mortgagee, (ii) a VA Approved Lender, (iii) approved by Ginnie Mae as an approved issuer, (iv) approved by Fannie Mae as an approved lender, (v) approved by Freddie Mac as an approved seller/servicer, and (vi) approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act (collectively, the “Agency Approvals”). In each such case, Guarantor is in good standing and Guarantor shall maintain all insurance requirements in accordance with the applicable Agency guidelines.
(gg) Separateness. Seller is in compliance with the requirements of Section 40 hereof.
Section 14. Covenants of Seller and Guarantor. On and as of the date of this Agreement and each Purchase Date and on each day until this Agreement is no longer in force, each of Seller and Guarantor covenants as to itself as follows:
(a) Preservation of Existence; Compliance with Law.
(i) Each of Seller and Guarantor shall preserve and maintain its legal existence;
(ii) Each of Seller and Guarantor shall (A) comply with all Requirements of Law (including, without limitation, all Environmental Laws), the violation of which could reasonably be expected to have a Material Adverse Effect; and (B) shall not engage in any conduct or activity that could reasonably be expected to subject its assets to forfeiture or seizure;
(iii) Each of Seller and Guarantor shall maintain in effect and enforce policies and procedures designed to ensure compliance by Seller, Guarantor and their directors, officers, employees and agents with Anti-Corruption Laws, Anti-Money Laundering Laws and applicable Sanctions;
(iv) Neither Seller and Guarantor, nor to the knowledge of Seller or Guarantor, any director, officer, agent, employee, or other person acting on behalf of Seller or Guarantor will request or use the proceeds of any Transaction, directly or indirectly, (A) for any payments to any Person, including any government official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, or otherwise take any action, directly or indirectly, that would result in a violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Person on the SDN List or a government of a Sanctioned Country, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto. Furthermore, neither Seller nor Guarantor will, directly or indirectly, use the proceeds of the any Transaction, or lend, contribute or otherwise make available such proceeds to any Subsidiary, Affiliate, joint venture partner or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person participating in the transaction of any Sanctions;
(v) Each of Seller and Guarantor shall preserve and maintain all material rights, privileges, licenses, franchises, permits or other approvals necessary for Seller or Guarantor, as applicable, to conduct its business and to perform its obligations under the applicable Facility Documents and shall conduct its business strictly in accordance with applicable law, the violation of which could reasonably be expected to have a Material Adverse Effect;
(vi) Each of Seller and Guarantor shall keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied;
(vii) Each of Seller and Guarantor shall permit representatives of Buyer, upon reasonable notice (unless an Event of Default shall have occurred and is continuing, in which case, no prior notice shall be required), during normal business hours, to examine, copy and make extracts of the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession or under the control of Seller or Guarantor and to discuss its regulatory compliance policies and procedures, business and affairs with its designated officers, all to the extent reasonably requested by Buyer; and
(viii) Neither Seller nor Guarantor shall change its legal name, chief executive office or jurisdiction of organization without having provided to the Buyer prior written notice of any such change.
(b) Taxes. Each of Seller and Guarantor shall timely file all federal income tax returns and all other material tax returns that are required to be filed by it and shall timely pay all Taxes due on such tax returns, except for any such Taxes as are being appropriately contested in good faith by appropriate proceedings diligently conducted and with respect to which adequate reserves have been provided.
(c) Notice of Proceedings or Adverse Change. Each of Seller and Guarantor shall give notice to Buyer immediately after a Responsible Officer of Seller or Guarantor has any knowledge of:
(i) the occurrence of any Default or Event of Default;
(ii) any default or event of default under any Indebtedness of Seller or Guarantor to the extent not waived or deemed not to exist after the application of any applicable waiver or cure period, or non-routine investigation or regulatory action that is pending or, to the knowledge of Seller or Guarantor, threatened against Seller or Guarantor in any federal or state court or before any Governmental Authority, which, if adversely determined, would reasonably be expected to have a Material Adverse Effect;
(iii) any material claim, dispute, litigation, investigation, proceeding or suspension that is pending against Seller or Guarantor before any Governmental Authority; and
(iv) as soon as reasonably possible, notice of any of the following events which, except for any other time period specified below, such notice may be delivered in the next Officer’s Compliance Certificate:
(A) a material and adverse change in the insurance coverage of Seller or Guarantor, with a copy of evidence of same attached;
(B) within [***], any material change in accounting policies or financial reporting practices of Seller or Guarantor, which could reasonably be expected to have a Material Adverse Effect;
(C) the involuntary termination or nonrenewal of any Indebtedness of Guarantor or Seller, or any new Indebtedness of in excess of $[***];
(D) within [***] upon receipt of notice or knowledge of any Lien or security interest (other than security interests created hereby or under any other Facility Document) on, or claim asserted against, any of the Repurchase Assets;
(E) as soon as practicable, but, in any case, no more than [***], after Seller or Guarantor has obtained knowledge of any fact that could
reasonably be the basis of any Underlying Mortgage Loan Issue with respect to an Underlying Mortgage Loan, notice identifying the related Underlying Mortgage Loan with respect to which such Underlying Mortgage Loan Issue exists and detailing the cause of such potential Underlying Mortgage Loan Issue;
(F) (1) entering into any settlement with any third party, including, without limitation, a Governmental Authority, or (2) the issuance of a consent order by any Governmental Authority, in which in the case of clauses (1) or (2), the fines, penalties, settlement amounts or any other amounts owed by Seller or Guarantor thereunder exceeds the Litigation Threshold;
(G) any litigation or proceeding that is pending or, to the knowledge of Seller or Guarantor, threatened (a) in which the amount involved exceeds the Litigation Threshold or (b) which, if adversely determined would reasonably be expected to have a Material Adverse Effect;
(v) promptly, but no later than [***] after Seller or Guarantor receives notice of the same, any Underlying Mortgage Loan agreed to be the subject of a Take-out Commitment and delivered to a Take-out Investor (whole loan or securitization) under a Bailee Letter, and which was rejected for purchase by such Take-out Investor; provided, that such notice shall include an explanation as to why such Underlying Mortgage Loan was rejected for purchase by such Take-out Investor; or
(vi) Seller or Guarantor shall furnish to Buyer written notice immediately upon Seller or Guarantor becoming aware of any Control Failure with respect to an Underlying Mortgage Loan that is an eMortgage Loan or any eNote Replacement Failure.
(d) Reporting. Guarantor shall furnish to Buyer the following:
(i) within thirty (30) days after the end of each calendar month, the unaudited balance sheets of Guarantor as at the end of such calendar month, the related unaudited consolidated statements of income, for such month accompanied by the Officer’s Compliance Certificate (including all specified schedules), executed by a Responsible Officer of Guarantor or a designee of such Responsible Officer, which certificate shall state that said financial statements and schedules fairly present in all material respects the financial condition and results of operations of Guarantor, in accordance with GAAP, consistently applied, as at the end of, and for, such month (subject to normal year-end adjustments);
(ii) within one hundred twenty (120) days after the end of Guarantor’s fiscal year, the audited balance sheets and the related statements of income for
Guarantor at the end of such fiscal year, with such balance sheets and statements of income being audited if required by Buyer but in any event prepared by a certified public accountant in accordance with GAAP, setting forth in each case in comparative form the figures for the previous year, accompanied by an opinion thereon of independent certified public accountants of recognized national standing, which opinion shall have no “going concern” qualification and shall state that said financial statements fairly present the financial condition and results of operations of Guarantor, as at the end of, and for, such fiscal year in accordance with GAAP;
(iii) within [***] after any material amendment, modification or supplement has been entered into with respect to any Servicing Agreement, a fully executed copy thereof, certified by Guarantor to be true, correct and complete;
(iv) [***], a position report summarizing all Interest Rate Protection Agreements entered into or maintained by Guarantor;
(v) within [***] following written request of Buyer, a monthly servicing and remittance report of each Servicer with respect to the Underlying Mortgage Loans, in form and substance reasonably acceptable to Buyer.
(e) Visitation and Inspection Rights. Seller and Guarantor shall, permit Buyer to inspect, and to discuss with Seller’s and Guarantor’s officers, agents and auditors, the affairs, finances, and accounts of Seller and Guarantor, the Repurchase Assets, OFAC sanctions scanning policies and procedures, including information relating to the method and frequency of scanning and the results of specific scans conducted on borrowers, anti-money laundering policies and procedures, and Seller’s and Guarantor’s books and records, and to make abstracts or reproductions thereof and to duplicate, reduce to hard copy or otherwise use any and all computer or electronically stored information or data, in each case, (i) during normal business hours, (ii) upon reasonable notice (provided, that upon the occurrence of an Event of Default, no notice shall be required), and (iii) at the expense of Seller to discuss with Seller’s and Guarantor’s officers, its affairs, finances, and accounts.
(f) Reimbursement of Expenses. Subject to Section 20, from and after the Restatement Date, Seller shall promptly reimburse Buyer for all expenses as the same are incurred by Buyer upon receipt of invoices therefor.
(g) Government Agency Approvals; Servicing. Guarantor shall maintain, if applicable, its status with Fannie Mae as an approved lender and Freddie Mac as an approved seller/servicer, in each case in good standing. Should Guarantor, for any reason, cease to possess all such applicable Government Agency approvals to the extent required by any such Government Agency, or should notification of an adverse occurrence to the relevant Government Agency or to the Department of Housing and Urban Development, FHA or VA be required, Guarantor shall so notify Buyer immediately in writing. Notwithstanding the preceding sentence, Guarantor shall
take all necessary action to maintain all of its applicable Government Agency approvals at all times during the term of this Agreement and each outstanding Transaction. Guarantor or the Servicer (if not the Guarantor), as applicable, has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of mortgage loans of the same types as may from time to time constitute Mortgage Loans and in accordance with Accepted Servicing Practices.
(h) Further Assurances. Seller and Guarantor shall each execute and deliver to Buyer all further documents, financing statements, agreements and instruments, and take all further action that may be required under applicable Requirements of Law, or that Buyer may reasonable request, in order to effectuate the transactions contemplated by this Agreement and the Facility Documents or, without limiting any of the foregoing, to grant, preserve, protect and perfect the validity and first- priority of the security interests created or intended to be created hereby. Each of Seller and Guarantor shall do all things necessary to preserve the Repurchase Assets so that they remain subject to the first priority perfected security interest hereunder.
(i) True and Correct Information. All information, reports, exhibits, schedules, financial statements or certificates of each of Seller and Guarantor or any of their respective officers furnished to Buyer hereunder and during Buyer’s diligence of each of Seller and Guarantor are and will be true and complete in all material respects and will not omit to disclose any material facts necessary to make the statements therein or therein, in light of the circumstances in which they are made, not misleading. All required financial statements, information and reports delivered by each of Seller or Guarantor to Buyer pursuant to this Agreement shall be prepared in accordance with GAAP, or in connection with Securities and Exchange Commission filings, if any, the appropriate Securities and Exchange Commission accounting requirements.
(j) ERISA Events.
(i) Promptly upon becoming aware of the occurrence of any Event of ERISA Termination which together with all other Events of ERISA Termination occurring within the [***]involve a payment of money by or a potential aggregate liability of Seller, Guarantor or any ERISA Affiliate thereof or any combination of such entities in excess of $[***], Seller shall give Buyer a written notice specifying the nature thereof, what action Seller, Guarantor or any ERISA Affiliate thereof has taken and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto.
(ii) Promptly upon receipt thereof, Seller or Guarantor shall furnish to Buyer copies of (i) all notices received by Seller, Guarantor or any ERISA Affiliate thereof of the PBGC’s intent to terminate any Plan or to have a trustee
appointed to administer any Plan; (ii) all notices received by Seller, Guarantor or any ERISA Affiliate thereof from the sponsor of a Multiemployer Plan pursuant to Section 4202 of ERISA involving a withdrawal liability in excess of , $[***]; and (iii) all funding waiver requests filed by Seller, Guarantor or any ERISA Affiliate thereof with the Internal Revenue Service with respect to any Plan, the accrued benefits of which exceed the present value of the plan assets as of the date the waiver request is filed by more than $[***], and all communications received by Seller, Guarantor or any ERISA Affiliate thereof from the Internal Revenue Service with respect to any such funding waiver request.
(k) Financial Covenants. Guarantor shall comply with the financial covenants set forth in Section 3 of the Pricing Side Letter.
(l) Investment Company Act. Neither the Seller nor Guarantor nor any of their Subsidiaries shall be an “investment company”, or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.
(m) Insurance. The Guarantor shall continue to maintain with responsible companies, at its own expense, the Required Insurance Policy with respect to its officers, employees or agents acting in any capacity requiring such persons to handle funds, money, documents or papers relating to the Underlying Mortgage Loans, with respect to any claims made in connection with all or any portion of the Underlying Mortgage Loans (collective, “Guarantor Insureds”). Any such Required Insurance Policy shall protect and insure the Guarantor against losses, including forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of such Guarantor Insureds, and such policies also shall protect and insure the Guarantor against losses in connection with the release or satisfaction of an Underlying Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section requiring such Required Insurance Policy shall diminish or relieve the Guarantor from its duties and obligations as set forth in this Agreement. The minimum coverage under any such Required Insurance Policy shall be at least equal to the amount required by the applicable Government Agency. Upon the request of the Buyer, the Seller shall cause to be delivered to the Buyer a certificate of insurance for such Required Insurance Policy and a statement from the Guarantor that such Required Insurance Policy shall in no event be terminated or materially modified without [***] notice to the Buyer. Guarantor shall name Buyer as a loss payee under any applicable Fidelity Insurance Policy and as a direct loss payee with right of action under any applicable Errors and Omissions Insurance Policy or Professional Liability Insurance Policy.
(n) Books and Records. Guarantor shall maintain and implement administrative and operating procedures (including, without limitation, an ability to recreate records evidencing the Repurchase Assets in the event of the destruction of the originals thereof), and keep and maintain or obtain, as and when required, all
documents, books, records and other information reasonably necessary or advisable for the collection of all Repurchase Assets.
(o) Material Change in Business. Each of Seller and Guarantor shall not make any material change in the nature of its business as carried on at the date hereof.
(p) Limitation on Dividends and Distributions. Following the occurrence and during the continuation of an Event of Default or if an Event of Default would result therefrom, neither Seller nor Guarantor shall make any payment on account of, or set apart assets for, a sinking or other analogous fund for the purchase, redemption, defeasance, retirement or other acquisition of any equity interest of Seller or Guarantor, whether now or hereafter outstanding, or make any other distribution or dividend in respect of any of the foregoing or to any shareholder or equity owner of Seller or Guarantor, either directly or indirectly, whether in cash or property or in obligations of Seller or Guarantor or any of Seller’s or Guarantor’s consolidated Subsidiaries, except that, notwithstanding the foregoing, Seller or Guarantor shall be permitted at all times (regardless of whether or not an Event of Default exists) to make Tax Distributions.
(q) Disposition of Assets; Liens. Neither Seller nor Guarantor shall (i) cause any of the Repurchase Assets to be sold, pledged, assigned or transferred except in compliance with the applicable Facility Documents or (ii) create, incur, assume or suffer to exist any mortgage, pledge, Lien, charge or other encumbrance of any nature whatsoever on any of the Repurchase Assets, whether real, personal or mixed, now or hereafter owned, other than Liens in favor of Buyer.
(r) Limitation on Accounting Changes. Each of Seller and Guarantor shall not make any material change in the accounting policies or financial reporting practices of Seller, Guarantor or their respective Subsidiaries, except to the extent such change is required by GAAP, consistently applied.
(s) ERISA Matters.
(i) Neither Seller nor Guarantor shall permit any event or condition which is described in any of clauses (i) through (x) of the definition of “Event of ERISA Termination” to occur or exist with respect to any Plan or Multiemployer Plan if such event or condition, together with all other events or conditions described in the definition of Event of ERISA Termination occurring within the [***], involves the payment of money by or an incurrence of liability of Seller, Guarantor or any ERISA Affiliate thereof, or any combination of such entities in an amount in excess of $[***].
(ii) Neither Seller nor Guarantor shall be an employee benefit plan as defined in Section 3(3) of Title I of ERISA, or a plan described in Section 4975(e)(1) of the Code or an entity deemed to hold “plan assets” within the meaning of 29 CFR §2510.3-101, as modified by Section 3(42) of ERISA, to
engage in this Agreement or the Transactions hereunder and transactions by or with Seller or Guarantor, and neither Seller nor Guarantor are subject to any state or local statute regulating investments of, or fiduciary obligations with respect to governmental plans within the meaning of Section 3(32) of ERISA.
(t) Consolidations, Mergers and Sales of Assets. Neither Seller nor Guarantor shall (i) consolidate or merge with or into any other Person or (ii) sell, lease or otherwise transfer all or substantially all of its assets to any other Person, in each case without the prior written consent of Buyer; provided, however, the Seller or Guarantor, may without the prior written consent of Buyer, and provided that an Event of Default is not existing and will not occur as a result thereof: (i) merge or consolidate with any Person if Seller or Guarantor, as applicable, is the surviving and controlling party and (ii) in the ordinary course of Seller’s and Guarantor’s mortgage banking business, sell equipment that is uneconomic or obsolete and acquire mortgage loans for resale and sell mortgage loans, mortgage servicing rights and mortgage related securities.
(u) Facility Documents. Neither Seller and Guarantor shall permit the amendment or modification of, the waiver of any event of default under, or the termination of any Facility Document to which Seller or Guarantor, as applicable, is a party without Buyer’s prior written consent. Neither Seller nor Guarantor shall waive (or direct the waiver of) the performance by any party to any Facility Document of any action, if the failure to perform such action would adversely affect Seller, Guarantor or any Underlying Mortgage Loans in any material respect, or waive (or direct the waiver of) any default resulting from any action or inaction by any party thereto.
(v) Illegal Activities. Neither Seller nor Guarantor shall engage in any conduct or activity that could subject its assets to forfeiture or seizure.
(w) Transactions with Affiliates. Neither Seller nor Guarantor shall enter into any transaction, including, without limitation, the purchase, sale, lease or exchange of property or assets or the rendering or accepting of any service with any Affiliate, unless such transaction is (a) not otherwise prohibited in this Agreement, (b) in the ordinary course of Seller’s or Guarantor’s business, and (c) upon fair and reasonable terms no less favorable to Seller or Guarantor, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person which is not an Affiliate. For the avoidance of doubt nothing herein prohibits Seller or Guarantor from making or paying any dividend or distribution to its members of shareholders on account of their equity interests in Seller or Guarantor, as applicable, provided any such dividend or distribution does not violate the provisions of Section 14(p) hereof.
(x) [Reserved].
(y) [Reserved].
(z) Reserve Account. The Reserve Account Threshold shall be maintained at all times.
(aa) Division of Limited Liability Company. Neither Seller nor Guarantor shall effect a “Division” into two or more domestic limited liability companies pursuant to and in accordance with Section 18-217 of Delaware Limited Liability Company Act, 6 Del. C. §§ 18-101 et seq., as amended.
(bb) Hedging. Guarantor has entered into Interest Rate Protection Agreements or other arrangements with respect to the Underlying Mortgage Loans, having terms with respect to protection against fluctuations in interest rates consistent with the terms of Guarantor’s hedging program and has notified Buyer of the terms of such Interest Rate Protection Agreements or other arrangements in writing.
(cc) [Reserved]
(dd) Agency Securities. With respect to any Mortgage Loans that are Pooled Mortgage Loans, Guarantor shall only designate Buyer or the agent under the Joint Securities Account Control Agreement as the party authorized to receive the related Agency Security and shall designate Buyer or the agent under the Joint Securities Account Control Agreement accordingly on the applicable Form HUD 11705 (Schedule of Subscribers).
(ee) Pooled Loans. With respect to any Underlying Mortgage Loans that are Pooled Mortgage Loans, each of Seller and Guarantor shall be deemed to make the representations and warranties listed on Schedule 1-B hereto. With respect to any Underlying Mortgage Loans that are Pooled Mortgage Loans, either Seller or Guarantor shall deliver to Buyer copies of the relevant Pooling Documents (the originals of which shall have been delivered to the Agency) as Buyer may request from time to time and as required by the Custodial and Disbursement Agreement.
(ff) MERS. Guarantor shall comply in all material respects with the rules and procedures of MERS in connection with the servicing of all Underlying Mortgage Loans that are registered with MERS and, with respect to Underlying Mortgage Loans that are eMortgage Loans, the maintenance of the related eNotes on the MERS eRegistry for as long as such Underlying Mortgage Loans are so registered.
(gg) Participation Agreement. Neither Seller nor Guarantor shall amend, restate, supplement or otherwise modify the Participation Agreement without the prior written approval of the Buyer.
Section 15. Events of Default. If any of the following events (each an “Event of Default”) occur, Seller, Guarantor and Buyer shall have the rights set forth in Section 16, as applicable:
(a) Payment Default. (i) Seller or Guarantor fails to make any payment of (A) Repurchase Price when due (other than Price Differential), whether by acceleration, mandatory repurchase (including following the occurrence of an Underlying Mortgage Loan Issue) or otherwise or (B) Price Differential or to cure any Margin Deficit when due, under the terms of the Facility Documents, or (ii) Seller or Guarantor fails to make any payment of any sum (other than Repurchase Price, Price Differential or Margin Deficit) when due under the terms of the Facility Documents within [***] notice; or
(b) Immediate Representation and Warranty Default. Any representation, warranty or certification made or deemed to be made by Seller or Guarantor contained in any of [***], in each case, of this Agreement shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished; or
(c) Additional Representation and Warranty Defaults. Any representation or warranty made or deemed made herein or in any other Facility Document (and not identified in clause (b) of Section 15) by Seller or Guarantor shall be determined by Buyer to have been untrue or misleading in any respect as of the time made or furnished (other than the representations and warranties set forth in Schedule 1-A or Schedule 1-B, Schedule 1-C or Schedule 1-D; unless (A) Seller or Guarantor shall have made any such representations and warranties with actual knowledge that they were materially false or misleading at the time made or (B) any such representations and warranties have been determined in good faith by Buyer in its sole discretion to be materially false or misleading on a regular basis), and if such default shall be capable of being remedied, such failure shall continue unremedied for more than [***]; or
(d) Immediate Covenant Default. The failure of Seller or Guarantor to perform, comply with or observe any term, covenant or agreement applicable to Seller or Guarantor contained in any of [***], in each case, of this Agreement; or
(e) Additional Covenant Defaults. The failure of Seller or Guarantor to observe or perform any other covenant or agreement contained in the Facility Documents (and not identified in clause (d) of this Section 15), and if such default shall be capable of being remedied, such failure to observe or perform continues unremedied for [***]; or
(f) Judgments. A judgment or judgments for the payment of money in excess of the Litigation Threshold in the aggregate is rendered against Guarantor or Seller, in each case by one or more courts, administrative tribunals or other bodies having jurisdiction and the same is not satisfied, discharged (or provision shall not be made for such discharge) or bonded, or a stay of execution thereof is not procured, within [***] from the date of entry thereof or such longer period during which execution of the same shall have been stayed or bonded, appeal therefrom and cause the execution thereof to be stayed during such appeal; or
(g) Cross-Default. Seller or Guarantor is in default beyond any applicable grace period (A) under any other Indebtedness, financing, hedging, security or other agreement or contract of Guarantor in excess of $[***] in the aggregate, which default involves the failure to pay a material matured obligation or permits the acceleration of the maturity of obligations by any other party to or beneficiary with respect to such agreement or Indebtedness, or (B) in making any payment when due under, or performing any other obligation under any other Indebtedness, financing, hedging, security or other agreement or contract between Seller or Guarantor on the one hand, and Buyer or any of its Affiliates on the other; or
(h) Insolvency Event. An Insolvency Event occurs with respect to Seller or Guarantor; or
(i) Enforceability. For any reason (i) Seller or Guarantor (or an Affiliate thereof) contests the validity, enforceability, perfection or priority of any Lien granted pursuant to the Facility Documents, (ii) Seller, Guarantor or any Affiliate seeks to disaffirm, terminate, limit, challenge, repudiate or reduce its obligations under any Facility Document or (iii) any Facility Document at any time fails to be in full force and effect in all material respects in accordance with its terms or shall not be enforceable in all material respects in accordance with its terms; or
(j) [Reserved]; or
(k) Material Adverse Effect. A Material Adverse Effect occurs and shall not have been waived as determined by Buyer in its reasonable discretion; or
(l) Change in Control. A Change in Control occurs without the prior written consent of Buyer and Seller shall fail to repurchase all Purchased Assets then subject to outstanding Transactions and satisfy all outstanding Obligations before such Change in Control; or
(m) Inability to Perform. A Responsible Officer of Seller or Guarantor admits its inability to, or its intention not to, perform any of its obligations under the Facility Documents; or
(n) Failure to Transfer. Seller or Guarantor fails to transfer the Purchased Assets to Buyer on or prior to the applicable Purchase Date (provided that Buyer has tendered the related Purchase Price and Seller has not repaid such Purchase Price on the same day as such tender)
(o) Government Action. Any Governmental Authority or any person, agency or entity acting or purporting to act under Governmental Authority takes any action to condemn, seize or appropriate, or to assume custody or control of, all or any substantial part of the Property of Seller or Guarantor, or takes any action to displace the management of Seller or Guarantor or to curtail its authority in the conduct of the business of Seller or Guarantor, or takes any action in the nature of enforcement to
remove, limit or restrict the approval of Seller or Guarantor as an issuer, buyer or a seller of Mortgage Loans or securities backed thereby, and such action shall not have been discontinued or stayed within [***]; or
(p) Assignment. Any assignment or attempted assignment by Seller or Guarantor of this Agreement or any other Facility Document or any rights hereunder or thereunder without first obtaining the specific written consent of Buyer; or
(q) [Reserved]; or
(r) Financial Statements. Guarantor’s audited annual financial statements or the notes thereto or other opinions or conclusions stated therein are qualified or limited by reference to the status of Guarantor as a “going concern” or a reference of similar import; or
(s) Servicer Default. A Servicer Termination Event occurs with respect to a Servicer and Seller or Guarantor fails to transfer the servicing of the Underlying Mortgage Loans to a successor servicer that is reasonably acceptable to Buyer within [***] of such Servicer Termination Event;
(t) Failure to Repurchase. Seller or Guarantor fails to (i) remove an Underlying Mortgage Loan from allocation to the Participation Certificate that is no longer an Eligible Mortgage Loan or Eligible Participation Interest within [***] of notice from Buyer;
(u) ERISA.
(i) Seller or Guarantor engages in any nonexempt “prohibited transaction” (as defined in Section 406 of ERISA or Section 4975 of the Code); or
(ii) the occurrence of an Event of ERISA Termination that could reasonably be expected to have a Material Adverse Effect;
(v) Guarantor Event of Default. A Guarantor Event of Default shall have occurred and be continuing under the Guaranty.
Section 16. Remedies.
(a) If an Event of Default occurs, the following rights and remedies are available to Buyer; provided, that an Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing:
(i) At the option of Buyer, exercised by written notice to Seller and Guarantor (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of an Insolvency Event of Seller or Guarantor), the Repurchase Date for each Transaction hereunder, if it has not already occurred, shall be deemed immediately to occur (the date on which such
option is exercised or deemed to have been exercised being referred to hereinafter as the “Accelerated Repurchase Date”).
(ii) If Buyer exercises or is deemed to have exercised the option referred to in subsection (a)(i) of this Section,
(A) Seller’s obligations in such Transactions to repurchase all Purchased Assets at the Repurchase Price therefor on the Repurchase Date determined in accordance with subsection (a)(i) of this Section, (1) shall thereupon become immediately due and payable, (2) all Income paid after such exercise or deemed exercise shall be retained by Buyer and applied to the aggregate unpaid Repurchase Price and any other amounts owed by Seller and Guarantor hereunder, and (3) Seller and Guarantor shall immediately deliver to Buyer any Underlying Mortgage Loans subject to such Transactions then in Seller’s, Guarantor’s or Servicer’s possession or control;
(B) to the extent permitted by applicable law, the Repurchase Price with respect to each such Transaction (determined as of the Accelerated Repurchase Date) shall be increased by the aggregate amount obtained by daily application of, on a 360 day per year basis for the actual number of days during the period from and including the date of the exercise or deemed exercise of such option to but excluding the date of payment of the Repurchase Price as so increased, (x) the Post-Default Rate in effect following an Event of Default to (y) the Repurchase Price for such Transaction as of the Repurchase Date as determined pursuant to subsection (a)(i) of this Section; and
(C) all Income actually received by Buyer pursuant to Section 5 shall be applied to the aggregate unpaid Obligations owed by Seller.
(iii) Upon the occurrence of one or more Events of Default, Buyer shall have the right to obtain physical possession of all files of Seller and Guarantor relating to the Purchased Assets including the Underlying Mortgage Loans and the Repurchase Assets and Residual Collateral and all documents relating to the Participation Certificates, Residual Collateral and Underlying Mortgage Loans which are then or may thereafter come in to the possession of Seller, Guarantor or any third party acting for Seller or Guarantor and Seller and Guarantor shall deliver to Buyer such assignments as Buyer shall request. Buyer shall be entitled to specific performance of all agreements of Seller and Guarantor contained in Facility Documents.
(iv) Upon the occurrence of an Event of Default, Buyer, or Buyer through its Affiliates or designees, may (A) immediately sell, without demand or further notice of any kind, at a public or private sale at such price or prices as Buyer may deem satisfactory any or all of the Purchased Assets including the
Underlying Mortgage Loans, Repurchase Assets and Residual Collateral or (B) in its sole discretion elect, in lieu of selling all or a portion of such Underlying Mortgage Loans, Repurchase Assets and Residual Collateral, to retain such Underlying Mortgage Loans, Repurchase Assets and Residual Collateral, and give Seller credit for such Underlying Mortgage Loans in an amount equal to the market value of the related Mortgage Loans (as determined and adjusted by Buyer in its sole discretion, giving such weight to the Market Value or outstanding principal balance of such Mortgage Loan as Buyer deems appropriate) against the aggregate unpaid Repurchase Price for such Underlying Mortgage Loans, Repurchase Assets and Residual Collateral and any other amounts owing by Seller and Guarantor under the Facility Documents. The proceeds of any disposition of Underlying Mortgage Loans, Repurchase Assets and Residual Collateral effected pursuant to the foregoing shall be applied as determined by Buyer.
(v) Seller shall be liable to Buyer for (A) the amount of all actual expenses, including reasonable documented legal fees and expenses, actually incurred by Buyer in connection with or as a consequence of an Event of Default, (B) all actual costs incurred in connection with covering transactions or hedging transactions, and (C) any other actual loss, damage, cost or expense arising or resulting from the occurrence of an Event of Default. In addition, Buyer shall have the right to satisfy any Obligations with funds remaining in the Reserve Account.
(vi) Buyer shall have, in addition to its rights hereunder, any rights otherwise available to it under any other agreement or applicable law.
(b) Each of Seller and Guarantor acknowledges and that (A) in the absence of a generally recognized source for prices or bid or offer quotations for any Underlying Mortgage Loans, Repurchase Assets and Residual Collateral, Buyer may establish the source therefor in its commercially reasonable discretion and (B) all prices, bids and offers shall be determined together with accrued Income. Each of Seller and Guarantor recognizes that it may not be possible to purchase or sell all of the Underlying Mortgage Loans, Repurchase Assets and Residual Collateral on a particular Business Day, or in a transaction with the same purchaser, or in the same manner because the market for such Underlying Mortgage Loans, Repurchase Assets and Residual Collateral may not be liquid at such time. In view of the nature of the Underlying Mortgage Loans, Repurchase Assets and Residual Collateral, Seller agrees that liquidation of a Transaction or the Underlying Mortgage Loans, Repurchase Assets or Residual Collateral does not require a public purchase or sale and that a good faith private purchase or sale shall be deemed to have been made in a commercially reasonable manner. Accordingly, Buyer may elect, in its sole discretion, the time and manner of liquidating any Underlying Mortgage Loans, Repurchase Assets and Residual Collateral, and nothing contained herein shall (A) obligate Buyer to liquidate any Underlying Mortgage Loans, Repurchase Assets or
Residual Collateral on the occurrence of an Event of Default or to liquidate all of the Underlying Mortgage Loans, Repurchase Assets or Residual Collateral in the same manner [***] or (B) constitute a waiver of any right or remedy of Buyer. Buyer may exercise one or more of the remedies available hereunder immediately upon the occurrence of an Event of Default and at any time thereafter without notice to Seller. All rights and remedies arising under this Agreement as amended from time to time hereunder are cumulative and not exclusive of any other rights or remedies which Buyer may have.
(c) Buyer may enforce its rights and remedies hereunder without prior judicial process or hearing, and each of Seller and Guarantor hereby expressly waives any defenses Seller or Guarantor might otherwise have to require Buyer to enforce its rights by judicial process. Each of Seller and Guarantor also waives any defense (other than a defense of payment or performance) it might otherwise have arising from the use of nonjudicial process, enforcement and sale of all or any portion of the Repurchase Assets or Residual Collateral, or from any other election of remedies. Each of Seller and Guarantor recognizes that nonjudicial remedies are consistent with the usages of the trade, are responsive to commercial necessity and are the result of a bargain at arm’s length.
(d) Without limiting the rights of Buyer hereto to pursue all other legal and equitable rights available to Buyer for Seller’s or Guarantor’s failure to perform its obligations under this Agreement, each of Seller and Guarantor acknowledges and agrees that the remedy at law for any failure to perform obligations hereunder would be inadequate and Buyer shall be entitled to specific performance, injunctive relief, or other equitable remedies in the event of any such failure. The availability of these remedies shall not prohibit Buyer from pursuing any other remedies for such breach, including the recovery of monetary damages.
(e) Buyer shall have, in addition to its rights and remedies under the Facility Documents, all of the rights and remedies provided by applicable federal, state, foreign, and local laws (including, without limitation, if the Transactions are recharacterized as secured financings, the rights and remedies of a secured party under the UCC of the State of New York, to the extent that the UCC is applicable, and the right to offset any mutual debt and claim), in equity, and under any other agreement between Buyer and Seller and/or Guarantor. Without limiting the generality of the foregoing, Buyer shall be entitled to set off the proceeds of the liquidation of the Underlying Mortgage Loans, Repurchase Assets and Residual Collateral against all of Seller’s Obligations to Buyer, whether or not such Obligations are then due, without prejudice to Buyer’s right to recover any deficiency.
Section 17. Indemnification and Expenses.
(a) Each of Seller and Guarantor agrees to hold Buyer, and its Affiliates and their respective officers, directors, employees, agents and advisors (each an
“Indemnified Party”) harmless from and indemnify any Indemnified Party against all liabilities, losses, damages, judgments, costs and expenses of any kind (including reasonable fees of counsel, and Taxes relating to or arising in connection with the ownership of the Purchased Assets, but excluding any Taxes otherwise expressly indemnified against, or excluded from indemnification in Section 8 of this Agreement) which may be imposed on, incurred by or asserted against such Indemnified Party (collectively, “Costs”), relating to or arising out of this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, or any amendment, supplement or modification of, or any waiver or consent under or in respect of, this Agreement, any other Facility Document or any transaction contemplated hereby or thereby (including without limitation any such liabilities, losses, damages, judgments, costs and expenses arising from any acts or omissions of a Servicer), that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction). Without limiting the generality of the foregoing, Seller agrees to hold any Indemnified Party harmless from and indemnify such Indemnified Party against all Costs with respect to the holding of the Underlying Mortgage Loans, that, in each case, results from anything other than the Indemnified Party’s gross negligence or willful misconduct (which gross negligence or willful misconduct is determined by a court of competent jurisdiction). In any suit, proceeding or action brought by an Indemnified Party in connection with any Underlying Mortgage Loans for any sum owing thereunder, or to enforce any provisions of any Underlying Mortgage Loans, Seller and Guarantor will save, indemnify and hold such Indemnified Party harmless from and against all expense, loss or damage suffered by reason of any defense, set-off, counterclaim, recoupment or reduction or liability whatsoever of the account debtor or obligor thereunder, arising out of a breach by Seller or Guarantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such account debtor or obligor or its successors from Seller and Guarantor. Each of Seller and Guarantor also agrees to reimburse an Indemnified Party as and when billed by such Indemnified Party for all the Indemnified Party’s costs and expenses incurred in connection with the enforcement or the preservation of Buyer’s rights under this Agreement, any other Facility Document or any transaction contemplated hereby or thereby, including without limitation the reasonable fees and disbursements of its counsel. Each of Seller’s and Guarantor’s agreements in this Section 17 shall survive the payment in full of the Repurchase Price and the expiration or termination of this Agreement. The Seller hereby acknowledges that its obligations hereunder are recourse obligations of Seller and are not limited to recoveries each Indemnified Party may have with respect to the Underlying Mortgage Loans. Each of Seller, Guarantor and Buyer agree not to assert any claim against the other or any of their respective Affiliates, or any of their respective officers, directors, employees, attorneys and agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to the facility established hereunder, the actual or proposed use of the proceeds of the Transactions, this Agreement or any of the transactions contemplated thereby. THE FOREGOING
INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS EXPRESSLY APPLIES, WITHOUT LIMITATION, TO THE NEGLIGENCE (BUT NOT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT) OF THE INDEMNIFIED PARTIES.
(b) Buyer shall be responsible for the fees, disbursements and expenses of counsel to Buyer, Seller and Guarantor in connection with the development, preparation, negotiation and execution of this Agreement, any other Facility Document or any other documents prepared in connection herewith and therewith which are executed on or about the Restatement Date. Subsequent to the Restatement Date, Seller and Guarantor agrees to pay as and when billed by Buyer all of the out-of-pocket costs and expenses incurred by Buyer in connection with any amendment, supplement or modification to or the enforcement of, this Agreement, any other Facility Document or any other documents prepared in connection herewith or therewith, without regard to the Expense Cap. Each of Seller and Guarantor agrees to pay as and when billed by Buyer all of the reasonable out-of-pocket costs and expenses incurred in connection with the consummation and administration of the transactions contemplated hereby and thereby including without limitation filing fees and all the fees, disbursements and expenses of counsel to Buyer which amount may be deducted from the Purchase Price paid for the first Transaction hereunder. Subject to the limitations set forth in Sections 20 and 31 hereof, each of Seller and Guarantor agrees to pay Buyer all the reasonable out-of-pocket due diligence, inspection, testing and review costs and expenses incurred by Buyer with respect to Mortgage Loans submitted by Seller to be subject to Transactions under this Agreement, including, but not limited to, those out-of-pocket costs and expenses incurred by Buyer pursuant to Sections 16(b) and 20 hereof.
(c) The obligations of Seller from time to time to pay the Repurchase Price, the Price Differential, and all other amounts due under this Agreement shall be full recourse obligations of Seller.
Section 18. Servicing.
(a) Guarantor, on Buyer’s behalf, shall service or contract with a Servicer to service the Underlying Mortgage Loans consistent with the degree of skill and care that Guarantor or such Servicer customarily requires with respect to similar Mortgage Loans owned or managed by Guarantor or such Servicer and in accordance with Accepted Servicing Practices. Guarantor or any other Servicer shall (i) comply with all applicable Requirements of Law, (ii) maintain all state and federal licenses necessary for it to perform its servicing responsibilities under the Servicing Agreement and (iii) not impair the rights of Buyer in any Underlying Mortgage Loan or any payment thereunder.
(b) Guarantor shall, or shall cause the Servicer, to hold or cause to be held all escrow funds collected by the Guarantor or such other Servicer with respect to
any Underlying Mortgage Loans in trust accounts and shall apply the same for the purposes for which such funds were collected.
(c) Guarantor shall, or shall cause the Servicer and any interim servicer to, deposit all collections received by Guarantor or such other Servicer on account of the Underlying Mortgage Loans in accordance with the provisions of Section 5(a)(i).
(d) If any Mortgage Loan that is proposed to be made subject to a Transaction on a Purchase Date is serviced or subserviced by a servicer other than Guarantor or a currently approved Servicer, or if the servicing of any Underlying Mortgage Loan is to be transferred from Guarantor or a currently approved Servicer to another servicer, Guarantor shall, prior to such Purchase Date or servicing transfer date, as applicable, (i) provide Buyer with the related Servicing Agreement pursuant to which such servicer shall service such Mortgage Loans, which Servicing Agreement shall be reasonably acceptable to Buyer in all respects, (ii) obtain Buyer’s prior written consent to the use of such servicer in the performance of such servicing duties and obligations, which consent may be withheld in Buyer’s sole reasonable discretion and (iii) provide Buyer with a fully executed servicer notice or letter agreement, executed by Buyer, Guarantor, Seller and such Servicer (each, a “Servicer Side Letter”), in form and substance acceptable to Buyer with respect to such Servicer. In no event shall Guarantor’s use of a third party Servicer relieve Guarantor of its obligations hereunder, and Guarantor shall remain liable under this Agreement as if Guarantor were servicing such Mortgage Loans directly. Guarantor hereby agrees and acknowledges, and shall cause any Servicer to agree and acknowledge, that Buyer or its designees shall have the right to conduct examinations and audits of the Servicer with respect to the servicing of the Underlying Mortgage Loans. Buyer shall also have the right to obtain copies of all Records and files of the Servicer relating to the Underlying Mortgage Loans, including all documents relating to the Underlying Mortgage Loans and the servicing thereof.
(e) Upon the occurrence of an Event of Default hereunder or a Servicer Termination Event, Buyer shall have the right to immediately terminate Guarantor’s or such Servicer’s right to service the Underlying Mortgage Loans under the Servicing Agreement (subject to the related servicing transfer period) without payment of any penalty or termination fee. Guarantor and any other Servicer shall cooperate in transferring the servicing and all Records of the Underlying Mortgage Loans to a successor servicer appointed by Buyer in its discretion.
(f) If Guarantor should discover that, for any reason whatsoever, Guarantor or any entity responsible by contract to Guarantor for managing or servicing any such Underlying Mortgage Loan has materially failed to perform fully Guarantor’s obligations under the Facility Documents or any of the obligations of such entities with respect to the Underlying Mortgage Loans, Guarantor shall promptly notify Buyer and promptly remedy any non-compliance.
(g) The Guarantor’s or such other Servicer’s rights and obligations to interim service the Underlying Mortgage Loans shall terminate on the [***], unless otherwise directed in writing by the Buyer prior to such date. For purposes of this provision, notice provided by electronic mail shall constitute written notice. For the avoidance of doubt, this Subsection 18(g) shall no longer apply to any Underlying Mortgage Loan that is no longer subject to a Transaction in accordance with the provisions of this Agreement and therefore is no longer subject to a Transaction. Upon termination, the Guarantor or such other Servicer shall transfer servicing, including, without limitation, delivery of all servicing files to the designee of the Buyer. The Guarantor or such other Servicer’s delivery of servicing files shall be in accordance with Accepted Servicing Practices. The Guarantor and any other Servicer shall have no right to select a subservicer or successor servicer. After the servicing terminates and until the servicing transfer date, the Guarantor or such other Servicer shall service the Underlying Mortgage Loans in accordance with the terms of this Agreement and for the benefit of the Buyer.
Section 19. Recording of Communications. Buyer, Seller and Guarantor shall have the right (but not the obligation) from time to time to make or cause to be made tape recordings of communications between its employees and those of the other party with respect to Transactions upon notice to the other party of such recording.
Section 20. Due Diligence. Each of Seller and Guarantor acknowledges that Buyer has the right to perform continuing due diligence reviews with respect to the Underlying Mortgage Loans, Seller, and each Servicer, including, without limitation, financial information, organization documents and purchase agreements for each pool of Underlying Mortgage Loans (to the extent not covered by confidentiality agreements), for purposes of verifying compliance with the representations, warranties and specifications made hereunder, to review the servicing of the Underlying Mortgage Loans, or otherwise, and each of Seller and Guarantor agrees that (a) upon reasonable prior notice to Seller and Guarantor, unless an Event of Default shall have occurred, in which case no notice is required, Buyer or its Authorized Representatives will be permitted during normal business hours to examine, inspect, and make copies and extracts of the Mortgage Files and any and all documents, records, agreements, instruments or information relating to such Underlying Mortgage Loans (the “Due Diligence Documents”) in the possession or under the control of Seller, Guarantor and/or the Custodian, or (b) upon request, Seller shall create and deliver to Buyer promptly, an electronic copy via email to [***], in a format acceptable to Buyer, of such Due Diligence Documents as Buyer may request. Each of Seller and Guarantor also shall make available to Buyer a knowledgeable financial or accounting officer for the purpose of answering questions respecting the Mortgage Files and the Underlying Mortgage Loans. Without limiting the generality of the foregoing, Seller acknowledges that Buyer may purchase Purchased Assets from Seller and enter into additional Transactions with respect to the Underlying Mortgage Loans based solely upon the information provided by Seller to Buyer in the Asset Schedule and the representations, warranties and covenants contained herein, and that Buyer, at its option, has the right at any time to conduct a partial or complete due diligence review on some or all of the Underlying Mortgage Loans subject to a Transaction, including, without limitation, ordering new credit reports and new appraisals on the related
Mortgaged Properties with respect to the Underlying Mortgage Loans and otherwise re-generating the information used to originate such Underlying Mortgage Loan, which information may be used by Buyer to calculate Market Value. Buyer may underwrite such Underlying Mortgage Loans itself or engage a mutually agreed upon third party underwriter to perform such underwriting. Each of Seller and Guarantor agrees to cooperate with Buyer or any third party underwriter in connection with such underwriting, including, but not limited to, providing Buyer with access to any documents, records, agreements, instruments or information relating to such Mortgage Loans in the possession, or under the control, of Seller or Guarantor. Subject to any applicable Expense Cap, Seller further agrees that Seller shall pay all out-of-pocket costs and expenses incurred by Buyer in connection with Buyer’s due diligence activities pursuant to this Section 20.
Section 21. Assignability.
(a) The rights and obligations of the parties under this Agreement and under any Transaction shall not be assigned by Seller without the prior written consent of Buyer. Subject to the foregoing, this Agreement and any Transactions shall be binding upon and shall inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement express or implied, shall give to any Person, other than the parties to this Agreement and their successors hereunder, any benefit of any legal or equitable right, power, remedy or claim under this Agreement. Buyer may from time to time assign all or a portion of its rights and obligations under this Agreement and the Facility Documents to any Person pursuant to an executed assignment and acceptance by Buyer and assignee (“Assignment and Acceptance”), specifying the percentage or portion of such rights and obligations assigned upon [***] to Seller and [***]; provided, that with respect to any assignment to an Affiliate of Buyer or any assignment by Buyer during the continuation of an Event of Default, no such notice to or consent from Seller shall be required. Upon such assignment, (a) such assignee shall be a party hereto and to each Facility Document to the extent of the percentage or portion set forth in the Assignment and Acceptance, and shall succeed to the applicable rights and obligations of Buyer hereunder, and (b) Buyer shall, to the extent that such rights and obligations have been so assigned by it be released from its obligations hereunder and under the Facility Documents. Unless otherwise stated in the Assignment and Acceptance, Seller shall continue to take directions solely from Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any prospective assignee any document or other information delivered to Buyer by Seller provided that such prospective assignee agrees to hold such information subject to the confidentiality provisions of this Agreement.
(b) Buyer, upon [***] written notice to Seller (provided, that the failure to give such notice shall not affect the validity of such sale), may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement to any Person; provided, however, that (i) Buyer’s obligations under this Agreement shall remain unchanged, (ii) Buyer shall remain solely responsible to the
other parties hereto for the performance of such obligations; and (iii) Seller shall continue to deal solely and directly with Buyer in connection with Buyer’s rights and obligations under this Agreement and the other Facility Documents except as provided in Section 8; provided that no such restrictions shall apply with respect to any sale to any Affiliate of Buyer or if an Event of Default has occurred and is continuing; and provided further that Buyer shall act as agent for all purchasers, assignees and point of contact for Seller pursuant to agency provisions to be agreed upon by Buyer, its intended purchasers and/or assignees and Seller.
(c) Buyer may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 21, disclose to the assignee or participant or proposed assignee or participant, as the case may be, any information relating to Seller or to any aspect of the Transactions that has been furnished to Buyer by or on behalf of Seller; provided that such assignee or participant agrees to hold such information subject to the confidentiality provisions of this Agreement..
(d) In the event Buyer assigns all or a portion of its rights and obligations under this Agreement, the parties hereto agree to negotiate in good faith an amendment to this Agreement to add agency provisions similar to those included in repurchase agreements for similar syndicated repurchase facilities.
Section 22. Transfer and Maintenance of Register.
(a) Subject to acceptance and recording thereof pursuant to paragraph (b) of this Section 22, from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of Buyer under this Agreement.
(b) Buyer shall maintain, on Seller’s behalf and for review by Seller, a register (the “Register”) on which it shall record Buyer’s rights hereunder, and each Assignment and Acceptance and participation. The Register shall include the names and addresses of Buyer (including all assignees, successors and participants) and the percentage or portion of such rights and obligations assigned or participated. Failure to make any such recordation, or any error in such recordation shall not affect Seller’s obligations in respect of such rights. If Buyer sells a participation in its rights hereunder, it shall provide Seller and maintain as agent of Seller, the information described in this paragraph and permit Seller to review such information as reasonably needed for Seller to comply with its obligations under this Agreement or under any applicable Requirement of Law.
Section 23. Tax Treatment. Each party to this Agreement acknowledges that it is its intent for purposes of U.S. federal taxes and all relevant state and local income and franchise taxes, to treat each Transaction as indebtedness of Seller that is secured by the Purchased Assets and Repurchase Assets and that the Purchased Assets and Repurchase Assets are owned by
Seller in the absence of a Default by Seller. All parties to this Agreement agree to such treatment and agree to take no action inconsistent with this treatment, unless required by law.
Section 24. Set-Off.
(a) In addition to any rights and remedies of Buyer hereunder and by law, Buyer shall have the right during the continuation of an Event of Default, without prior notice to Seller or Guarantor, any such notice being expressly waived by Seller and Guarantor to the extent permitted by applicable law to set-off and appropriate and apply against any obligation from each of Seller and Guarantor to Buyer or any Affiliate thereof any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other obligation (including to return excess margin), credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by or due from Buyer or any Affiliate thereof to or for the credit or the account of Seller or Guarantor. Buyer agrees promptly to notify Seller and Guarantor after any such set-off and application made by Buyer; provided that the failure to give such notice shall not affect the validity of such set-off and application.
(b) Buyer shall at any time have the right, in each case until such time as Buyer determines otherwise, to retain, to suspend payment or performance of, or to decline to remit, any amounts or deliver any property that Buyer would otherwise be obligated to pay, remit or deliver to Seller or Guarantor hereunder if an Event of Default has occurred. For avoidance of doubt and not as a limitation, Buyer may set-off any amounts in the Reserve Account against any outstanding Obligations provided an Event of Default has occurred and is continuing, but may not set-off, transfer or withdraw any amounts from the Reserve Account unless an Event of Default has occurred and is continuing.
Section 25. Terminability. Each representation and warranty made or deemed to be made by entering into a Transaction, herein or pursuant hereto shall survive the making of such representation and warranty, and Buyer shall not be deemed to have waived any Default that may arise because any such representation or warranty shall have proved to be false or misleading, notwithstanding that Buyer may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time the Transaction was made. The obligations of Seller under Section 17 hereof shall survive the termination of this Agreement.
Section 26. Notices and Other Communications. Except as otherwise expressly permitted by this Agreement, all notices, requests and other communications provided for herein (including without limitation any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including without limitation by electronic mail or facsimile) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof or thereof; or, as to any party, at such other address as shall be designated by such party in a written notice to each other party. Except as otherwise provided in this Agreement and except for notices given under Sections 3 and 4 (which shall be effective only on receipt), all such communications shall be deemed to have been duly given when
transmitted by facsimile or electronic mail or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. In all cases, to the extent that the related individual set forth in the respective “Attention” line is no longer employed by the respective Person, such notice may be given to the attention of a Responsible Officer of the respective Person or to the attention of such individual or individuals as subsequently notified in writing by a Responsible Officer of the respective Person. Notwithstanding anything herein to the contrary, notice from Buyer to Seller shall also be deemed to be notice from Buyer to Guarantor, and notice from Buyer to Guarantor shall also be deemed to be notice from Buyer to Seller.
Section 27. Entire Agreement; Severability; Single Agreement.
(a) This Agreement and the Facility Documents collectively constitute the entire understanding between Buyer, Seller and Guarantor with respect to the subject matter they cover and shall supersede any existing agreements between the parties containing general terms and conditions for repurchase transactions involving the Purchased Assets and the Underlying Mortgage Loans. By acceptance of this Agreement, Buyer, Seller and Guarantor acknowledges that they have not made, and are not relying upon, any statements, representations, promises or undertakings not contained in this Agreement. Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.
(b) Buyer and Seller acknowledge that, and have entered hereinto and will enter into each Transaction hereunder in consideration of and in reliance upon the fact that, all Transactions hereunder constitute a single business and contractual relationship and that each has been entered into in consideration of the other Transactions. Accordingly, each of Buyer and Seller agrees (i) to perform all of its obligations in respect of each Transaction hereunder, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Transactions hereunder, (ii) that payments, deliveries, and other transfers made by either of them in respect of any Transaction shall be deemed to have been made in consideration of payments, deliveries, and other transfers in respect of any other Transactions hereunder, and the obligations to make any such payments, deliveries, and other transfers may be applied against each other and netted and (iii) to promptly provide notice to the other after any such set off or application.
Section 28. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL GOVERN.
Section 29. SUBMISSION TO JURISDICTION; WAIVERS. BUYER, GUARANTOR AND SELLER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH BUYER SHALL HAVE BEEN NOTIFIED; PROVIDED THAT, AT THE TIME OF SUCH MAILING AN ELECTRONIC COPY OF SUCH SERVICE OF PROCESS IS ALSO SENT BY ELECTRONIC MAIL TO THE PERSONS SPECIFIED IN THE ADDRESS FOR NOTICES FOR SUCH PARTY ON THE SIGNATURE PAGE HERETO (OR SUCH OTHER PERSONS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED);
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION; AND
(e) BUYER, GUARANTOR AND SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 30. No Waivers, etc. No failure on the part of Buyer to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Facility Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Facility Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. An Event of Default shall be deemed to be continuing unless expressly waived by Buyer in writing.
Section 31. Netting. If Buyer, Guarantor and Seller are “financial institutions” as now or hereinafter defined in Section 4402 of Title 12 of the United States Code (“Section 4402”) and any rules or regulations promulgated thereunder,
(a) All amounts to be paid or advanced by one party to or on behalf of the other under this Agreement or any Transaction hereunder shall be deemed to be “payment obligations” and all amounts to be received by or on behalf of one party from the other under this Agreement or any Transaction hereunder shall be deemed to be “payment entitlements” within the meaning of Section 4402, and this Agreement shall be deemed to be a “netting contract” as defined in Section 4402.
(b) The payment obligations and the payment entitlements of the parties hereto pursuant to this Agreement and any Transaction hereunder shall be netted as follows. In the event that Buyer or Seller shall fail to honor any payment obligation under this Agreement or any Transaction hereunder (the “Defaulting Party”), the other party (the “Nondefaulting Party”) shall be entitled to reduce the amount of any payment to be made by the Nondefaulting Party to the Defaulting Party by the amount of the payment obligation that the Defaulting Party failed to honor.
Section 32. Confidentiality.
(a) Buyer, Seller and Guarantor each hereby acknowledges and agrees that any oral information relating to pricing and/or financial covenants under any Facility Document communicated by a Responsible Officer and/or the Treasurer of Seller and Guarantor during the course of any due diligence review and all written or computer-readable information provided by one party to any other regarding the terms and provisions set forth in any of the Facility Documents and any supplements and amendments thereto and notices thereunder (including any information delivered pursuant to the Officer’s Compliance Certificate) or the Transactions contemplated thereby or pursuant to the terms thereof, including, but not limited to, the name of, or identifying information with respect to Buyer, any pricing terms, or other nonpublic business or financial information (including, without limitation, any sub-limits, financial covenants, financial statements and performance data), the existence of this Agreement and the Transactions with Buyer (the “Confidential Information”) shall be kept confidential and shall not be divulged to any party without the prior written consent of such other parties except to the extent that (i) it is necessary to disclose to its Affiliates and its and their employees, directors, officers, advisors (including legal counsel, accountants, and auditors), representatives and servicers, (ii) it is requested
or required by governmental agencies, regulatory bodies or other legal, governmental or regulatory process, in which case the receiving party shall provide prior written notice to disclosing party to the extent not prohibited by the applicable law or regulation, (iii) any of the Confidential Information is in the public domain other than due to a breach of this covenant, (iv) disclosure to any approved hedge counterparty to the extent necessary to obtain any Interest Rate Protection Agreement or, (v) an Event of Default has occurred and Buyer determines such information to be necessary or desirable to disclose in connection with the marketing and sales of the Purchased Assets, including the Underlying Mortgage Loans, or otherwise to enforce or exercise Buyer’s rights hereunder provided that any such Person agrees to hold such information subject to the confidentiality provisions of this Agreement. Seller, Guarantor and Buyer shall be responsible for any breach of the terms of this Section 32(a) by any Person that it discloses Confidential Information to pursuant to clause (i) above. Each of Seller and Guarantor shall not, without the written consent of Buyer, make any communication, press release, public announcement or statement in any way connected to the existence or terms of this Agreement or the other Facility Documents or the Transactions contemplated hereby or thereby, except where such communication or announcement is required by law or regulation, in which event Seller and Guarantor will consult and cooperate with Buyer with respect to the wording of any such announcement. Notwithstanding the foregoing or anything to the contrary contained herein or in any other Facility Document, the parties hereto may disclose to any and all Persons, without limitation of any kind, the federal, state and local tax treatment or tax structure of the Transactions, any fact relevant to understanding the federal, state and local tax treatment or tax structure of the Transactions, and all materials of any kind (including opinions or other tax analyses) relating to such federal, state and local tax treatment and that may be relevant to understanding such tax treatment or tax structure; provided that the “tax treatment” or “tax structure” shall be limited to any facts relevant to the U.S. federal, state or local tax treatment of any Transaction contemplated hereunder and specifically does not include any information relating to the identity of Buyer or any pricing terms hereunder. In addition, loanDepot, Inc., Seller and Guarantor may disclose the Confidential Information with prior (if feasible) written notice to Buyer, any disclosures or filing required under Securities and Exchange Commission (“SEC”) or state securities’ laws; provided that none of loanDepot, Inc., Seller nor Guarantor shall file the Pricing Letter without Buyer’s prior written consent. The provisions set forth in this Section 32(a) shall survive the termination of this Agreement for one year.
(b) Notwithstanding anything in this Agreement to the contrary, each of Seller, Guarantor and Buyer understands that Confidential Information disclosed hereunder may contain “nonpublic personal information”, as that term is defined in Section 509(4) of the Gramm-Leach-Bliley Act (the “GLB Act”), and each party agrees to maintain such nonpublic personal information that it receives hereunder in accordance with the GLB Act and other applicable local, state and federal laws relating to privacy and data protection. Seller and Guarantor shall implement
administrative, technical and physical safeguards and other security measures designed to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” (as defined in the GLB Act) of Buyer or any Affiliate of Buyer which Buyer holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. Upon request, each of Seller and Guarantor will provide evidence reasonably satisfactory to allow Buyer to confirm that Seller or Guarantor, as applicable, has satisfied its obligations as required under this Section 32(b). Without limitation, this may include Buyer’s review of audits, summaries of test results, and other equivalent evaluations of Seller and Guarantor. Unless otherwise prohibited by a Governmental Authority or any Requirement of Law, each party hereto shall notify the other parties hereto promptly following discovery of any breach or compromise of the security, confidentiality, or integrity of nonpublic personal information of the customers and consumers of such party or any Affiliate of such party provided directly to by the other parties hereto. Each party shall provide such notice to the other parties by personal delivery, by facsimile with confirmation of receipt, or by overnight courier with confirmation of receipt to the applicable requesting individual. The provisions set forth in this Section 32(b) shall survive the termination of this Agreement for as long as each party retains any “nonpublic personal information” disclosed hereunder.
Section 33. Intent.
(a) The parties intend and recognize that (i) this Agreement and each Transaction hereunder is a “repurchase agreement” as that term is defined in Section 101 of the Bankruptcy Code, a “securities contract” as that term is defined in Section 741 of the Bankruptcy Code, and a “master netting agreement” as that term is defined in Section 101(38A)(A) of the Bankruptcy Code, (ii) all payments hereunder are deemed “margin payments” or “settlement payments” as defined in the Bankruptcy Code, and (iii) the pledge of the Repurchase Assets constitutes “a security agreement or other arrangement or other credit enhancement” that is “related to” this Agreement and Transactions hereunder within the meaning of Sections 101(38A)(A), 101(47)(A)(v) and 741(7)(A)(xi) of the Bankruptcy Code. Each of Seller, Guarantor and Buyer further recognize and intend that this Agreement is an agreement to provide financial accommodations and is not subject to assumption pursuant to Bankruptcy Code Section 365(a).
(b) Buyer’s right to liquidate the Purchased Assets, including the Underlying Mortgage Loans, delivered to it in connection with the Transactions hereunder or to accelerate or terminate this Agreement or otherwise exercise any other remedies pursuant to Section 16 hereof is a contractual right to liquidate, accelerate or terminate such Transaction as described in Bankruptcy Code Sections 362(b)(6), 362(b)(7), 362(b)(27), 546(e), 546(f), 546(j), 555, 559 and 561; Buyer’s right to set-off claims and appropriate and apply any and all deposits of money or property or any other indebtedness at any time held or owing by Buyer to or for the
credit of the account of any Affiliate against and on account of the obligations and liabilities of Seller and Guarantor pursuant to Section 24 hereof is a contractual right as described in Bankruptcy Code Sections 553 and 561; and; any payments or transfers of property made with respect to this Agreement or any Transaction to satisfy a Margin Deficit shall be considered a “margin payment” or “settlement payment” as such terms are defined in Bankruptcy Code Sections 741(5) and 741(8).
(c) [Reserved].
(d) Each party agrees that this Agreement and each Transaction hereunder is intended to create mutuality of obligations among the parties, and as such, this Agreement and each Transaction hereunder constitutes a contract which (i) is between all of the parties and (ii) places each party in the same right and capacity.
(e) Each party agrees that it shall not challenge, and hereby waives to the fullest extent available under applicable law it’s right to challenge, the characterization of any Transaction under this Agreement or this Agreement as a “repurchase agreement,” “securities contract” and/or “master netting agreement” within the meaning of the Bankruptcy Code.
(f) Each party agrees that this Agreement and the Facility Documents and the Transactions entered into hereunder are part of an integrated, simultaneously-closing suite of financial contracts.
(g) The parties hereto agree and intend that (x) each Underlying Mortgage Loan shall constitute a “mortgage loan” or an “interest in a mortgage loan” as such terms are used in Sections 101(47)(A)(i) and 741(7)(A)(i) of the Bankruptcy Code, as amended and (y) each Purchased Asset shall constitute an “interest in a mortgage loan” as such phrase is used in Sections 101(47)(A)(i) and 741(7)(A)(i) of the Bankruptcy Code, as amended.
Section 34. Conflicts. In the event of any conflict between the terms of this Agreement and any other Facility Document, the documents shall control in the following order of priority: first, the terms of this Agreement shall prevail, and second, the terms of the other Facility Documents shall prevail.
Section 35. Authorizations. Any of the persons whose signatures and titles appear on Exhibit B to the Pricing Side Letter are authorized, acting singly, to act for Seller, Guarantor or Buyer under this Agreement. The Seller or Guarantor may amend Exhibit B to the Pricing Side Letter from time to time by delivering a revised Exhibit B to Buyer and expressly stating that such revised Exhibit B shall replace the existing Exhibit B to the Pricing Side Letter.
Section 36. Miscellaneous.
(a) Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument,
and any of the parties hereto may execute this Agreement by signing any such counterpart. Counterparts may be delivered electronically. The parties agree that this Agreement, any addendum or amendment hereto or any other document necessary for the consummation of the transaction contemplated by this Agreement may be accepted, executed or agreed to through the use of an electronic signature in accordance with the E-Sign, the UETA and any applicable state law. Any document accepted, executed or agreed to in conformity with such laws will be binding on all parties hereto to the same extent as if it were physically executed and each party hereby consents to the use of any secure third party electronic signature capture service providers, as long as such service providers use system logs and audit trails that establish a temporal and process link between the presentation of identity documents and the electronic signing, together with identifying information that can be used to verify the electronic signature and its attribution to the signer’s identity and evidence of the signer’s agreement to conduct the transaction electronically and of the signer’s execution of each electronic signature.
(b) Captions. The captions and headings appearing herein are for included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.
(c) Acknowledgment. Each party hereby acknowledges that:
(i) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Facility Documents;
(ii) it has no fiduciary relationship to any other party in connection with the Facility Documents;
(iii) no joint venture exists between Buyer and Seller or Guarantor as a result of the Facility Documents; and
(iv) it has made its own independent decisions to enter into the Facility Documents and each Transaction and as to whether such Transaction is appropriate and proper for it based upon its own judgment and upon advice from such advisors (including without limitation, legal counsel and accountants) as it has deemed necessary and it is not relying upon any advice from any other party as to any aspect of the Transactions, including without limitation, the legal, accounting or tax treatment of such Transactions.
(d) Documents Mutually Drafted. Seller, Guarantor and Buyer agree that this Agreement and each other Facility Document prepared in connection with the Transactions set forth herein have been mutually drafted and negotiated by each party, and consequently such documents shall not be construed against either party as the drafter thereof.
Section 37. Recognition of the U.S. Special Resolution Regimes.
(a) In the event that Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from Buyer of this Agreement and/or the Facility Documents, and any interest and obligation in or under this Agreement and/or the Facility Documents, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement and/or the Facility Documents, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.
(b) In the event that Buyer or a BHC Act Affiliate of Buyer becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement and/or the Facility Documents that may be exercised against Buyer are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement and/or the Facility Documents were governed by the laws of the United States or a state of the United States.
Section 38. Effect of Benchmark Transition Event.
(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in any other Facility Document, upon the occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, Buyer may amend this Agreement to replace Term SOFR with a Benchmark Replacement. Any such amendment will become effective at [***] after Buyer has [***]. No replacement of Term SOFR with a Benchmark Replacement pursuant to this Section 38 will occur prior to the applicable Benchmark Transition Start Date.
(b) Benchmark Replacement Conforming Changes. In connection with a Benchmark Replacement, Buyer will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Facility Document, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of Seller or Guarantor.
(c) Notices; Standards for Decisions and Determinations. Buyer will promptly notify Seller and Guarantor of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date and Benchmark Transition Start Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Benchmark Replacement Conforming Changes and (iv) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Buyer pursuant to this Section 38 including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in Buyer’s sole discretion and without consent from Seller or Guarantor.
(d) Benchmark Unavailability Period. Upon Seller’s or Guarantor’s receipt of notice of the commencement of a Benchmark Unavailability Period, Seller or Guarantor may revoke any request for a proposed Transaction to be entered into during any Benchmark Unavailability Period.
Section 39. General Interpretive Principles. For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(c) references herein to “Articles”, “Sections”, “Subsections”, “Paragraphs”, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) a reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provision;
(f) the term “include” or “including” shall mean without limitation by reason of enumeration;
(g) all times specified herein or in any other Facility Document (unless expressly specified otherwise) are local times in New York, New York unless otherwise stated; and
(h) all references herein or in any Facility Document to “good faith” means good faith as defined in Section 5-102(7) of the UCC as in effect in the State of New York.
Section 40. Single Purpose Entity.
Seller shall (i) own no assets, and shall not engage in any business, other than the assets and transactions specifically contemplated by this Agreement and any other Facility Documents, , (ii) not incur any Indebtedness or other obligation, secured or unsecured, direct or indirect, absolute or contingent (including guaranteeing any obligation), other than as otherwise permitted under this Agreement or other Facility Documents, (iii) not make any loans or advances to any Affiliate or third party and shall not acquire obligations or securities of its Affiliates, other than assets and transactions specifically contemplated by the Facility Documents, (iv) pay its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) only from its own assets, (v) comply with the provisions of its governing documents, (vi) do all things necessary to observe organizational formalities and to preserve its existence, and shall not amend, modify, waive provisions of or otherwise change its governing documents without the prior written consent of Buyer, which shall not be unreasonably withheld, (vii) maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates (except that such financial statements may be consolidated to the extent consolidation is required under GAAP or as a matter of Requirements of Law); (viii) be, and at all times shall hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate), shall correct any known misunderstanding regarding its status as a separate entity, shall conduct business in its own name, and shall not identify itself or any of its Affiliates as a division of the other, (ix) maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall remain solvent, (x) not engage in or suffer any Change in Control, dissolution, winding up, liquidation, consolidation or merger in whole or in part or convey or transfer all or substantially all of its properties and assets to any Person (except as contemplated herein), (xi) not commingle its funds or other assets with those of any Affiliate or any other Person (other than ordinary course commingling of funds, which commingled funds are promptly remitted to the appropriate account of Seller as set forth herein) and shall maintain its properties and assets in such a manner that it would not be costly or difficult to identify, segregate or ascertain its properties and assets from those of others, (xii) maintain its properties, assets and accounts separate from those of any Affiliate or any other Person, (xiii) not hold itself out to be responsible for the debts or obligations of any other Person, (xiv) not, without the prior unanimous written consent of all of its members and its Independent Directors, take any act of insolvency and when voting on such matters the members shall consider only the interests of Seller, including its creditors, (xv) not enter into any transaction with any Affiliate (other than the Facility Documents) except on commercially reasonable terms similar to those available to unaffiliated parties in an arm’s-length transaction, (xvi) use separate stationery, invoices and checks bearing its own name, (xvii) allocate fairly and reasonably any overhead for shared office space and for services performed by an employee of an Affiliate, and (xviii) not pledge its assets to secure the obligations of any other Person (other than pursuant to the Facility Documents), (xix) have at all times at least one (1) Independent Director, and (xx) provide Buyer [***] prior written notice of the removal and/or replacement of any Independent Director, together with the name and contact information of the replacement Independent Director and evidence of the replacement’s satisfaction of the definition of Independent Director and any Independent Director of the Seller shall not have any fiduciary duty to anyone including the holders of the equity interests in Seller and any of its Affiliates.
Section 41. Amendment and Restatement. The parties hereto desire to enter into this Agreement in order to amend and restate the Existing Agreement in its entirety. As of the date hereof, the terms and provisions of the Existing Agreement shall be and hereby are amended, superseded and restated in their respective entireties by the terms and provisions of this Agreement. This Agreement is not intended to, and shall not, effect a novation of any of the obligations of the parties to the Existing Agreement, but shall merely be an amendment and restatement of the terms governing such obligations.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date set forth above.
BUYER:
BANK OF MONTREAL
By:
Name:
Title:
Address for Notices:
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attn: [***]
Email: [***]
With a copy to:
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attn: Legal Department
Signature Page to Amended and Restated Master Repurchase Agreement
SELLER:
LOANDEPOT BMO WAREHOUSE, LLC
By:
Name:
Title:
Address for Notices:
loanDepot BMO Warehouse, LLC
c/o loanDepot.com, LLC
6561 Irvine Center Drive
Irvine CA 92618
Attention: [***]
Email: [***]
Telephone: [***]
With copies to:
loanDepot BMO Warehouse, LLC
c/o loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: General Counsel
Email: [***]
Signature Page to Amended and Restated Master Repurchase Agreement
GUARANTOR:
LOANDEPOT.COM, LLC
By:
Name:
Title:
Address for Notices:
LOANDEPOT.COM, LLC
6561 Irvine Center Drive
Irvine CA 92618
Attention: [***]
Email: [***]
Telephone: [***]
With copies to:
loanDepot.com, LLC
6561 Irvine Center Drive
Irvine, CA 92618
Attention: General Counsel
Email: [***]
Signature Page to Amended and Restated Master Repurchase Agreement
SCHEDULE 1-A
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
UNDERLYING MORTGAGE LOANS
Each of Seller and Guarantor makes the following representations and warranties to Buyer with respect to each Underlying Mortgage Loan, as of the Purchase Date for such Underlying Mortgage Loan and at all times while such Underlying Mortgage Loan is subject to a Transaction hereunder. Notwithstanding the preceding, to the extent a defect with respect to a Scratch and Dent Mortgage Loan is disclosed by Seller or Guarantor to Buyer in writing (which disclosure may be made by identifying any defects in the loan tape delivered by Seller or Guarantor to Buyer) prior to the related Purchase Date, Buyer may, in its sole discretion, expressly waive in writing (which waiver may be via email) any applicable representation and warranty solely with respect to such Scratch and Dent Mortgage Loan.
(a) Payments Current. No payment required under the Underlying Mortgage Loan is thirty (30) days or more delinquent using the MBA delinquency methodology (“Delinquent”) and, as of the related Purchase Date, no payment under the Underlying Mortgage Loan has been thirty (30) days or more Delinquent at any time, nor (other than with respect to a Scratch and Dent Mortgage Loan) has any payment under the Underlying Mortgage Loan been Delinquent at any time since the origination of the Underlying Mortgage Loan. The first Monthly Payment shall be made, or shall have been made, with respect to the Underlying Mortgage Loan on its Due Date or within thirty (30) days thereof, all in accordance with the terms of the related Mortgage Note. No payment required under the Underlying Mortgage Loan is or has ever been subject to forbearance for any reason.
(b) No Outstanding Charges. All taxes and governmental assessments or other similar charges, levies or assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid, or an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed but is not yet due and payable. Neither Guarantor nor the Qualified Originator from which Guarantor acquired the Underlying Mortgage Loan has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor, directly or indirectly, for the payment of any amount required under the Underlying Mortgage Loan, except for interest accruing from the date of the Mortgage Note or date of disbursement of the proceeds of the Underlying Mortgage Loan, whichever is earlier, to the day which precedes by one (1) month the Due Date of the first installment of principal and/or interest thereunder.
(c) Original Terms Unmodified. The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect, from the date of origination; except by a written instrument which has been recorded, if necessary to protect the interests of Buyer, and which has been delivered to the Custodian and the terms of which are reflected in the Asset Schedule. The substance of any such waiver, alteration or modification has been approved by the title insurer, to the extent required, and its terms are reflected on the Asset
Schedule. No Mortgagor in respect of the Underlying Mortgage Loan has been released, in whole or in part, except in connection with an assumption agreement approved by the title insurer, to the extent required by such policy, and which assumption agreement is part of the Mortgage File delivered to the Custodian and the terms of which are reflected in the Asset Schedule. The related Mortgage and Mortgage Note contain the entire agreement of the parties and all of the obligations of the Guarantor under the Underlying Mortgage Loans.
(d) No Defenses. The Underlying Mortgage Loan is not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto, and no Mortgagor in respect of the Underlying Mortgage Loan was a debtor in any state or Federal bankruptcy or insolvency proceeding at the time the Underlying Mortgage Loan was originated. The Mortgagor in respect of the Underlying Mortgage Loan is not currently a debtor in any state or federal bankruptcy or insolvency proceeding.
(e) Hazard Insurance. The Mortgaged Property is insured by a fire and extended perils insurance policy, issued by a qualified insurer as defined by the applicable Loan Program Authority, and such other hazards as are customary in the area where the Mortgaged Property is located, and to the extent required by Guarantor as of the date of origination consistent with the applicable Loan Program Authority’s requirements, against earthquake and other risks insured against by Persons operating like properties in the locality of the Mortgaged Property, in an amount that would have been required as of the date of origination in accordance with the applicable Loan Program Authority’s requirements. If any portion of the Mortgaged Property is in an area identified by any federal Governmental Authority as having special flood hazards, and flood insurance is available, a flood insurance policy meeting the current guidelines of the Federal Emergency Management Agency is in effect with a generally acceptable insurance carrier, in an amount representing coverage not less than the least of (1) the outstanding principal balance of the Underlying Mortgage Loan and, with respect to any Second Lien Mortgage Loan, the outstanding principal balance of the senior mortgage loan, (2) the full insurable value of the Mortgaged Property, and (3) the maximum amount of insurance available under the National Flood Insurance Act of 1968, as amended by the Flood Disaster Protection Act of 1974. All such insurance policies (collectively, the “hazard insurance policy”) contain a standard mortgagee clause naming Guarantor, its successors and assigns (including, without limitation, subsequent owners of the Underlying Mortgage Loan), as mortgagee, and may not be reduced, terminated or canceled without thirty (30) days’ prior written notice to the mortgagee. No such notice has been received by Guarantor. All premiums on such insurance policy have been paid. The related Mortgage obligates the Mortgagor to maintain all such insurance and, at such Mortgagor’s failure to do so, authorizes the mortgagee to maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from such Mortgagor. Where required by state law or regulation, the Mortgagor has been given an opportunity to choose the carrier of the required hazard insurance, provided the policy is not a “master” or “blanket” hazard insurance policy covering a condominium, or any hazard insurance policy covering the common facilities of a planned unit development. The hazard insurance policy is the valid and binding obligation of the
insurer and is in full force and effect. Neither Guarantor nor Mortgagor has engaged in any act or omission which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either including, without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Guarantor.
(f) Compliance with Applicable Laws. Any requirements of any federal, state or local law or regulation including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the Underlying Mortgage Loan have been complied with, the consummation of the transactions contemplated hereby will not involve the violation of any such laws or regulations, and Guarantor shall maintain or shall cause its agent to maintain in its possession, available for the inspection of Buyer, and shall deliver to Buyer, upon demand, evidence of compliance with all such requirements.
(g) No Satisfaction of Mortgage. The Mortgage has not been satisfied, canceled, subordinated (except with respect to subordination of a Second Lien Mortgage Loan to the first priority lien or security interest) or rescinded, in whole or in part, and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would affect any such release, cancellation, subordination (except with respect to subordination of a Second Lien Mortgage Loan to the first priority lien or security interest) or rescission. Guarantor has not waived the performance by the Mortgagor of any action, if the Mortgagor’s failure to perform such action would cause the Underlying Mortgage Loan to be in default, nor has Guarantor waived any default resulting from any action or inaction by the Mortgagor.
(h) Location and Type of Mortgaged Property. The Mortgaged Property is located in an Acceptable State and consists of a single parcel of real property with a detached single family residence erected thereon, or a two- to four-family dwelling, or an individual condominium unit in a low-rise condominium project, or an individual unit in a planned unit development or a de minimis planned unit development; provided, however, that any condominium unit or planned unit development shall conform with the applicable Loan Program Authority’s requirements regarding such dwellings or shall conform to Underwriting Guidelines acceptable to Buyer in its discretion and that no residence or dwelling is a (i) a mobile home or manufactured housing unit (other than a Manufactured Home) not secured by real property, (ii) a log home, (iii) an earthen home, (iv) an underground home, (v) any dwelling situated on more property than is permitted by the applicable Loan Program Authority’s requirements and (vi) any dwelling situated on a leasehold estate. No portion of the Mortgaged Property is used for commercial purposes; provided, that, the Mortgaged Property may be a mixed use property if such Mortgaged Property conforms to Underwriting Guidelines acceptable to Buyer in its discretion. With respect to each Manufactured Home, such unit is a “single family residence” within the meaning of Section 25(e)(1) of the Code, and has a minimum of four hundred (400) square feet of living space, a minimum width of one hundred two (102) inches and is of a kind customarily used at a fixed location.
(i) Valid Lien. The Mortgage is a valid, subsisting, enforceable and (a) with respect to each first lien Mortgage Loan, perfected first priority lien and perfected first priority security interest or (b) with respect to each Second Lien Mortgage Loan, perfected second priority lien and perfected second priority security interest, in each case, on the real property included in the Mortgaged Property, including all buildings on the Mortgaged Property and all installations and mechanical, electrical, plumbing, heating and air conditioning systems located in or annexed to such buildings, and all additions, alterations and replacements made at any time with respect to the foregoing. The lien of the Mortgage is subject only to:
a. the lien of current real property taxes and assessments not yet due and payable;
b. covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording acceptable to prudent mortgage lending institutions generally and specifically referred to in Buyer’s title insurance policy (except for Second Lien Mortgage Loans) delivered to the originator of the Underlying Mortgage Loan and (a) referred to or otherwise considered in the appraisal, if any, made for the originator of the Underlying Mortgage Loan or (b) which do not adversely affect the Appraised Value of the Mortgaged Property set forth in such appraisal, if any;
c. other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property; and
d. with respect to each Second Lien Mortgage Loan, a first lien on the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Underlying Mortgage Loan establishes and creates (a) with respect to each first lien mortgage loan, a valid, subsisting and enforceable first lien and first priority security interest or (b) with respect to each Second Lien Mortgage Loan, a valid, subsisting and enforceable second priority lien and second priority security interest, in each case, on the property described therein and Seller has full right to pledge and assign the same to Buyer. The Mortgaged Property was not, as of the date of origination of the Underlying Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or other security instrument creating a lien subordinate to the lien of the Mortgage, other than the senior lien in the case of a Second Lien Mortgage Loan.
(j) Validity of Mortgage Documents; Fraud. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor or guarantor, if applicable, in connection with an Underlying Mortgage Loan are genuine, and each is the legal, valid and binding obligation of the maker thereof enforceable in accordance with its terms. All parties to the Mortgage Note, the Mortgage and any other such related agreement had legal capacity to enter into the Underlying Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage and any such agreement, and the Mortgage Note, the Mortgage and any other such related agreement have been duly and properly executed by such related parties. No fraud,
error, omission, misrepresentation, negligence or similar occurrence with respect to an Underlying Mortgage Loan has taken place on the part of any Person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Underlying Mortgage Loan. Guarantor has reviewed all of the documents constituting the Mortgage File and has made such inquiries as it deems necessary to make and confirm the accuracy of the representations set forth herein. Except as disclosed to Buyer in writing, all tax identifications and property descriptions are legally sufficient; and tax segregation, where required, has been completed.
(k) Full Disbursement of Proceeds. Except with respect to HELOCs, Homestyle Renovation Mortgage Loans or HomePath Renovation Mortgage Loans, there is no further requirement for future advances under the Underlying Mortgage Loan, and any requirements as to completion of any on-site or off-site improvement and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Underlying Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.
(l) Ownership. Guarantor is the sole owner and holder of bare legal title to the Underlying Mortgage Loan and the indebtedness evidenced by the Mortgage Note. Seller is the sole owner and holder of 100% of the economic, beneficial and equitable interests in the Underlying Mortgage Loan. Seller has full right to pledge its rights, the Participation Certificate and the Underlying Mortgage Loan to Buyer free and clear of any encumbrance, equity, participation interest (other than the Participation Interests), lien, pledge, charge, claim or security interest, and has full right and authority subject to no interest or participation of, or agreement with, any other party, to sell or otherwise transfer each Underlying Mortgage Loan and following the sale of each Participation Interests in such Underlying Mortgage Loan, Buyer will own such Participation Interest in the Underlying Mortgage Loan free and clear of any encumbrance, equity, participation interest (other than the Participation Interests), lien, pledge, charge, claim or security interest except any such security interest created pursuant to the terms of this Agreement. Neither the Seller nor the Guarantor has pledged such Mortgage Loan under any other repurchase agreement or other financing arrangement.
(m) Doing Business. All parties which have had any interest in the Underlying Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (i) in compliance with any applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located, and (ii) either (A) organized under the laws of such state, (B) qualified to do business in such state, (C) a federal savings and loan association, a savings bank or a national bank having a principal office in such state, or (D) not doing business in such state.
(n) Title Insurance. Except with respect to a Second Lien Mortgage Loan, an Agency Title Alternative Mortgage Loan and first lien HELOCs, the Underlying Mortgage Loan is covered by either (i) an irrevocable title commitment, or an attorney’s opinion of title and abstract of title, each of which must be in form and substance acceptable to prudent mortgage
lending institutions making mortgage loans in the area wherein the Mortgaged Property is located or (ii) an ALTA lender’s title insurance policy, or with respect to any Mortgage Loan for which the related Mortgaged Property is located in California a CLTA lender’s title insurance policy, or other generally acceptable form of policy or insurance acceptable to the applicable Loan Program Authority and each such title insurance policy is issued by a title insurer acceptable to the applicable Loan Program Authority and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring Guarantor, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Underlying Mortgage Loan, and in the case of adjustable rate Mortgage Loans, against any loss by reason of the invalidity or unenforceability of the lien resulting from the provisions of the Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly Payment. Where required by state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. Additionally, such lender’s title insurance policy affirmatively insures ingress and egress and against encroachments by or upon the Mortgaged Property or any interest therein. The title policy does not contain any special exceptions (other than the standard exclusions) for zoning and uses and has been marked to delete the standard survey exception or to replace the standard survey exception with a specific survey reading. Guarantor, its successors and assigns, are the sole insureds of such lender’s title insurance policy, and such lender’s title insurance policy is valid and remains in full force and effect and will be in force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder or servicer of the related Mortgage, including Guarantor, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy, including without limitation, no unlawful fee, commission, kickback or other unlawful compensation or value of any kind has been or will be received, retained or realized by any attorney, firm or other Person, and no such unlawful items have been received, retained or realized by Guarantor. Each Second Lien Mortgage Loan and first lien HELOC is covered by an owner and encumbrance report.
(o) No Defaults. Other than payments due but not yet thirty (30) days or more Delinquent, there is no default, breach, violation or event of acceleration existing under the Mortgage or the Mortgage Note and no event has occurred which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and neither Guarantor nor its predecessors have waived any default, breach, violation or event of acceleration.
(p) No Mechanics’ Liens. There are no mechanics’ or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under the law could give rise to such liens) affecting the Mortgaged Property which are or may be liens prior to, or equal or coordinate with, the lien of the Mortgage.
(q) Location of Improvements; No Encroachments. All improvements which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property, and no improvements on adjoining properties encroach upon the Mortgaged Property. No improvement
located on or being part of the Mortgaged Property is in violation of any applicable zoning and building law, ordinance or regulation.
(r) Payment Terms. Except with respect to HELOCs, principal and/or interest payments on the Underlying Mortgage Loan commenced or will commence no more than sixty (60) days after funds were disbursed in connection with the Underlying Mortgage Loan. With respect to adjustable rate Underlying Mortgage Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment Date to equal the Index plus the Gross Margin (rounded up or down to the nearest .125%) subject to the Mortgage Interest Rate Cap. Other than with respect to HELOCs, the Mortgage Note is payable on the first (1st) day of each month in equal monthly installments of principal and/or interest (subject to an “interest only” period in the case of Interest Only Mortgage Loans), which installments of interest (a) with respect to adjustable rate Underlying Mortgage Loans are subject to change on the Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Rate Adjustment Date and (b) with respect to Interest Only Mortgage Loans are subject to change on the Interest Only Adjustment Date due to adjustments to the Mortgage Interest Rate on each Interest Only Adjustment Date, in both cases with interest calculated and payable in arrears, sufficient to amortize the Underlying Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty (30) years from commencement of amortization. The Mortgage Note does not permit Negative Amortization.
(s) Customary Provisions. The Mortgage Note has a stated maturity. The Mortgage contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against the Mortgaged Property of the benefits of the security provided thereby, including, (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on an Underlying Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property pursuant to the proper procedures, the holder of the Underlying Mortgage Loan will be able to deliver good and marketable title (subject to in the case of a Second Lien Mortgage Loan, the first lien Mortgage of the first lien loan related thereto) to the Mortgaged Property. There is no homestead or other exemption available to a Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee’s sale or the right to foreclose the Mortgage. The Mortgage Note and Mortgage are on forms acceptable to the applicable Loan Program Authority or Buyer at its discretion.
(t) Occupancy of the Mortgaged Property. As of the Purchase Date the Mortgaged Property is lawfully permitted to be occupied under applicable law. All inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities. Guarantor has not received notification from any Governmental Authority that the Mortgaged Property is in material non-compliance with such laws or regulations, is being used, operated or occupied unlawfully or has failed to have or obtain such inspection, licenses or certificates, as the case may be. Guarantor has not received notice of any violation or failure to conform with any such law, ordinance, regulation, standard, license or
certificate. With respect to any Underlying Mortgage Loan originated with an “owner-occupied” Mortgaged Property, the Mortgagor represented at the time of origination of the Underlying Mortgage Loan that the Mortgagor would occupy the Mortgaged Property as the Mortgagor’s primary residence.
(u) No Additional Collateral. The Mortgage Note is not and has not been secured by any collateral except the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in paragraph (i) above. No Underlying Mortgage Loan is cross-collateralized or is subject to a cross-default provision with any mortgage loan that is not an Underlying Mortgage Loan.
(v) Deeds of Trust. In the event the Mortgage constitutes a deed of trust, a trustee, authorized and duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in the Mortgage, and no fees or expenses are or will become payable by the Custodian or Buyer to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the Mortgagor.
(w) Transfer of Underlying Mortgage Loans. Except with respect to Underlying Mortgage Loans registered with MERS, the Assignment of Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located. With respect to each MOM Mortgage Loan, the related Assignment of Mortgage to MERS, if applicable, has been duly and properly recorded, or has been delivered for recording to the applicable recording office.
(x) Due-On-Sale. Except as permitted by the applicable Loan Program Authority, the Mortgage contains an enforceable provision for the acceleration of the payment of the unpaid principal balance of the Underlying Mortgage Loan in the event that the Mortgaged Property is sold or transferred without the prior written consent of the mortgagee thereunder.
(y) No Buydown Provisions; No Graduated Payments or Contingent Interests. The Underlying Mortgage Loan does not contain provisions pursuant to which Monthly Payments are paid or partially paid with funds deposited in any separate account established by Guarantor, the Mortgagor, or anyone on behalf of the Mortgagor, or paid by any source other than the Mortgagor nor does it contain any other similar provisions which may constitute a “buydown” provision. The Underlying Mortgage Loan is not a graduated payment mortgage loan and the Underlying Mortgage Loan does not have a shared appreciation or other contingent interest feature.
(z) Consolidation of Future Advances. Any future advances made to the Mortgagor prior to the Purchase Date have been consolidated with the outstanding principal amount secured by the Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term. Except in the case of a Second Lien Mortgage Loan, an Agency Title Alternative Mortgage Loan and a First Lien HELOC, the lien of the Mortgage securing the consolidated principal amount is expressly insured as having first lien priority by a title insurance policy, an endorsement to the policy insuring the mortgagee’s consolidated interest or by other title evidence acceptable to the applicable Loan Program
Authority. Except in the case of a Second Lien HELOC, the consolidated principal amount does not exceed the original principal amount of the Underlying Mortgage Loan. In the case of a Second Lien HELOC, the consolidated principal amount of the Underlying Mortgage does not exceed the Credit Limit of the HELOC.
(aa) Mortgaged Property Undamaged. The related Mortgaged Property is free of damage and waste and there is no proceeding pending for the total or partial condemnation of such Mortgaged Property.
(bb) Origination; Collection Practices; Escrow Deposits; Interest Rate Adjustments. The Underlying Mortgage Loan was originated by Guarantor or a Correspondent Seller. The origination and collection practices used by the originator, each servicer of the Underlying Mortgage Loan and Guarantor with respect to the Underlying Mortgage Loan have been in all respects in compliance with Accepted Servicing Practices, applicable laws and regulations, and have been in all respects legal and proper. With respect to escrow deposits and Escrow Payments (other than with respect to each Second Lien Mortgage Loan), all such payments are in the possession of, or under the control of, Guarantor or Servicer and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All Escrow Payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and if an escrow deposit has been established, it has been established in an amount sufficient to pay for every item that remains unpaid and has been assessed but is not yet due and payable. No escrow deposits or Escrow Payments or other charges or payments due Guarantor have been capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict compliance with state and federal law and the terms of the related Mortgage Note. Any interest required to be paid pursuant to state, federal and local law has been properly paid and credited.
(cc) Conversion to Fixed Interest Rate. Except as allowed by the applicable Loan Program Authority or otherwise as expressly approved in writing by Buyer, with respect to adjustable rate Mortgage Loans, the Mortgage Loan is not convertible to a fixed interest rate Mortgage Loan.
(dd) Other Insurance Policies. To the knowledge of Guarantor, no action, inaction or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any applicable special hazard insurance policy, private mortgage insurance policy or bankruptcy bond, irrespective of the cause of such failure of coverage. In connection with the placement of any such insurance, no commission, fee, or other compensation has been or will be received by Guarantor or by any officer, director, or employee of Guarantor or any designee of Guarantor.
(ee) Servicemembers Civil Relief Act. The Mortgagor has not notified Guarantor, and Guarantor has no knowledge, of any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act of 2003.
(ff) Appraisal. Other than with respect to Second Lien Mortgage Loans and First Lien HELOCs, the Mortgage File with respect to such Underlying Mortgage Loan contains either an evaluation or appraisal of the related Mortgaged Property meeting the requirements set forth by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, unless such evaluation is not required by the applicable Loan Program Authority, or applicable regulatory or licensing body or has received an appraisal waiver from the applicable Agency. Such evaluation or appraisal must have been made and signed, prior to the approval of the application for such Underlying Mortgage Loan, by a qualified appraiser (a) who, at the time of such appraisal, met the minimum qualifications of the applicable Loan Program Authority, and the requirements of the Guarantor’s appraisal policy and (b) who satisfied (and which appraisal was conducted in accordance with) all of the applicable requirements of the Uniform Standards of Professional Appraisal Practice and all applicable federal and state laws and regulations in effect at the time of such appraisal and procedures. Such appraiser was licensed in the state where the Mortgaged Property is located, had no interest, direct or indirect, in such Mortgaged Property or in any loan made on the security thereof, and such appraiser’s compensation was not affected by the approval or disapproval of such Underlying Mortgage Loan. The evaluation or appraisal shall have been made within [***] of the origination of the Underlying Mortgage Loan.
(gg) Disclosure Materials. The Mortgagor has executed a statement to the effect that the Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable rate mortgage loans, and Guarantor maintains such statement in the Mortgage File.
(hh) Construction or Rehabilitation of Mortgaged Property. No Underlying Mortgage Loan was made in connection with the construction or rehabilitation of a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged Property.
(ii) No Defense to Insurance Coverage. No action has been taken or failed to be taken, no event has occurred and no state of facts exists or has existed on or prior to the Purchase Date (whether or not known to Guarantor on or prior to such date) which has resulted or will result in an exclusion from, denial of, or defense to coverage under any private mortgage insurance (including, without limitation, any exclusions, denials or defenses which would limit or reduce the availability of the timely payment of the full amount of the loss otherwise due thereunder to the insured) whether arising out of actions, representations, errors, omissions, negligence, or fraud of Guarantor, the related Mortgagor or any party involved in the application for such coverage, including the appraisal, plans and specifications and other exhibits or documents submitted therewith to the insurer under such insurance policy, or for any other reason under such coverage, but not including the failure of such insurer to pay by reason of such insurer’s breach of such insurance policy or such insurer’s financial inability to pay.
(jj) Capitalization of Interest. The Mortgage Note does not by its terms provide for the capitalization or forbearance of interest.
(kk) No Equity Participation. No document relating to the Underlying Mortgage Loan provides for any contingent or additional interest in the form of participation in the cash flow of the Mortgaged Property or a sharing in the appreciation of the value of the
Mortgaged Property. The indebtedness evidenced by the Mortgage Note is not convertible to an ownership interest in the Mortgaged Property or the Mortgagor and neither Seller nor Guarantor has financed nor does Seller or Guarantor own directly or indirectly, any equity of any form in the Mortgaged Property or the Mortgagor.
(ll) Proceeds of Underlying Mortgage Loan. The proceeds of the Underlying Mortgage Loan have not been and shall not be used to satisfy, in whole or in part, any debt owed or owing by the Mortgagor to Guarantor or any Affiliate or correspondent of Guarantor, except in connection with a refinanced Underlying Mortgage Loan.
(mm) Origination Date. Other than with respect to Scratch and Dent Mortgage Loans, the origination date of the Underlying Mortgage Loan is no earlier than [***] prior to the related Purchase Date.
(nn) No Exception. The Custodian has not noted any material exceptions on an Asset Schedule with respect to the Underlying Mortgage Loan which would materially adversely affect the Underlying Mortgage Loan or Buyer’s interest in the Underlying Mortgage Loan.
(oo) Mortgage Submitted for Recordation. The Mortgage either has been or will promptly be submitted for recordation (including electronic recordation) in the appropriate governmental recording office of the jurisdiction where the Mortgaged Property is located.
(pp) Documents Genuine. The Mortgage Note and the Mortgage and any other agreement executed and delivered by a Mortgagor in connection with an Underlying Mortgage Loan are genuine.
(qq) Capacity. Such Underlying Mortgage Loan was made to persons having legal capacity to contract and is not subject to any defense, set-off or counterclaim.
(rr) Committed Mortgage Loans. Each Committed Mortgage Loan is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment (taking into consideration mortgage loans which have been purchased by the respective Take-out Investor under the Take-out Commitment and mortgage loan which Seller has identified to Buyer as covered by such Take-out Commitment) and conforms to the requirements and the specifications set forth in such Take-out Commitment and the related regulations, rules, requirements and/or handbooks of the applicable Take-out Investor and is eligible for sale to and insurance or guaranty by, respectively the applicable Take-out Investor and applicable insurer. Each Take-out Commitment is a legal, valid and binding obligation of Guarantor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(ss) Credit Score and Reporting. If required, full, complete and accurate information with respect to the Mortgagor’s credit file was furnished to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
(tt) Other Encumbrances. Any property subject to any security interest given in connection with such Underlying Mortgage Loan is not subject to any other encumbrances other than a stated first mortgage, if applicable, and encumbrances which may be allowed under the Underwriting Guidelines.
(uu) Description. Each Underlying Mortgage Loan conforms in all material respects to the description thereof as set forth on the related Asset Schedule delivered to the Custodian and Buyer.
(vv) Located in U.S. No collateral (including, without limitation, the related real property and the dwellings thereon and otherwise) relating to an Underlying Mortgage Loan is located in any jurisdiction other than in one of the fifty (50) states of the United States of America or the District of Columbia.
(ww) Underwriting Guidelines. Except with respect to Underlying Mortgage Loans that are Scratch and Dent Mortgage Loans, each Underlying Mortgage Loan has been originated in accordance with the Underwriting Guidelines (including all supplements or amendments thereto) in effect as of the date of the Transaction is entered into and as previously provided to Buyer.
(xx) Primary Mortgage Guaranty Insurance. If required by the applicable Loan Program Authority, after the funding of the Underlying Mortgage Loan and payment of any premium thereafter, each Mortgage Loan is insured as to payment defaults by a policy of primary mortgage guaranty insurance in the amount required where applicable, and by an insurer approved, by the applicable Take-out Investor, if applicable, and all provisions of such primary mortgage guaranty insurance have been and are being complied with, such policy is in full force and effect, and all premiums due thereunder have been paid. Each Underlying Mortgage Loan which is represented to Buyer to have, or to be eligible for, FHA insurance is insured, or eligible to be insured, pursuant to the National Housing Act. Each Underlying Mortgage Loan which is represented by Seller or Guarantor to be guaranteed, or to be eligible for guaranty, by the VA is guaranteed, or eligible to be guaranteed, under the provisions of Chapter 37 of Title 38 of the United States Code. As to each FHA insurance certificate or each VA guaranty certificate, Guarantor has complied with applicable provisions of the insurance for guaranty contract and federal statutes and regulations, all premiums or other charges due in connection with such insurance or guarantee have been paid, there has been no act or omission which would or may invalidate any such insurance or guaranty, and the insurance or guaranty is, or when issued, will be, in full force and effect with respect to each Mortgage Loan. There are no defenses, counterclaims, or rights of setoff affecting the Mortgage Loans or affecting the validity or enforceability of any private mortgage insurance or FHA insurance applicable to the Mortgage Loans or any VA guaranty with respect to the Mortgage Loans.
(yy) Predatory Lending Regulations; High Cost Loans. None of the Mortgage Loans are classified as High Cost Mortgage Loans.
(zz) FHA Mortgage Insurance; VA Loan Guaranty; USA Mortgage Loan Guaranty. With respect to each Mortgage Loan to be insured or guaranteed by the FHA, the VA
or the USDA, (i) all insurance or guaranty premiums or payments payable to the applicable Loan Program Authority in connection with such Mortgage Loan were paid within the timeframe required by such agency to avoid the imposition of any late fees or penalty fees, (ii) Guarantor has submitted all documents required by and in accordance with the timeframes established by the applicable Loan Program Authority to insure such Mortgage Loan (regardless of whether such documents are required to be contained in the related servicing file) (iii) there has been no notice, indication of ineligibility or rejection of the Mortgage Loan and there exists no impairment to full recovery without indemnity from the related Loan Program Authority, and (iv) the related insurance contract, guaranty agreement and each similar agreement, as applicable, (x) is in full force and effect, all necessary steps have been taken to keep such guaranty or insurance valid, binding and enforceable and each of such is the binding, valid and enforceable obligation of the related Loan Program Authority to the full extent thereof, without surcharge, set-off or defense, or, (y) is not yet in full force and effect, all required documentation has been successfully submitted to the appropriate agency within the time frame set forth in clause (ii) above and Guarantor has provided Buyer any evidence or information requested by Buyer necessary for Buyer to verify compliance with (ii) above and that the related insurance or guaranty premiums or payments have been made.
(aaa) LTV; CLTV. The LTV and CLTV, as applicable, of any Underlying Mortgage Loan at origination was in accordance with the applicable Loan Program Authority’s guidelines, or such other percentage approved by the Buyer in writing.
(bbb) No Adverse Selection. Such Underlying Mortgage Loan was not intentionally selected by the Seller or the Guarantor in a manner intended to adversely affect the interest of the Buyer. For the avoidance of doubt, the fact that a Mortgage Loan is a Scratch and Dent Mortgage Loan will not, by itself, result in a breach of this clause (bbb).
(ccc) Single Mortgage Note. There is only one executed Mortgage Note (or in the case of an eNote, a single Authoritative Copy); provided, however, that if there is more than one signed note, then each page of such additional note will have “Duplicate,” “Copy” or similar language clearly stamped on it.
(ddd) Acceptable Investment. Other than with respect to Scratch and Dent Mortgage Loans, there are no circumstances or conditions exists with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor’s credit standing that can reasonably be expected to cause private institutional investors to regard the Underlying Mortgage Loan as an unacceptable investment, or adversely affect the value or marketability of the Underlying Mortgage Loan.
(eee) Environmental Matters. The Mortgaged Property is free from any and all toxic or hazardous substances and there exists no violation of any local, state or federal environmental law, rule or regulation. There is no pending action or proceeding directly involving any Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation existing as a prerequisite to use and enjoyment of said property.
(fff) Regarding the Mortgagor. The Mortgagor is one or more natural persons and/or trustees for an Illinois land trust or a trustee under a “living trust” and such “living trust” is in compliance with the applicable Take-out Investor guidelines for such trusts.
(ggg) Insurance. Guarantor has caused or will cause to be performed any acts required to preserve the rights and remedies of Buyer in any insurance policies applicable to the Underlying Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and establishments of coinsured, joint loss payee and mortgagee rights in favor of Buyer.
(hhh) Simple Interest Mortgage Loans. None of the Underlying Mortgage Loans are simple interest Mortgage Loans.
(iii) Prepayment Fee. With respect to each Underlying Mortgage Loan that has a prepayment fee feature, each such prepayment fee is enforceable and was originated in compliance with all applicable federal, state and local laws and regulations and will be enforced by Guarantor for the benefit of Buyer, and is only payable during the first [***] of the term of the Underlying Mortgage Loan. The Mortgagor received a benefit in exchange for accepting such prepayment fee.
(jjj) Flood Certification Contract. Guarantor shall have obtained a life of loan, transferable flood certification contract for each Underlying Mortgage Loan and such contract is assignable to Buyer.
(kkk) Endorsements. Each Mortgage Note has been endorsed by a duly authorized officer of Guarantor for its own account and not as a fiduciary, trustee, trustor or beneficiary under a trust agreement.
(lll) Accuracy of Information. All information provided to Buyer by Seller and/or Guarantor with respect to the Underlying Mortgage Loans, including but not limited to, any information contained in the Mortgage File, is accurate in all material respects.
(mmm) Single Premium Credit Insurance. No Mortgagor is offered or required to purchase single premium credit insurance in connection with the origination of the related Underlying Mortgage Loan.
(nnn) Patriot Act. Each of Seller and Guarantor has complied with all applicable anti money laundering laws and regulations, including, without limitation, the Patriot Act. No Underlying Mortgage Loan is subject to nullification pursuant to the Executive Order or the regulations promulgated by OFAC (the “OFAC Regulations”) or in violation of the Executive Order or the OFAC Regulations, and no Mortgagor is subject to the provisions of such Executive Order or the OFAC Regulations nor listed as a “blocked person” for purposes of the OFAC Regulations.
(ooo) Acquisition of Mortgage Loan. (i) Each Mortgage Loan that was acquired from a third party was transferred on a legal true sale basis pursuant to the applicable purchase
agreement, (ii) each transferor, if applicable, received reasonably equivalent value in consideration for the transfer of such mortgage loan, (iii) no such transfer was made for or on account of an antecedent debt owed by such transferor to the Guarantor or an Affiliate of the Guarantor, and (iv) no such transfer is or may be voidable or subject to avoidance under the bankruptcy code.
(ppp) MERS Designated Mortgage Loans. With respect to each MERS Designated Mortgage Loans, a mortgage identification number has been assigned by MERS and such mortgage identification number is accurately provided on the Asset Schedule. The related Assignment of Mortgage to MERS has been duly and properly recorded. With respect to each MERS Designated Mortgage Loan, no Mortgagor has received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(qqq) MOM Mortgage Loans. With respect to each MOM Mortgage Loan, Guarantor has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
(rrr) Authorized Funds Recipient. To the Guarantor’s knowledge, any related settlement or closing agent has fully disbursed all proceeds received from Buyer in accordance with the related HUD-1 form or closing disclosure, as applicable.
(sss) Ability to Repay. Before originating the Underlying Mortgage Loan (other than with respect to a HELOC), the originator made a reasonable and good faith determination that the borrower would have a reasonable ability to repay the loan according to its terms, in accordance with the “ability to repay” standards of the federal Truth in Lending Act, 15 U.S.C. 1639c(a), and Regulation Z, 12 C.F.R. 1026.43, as may be amended from time to time.
(ttt) Qualified Mortgage. Each Underlying Mortgage Loan (other than with respect to a Non-QM Mortgage Loan, Scratch and Dent Mortgage Loan or a HELOC) is “Qualified Mortgage” as defined in Regulation Z, 12 C.F.R. 1026.43(e) as may be amended from time to time.
(uuu) USDA Mortgage Loans. With respect to each USDA Mortgage Loan, such Underlying Mortgage Loan was originated and either (i) has been submitted for guaranty and not rejected and is eligible to be guaranteed in accordance with the USDA’s Guaranteed Rural Housing Loan Program or (ii) is guaranteed in accordance with the USDA’s Guaranteed Rural Housing Loan Program.
(vvv) FICO Floor. Other than with respect to Scratch and Dent Mortgage Loans and those Government Mortgage Loans originated in connection with any “streamline refinance program”, the FICO score of each Underlying Mortgage Loan meets or exceeds [***]. Notwithstanding the foregoing, to the extent the Underlying Mortgage Loan is a Jumbo Mortgage Loan, the FICO score of such Underlying Mortgage Loan meets or exceeds the greater of (x) [***] or (y) such other FICO score allowable pursuant to the Underwriting Guidelines in
effect as of the date of origination of such Mortgage Loan. With respect to a Scratch and Dent Mortgage Loan, the FICO score as of the related origination date meets or exceeds [***].
(www) TRID Compliance. With respect to each Underlying Mortgage Loan where the Mortgagor’s loan application for the Underlying Mortgage Loan was taken on or after October 3, 2015 (other than with respect to a HELOC), such Underlying Mortgage Loan was originated in compliance with the TILA-RESPA Integrated Disclosure Rule.
(xxx) Closing Protection Letter. With respect to each Underlying Mortgage Loan that is a Wet-Ink Mortgage Loan (other than a Mortgage Loan originated in the State of New York, a Second Lien Mortgage Loan or a First Lien HELOC), Guarantor has obtained an ALTA closing protection letter which provides indemnification for Buyer for losses arising from the Closing Agent’s fraud, theft, dishonesty, negligence or failure to follow written closing instructions, in form and substance acceptable to Buyer. If such closing protection letter is not addressed to Buyer, such closing protection letter shall provide that Buyer and any assignee of Buyer are protected by such letter as if it were addressed directly to them.
(yyy) Wet-Ink Mortgage Loans. With respect to each Underlying Mortgage Loan that is a Wet-Ink Mortgage Loan, the Closing Agent has been instructed in writing by Seller or Guarantor to hold the related Mortgage File as agent and bailee for Buyer and to promptly forward such Mortgage File in accordance with the provisions of the Custodial and Disbursement Agreement and the escrow instruction letter, if any.
(zzz) eNote Legend. If the Underlying Mortgage Loan is an eMortgage Loan, the related eNote contains the Agency-Required eNote Legend.
(aaaa) eNotes. With respect to each eMortgage Loan, the related eNote satisfies all of the following criteria:
a. the eNote bears a digital or electronic signature;
b. the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash Value of the eNote as reflected in the eVault;
c. there is a single Authoritative Copy of the eNote, as applicable and within the meaning of Section 9-105 of the UCC or Section 16 of the UETA or Section 7021 of E-Sign, as applicable, that is held in the eVault;
d. the Location status of the eNote on the MERS eRegistry reflects (x) other than with respect to a Ginnie Mae eNote Pooled Loan, the MERS Org ID of the Custodian, and (y) with respect to a Ginnie Mae eNote Pooled Loan, the Custodian’s General MERS Org ID;
e. the Controller status of the eNote on the MERS eRegistry reflects (x) other than with respect to a Ginnie Mae eNote Pooled Loan, the MERS Org ID of Buyer, and (y) with respect to a Ginnie Mae eNote Pooled Loan, the MERS Org ID of the Guarantor;
f. the Delegatee status of the eNote on the MERS eRegistry reflects (x) other than with respect to a Ginnie Mae eNote Pooled Loan, the MERS Org ID of Custodian, and (y) with respect to a Ginnie Mae eNote Pooled Loan, to be blank;
g. the Master Servicer Field status of the eNote on the MERS eRegistry reflects the MERS Org ID of the Guarantor;
h. with respect to a Ginnie Mae eNote Pooled Loan, the Secured Party status of the eNote in the MERS eRegistry reflects MERS Org of Ginnie Mae;
i. the Subservicer Field status of the eNote on the MERS eRegistry (i) reflects, if there is a third-party subservicer, such subservicer's MERS Org ID or (ii) if there is not a subservicer, is blank;
j. there is no Control Failure, eNote Replacement Failure or Unauthorized Master Servicer or Subservicer Modification with respect to such eNote;
k. the eNote is a valid and enforceable Transferable Record or comprises "electronic chattel paper" within the meaning of the UCC;
l. there is no defect with respect to the eNote that would result in Buyer having less than full rights, benefits and defenses of "Control" (within the meaning of the UETA or the UCC, as applicable) of the Transferable Record; and
m. the single Authoritative Copy of the eNote is maintained electronically and has not been papered-out, nor is there another paper representation of such eNote.
(bbbb) HELOCs; Revolving Term. With respect to HELOCs, the related Mortgagor may request advances up to the Credit Limit within the time period permitted by the Underwriting Guidelines. Each HELOC provides for an initial period (the “Revolving Period”) during which the Mortgagor is required to make monthly payments of interest payable in arrears and requires repayment of the unpaid principal balance thereof over a period following the Revolving Period (the “Repayment Period”) which is not in excess of the time permitted by the Underwriting Guidelines. As of the Purchase Date no HELOC was in its Repayment Period. The Mortgage Interest Rate on each Mortgage Loan adjusts periodically in accordance with the Credit Line Agreement to equal the sum of the index and the related Gross Margin. On each Interest Rate Adjustment Date the Guarantor has made interest rate adjustments on the Mortgage Loan which are in compliance with the related Mortgage and Mortgage Note and applicable law.
(cccc) HELOCs; Draws In Compliance With Laws. Each Draw under the HELOC has been disbursed in accordance with all applicable laws, rules, and regulations, including, without limitation, all state and local licensing requirements.
(dddd) HELOCs; Enforcement of Remedies. Each Credit Line Agreement permits the holder to enforce its full remedies, with respect to, among other things, material
events of default by the Mortgagor, declines in the value of the related Mortgaged Property and material changes in the Mortgagor’s financial circumstances.
SCHEDULE 1-B
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
POOLED MORTGAGE LOANS
Seller makes the following representations and warranties to Buyer with respect to each Pooled Mortgage Loan, as of the Purchase Date for such Mortgage Loan and at all times while such Pooled Mortgage Loan is subject to a Transaction hereunder.
(a) Agency Approvals. To the extent required by applicable law or necessary to issue and/or service, as applicable, an Agency Security, Guarantor and Servicer possess all Agency Approvals and are in good standing with each Agency. No event has occurred, and neither of the Guarantor or Servicer has any knowledge that an event may occur, prior to the issuance of the Agency Security (including a change in insurance coverage), which would make Guarantor or Servicer, as applicable, unable to comply with the eligibility requirements for maintaining all such Agency Approvals or require notification to the relevant Agency or to HUD, FHA or VA. To Guarantor’s knowledge, Servicer has adequate financial standing, servicing facilities, procedures and experienced personnel necessary for the sound servicing of Mortgage Loans of the same types as may from time to time constitute Pooled Mortgage Loans and in accordance with Accepted Servicing Practices.
(b) Agency Eligibility. Each Pooled Mortgage Loan is an Agency Eligible Mortgage Loan.
(c) [Reserved].
(d) Aggregate Principal Balance. The Cut-off Date Principal Balance respecting each Pooled Mortgage Loan shall be at least equal to the original unpaid principal balance of the Agency Security for the Pooled Mortgage Loans designated to be issued.
(e) Committed Mortgage Loans. The Agency Security to be issued on account of the Pooled Mortgage Loans is covered by a Take-out Commitment, does not exceed the availability under such Take-out Commitment. Each Take-out Commitment is a legal, valid and binding obligation of Guarantor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(f) Certification. With respect to Pooled Mortgage Loans being placed in an Agency Security, the Custodian has certified such Pooled Mortgage Loans to the applicable Agency for the purpose of being swapped for an Agency Security backed by such pool, in each case, in accordance with the terms of the applicable Agency guidelines.
Schedule 1-B-1
LEGAL02/41029716v4
(g) Sole Subscriber. As to the Agency Security being issued with respect to Pooled Mortgage Loans, Buyer or the agent under the Joint Securities Account Control Agreement has been listed as the sole subscriber thereto.
(h) No Securities Issuance Failure. With respect to each Pooled Mortgage Loan being placed in an Agency Security, no Securities Issuance Failure shall have occurred.
Schedule 1-B-2
LEGAL02/41029716v4
SCHEDULE 1-C
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
PARTICIPATION INTERESTS
As to each Participation Interest that is subject to any Transaction outstanding on a Purchase Date, the Seller shall be deemed to make the following representations and warranties to the Buyer as of such date and at all times a Participation Interest is subject to a Transaction.
(a) Compliance with Law. Each Participation Interest complies in all respects with, or is exempt from, all applicable requirements of federal, state or local law relating to such Participation Interest.
(b) Good and Marketable Title. Immediately prior to the sale, transfer and assignment to Buyer thereof, the Seller had good and marketable title to, and was the sole owner and holder of, the Participation Interests, and Seller is transferring such Participation Interests free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Participation Interests. Upon consummation of the purchase contemplated to occur in respect of such Participation Interests, Seller will have validly and effectively conveyed to Buyer all legal and beneficial interest in and to such Participation Interests free and clear of any pledge, lien, encumbrance or security interest and upon the filing of a financing statement covering the Participation Interests in the State of Delaware and naming Seller as debtor and Buyer as secured party, the Lien granted pursuant to this Agreement will constitute a valid, perfected first priority Lien on the Participation Interests in favor of Buyer enforceable as such against all creditors of Seller and any Persons purporting to purchase the Participation Interests from Seller.
(c) No Fraud. No fraudulent acts were committed by Seller or Guarantor or any of their respective Affiliates in connection with the issuance of such Participation Interests.
(d) No Defaults. No (i) monetary default, breach or violation exists with respect to any agreement or other document governing or pertaining to such Participation Interests, (ii) non-monetary default, breach or violation exists with respect to such Participation Interests, or (iii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation of such Participation Interests.
(e) No Modifications. Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Participation Interests and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.
(f) Power and Authority. Seller has full right, power and authority to sell and assign such Participation Interests, and such Participation Interests have not been cancelled,
satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.
(g) Consents and Approvals. Other than consents and approvals obtained as of the related Purchase Date or those already granted in the Facility Documents governing such Participation Interests, no consent or approval by any Person is required in connection with Seller’s sale and/or Buyer’s acquisition of such Participation Interests, for Buyer’s exercise of any rights or remedies in respect of such Participation Interests or for Buyer’s sale, pledge or other disposition of such Participation Interests. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies with respect to such Participation Interests.
(h) No Governmental Approvals. No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Seller is required for any transfer or assignment by the holder of such Participation Interests to the Buyer.
(i) Original Certificates. Seller has delivered to Buyer the original certificate of such Participation Interests in Buyer’s name.
(j) No Litigation. Seller has not received written notice of any material outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Participation Interests is or may become obligated.
(k) Duly and Validly Issued. The Participation Interests are duly and validly issued and the ownership of each Participation Interest is reflected in the participation interest register maintained by Guarantor.
(l) No Notices. Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Participation Interests is or may become obligated.
SCHEDULE 1-D
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
PARTICIPATION CERTIFICATE
As to each Participation Certificate that is subject to any Transaction outstanding on a Purchase Date, the Seller shall be deemed to make the following representations and warranties to the Buyer as of such date and at all times a Participation Certificate is subject to a Transaction.
(a) Compliance with Law. Each Participation Certificate complies in all respects with, or is exempt from, all applicable requirements of federal, state or local law relating to such Participation Interest.
(b) Good and Marketable Title. Immediately prior to the sale, transfer and assignment to Buyer, Seller has good and marketable title to, and is the sole owner and holder of, the Participation Certificate, and Seller is transferring such Participation Certificate free and clear of any and all liens, pledges, encumbrances, charges, security interests or any other ownership interests of any nature encumbering such Participation Certificate. Upon consummation of the purchase contemplated to occur in respect of such Participation Certificate, Seller will have validly and effectively conveyed to Buyer all legal and beneficial interest in and to such Participation Certificate free and clear of any pledge, lien, encumbrance or security interest and upon each of (x) the filing of a financing statement covering such Participation Certificate in the State of Delaware and naming Seller as debtor and Buyer as secured party and (y) delivery of the Participation Certificate to Buyer, the Lien granted pursuant to the Repurchase Agreement will constitute a valid, perfected first priority Lien on such Participation Certificate in favor of Buyer enforceable as such against all creditors of Seller and any Persons purporting to purchase such Participation Certificate from Seller.
(c) No Fraud. No fraudulent acts were committed by Seller or Guarantor or any of their respective Affiliates in connection with the issuance of such Participation Certificate.
(d) No Defaults. No (i) monetary default, breach or violation exists with respect to any agreement or other document governing or pertaining to such Participation Certificate, (ii) non-monetary default, breach or violation exists with respect to such Participation Certificate, or (iii) event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach or violation of such Participation Certificate.
(e) No Modifications. Seller is not a party to any document, instrument or agreement, and there is no document, that by its terms modifies or affects the rights and obligations of any holder of such Participation Certificate and Seller has not consented to any material change or waiver to any term or provision of any such document, instrument or agreement and no such change or waiver exists.
(f) Power and Authority. Seller has full right, power and authority to sell and assign the related Participation Certificate, and such Participation Certificate has not been
cancelled, satisfied or rescinded in whole or part nor has any instrument been executed that would effect a cancellation, satisfaction or rescission thereof.
(g) Consents and Approvals. Other than consents and approvals obtained as of the related Purchase Date or those already granted in the documents governing such Participation Certificate, no consent or approval by any Person is required in connection with Seller’s sale and/or Buyer’s acquisition of the related Participation Certificate, for Buyer’s exercise of any rights or remedies in respect of such Participation Certificate or for Buyer’s sale, pledge or other disposition of such Participation Certificate. No third party holds any “right of first refusal”, “right of first negotiation”, “right of first offer”, purchase option, or other similar rights of any kind, and no other impediment exists to any such transfer or exercise of rights or remedies with respect to such Participation Certificate.
(h) No Governmental Approvals. No consent, approval, authorization or order of, or registration or filing with, or notice to, any court or governmental agency or body having jurisdiction or regulatory authority over Seller are required for any transfer or assignment by the holder of such Participation Certificate to the Buyer.
(i) No Litigation. Seller has not received written notice of any outstanding material liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind related to such Participation Certificate for which the holder of such Participation Certificate is or may become obligated.
(j) Duly and Validly Issued. The Participation Certificates have been duly and validly issued in the name of the Buyer.
(k) No Notices. Seller has not received written notice of any outstanding liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind for which the holder of such Participation Certificate is or may become obligated.
(l) Eligible Certificates as Securities. Each Participation Certificate (a) constitutes a “security” as defined in Section 8-102 of the Uniform Commercial Code, (b) is not dealt in or traded on securities exchanges or in securities markets, (c) does not constitute an investment company security (within the meaning of Section 8-103(c) of the Uniform Commercial Code) and (d) is not held in a securities account (within the meaning of Section 8-103(c) of the Uniform Commercial Code).
(m) No Distributions. There are (x) no outstanding rights, options, warrants or agreements for a purchase, sale or issuance, in connection with the Participation Certificates (except as expressly contemplated or permitted by the Repurchase Agreement), (y) no agreements on the part of Seller to issue, sell or distribute such Participation Certificate (except as expressly contemplated or permitted by the Repurchase Agreement), and (z) no obligations on the part of Seller (contingent or otherwise) to purchase, repurchase, redeem or otherwise acquire any securities or any interest therein (other than from Buyer or as expressly contemplated by the Repurchase Agreement) or to pay any dividend or make any distribution in respect of such Participation Certificate (other than to Buyer or as expressly contemplated by the Repurchase Agreement until the repurchase of such Participation Certificate).
SCHEDULE 2
[RESERVED]
Schedule 2-1
LEGAL02/41029716v4
SCHEDULE 3
[RESERVED]
Schedule 3-1
LEGAL02/41029716v4
EXHIBIT A
[RESERVED]
Exhibit A-1
LEGAL02/41029716v4
EXHIBIT B
[RESERVED]
Exhibit B-1
LEGAL02/41029716v4
EXHIBIT C
[RESERVED]
Exhibit C-1
LEGAL02/41029716v4
EXHIBIT D
FORM OF SECTION 8 CERTIFICATE
Reference is hereby made to the Amended and Restated Master Repurchase Agreement and Securities Contract dated as of April 25, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), among loanDepot.com, LLC (the “Guarantor”), loanDepot BMO Warehouse, LLC (the “Seller”) and Bank of Montreal (the “Buyer”). Pursuant to the provisions of Section 8 of the Agreement, the undersigned hereby certifies that:
1. It is __ a natural individual person, __ treated as a corporation for U.S. federal income tax purposes, __ disregarded for federal income tax purposes (in which case a copy of this Section 8 Certificate is attached in respect of its sole beneficial owner), or treated as a partnership for U.S. federal income tax purposes (one must be checked).
2. It is the beneficial owner of amounts received pursuant to the Agreement.
3. It is not a bank, as such term is used in section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), or the Agreement is not, with respect to the undersigned, a loan agreement entered into in the ordinary course of its trade or business, within the meaning of such section.
4. It is not a 10-percent shareholder of Seller within the meaning of section 871(h)(3) or 881(c)(3)(B) of the Code.
5. It is not a controlled foreign corporation that is related to Seller within the meaning of section 881(c)(3)(C) of the Code.
6. Amounts paid to it under the Facility Documents are not effectively connected with its conduct of a trade or business in the United States.
[NAME OF UNDERSIGNED]
By:
Title:
Exhibit D-1
LEGAL02/41029716v4
EXHIBIT E
ASSET SCHEDULE FIELDS
[***]
Exhibit E-1
LEGAL02/41029716v4
EXHIBIT F
FORM OF POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that [loanDepot.com, LLC (“Guarantor”)] [loanDepot BMO Warehouse, LLC (“Seller”)] hereby irrevocably constitutes and appoints Bank of Montreal (“Buyer”) and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of [Seller][Guarantor] and in the name of [Seller][Guarantor] or in its own name, from time to time in Buyer’s discretion:
(a) in the name of [Seller][Guarantor], or in its own name, or otherwise, to take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due with respect to any assets purchased by Buyer under the Amended and Restated Master Repurchase Agreement and Securities Contract (as amended, restated or modified) dated as of April 25, 2025 (the “Assets”), and to file any claim or to take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Buyer for the purpose of collecting any and all such moneys due with respect to any other assets whenever payable;
(b) to pay or discharge taxes and liens levied or placed on or threatened against the Assets;
(c) (i) to direct any party liable for any payment under any Assets to make payment of any and all moneys due or to become due thereunder directly to Buyer or as Buyer shall direct; (ii) to send “goodbye” letters on behalf of [Seller][Guarantor] and Servicer; (iii) to ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Assets; (iv) to sign and endorse any invoices, assignments, verifications, notices and other documents in connection with any Assets; (v) to commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Assets or any proceeds thereof and to enforce any other right in respect of any Assets; (vi) to defend any suit, action or proceeding brought against [Seller][Guarantor] with respect to any Assets; (vii) to settle, compromise or adjust any suit, action or proceeding described in clause (vi) above and, in connection therewith, to give such discharges or releases as Buyer may deem appropriate; and (viii) generally, to sell, transfer, pledge and make any agreement with respect to or otherwise deal with any Assets as fully and completely as though Buyer were the absolute owner thereof for all purposes, and to do, at Buyer’s option and [Seller’s][Guarantor’s] expense, at any time, and from time to time, all acts and things which Buyer deems necessary to protect, preserve or realize upon the Assets and Buyer’s Liens thereon and to effect the intent of this Agreement, all as fully and effectively as [Seller][Guarantor] might do;
(d) for the purpose of carrying out the transfer of servicing with respect to the Assets from [Seller][Guarantor] to a successor servicer appointed by Buyer in its sole discretion and to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish such transfer of servicing, and, without limiting the
generality of the foregoing, [Seller][Guarantor] hereby gives Buyer the power and right, on behalf of [Seller][Guarantor], without assent by [Seller][Guarantor], to, in the name of [Seller][Guarantor] or its own name, or otherwise, prepare and send or cause to be sent “good-bye” letters to all mortgagors under the Assets, transferring the servicing of the Assets to a successor servicer appointed by Buyer in its sole discretion;
(e) for the purpose of delivering any notices of sale to mortgagors or other third parties, including without limitation, those required by law.
[Seller][Guarantor] hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. This power of attorney is a power coupled with an interest and shall be irrevocable.
[Seller][Guarantor] also authorizes Buyer, from time to time, to execute, in connection with any sale, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Assets.
The powers conferred on Buyer hereunder are solely to protect Buyer’s interests in the Assets and shall not impose any duty upon it to exercise any such powers. Buyer shall be accountable only for amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or agents shall be responsible to [Seller][Guarantor] for any act or failure to act hereunder, except for its or their own gross negligence or willful misconduct.
TO INDUCE ANY THIRD PARTY TO ACT HEREUNDER, [SELLER][GUARANTOR] HEREBY AGREES THAT ANY THIRD PARTY RECEIVING A DULY EXECUTED COPY OR FACSIMILE OF THIS INSTRUMENT MAY ACT HEREUNDER, AND THAT REVOCATION OR TERMINATION HEREOF SHALL BE INEFFECTIVE AS TO SUCH THIRD PARTY UNLESS AND UNTIL ACTUAL NOTICE OR KNOWLEDGE OF SUCH REVOCATION OR TERMINATION SHALL HAVE BEEN RECEIVED BY SUCH THIRD PARTY, AND BUYER ON ITS OWN BEHALF AND ON BEHALF OF BUYER’S ASSIGNS, HEREBY AGREES TO INDEMNIFY AND HOLD HARMLESS ANY SUCH THIRD PARTY FROM AND AGAINST ANY AND ALL CLAIMS THAT MAY ARISE AGAINST SUCH THIRD PARTY BY REASON OF SUCH THIRD PARTY HAVING RELIED ON THE PROVISIONS OF THIS INSTRUMENT.
[REMAINDER OF PAGE INTENTIONALLY BLANK. SIGNATURES FOLLOW.]
IN WITNESS WHEREOF Seller has caused this power of attorney to be executed this ___ day of __________, 2025.
[LOANDEPOT.COM, LLC
(Guarantor)
By:
Name:
Title:]
[LOANDEPOT BMO WAREHOUSE, LLC
(Seller)
By:
Name:
Title:]
ACKNOWLEDGEMENT
| | |
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. |
State of California )
County of Orange )
On _______________________________, before me, ___________________________a Notary Public personally appeared ___________________________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature______________________________ (SEAL)
EXHIBIT G
[RESERVED]
EXHIBIT H
FORM OF SECURITY RELEASE CERTIFICATION
[DATE]
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attn: [***]
Email: [***]
Bank of Montreal
c/o BMO Capital Markets Corp.
151 West 42nd Street
New York, New York 10036
Attn: Legal Department
Re: Security Release Certification
Effective as of [___], [_______] hereby relinquishes any and all right, title and interest it may have in and to the Underlying Mortgage Loans described in Schedule 1 attached hereto upon purchase thereof by [Bank of Montreal] (“Buyer”) from Seller named below pursuant to that certain Amended and Restated Master Repurchase Agreement, dated as of [___] as of the date and time of receipt by [______] of $[___] for such Underlying Mortgage Loans (the “Date and Time of Sale”) and certifies that all notes, mortgages, assignments and other documents in its possession relating to such Underlying Mortgage Loans have been delivered and released to Seller named below or its designees as of the Date and Time of Sale.
Name and address of Lender:
[Custodian]
[ ]
For Credit Account No. [ ]
Attention: [ ]
Phone: [ ]
Further Credit [ ]
[NAME OF WAREHOUSE LENDER]
By:__________________________
Name:
Title:
Seller named below hereby certifies to Buyer that, as of the Date and Time of Sale of the above mentioned Underlying Mortgage Loans to Buyer, the security interests in the Underlying Mortgage Loans released by the above named [corporation] comprise all security interests relating to or affecting any and all such Underlying Mortgage Loans. Seller warrants that, as of such time, there are and will be no other security interests affecting any or all of such Loans.
loanDepot BMO Warehouse, LLC
By:__________________________
Name:
Title:
Schedule 1 to Security Release Certification
Certain confidential information contained in this document, marked by “[***]”, has been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential.
Exhibit 10.5
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the “Agreement”) is entered into as of May 6, 2026, by and between ANTHONY HSIEH (“Executive”) and LOANDEPOT, INC., a Delaware corporation (the “Company”).
WHEREAS, Executive is currently a party to that certain Letter Agreement with the Company, dated March 6, 2025, pursuant to which Executive serves as Chief Executive Officer and President of the Company (the “Letter Agreement”); and
WHEREAS, the Company wishes to continue to employ, and Executive wishes to accept continued employment with the Company pursuant to the terms and conditions set forth in this Agreement, effective as of March 1, 2026 (the “Effective Date”).
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:
ARTICLE I
DEFINITIONS
For purposes of the Agreement, the following terms are defined as follows:
1.1 “Board” means the Board of Directors of the Company.
1.2 “Cause” means Executive’s: (i) material failure to comply with, material breach of or material continued refusal to comply with, in each case, terms of this Agreement, of any written agreement or covenant that Executive is a party to with the Company or any affiliate (including, without limitation, any employment, consulting, confidentiality, non-competition, non-solicitation, non-disparagement or similar agreement or covenant); (ii) material violation of any lawful policies, standards or regulations of the Company or any affiliate which have been furnished to Executive (directly or through the Company’s intranet or other distribution systems), including policies related to discrimination, harassment, performance of illegal or unethical activities, related party transactions, conflicts of interest, and ethical misconduct; (iii) indictment for, conviction of or plea of no contest to a felony under the laws of the United States or any state (other than traffic-related offenses); (iv) fraud, embezzlement, material dishonesty, breach of fiduciary duty against the Company or its affiliates, or material misappropriation of property belonging to the Company or its affiliates; (v) willful and repeated failure to perform Executive’s duties as specifically directed in any reasonable and lawful directive of the Board; or (vi) willful misconduct or gross negligence in connection with the performance of Executive’s duties; provided that in each case of (i), (v), and (vi), to the extent such event is capable of cure, “Cause” as a result of such event shall not exist unless (x) the Board provides written notice thereof to Executive and (y) to the extent correctable, Executive fails to remedy such circumstance or event within 30 days following Executive’s receipt of such written notice. For purposes of the foregoing definition of Cause, no act or failure to act on Executive’s part shall be considered
“willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive’s action or omission was in the best interest of the Company.
1.3 “Change in Control” shall have the meaning ascribed to that term in the Second Amendment to the loanDepot 2021 Omnibus Incentive Plan (the “Plan”).
1.4 “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
1.5 “Code” means the Internal Revenue Code of 1986, as amended.
1.6 “Common Stock” means the Class A common stock, par value $0.001 per share, of the Company.
1.7 “Covered Termination” means (i) an Involuntary Termination Without Cause or (ii) a voluntary termination for Good Reason. For the avoidance of doubt, the termination of Executive’s employment as a result of Executive’s death or Disability will not be deemed to be a Covered Termination.
1.8 “Disability” shall mean a termination of Executive’s employment due to Executive’s absence from Executive’s duties with the Company on a full-time basis for at least 180 consecutive days as a result of Executive’s incapacity due to physical or mental illness which is determined to be total and permanent by a physician selected by the Company or its insurers.
1.9 “Good Reason” means any of the following taken without Executive’s written consent: (i) failure or refusal by the Company to comply in any material respect with the material terms of this Agreement, (ii) a material diminution in Executive’s duties, title, authority or responsibilities in effect or contemplated to be in effect as of the date hereof, (iii) any change in reporting structure resulting in Executive no longer reporting directly and exclusively to the Board, (iv) failure of the Board to renominate Executive for reelection to the Board upon the expiration of his previous term or failure of the Executive to be reelected to the Board after nomination, (v) a material reduction in Executive’s Base Salary or Target Bonus (unless such reduction is less than 10% and the annual base salary or target bonus of all other executive officers is similarly reduced, as applicable), or (vi) the Company requiring Executive to be located more than 35 miles from the Company’s current offices in Plantation, Florida. Notwithstanding the foregoing, Executive’s resignation shall not constitute a resignation for “Good Reason” as a result of any event described in the preceding sentence unless (x) Executive provides written notice thereof to the Company within 30 days after the first occurrence of such event, (y) to the extent correctable, the Company fails to remedy such circumstance or event within 30 days following the Company’s receipt of such written notice and (z) the effective date of Executive’s resignation for “Good Reason” is not later than 90 days after the initial existence of the circumstances constituting Good Reason.
1.10 “Involuntary Termination Without Cause” means Executive’s dismissal or discharge by the Company other than for Cause or by reason of Executive’s death or Disability.
1.11 “Section 409A” means Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.
1.12 “Separation from Service” means Executive’s termination of employment that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h).
1.13 “Stockholders Agreement” means that certain Amended and Restated Stockholders Agreement, dated April 21, 2022, among the Company and the other parties thereto.
1.14 “Termination Date” means the date of Executive’s termination of employment under this Agreement.
ARTICLE II
EMPLOYMENT BY THE COMPANY
2.1 Position and Duties. Subject to terms set forth herein, Executive shall serve in an executive capacity and shall perform such duties, and shall have such authorities, as are customarily associated with the position of Chief Executive Officer and President and such other duties and authorities (in each case, commensurate with such position) as are assigned to Executive by the Board. During the Term, Executive shall also serve as a member of the Board, subject to and in accordance with the Company’s Amended and Restated Certificate of Incorporation (as amended from time to time, the “Certificate of Incorporation”), Amended and Restated Bylaws and the Stockholders Agreement. For the avoidance of doubt, Executive acknowledges and agrees that Executive shall not be entitled to any additional compensation in connection with Executive’s services as a member of the Board. During the Term (as defined below) and subject to the additional details set forth below in Section 6.1, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention (except for vacation periods and absences due to reasonable periods of illness or other incapacities permitted by the Company’s general employment policies or as otherwise set forth in this Agreement) to the business of the Company.
2.2 Term. The term of this Agreement shall commence on the Effective Date and will continue until terminated in accordance with Article IV. The period from the Effective Date until the termination of Executive’s employment under this Agreement is referred to as the “Term.”
2.3 Employment at Will. The Company shall have the right to terminate Executive’s employment with the Company at any time, with or without cause, and, in the case of a termination by the Company, with or without prior notice. In addition to Executive’s right to
resign for Good Reason, Executive shall have the right to resign at any time and for any reason or no reason at all, upon 30 days’ advance written notice to the Company; provided, however, that if Executive has provided a resignation notice to the Company, the Company may determine, in its sole discretion, that such termination shall be effective on any date prior to the effective date of termination provided in such notice (and, if such earlier date is so required, then it shall not change the basis for Executive’s termination of employment nor be construed or interpreted as a termination of Executive’s employment by the Company) and any requirement to continue salary or benefits shall cease as of such earlier date. Upon certain terminations of Executive’s employment with the Company, Executive may become eligible to receive the severance benefits provided in Article IV of this Agreement.
2.4 Tax Characterization. Notwithstanding anything herein to the contrary, references to Executive’s employment refer to Executive’s engagement as a service partner of loanDepot.com LLC (the “Partnership”). This Agreement does not in any way alter Executive’s status for U.S. federal income tax purposes. The parties hereto agree that for all income tax purposes, Executive shall not be treated as an “employee,” but instead any amounts required to be included in income by Executive, including amounts paid pursuant to Article IV of this Agreement, shall be characterized as a “guaranteed payment” under Section 707(c) of the Code by the Partnership to Executive.
2.5 Deemed Resignations. Except as otherwise determined by the Board or as otherwise agreed to in writing by Executive and the Company or any of its affiliates prior to the termination of Executive’s employment with the Company or any of its affiliates, any termination of Executive’s employment shall constitute, as applicable, an automatic resignation of Executive: (a) as an officer of the Company and each of its affiliates; (b) as Executive Chairman of the Board (but not as Chairman to the extent he has a right to serve as Chairman under the Stockholders Agreement); (c) from the Board, unless he has a right to be on the Board pursuant to the Stockholders Agreement; and (d) from the board of directors or board of managers (or similar governing body) of any affiliate of the Company and from the board of directors or board of managers (or similar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in which the Company or any of its affiliates holds an equity interest and with respect to which board of directors or board of managers (or similar governing body) Executive serves as such designee or other representative of the Company or any of its affiliates. Executive agrees to take any further actions that the Company or any of its affiliates reasonably requests to effectuate or document the foregoing. For the avoidance of doubt, this section will not be deemed to apply with respect to any position the Executive may hold at The JLSSAA Trust, established September 4, 2014, JLSA, LLC, Trilogy Mortgage Holdings, Inc., Trilogy Management Investors Six, LLC, Trilogy Management Investors Seven, LLC and Trilogy Management Investors Eight, LLC (collectively, together with their permitted transferees, the “Hsieh Stockholders”).
2.6 Employment Policies. The employment relationship between the parties shall also be governed by the general employment policies and practices of the Company and its affiliates, including those relating to protection of confidential information and assignment of
inventions, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.
2.7 Indemnification. The Indemnification Agreement by and between Executive and the Company dated as of February 16, 2021 (the “Indemnification Agreement”) remains in full force and effect.
ARTICLE III
COMPENSATION
3.1 Base Salary. As of the Effective Date, Executive shall receive for services to be rendered hereunder an annualized base salary of $1,000,000 for each of 2026 and 2027, payable monthly in arrears by the 10th day of each calendar month, subject to increase in the sole discretion of the Board or a committee of the Board. Commencing with 2028, the Board or the Compensation Committee of the Board (or any successor committee, the “Compensation Committee”) shall review the rate of Base Salary for potential increase at least annually during the Term. Executive’s annualized base salary as in effect from time to time is referred to as the “Base Salary.”
3.2 Bonus Opportunities.
(a) Annual Bonus. For each calendar year during the Term, Executive shall be eligible to receive an annual performance bonus (the “Annual Bonus”) on such terms and conditions determined by the Board or the Compensation Committee, and pursuant to the bonus plan in effect as of the date hereof (which is subject to review or adjustment by the Board or the Compensation Committee). For calendar year 2026, Executive’s target bonus shall be 225% of Base Salary, and commencing in calendar year 2027, Executive’s target bonus shall be 250% of Base Salary (the applicable target bonus, the “Target Bonus”). For the avoidance of doubt, Executive’s Target Bonus for calendar year 2026 shall not be pro-rated. The actual amount of any Annual Bonus (if any) will be determined in the discretion of the Board or the Compensation Committee based on (i) achievement of bonus objectives and/or conditions determined by the Board or the Compensation Committee for that applicable year and communicated to Executive and (ii) subject to Executive’s continued employment with the Company through the date the Annual Bonus is paid (except as otherwise provided in Section 4.1). The Annual Bonus for any calendar year will be paid during the year following the year to which the Annual Bonus relates at the same time as annual bonuses for other Company executives are paid generally, which in no event will be later than 30 days following the completion of the Company’s audited financial statements for the year to which the Annual Bonus relates and no later than March 15 of the year following the year to which the Annual Bonus relates.
3.3 Standard Company Benefits. During the Term, Executive shall be entitled to all rights and benefits for which Executive is eligible under the terms and conditions of the standard Company benefits and compensation practices that may be in effect from time to time and are provided by the Company to its executive employees generally, subject to the eligibility
provisions of such benefits, which Executive acknowledges may not permit Executive’s participation on account of his status as a partner as described in Section 2.3 of this Agreement. For the avoidance of doubt, to the extent that the foregoing applies to any Company sponsored health and welfare benefits, Executive shall pay the full cost of premiums for such benefits during the Term while Executive is not treated as an “employee” as described in Section 2.3 of this Agreement, subject to any right of reimbursement or payment by the Company or its affiliates under the Ninth Amended and Restated Limited Liability Company Agreement of loanDepot.com, LLC, as amended. Notwithstanding the foregoing, this Section 3.3 shall not create or be deemed to create any obligation on the part of the Company to adopt or maintain any benefits or compensation practices at any time.
3.4 Equity Awards. Executive will be eligible to receive equity incentive grants based on the terms and conditions of the Plan. The Executive shall be eligible to receive the following equity awards:
(a) 2026 Restricted Stock Units. Subject to Executive’s employment with the Company as of the date of grant, on the Company’s next regularly scheduled quarterly grant date after the date this Agreement is signed by the parties, the Company shall grant Executive 1,000,000 restricted stock units covering an equal number of shares of Common Stock (the “2026 RSU Award”). The 2026 RSU Award shall vest ratably over three years, subject to Executive’s continued services under this Agreement as Chief Executive Officer through each such vesting date (except as set forth in this Agreement). The 2026 RSU Award shall be subject to the terms and conditions of the Plan (except as set forth in this Agreement) and a restricted stock unit award agreement in the form attached hereto as Exhibit A.
(b) 2026 Performance Stock Units. Subject to Executive’s employment with the Company as of the date of grant, on the Company’s next regularly scheduled quarterly grant date after the date this Agreement is signed by the parties, the Company shall grant Executive (i) 1,000,000 performance stock units covering an equal number of shares of Common Stock, which will vest in equal increments upon achievement of stock price hurdles of $3, $5, and $7 based on the closing price of Common Stock over any 30-day trading day period during the three-year performance period commencing on the grant date and (ii) 1,000,000 performance stock units covering an equal number of shares of Common Stock, which will vest upon achievement of a stock price hurdle of $8 based on the closing price of Common Stock over any 30-day trading day period during the three-year performance period commencing on the grant date, in each case, subject to Executive’s continued services under this Agreement as Chief Executive Officer during such performance period (except as set forth in this Agreement) (collectively, the “2026 PSU Awards”), provided, however, that any portion of the 2026 PSU Awards that is earned in 2026 shall vest on December 31, 2027. Executive acknowledges and agrees that the 2026 PSU Awards shall be granted in lieu of the additional grant of 1,500,000 performance stock units as set forth in the Letter Agreement. The 2026 PSU Awards shall be subject to the terms and conditions of the Plan (except as set forth in this Agreement) and performance stock unit award agreements in the form attached hereto as Exhibit B.
(c) 2027 Restricted Stock Units. Subject to Executive’s employment with the Company as of the date of grant, as part of the Company’s annual equity grant process for 2027, the Company shall grant Executive 1,000,000 restricted stock units covering an equal number of shares of Common Stock (the “2027 RSU Award”). The 2027 RSU Award shall vest ratably over three years, subject to Executive’s continued services under this Agreement as Chief Executive Officer through each such vesting date (except as set forth in this Agreement). The 2027 RSU Award shall be subject to the terms and conditions of the Plan (except as set forth in this Agreement) and a restricted stock unit award agreement in substantially the form attached hereto as Exhibit A. The date of grant for the 2027 RSU Award shall be selected and approved by the Compensation Committee consistent with the annual grants in 2027 to the Company’s other executive officers.
(d) 2027 Performance Stock Units. Subject to Executive’s employment with the Company as of the date of grant, as part of the Company’s annual equity grant process for 2027, the Company shall grant Executive 1,000,000 performance stock units covering an equal number of shares of Common Stock, which will vest upon achievement of stock price hurdles, to be determined by the Compensation Committee in good faith in accordance with Exhibit C and consistent with the Company’s past practices, based on the closing price of Common Stock over any 30-day trading day period during the three-year performance period commencing on the grant date subject to Executive’s continued services under this Agreement as Chief Executive Officer during such performance period (except as set forth in this Agreement) (the “2027 PSU Award”), provided, however, that any portion of the 2027 PSU Awards that is earned in 2027 shall vest on December 31, 2028. The 2027 PSU Award shall be subject to the terms and conditions of the Plan (except as set forth in this Agreement) and performance stock unit award agreements in substantially the form attached hereto as Exhibit B (with the stock price hurdles determined in accordance with Exhibit C). The date of grant for the 2027 PSU Award shall be selected and approved by the Compensation Committee consistent with the annual grants in 2027 to the Company’s other executive officers.
3.5 Expense Reimbursement. The Company will pay or reimburse Executive for all reasonable business and travel expenses incurred or paid by Executive in the provision of services hereunder, subject to such reasonable substantiation and documentation as may be specified by the Company in accordance with its expense reimbursement policy in effect from time to time, including the Company’s requirements with respect to reporting and documentation of such expenses. Without limiting the foregoing, the Company will reimburse Executive during the Term for all reasonable, documented, out-of-pocket costs incurred by Executive in respect of (i) all strictly business-related uses of any aircraft or watercraft owned or leased by Executive, (ii) for travel by guests of Executive on business-related uses of any aircraft or watercraft owned or leased by Executive, and (iii) travel via any aircraft or watercraft owned or leased by Executive between any of Executive’s personal residences and the Company’s headquarters, collectively, in an amount not to exceed $400,000 per calendar year (the “Expense Reimbursement Allowance”). Any unused portion of the Expense Reimbursement Allowance as of the end of the applicable calendar year will be forfeited. For the avoidance of doubt, the Expense Reimbursement Allowance excludes travel on scheduled commercial flights on major
airlines between any of Executive’s personal U.S. residences and the Company’s headquarters or other business-related destinations. Executive acknowledges and agrees that the benefits and perquisites provided to Executive, including under Section 3.5(ii), may be taxable to Executive and reported as guaranteed payments in accordance with Section 2.4. Within 30 days following the date this Agreement is signed by the Parties and subject to Executive’ providing appropriate substantiation, the Company will reimburse Executive for legal fees in connection with the review and negotiation of this Agreement, up to $40,000.
ARTICLE IV
SEVERANCE BENEFITS
4.1 Severance Benefits. Upon termination of Executive’s employment for any reason, Executive shall receive any accrued but unpaid Base Salary and other accrued and unpaid compensation, including any accrued but unpaid vacation, unreimbursed business expenses, and, except in the case of a termination for Cause, Executive’s earned Annual Bonus for the prior year, if any, and if not already paid (the “Accrued Obligations”). If the termination is due to a Covered Termination, or for Executive’s death or Disability, provided that Executive (or Executive’s representative, as applicable) (A) delivers to the Company an executed general release of claims substantially in a form attached hereto as Exhibit D (a “Release of Claims”) within 45 days following the Covered Termination (and Executive does not exercise his or her revocation right provided for in the Release of Claims) and (B) continues to materially comply with Articles V through VII of this Agreement, Executive shall be entitled to receive the severance benefits described in Sections 4.1(a), (b) or (c), as applicable.
(a) Covered Termination Not Related to a Change in Control. If Executive’s employment terminates due to a Covered Termination which occurs at any time other than during the period beginning 3 months prior to a Change in Control and ending 24 months after a Change in Control (the “CIC Protection Period”), Executive shall receive the Accrued Obligations, and the following shall occur:
(i) The Company shall pay Executive an amount equal to two times Executive’s Base Salary at the rate in effect (or required to be in effect before any diminution that is the basis of Executive’s termination for Good Reason) at the time of termination of Executive’s employment, payable in a lump sum payment, less applicable withholdings, on the next regular payment date that is at least three business days following the date on which the Release of Claims becomes effective and, in any event, no later than the 60th day following the Termination Date; provided, however, if such 60-day period falls in two different calendar years, payment will be made in the later calendar year (on the next regular payment date that is at least three business days after the later of the date on which the Release of Claims becomes effective and January 1 of that later calendar year).
(ii) Notwithstanding anything set forth in an award agreement or incentive plan to the contrary, Executive shall receive a pro-rata portion of Executive’s
Annual Bonus for the fiscal year in which Executive’s termination occurs based on actual achievement of the applicable bonus objectives and/or conditions determined by the Board or a committee of the Board for such year (determined by multiplying the amount of the Annual Bonus that would be payable for the full fiscal year by a fraction, the numerator of which shall be equal to the number of days during the fiscal year of termination that Executive is employed by, and performing services for, the Company and the denominator of which is 365 days), payable, less applicable withholdings, at the same time bonuses for such year are paid to other senior executives of the Company, but in no event later than March 15 of the year following the year of Executive’s termination of employment.
(iii) If the Covered Termination constitutes a COBRA qualifying event under the Company’s group health plan, subject to Executive’s timely election of continuation coverage under COBRA, the Company shall directly pay, or reimburse Executive for the premium for Executive and Executive’s covered dependents to maintain continued health coverage pursuant to the provisions of COBRA through the earlier of (A) the second anniversary of the Termination Date and (B) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided, however, that if Executive ceases to be eligible for COBRA (other than as a result of becoming eligible under another employer’s plan(s)), the Company shall pay to Executive within 30 days following the date Executive ceases to be so eligible a lump sum amount equal to (x) 24 less the number of months of COBRA that have previously been provided for as of such date, multiplied by (y) the amount of the COBRA premiums paid by the Company in the final month of COBRA eligibility. Notwithstanding the foregoing, if the Company is otherwise unable to continue to cover Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.
(iv) Notwithstanding anything set forth in an award agreement or equity incentive plan to the contrary, Executive’s unvested equity awards granted on or after the Effective Date shall be immediately forfeited; provided, however, that any performance-based award held by Executive, including the 2026 PSU Awards and the 2027 PSU Awards, shall accelerate based on actual performance measured through the date that is 30 days following the Termination Date.
(v) Executive’s vested but unexercised options will remain exercisable until the earlier of (A) one year following the Termination Date; or (B) the expiration date of the option.
(b) Covered Termination Related to a Change in Control. If Executive’s employment terminates due to a Covered Termination that occurs during the CIC Protection Period, Executive shall receive the Accrued Obligations, and the following shall occur:
(i) The Company shall pay Executive an amount equal to three times the sum of (i) Executive’s Base Salary at the rate in effect (or required to be in effect before any diminution that is the basis of Executive’s termination for Good Reason) at the time of termination of Executive’s employment and (ii) Executive’s Target Bonus in effect for the year in which termination of Executive’s employment occurs, payable in a lump sum payment, less applicable withholdings, on the next regular payment date that is at least 3 business days following the date on which the Release of Claims becomes effective and, in any event, no later than the 60th day following the Termination Date; provided, however, if such 60-day period falls in two different calendar years, payment will be made in the later calendar year (on the next regular payment date that is at least 3 business days after the later of the date on which the Release of Claims becomes effective and January 1 of that later calendar year). To the extent Executive’s Covered Termination occurs during the CIC Protection Period and prior to a Change in Control, and Executive’s severance payment pursuant to Section 4.1(a)(i) is paid prior to the Change in Control, an amount equal to the severance payable pursuant to this Section 4.1(b)(i), less the amount previously paid pursuant to Section 4.1(a)(i), will be paid in a lump sum payment, less applicable withholdings, as soon as administratively practicable, but not later than 15 business days, following the occurrence of the Change in Control.
(ii) Notwithstanding anything set forth in an award agreement or incentive plan to the contrary, Executive shall receive a pro-rata portion of Executive’s Annual Bonus for the fiscal year in which termination of Executive’s employment occurs based on actual achievement of the applicable bonus objectives and/or conditions determined by the Board or a committee of the Board for such year (determined by multiplying the amount of the Annual Bonus that would be payable for the full fiscal year by a fraction, the numerator of which shall be equal to the number of days during the fiscal year of termination that Executive is employed by, and performing services for, the Company and the denominator of which is 365 days), payable, less applicable withholdings, at the same time bonuses for such year are paid to other senior executives of the Company, but in no event later than March 15 of the year following the year of Executive’s termination of employment.
(iii) If the Covered Termination constitutes a COBRA qualifying event under the Company’s group health plan, subject to Executive’s timely election of continuation coverage under COBRA, the Company shall directly pay, or reimburse Executive for the premium for Executive and Executive’s covered dependents to maintain continued health coverage pursuant to the provisions of COBRA through the earlier of (A) the second anniversary of the Termination Date and (B) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided, however, that if Executive ceases to be eligible for COBRA (other than as a result of becoming eligible under another employer’s plan(s)), the Company shall pay to Executive within 30 days following the date Executive ceases to be so eligible a lump sum amount equal to (x) 24 less the number of months of COBRA that have previously been provided for as of such date, multiplied by (y) the
amount of the COBRA premiums paid by the Company in the final month of COBRA eligibility. Notwithstanding the foregoing, if the Company is otherwise unable to continue to cover Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.
(iv) Notwithstanding anything set forth in an award agreement or equity incentive plan to the contrary, Executive’s unvested equity awards shall be immediately fully vested, with any performance goals determined based on the greater of target or actual performance through the Termination Date.
(c) Termination in Relation to Executive’s Death or Disability. If Executive’s employment terminates due to Executive’s death or Disability, Executive (or Executive’s representative, as applicable) shall receive the Accrued Obligations, and the following shall occur:
(i) Notwithstanding anything set forth in an award agreement or incentive plan to the contrary, Executive (or Executive’s representative) shall receive a pro-rata portion of Executive’s Annual Bonus for the fiscal year in which Executive’s termination occurs based on actual achievement of the applicable bonus objectives and/or conditions determined by the Board or a committee of the Board for such year (determined by multiplying the amount of the Annual Bonus that would be payable for the full fiscal year by a fraction, the numerator of which shall be equal to the number of days during the fiscal year of termination that Executive is employed by, and performing services for, the Company and the denominator of which is 365 days), payable, less applicable withholdings, at the same time bonuses for such year are paid to other senior executives of the Company, but in no event later than March 15 of the year following the year of Executive’s termination of employment.
(ii) Notwithstanding anything set forth in an award agreement or equity incentive plan to the contrary, Executive’s unvested equity awards shall be immediately fully vested, with any performance goals determined based on the greater of target or actual performance through the Termination Date.
(iii) Executive’s vested but unexercised options will remain exercisable until the earlier of (A) one year following Termination Date; or (B) the expiration date of the option.
(d) Termination for Cause or by Executive without Good Reason. If Executive’s employment terminates by the Company’s termination for Cause or by Executive’s resignation without Good Reason, Executive shall receive the Accrued Obligations, and the following shall occur:
(i) Executive’s unvested equity awards shall be immediately forfeited, except in the case of a resignation by Executive, in which case unvested equity awards granted prior to the Effective Date (excluding, for the avoidance of doubt, the 2026 RSU Award, 2027 RSU Award, 2026 PSU Award and 2027 PSU Award) shall be eligible to continue vesting in accordance with their terms.
(ii) Executive’s vested but unexercised options will remain exercisable until the earlier of (A) 90 days following the Termination Date; or (B) the expiration date of the option, except in the case of a termination for Cause (in which case all such options shall be immediately forfeited).
4.2 280G Provisions. Notwithstanding anything in this Agreement to the contrary, if any payment or distribution Executive would receive pursuant to this Agreement or otherwise (“Payment”) would (a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall either be (i) delivered in full, or (ii) delivered as to such lesser extent which would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the largest payment, notwithstanding that all or some portion of the Payment may be taxable under Section 4999 of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm shall provide its calculations to the Company and Executive within 15 calendar days after the date on which Executive’s right to a Payment is triggered (if requested at that time by the Company or Executive) or such other time as requested by the Company or Executive. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and Executive. Unless Executive elects a different order of reduction, any such election to be consistent with the requirements of Section 409A of the Code, to the extent that a reduction in payments or benefits is required pursuant to this Section 4.2, the Company shall reduce or eliminate amounts which are payable first from any cash severance, then from any payment in respect of an equity award that is not covered by Treas. Reg. Section 1.280G-1 Q/A-24(b) or (c), then from any payment in respect of an equity award that is covered by Treas. Reg. Section 1.280G-1 Q/A-24(c), in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the date of such determination. Nothing in this Section 4.2 shall require the Company or any of its affiliates to be responsible for, or have any liability or obligation with respect to, Executive’s excise tax liabilities under Section 4999 of the Code.
4.3 Section 409A. Notwithstanding any provision to the contrary in this Agreement:
(a) All provisions of this Agreement are intended to comply with Section 409A or an exemption therefrom and shall be construed and administered in accordance with
such intent. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary Separation from Service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under this Agreement are exempt from, or compliant with, Section 409A and in no event shall the Company or any of its affiliates be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by Executive on account of non-compliance with Section 409A.
(b) If Executive is deemed at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code which would subject Executive to a tax obligation under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six- month period measured from the date of Executive’s Separation from Service or (ii) the date of Executive’s death. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 4.3(b) shall be paid in a lump sum to Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.
(c) Any reimbursements payable to Executive pursuant to the Agreement shall be paid to Executive no later than 30 days after Executive provides the Company with a written request for reimbursement, and to the extent that any such reimbursements are deemed to constitute “nonqualified deferred compensation” within the meaning of Section 409A (i) such amounts shall be paid or reimbursed to Executive promptly, but in no event later than December 31 of the year following the year in which the expense is incurred, (ii) the amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and (iii) Executive’s right to such payments or reimbursement shall not be subject to liquidation or exchange for any other benefit; provided, that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period in which the arrangement is in effect.
(d) For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive installment payments under the Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment.
4.4 Mitigation. Executive shall not be required to mitigate damages or the amount of any payment provided under this Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided for under this Agreement be reduced by any compensation earned by Executive as a result of employment by another employer or by any retirement benefits received by Executive after the Termination Date or otherwise.
4.5 Equity Coordination. For the avoidance of doubt, all equity awards, including stock options, restricted stock units and other equity-based compensation granted by the Company to Executive under the Company’s equity-based compensation plans shall be subject to the terms of such plans and Executive’s equity award agreements with respect thereto, subject to the provisions of Sections 3.4 and 4.1 above.
ARTICLE V
PROPRIETARY INFORMATION AND CONFIDENTIALITY OBLIGATIONS
5.1 Proprietary Information. All Company Innovations shall be the sole and exclusive property of the Company (or one of its designated affiliates) without further compensation and are “works made for hire” as that term is defined under the United States copyright laws. Executive shall promptly notify the Company of any Company Innovations that Executive solely or jointly Creates. “Company Innovations” means all Innovations, and any associated intellectual property rights, which Executive may solely or jointly Create, in the course of Executive’s employment with the Company, which (i) relate, at the time Created, to the business of the Company or its affiliates or actual or demonstrably anticipated research or development, or (ii) were developed on any amount of the Company’s time or with the use of any of the equipment, supplies, facilities or trade secret information of the Company or any of its affiliates, or (iii) resulted from any work Executive performed for the Company or its affiliates. Executive is notified that Company Innovations does not include any Innovation which qualifies fully under the provisions of California Labor Code Section 2870. “Create” means to create, conceive, reduce to practice, derive, develop or make. “Innovations” means processes, machines, manufactures, compositions of matter, improvements, inventions (whether or not protectable under patent laws), works of authorship, information fixed in any tangible medium of expression (whether or not protectable under copyright laws), mask works, trademarks, trade names, trade dress, trade secrets, know-how, ideas (whether or not protectable under trade secret laws), and other subject matter protectable under patent, copyright, moral rights, mask work, trademark, trade secret or other laws regarding proprietary rights, including new or useful art, combinations, discoveries, formulae, manufacturing techniques, technical developments, discoveries, artwork, software and designs. Executive hereby assigns (and will assign) to the Company (or one of its designated affiliates) all Company Innovations. Executive shall perform (at the Company’s expense), during and after Executive’s employment, all acts reasonably deemed necessary or desirable by the Company to assist the Company in obtaining and enforcing the full benefits, enjoyment, rights and title throughout the world in the Company Innovations, provided that Executive will be reimbursed by the Company for reasonable out-of-pocket expenses incurred by Executive in connection with fulfilling such obligations. Such acts may include execution of documents and assistance or cooperation (i) in the filing, prosecution, registration, and memorialization of assignment of patent, copyright, mask work or other applications, (ii) in the enforcement of any applicable Proprietary Rights, and (iii) in other legal proceedings related to the Company’s Innovations. “Proprietary Rights” means patents, copyrights, mask work, moral rights, trade secrets and other proprietary rights. No provision in this Agreement is intended to require Executive to assign or offer to assign any of Executive’s rights in any invention for which no trade secret information of the Company or any of its
affiliates were used, and which was developed on Executive’s own time, unless the invention relates to actual or demonstrably anticipated research or development of the Company or any its affiliates, or the invention results from any work performed by Executive for the Company or any of its affiliates.
5.2 Confidentiality. In the course of Executive’s employment with the Company and the performance of Executive’s duties on behalf of the Company and its affiliates hereunder, Executive will be provided with, and will have access to, Confidential Information (as defined below). In consideration of Executive’s receipt and access to such Confidential Information, and as a condition of Executive’s employment, Executive shall comply with this Section 5.2.
(a) Both during the Term and thereafter, except as expressly permitted by this Agreement, Executive shall not disclose any Confidential Information to any person or entity and shall not use any Confidential Information except for the benefit of the Company or its affiliates. Executive shall follow all policies and protocols of the Company and its affiliates regarding the security of all documents and other materials containing Confidential Information (regardless of the medium on which Confidential Information is stored). Except in the course of good faith performance of Executive’s duties on behalf of the Company or any of its affiliates, Executive shall not remove from facilities of the Company or any of its affiliates any information, property, equipment, drawings, notes, reports, manuals, invention records, computer software, customer information, or other data or materials that relate in any way to the Confidential Information, whether paper or electronic and whether produced by Executive or obtained by the Company or any of its affiliates. The covenants of this Section 5.2(a) shall apply to all Confidential Information, whether now known or later to become known to Executive during the period that Executive is employed by the Company or any of its affiliates.
(b) Notwithstanding any provision of Section 5.2(a) to the contrary, Executive may make the following disclosures and uses of Confidential Information:
(i) disclosures that Executive reasonably believes are required, or in the best interests of the Company, in Executive’s good faith performance of his or her duties;
(ii) disclosures and uses that are approved in writing by the Board; or
(iii) disclosures to a person or entity that has (x) been retained by the Company or any of its affiliates to provide services to the Company and/or its affiliates and (y) agreed in writing to abide by the terms of a confidentiality agreement.
(c) Upon the end of the Term, and at any other time upon request of the Company, Executive shall promptly and permanently surrender and deliver to the Company all documents (including electronically stored information) and all copies thereof and all other materials of any nature containing or pertaining to all Confidential Information and any other Company property (including any Company-issued computer, mobile device or other equipment)
in Executive’s possession, custody or control and Executive shall not retain any such documents or other materials or property of the Company or any of its affiliates; provided that Executive shall be solely entitled to retain copies of his or her compensation and benefits arrangements with the Company. Executive acknowledges and agrees that failure to surrender or return such material would cause irreparable harm to the Company. Within 10 days of any such request and upon the end of the Term, Executive shall certify to the Company in writing that, to Executive’s knowledge, all such documents, materials and property (other than those described in the proviso of the immediately preceding sentence) have been returned to the Company or otherwise destroyed.
(d) “Confidential Information” means all confidential, competitively valuable, non-public or proprietary information that is conceived, made, developed or acquired by or disclosed to Executive (whether conveyed orally or in writing), individually or in conjunction with others, during the period that Executive is employed or engaged by the Company or any of its affiliates (whether during business hours or otherwise and whether on the Company’s premises or otherwise) including: (i) technical information of the Company, its affiliates, its investors, customers, vendors, suppliers or other third parties, including computer programs, software, databases, data, ideas, know-how, formulae, compositions, processes, discoveries, machines, inventions (whether patentable or not), designs, developmental or experimental work, techniques, improvements, work in process, research or test results, original works of authorship, training programs and procedures, diagrams, charts, business and product development plans, and similar items; (ii) information relating to the Company or any of its affiliates’ businesses or properties, products or services (including all such information relating to corporate opportunities, operations, future plans, methods of doing business, business plans, strategies for developing business and market share, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or acquisition targets or their requirements, the identity of key contacts within customers’ organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) or pursuant to which the Company or any of its affiliates owes a confidentiality obligation; and (iii) other valuable, confidential information and trade secrets of the Company, its affiliates, its customers or other third parties. Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e-mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type including or embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other similar forms of expression are and shall be the sole and exclusive property of the Company or its other applicable affiliates and be subject to the same restrictions on disclosure applicable to all Confidential Information pursuant to this Agreement. For purposes of this Agreement, Confidential Information shall not include any information that (A) is or becomes generally available to the public other than as a result of a disclosure or wrongful act of Executive or any of Executive’s agents; (B) was available to Executive on a non-confidential basis before its disclosure by the Company or any of its affiliates; (C) becomes available to Executive on a non-confidential basis from a source other
than the Company or any of its affiliates; provided, however, that such source is not bound by a confidentiality agreement with, or other obligation with respect to confidentiality to, the Company or any of its affiliates; or (D) is required to be disclosed by applicable law.
(e) Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict Executive from lawfully: (i) initiating communications directly with, cooperating with, providing information to, causing information to be provided to, or otherwise assisting in an investigation by, any governmental authority regarding a possible violation of any law; (ii) responding to any inquiry or legal process directed to Executive from any such governmental authority; (iii) testifying, participating or otherwise assisting in any action or proceeding by any such governmental authority relating to a possible violation of law; or (iv) making any other disclosures that are protected under the whistleblower provisions of any applicable law. Additionally, pursuant to the federal Defend Trade Secrets Act of 2016, an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (A) is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and (2) solely for the purpose of reporting or investigating a suspected violation of law; (B) is made to the individual’s attorney in relation to a lawsuit for retaliation against the individual for reporting a suspected violation of law; or (C) is made in a complaint or other document filed in a lawsuit or proceeding, if such filing is made under seal. Nothing in this Agreement requires Executive to obtain prior authorization before engaging in any conduct described in this paragraph, or to notify the Company that Executive has engaged in any such conduct.
5.3 Nondisparagement. Subject to Section 5.2(e) above, Executive agrees that from and after the Effective Date, Executive will not, directly or indirectly, make, publish, or communicate any disparaging or defamatory comments regarding the Company, any of its affiliates or any of their current or former directors, officers, or executives. The Company agrees that, from and after the Effective Date, the Company will counsel its senior executive officers and directors to not, directly or indirectly, and the Company will not, in corporate communications to third parties, directly or indirectly, make, publish, or communicate publicly any disparaging or defamatory comments regarding Executive. The foregoing shall not be violated by truthful statements in response to legal process, required governmental testimony or filings or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings), and the foregoing limitation on the Company’s senior executives and directors shall not be violated by statements that they in good faith believe are necessary or appropriate to make in connection with performing their duties and obligations to the Company or any of its affiliates. Nothing in this Agreement prevents Executive from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Executive has reason to believe is unlawful.
5.4 Remedies. Executive’s and the Company’s duties under this Article V shall survive termination of Executive’s employment with the Company and the termination of this Agreement. Because of the difficulty of measuring economic losses to the Company and its affiliates as a result of a breach or threatened breach of the covenants set forth in this Article V,
Section 6.2 and Article VII, and because of the immediate and irreparable damage that would be caused to the Company and its affiliates for which they would have no other adequate remedy, Executive acknowledges that a remedy at law for any breach or threatened breach by Executive of Article V, as well as Executive’s obligations pursuant to Section 6.2 and Article VII below, would be inadequate, and Executive therefore agrees that the Company shall be entitled to seek injunctive relief in case of any such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and without the necessity of posting any bond or other security. The aforementioned equitable relief shall not be the Company’s or any of its affiliates’ exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company and each of its affiliates at law and equity.
5.5 Modification. The covenants in this Article V, Section 6.2 and Article VII, and each provision and portion hereof, are severable and separate, and the unenforceability of any specific covenant (or portion thereof) shall not affect the provisions of any other covenant (or portion thereof). If it is determined by an arbitrator or a court of competent jurisdiction in any state that any restriction in this Article V, Section 6.2 and Article VII is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the arbitrator or the court to render it enforceable to the maximum extent permitted by the law of that state.
ARTICLE VI
OUTSIDE ACTIVITIES
6.1 Other Activities.
(a) Except as otherwise provided in Section 6.1(b) or the Certificate of Incorporation, Executive shall not, during the Term, undertake or engage in any other employment, occupation or business enterprise, other than ones in which Executive is a passive investor (not more than more than 2% of the voting stock of such corporation), unless Executive obtains the prior written consent of the Board or one of its committees, and then subject to any terms or conditions specified by the Board or one of its committees. For the avoidance of doubt, this section will not prohibit Executive from continuing his activities with respect to the Hsieh Stockholders as in effect on the Effective Date.
(b) Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executive’s duties hereunder. In addition, Executive shall be allowed to continue to be engaged in, or provide services to, the business and activities in which Executive is engaged in as of the Effective Date in a substantially similar manner and scope as exists as of the Effective Date, so long as such activities do not interfere with the performance of Executive’s duties under this Agreement or otherwise result in the breach of any terms of this Agreement, in each case as determined in the sole judgment of the Board or one of its committees.
6.2 Competition/Investments. During the Term, Executive shall not (except on behalf of the Company) directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, or be employed by any other person, corporation, firm, partnership or other entity whatsoever which are known by Executive to compete directly with the Company or any of its affiliates, throughout the world, in any line of business engaged in (or actively planned to be engaged in, to Executive’s knowledge) by the Company; provided, however, that anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive’s direct holdings in any one such corporation do not, in the aggregate, constitute more than 2% of the voting stock of such corporation. For the avoidance of doubt, this Section 6.2 will not be deemed to apply to the Executive’s activities with respect to the Hsieh Stockholders, provided such activities are substantially similar in manner and scope as exists as of the Effective Date, and so long as such activities do not interfere with the performance of Executive’s duties under this Agreement or otherwise result in the breach of any terms of this Agreement, in each case as determined in the sole judgment of the Board or one of its committees.
6.3 Defense of Claims; Cooperation. During the Term and thereafter, upon reasonable request from the Company, Executive shall use commercially reasonable efforts to cooperate with the Company and its affiliates in the defense of any claims or actions made by or against the Company or any of its affiliates that relate to Executive’s actual or prior areas of responsibility or knowledge. Executive shall further use commercially reasonable efforts to provide reasonable and timely cooperation in connection with any actual or threatened claim, action, inquiry, review, investigation, process, or other matter by or before any court, arbitrator, regulatory, or governmental entity, and by or on behalf of the Company or any of its affiliates, that relates to Executive’s actual or prior areas of responsibility or knowledge. Executive will be reimbursed by the Company for reasonable out-of-pocket expenses incurred by Executive in connection with fulfilling Executive’s obligations under this Section 6.3. In no event shall Executive be required to act or cooperate in any matter that Executive reasonably believes is against Executive’s own interests.
ARTICLE VII
NONINTERFERENCE
Executive shall not, during the Term and, solely with respect to clause (ii) below, for 24 months thereafter, either on Executive’s own account or jointly with or as a manager, agent, officer, employee, consultant, partner, joint venturer, owner or stockholder or otherwise on behalf of any other person, firm or corporation, directly or indirectly solicit, induce, or attempt to solicit any (i) customers or clients to terminate their relationship with the Company or its affiliates or to cease purchasing services or products from the Company or any of its affiliates or (ii) officers or employees of the Company or any of its affiliates or offer employment to any person who is an officer or employee of the Company or any of its affiliates; provided, however, that a general advertisement to which an employee of the Company or its affiliates responds shall in no event be deemed to result in a breach of this Article VII. If it is determined by a court of
competent jurisdiction in any state that any restriction in this Article VII is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.
ARTICLE VIII
GENERAL PROVISIONS
8.1 Notices. Any notices provided hereunder must be in writing and shall be deemed effective upon the earlier of personal delivery (including personal delivery by facsimile or electronic mail) or the third day after mailing by first class mail, to the Company at its primary office location and to Executive at Executive’s address as listed on the Company’s books and records (or such other address as Executive may provide to the Company).
8.2 Tax Withholding. Executive acknowledges that all amounts and benefits payable under this Agreement are subject to deduction and withholding to the extent required by applicable law.
8.3 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.
8.4 Clawback. Amounts paid or payable under this Agreement shall be subject to the provisions of any applicable clawback policies or procedures adopted by the Company or any of its affiliates applicable to Executive, which clawback policies or procedures may provide for forfeiture and/or recoupment of amounts paid or payable under this Agreement to the extent of such overpayment, provided that Executive shall not be subject to different treatment under such policies and procedures than the Company’s other current and former senior executive officers. Notwithstanding any provision of this Agreement to the contrary, the Company and each of its affiliates reserves the right, without the consent of Executive, to adopt any such clawback policies and procedures, including such policies and procedures applicable to this Agreement with retroactive effect, provided that any such policies and procedures shall be promptly provided to Executive.
8.5 Waiver. Any waiver of this Agreement must be executed by the party to be bound by such waiver. If either party should waive any breach of any provisions of this Agreement, they shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement or any similar or dissimilar provision or condition at the same or any subsequent time. The failure of either party hereto to take any action by reason of any breach will not deprive such party of the right to take action at any time.
8.6 Complete Agreement. This Agreement constitutes the entire agreement between Executive and the Company and is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter, and will supersede all prior agreements, understandings, discussions, negotiations and undertakings, whether written or oral, between the parties with respect to the subject matter hereof (including the Letter Agreement). This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein or therein, and cannot be modified or amended except in a writing signed by a duly-authorized officer of the Company and Executive. For the avoidance of doubt, nothing in this Agreement shall be deemed to supersede the Indemnification Agreement, any agreement with the Company with respect to Executive’s service on the Board or Executive’s ownership interests with respect to the Company or its affiliates, including under the Stockholders Agreement, or any of Executive’s outstanding equity award agreements.
8.7 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.
8.8 Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
8.9 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign Executive’s rights or delegate Executive’s duties or obligations hereunder without the prior written consent of the Company.
8.10 Effect of Termination. The provisions of Section 2.4 and Articles IV, V, VII and VIII and those provisions necessary to interpret and enforce them, shall survive any termination of this Agreement and any termination of the employment relationship between Executive and the Company.
8.11 Executive Acknowledgement. Executive acknowledges and agrees that (a) Executive was represented by counsel in connection with the negotiation of this Agreement, and (b) that Executive has read and understands the Agreement, is fully aware of its legal effect, and has entered into it freely based on Executive’s own judgment.
8.12 Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the State of Florida without regard to the conflicts of law provisions thereof. With respect to any claim or dispute related to or arising under this Agreement, the parties hereby consent to the arbitration provisions of Section 8.13 and recognize and agree that should any resort to a court be necessary and permitted under this Agreement, then they consent to the exclusive jurisdiction, forum and venue of the state and federal courts (as applicable) located in Florida.
8.13 Arbitration.
(a) Subject to Section 8.13(b), any dispute, controversy or claim between Executive and the Company or any of its affiliates arising out of or relating to this Agreement or Executive’s employment or engagement with the Company or any of its affiliates (“Disputes”) will be finally settled by confidential arbitration in the State of Florida in accordance with the then-existing Judicial Arbitration and Mediation Services, Inc. (“JAMS”) Employment Arbitration Rules. The arbitration award shall be final and binding on both parties. Any arbitration conducted under this Section 8.13 shall be private, shall be heard by a single arbitrator (the “Arbitrator”) selected in accordance with the then-applicable rules of the JAMS and shall be conducted in accordance with the Federal Arbitration Act. The Arbitrator shall expeditiously hear and decide all matters concerning the Dispute. Except as expressly provided to the contrary in this Agreement, the Arbitrator shall have the power to (i) gather such materials, information, testimony and evidence as the Arbitrator deems relevant to the Dispute before him or her (and each party will provide such materials, information, testimony and evidence requested by the Arbitrator), and (ii) grant injunctive relief and enforce specific performance. All Disputes shall be arbitrated on an individual basis, and each party hereto hereby foregoes and waives any right to arbitrate any Dispute as a class action or collective action or on a consolidated basis or in a representative capacity on behalf of other persons or entities who are claimed to be similarly situated, or to participate as a class member in such a proceeding. The decision of the Arbitrator shall be reasoned, rendered in writing, be final and binding upon the disputing parties and the parties agree that judgment upon the award may be entered by any court of competent jurisdiction. The parties acknowledge and agree that in connection with any such arbitration and regardless of outcome, except as provided under this Section 8.13, each party will pay all of its own costs and expenses, including its own legal fees and expenses, and the arbitration costs will be paid by the Company.
(b) Notwithstanding Section 8.13(a), either party may make a timely application for, and obtain, judicial emergency or temporary injunctive relief to enforce any of the provisions of Articles V through VII; provided, however, that the remainder of any such Dispute (beyond the application for emergency or temporary injunctive relief) shall be subject to arbitration under this Section 8.13.
(c) By entering into this Agreement and entering into the arbitration provisions of this Section 8.13, THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVING THEIR RIGHTS TO A JURY TRIAL.
(d) Nothing in this Section 8.13 shall prohibit a party to this Agreement from (i) instituting litigation to enforce any arbitration award, or (ii) joining the other party to this Agreement in a litigation initiated by a person or entity that is not a party to this Agreement.
Further, nothing in this Section 8.13 precludes Executive from filing a charge or complaint with a federal, state or other governmental administrative agency.
[Signature page follows]
IN WITNESS WHEREAS, the parties have executed this Agreement as of the date first written above.
LOANDEPOT, INC.
By: /s/ Gregory Smallwood
Name: Gregory Smallwood
Title: Chief Legal Officer and Corporate Secretary
Accepted and Agreed:
/s/ Anthony Hsieh
Anthony Hsieh
EXHIBIT A
RESTRICTED STOCK UNIT AWARD AGREEMENT
PURSUANT TO THE
LOANDEPOT, INC. 2021 OMNIBUS INCENTIVE PLAN
* * * * *
Participant: Anthony Hsieh
Grant Date: [•]
Number of Restricted Stock Units Granted: [•]
* * * * *
THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between loanDepot, Inc., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the loanDepot, Inc. 2021 Omnibus Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”); and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“RSUs”) provided herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
1. Incorporation By Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time, unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.
2. Grant of Restricted Stock Unit Award. The Company hereby grants to the Participant, as of the Grant Date specified above, the number of RSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in
respect of the shares of Common Stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement.
3. Vesting.
(a) Subject to the provisions of Sections 3(b) hereof, the RSUs subject to this Award shall become vested as follows; provided that the Participant has not incurred a Termination (as defined below) prior to the applicable vesting date:
| | | | | |
| Vesting Schedule |
| #VestDate_1# | #VestQty_1# |
| #VestDate_2# | #VestQty_2# |
| #VestDate_3# | #VestQty_3# |
There shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant's continued service with the Company or any of its Subsidiaries on each applicable vesting date.
(b) Forfeiture.
(i) In the event of a Covered Termination (as defined in that certain Executive Employment Agreement between the Participant and the Company dated as of [•], 2026 (the “Employment Agreement”)) during the CIC Protection Period (as defined in the Employment Agreement), subject to the Participant’s execution and non-revocation of the Release of Claims (as defined in the Employment Agreement), any unvested RSUs shall become vested as of the date of such Covered Termination.
(ii) In the event of a Termination as a result of the Participant’s death or Disability (as defined in the Employment Agreement), any unvested RSUs shall become vested as of the date of such Termination.
(iii) All unvested RSUs shall be immediately forfeited upon the Participant’s Termination for any reason except as set forth in Section 3(b)(i) and 3(b)(ii) above.
(iv) As used herein, “Termination” shall mean a termination of the Participant’s services under the Employment Agreement.
4. Delivery of Shares.
(a) General. Subject to the provisions of Sections 4(b) and 8 hereof, within 30 days following the vesting of the RSUs, the Participant shall receive the number of shares of Common Stock that correspond to the number of RSUs that have become vested on the applicable vesting date.
(b) Blackout Periods. If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would
otherwise be made pursuant to Section 3(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.
5. Dividends; Rights as Stockholder. Cash dividends on shares of Common Stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of Common Stock (or cash payments, if applicable) underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided, that such stock dividends shall be paid in shares of Common Stock at the same time that the shares of Common Stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by any RSU unless and until the Participant has become the holder of record of such shares.
6. Non-Transferability. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, unless and until payment is made in respect of vested RSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Common Stock issuable hereunder.
7. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.
8. Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the RSUs and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any statutorily required withholding obligation with regard to the Participant or any additional tax obligation with regard to the Participant that does not result in any adverse accounting implications to the Company may, with the consent of the Committee, be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder.
9. Entire Agreement; Amendment. This Agreement, together with the Plan and the Employment Agreement, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings,
whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
10. Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.
11. No Right to Employment. Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.
12. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.
13. Compliance with Laws. The grant of RSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
14. Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the RSUs are intended to be exempt from the application of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.
15. Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 6 hereof) all or any part of this Agreement without the prior written consent of the Company.
16. Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
18. Electronic Signatures. The parties acknowledge and agree that this Agreement may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. Without limitation, “electronic signature” shall include faxed versions of an original signature or electronically scanned and transmitted versions (e.g., via pdf) of an original signature.
19. Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated hereunder.
20. Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
21. Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
LOANDEPOT, INC.
By:
Name:
Title:
PARTICIPANT
Anthony Hsieh
EXHIBIT B
PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT PURSUANT TO THE
LOANDEPOT, INC. 2021 OMNIBUS INCENTIVE PLAN
* * * * *
Participant: Anthony Hsieh
Grant Date: [•]
Target Number of Performance Restricted Stock Units Granted: [•]
* * * * *
THIS PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between loanDepot, Inc., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the loanDepot, Inc. 2021 Omnibus Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”); and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Performance Restricted Stock Units (“PSUs”) provided herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
1. Incorporation By Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time, unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.
2. Grant of Performance Restricted Stock Unit Award. The Company hereby grants to the Participant, as of the Grant Date specified above, the target number of PSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the
Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of Common Stock underlying the PSUs, except as otherwise specifically provided for in the Plan or this Agreement.
3. Vesting.
(a) Vesting Schedule. If the average closing price of a share of Common Stock for any consecutive 30-trading day period during the date beginning on [Date] and ending on the second anniversary thereof (the “Performance Period”) equals or exceeds a price set forth in the chart below, then upon certification of such achievement by the Committee, the related portion of the PSUs set forth below (the “Earned PSUs”) shall become eligible to vest, with the vesting of such Earned PSUs occurring on December 31 of the year in which such PSUs became Earned PSUs; provided, however, that PSUs that become Earned PSUs in [Year 1] shall vest on December 31, [Year 2] (each such date of vesting, a “Vesting Date”); provided further, however, that the Participant has continuously provided services under the Employment Agreement (as defined below) though the relevant Vesting Date (which, for the avoidance of doubt, shall exclude services solely as a member of the Board), except as set forth in this Agreement.
| | | | | |
LDI Stock Price | Target PSUs That Become Earned PSUs |
<$[•] | 0 |
$[•] | [•] |
$[•] | [•] |
$[•] | [•] |
(b) Subject to the provisions of Section 3(c) hereof, and if applicable, subject to Section 9 hereof, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, subject to the Participant’s continued service under the Employment Agreement on each applicable vesting date.
(c) Forfeiture.
(i) In the event of a Covered Termination (as defined in that certain Executive Employment Agreement between the Participant and the Company dated as of [•], 2026 (the “Employment Agreement”)) outside of a CIC Protection Period (as defined in the Employment Agreement), subject to the Participant’s execution and non-revocation of the Release of Claims (as defined in the Employment Agreement), any PSUs that become Earned PSUs prior to the date that is 30 days following such Covered Termination shall vest as of the later of the date of such Termination and the date the PSUs become Earned PSUs, and (ii) any PSUs that have not become Earned PSUs by the date that is 30 days following such Covered Termination shall be immediately forfeited.
(ii) In the event of a Covered Termination during the CIC Protection Period, subject to the Participant’s execution and non-revocation of the Release of Claims, any outstanding PSUs shall vest as of the date of such Covered Termination.
(iii) Notwithstanding Section 4.1(c)(ii) of the Employment Agreement, which shall be expressly superseded by this Section 3(c)(iii), in the event of a Termination (as defined below) as a result of the Participant’s death or Disability (as defined in the Employment Agreement), the PSUs will remain outstanding until the end of the Performance Period and eligible to become Earned PSUs. Any PSUs that become Earned PSUs prior to the end of the Performance Period shall vest as of the date the PSUs become Earned PSUs.
(iv) All unvested PSUs shall be immediately forfeited upon the Participant’s Termination for any reason except as set forth in Section 3(c)(i), 3(c)(ii) and 3(c)(iii) above.
(v) As used herein, “Termination” shall mean a termination of the Participant’s services under the Employment Agreement.
4. Delivery of Shares.
(a) General. Subject to the provisions of Sections 4(b) and 8 hereof, within thirty (30) days following the vesting of the PSUs, the Participant shall receive the number of shares of Common Stock that correspond to the number of PSUs that have become vested on the applicable vesting date.
(b) Blackout Periods. If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 3(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.
5. Dividends; Rights as Stockholder. Cash dividends on shares of Common Stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each PSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of Common Stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of Common Stock (or cash payments, if applicable) underlying the PSUs are delivered to the Participant in accordance with the provisions hereof. Stock dividends on shares of Common Stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each PSU granted to the Participant, provided, that such stock dividends shall be paid in shares of Common Stock at the same time that the shares of Common Stock underlying the PSUs are delivered to the Participant in accordance with the provisions hereof. Except as otherwise provided herein, the Participant
shall have no rights as a stockholder with respect to any shares of Common Stock covered by any PSU unless and until the Participant has become the holder of record of such shares.
6. Non-Transferability. No portion of the PSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the PSUs as provided herein, unless and until payment is made in respect of vested PSUs in accordance with the provisions hereof and the Participant has become the holder of record of the vested shares of Common Stock issuable hereunder.
7. Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.
8. Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the PSUs and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any statutorily required withholding obligation with regard to the Participant or any additional tax obligation with regard to the Participant that does not result in any adverse accounting implications to the Company may, with the consent of the Committee, be satisfied by reducing the amount of cash or shares of Common Stock otherwise deliverable to the Participant hereunder.
9. Entire Agreement; Amendment. This Agreement, together with the Plan and the Employment Agreement, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
10. Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.
11. No Right to Employment. Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the
Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.
12. Transfer of Personal Data. The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the PSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.
13. Compliance with Laws. The grant of PSUs and the issuance of shares of Common Stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the PSUs or any shares of Common Stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the PSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.
14. Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the PSUs are intended to be exempt from the application of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.
15. Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 6 hereof) all or any part of this Agreement without the prior written consent of the Company.
16. Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
17. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
18. Electronic Signatures. The parties acknowledge and agree that this Agreement may be executed by electronic signature, which shall be considered as an original signature for all purposes and shall have the same force and effect as an original signature. Without limitation, “electronic signature” shall include faxed versions of an original signature or electronically scanned and transmitted versions (e.g., via pdf) of an original signature.
19. Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to
carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated hereunder.
20. Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
21. Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the Award of PSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the PSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
LOANDEPOT, INC.
By:
Name:
Title:
PARTICIPANT
Anthony Hsieh
EXHIBIT C
2027 PSU METHODOLOGY
The stock price hurdles for the 2027 PSU Award shall be as set forth below based on the closing price of the Company’s common stock on the trading day immediately prior to the date of grant of the 2027 PSU Award. The applicable prices and hurdle amounts shall be adjusted by the Compensation Committee in good faith and consistent with the Plan in the event of any stock split, reverse stock split or other change in capitalization after the date this Agreement is signed and prior to the date of grant as needed to preserve the intended economics.
| | | | | | | | | | | |
Trading Price Immediately Preceding the Date of Grant | Hurdle 1 | Hurdle 2 | Hurdle 3 |
Less than or equal to $[***] | [***] | [***] | [***] |
Greater than $[***], less than or equal to $[***] | [***] | [***] | [***] |
Greater than $[***], less than or equal to $[***] | [***] | [***] | [***] |
Greater than $[***], less than or equal to $[***] | [***] | [***] | [***] |
Greater than $[***], less than or equal to $[***] | [***] | [***] | [***] |
Greater than $[***] | Increasing consistent with the pattern set forth above. |
EXHIBIT D
RELEASE AGREEMENT
1. Executive’s Release. Anthony Hsieh (“Executive”), on Executive’s own behalf and on behalf of Executive’s descendants, dependents, heirs, executors, administrators, assigns and successors, and each of them, hereby acknowledges full and complete satisfaction of and releases and discharges and covenants not to sue LOANDEPOT, INC. (the “Company”), its divisions, subsidiaries, parents, or affiliated corporations, past and present, and each of them, as well as its and their assignees, successors, directors, officers, stockholders, partners, representatives, attorneys, agents or employees, past or present, or any of them (individually and collectively, “Releasees”), from and with respect to any and all claims, agreements, obligations, demands and causes of action, known or unknown, suspected or unsuspected, arising out of or in any way connected with Executive’s employment or any other service relationship with the Company or the termination thereof, including without limiting the generality of the foregoing, any claim for severance pay, profit sharing, bonus or similar benefit, pension, retirement, life insurance, health or medical insurance or any other fringe benefit, or disability, whether, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of Releasees committed or omitted prior to the date of Executive’s signature on this Release Agreement (this “Agreement”) set forth below, including, without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the California Fair Employment and Housing Act, California Labor Code Section 132a, the California Family Rights Act, the Florida Civil Rights Act (FCRA), Florida Whistleblower Protection Act (FWA), Florida Workers' Compensation Law's Retaliation provision, Florida Wage Discrimination Law, Florida Minimum Wage Act, Florida Equal Pay Law, Florida Omnibus AIDS Act, the Florida Domestic Violence Leave Act, Florida Discrimination on the Basis of Sickle Cell Trait Law, Florida OSHA, the Florida Constitution, the Florida Fair Housing Act (FHA), or any other federal, state or local law, regulation, ordinance, constitution or common law (collectively, “Claims”); provided, however, that the foregoing release does not apply to any obligation of the Company to Executive pursuant to any of the following: (1) Section 4.1 of the Employment Agreement dated as of [_______], 2026, by and between the Company and Executive (the “Employment Agreement”); (2) any equity-based awards previously granted by the Company to Executive, to the extent that such awards continue after the termination of Executive’s employment with the Company in accordance with the applicable terms of such awards; (3) any right to indemnification that Executive may have pursuant to the Company’s bylaws, its corporate charter, applicable law or under any written indemnification agreement with the Company (or any corresponding provision of any subsidiary or affiliate of the Company), including the Indemnification Agreement, with respect to any loss, damages or expenses (including but not limited to attorneys’ fees to the extent otherwise provided) that Executive may in the future incur with respect to Executive’s service as an employee, officer, partner or director of the Company or any of its subsidiaries or affiliates; (4) with respect to any rights that Executive may have to insurance coverage for such losses, damages or expenses under any Company (or subsidiary or affiliate) directors and officers liability insurance policy; (5) any rights to continued medical and dental coverage that Executive may have under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or
the terms of any group health plan providing for coverage for Executive as an eligible participant pursuant to the terms of such plan; (6) any rights to payment of benefits that Executive may have under a retirement plan, supplemental retirement plan, or deferred compensation plan sponsored or maintained by the Company; (7) any rights as a director of the Company or any rights as a stockholder of the Company; or (8) claims that first arise after the date Executive first executes this Agreement. In addition, this release does not cover any Claim that cannot be so released as a matter of applicable law. Notwithstanding anything to the contrary herein, nothing in this Agreement prohibits Executive from filing a charge with or participating in an investigation conducted by any state or federal government agencies. However, Executive does waive, to the maximum extent permitted by law, the right to receive any monetary or other recovery, should any agency or any other person pursue any claims on Executive’s behalf arising out of any claim released pursuant to this Agreement. For clarity, and as required by law, such waiver does not prevent Executive from accepting a whistleblower award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934, as amended. Executive acknowledges and agrees that he or she has received any and all leave and other benefits that he or she has been and is entitled to pursuant to the Family and Medical Leave Act of 1993.
2. [Company Representation. The Company, on its own behalf and on behalf of the Company’s divisions, subsidiaries, parents, and affiliated corporations, past and present, and each of them, and their respective stockholders or other equity holders, hereby represents that, as of the date of this Agreement, the Company is not aware of any claims, demands or causes of action against Executive or any of Executive’s descendants, dependents, heirs, executors, administrators, assigns and successors, or any of them, known or unknown, suspected or unsuspected, arising out of or in any way connected with Executive’s employment or any other relationship with or interest in the Company or the termination thereof, whether, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of Executive committed or omitted prior to the date of the Company’s signature on this Agreement set forth below.]1
3. Waiver of Unknown Claims. This Agreement is intended to be effective as a general release of and bar to each and every Claim hereinabove specified. Accordingly, Executive expressly waives any rights and benefits conferred by Section 1542 of the California Civil Code and any similar provision of any other applicable state law as to the Claims. Section 1542 of the California Civil Code provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
1 To be included or modified by the Company in good faith at the time of separation, based on facts and circumstances as of such time.
Executive acknowledges that Executive later may discover claims, demands, causes of action or facts in addition to or different from those which Executive now knows or believes to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected its terms. Nevertheless, Executive hereby waives, as to the Claims, any claims, demands, and causes of action that might arise as a result of such different or additional claims, demands, causes of action or facts.
4. ADEA Waiver. Executive expressly acknowledges and agrees that by entering into this Agreement, Executive is waiving any and all rights or claims that Executive may have arising under the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), and that this waiver and release is knowing and voluntary. Executive and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the date Executive signs this Agreement. Executive further expressly acknowledges and agrees that:
(a) In return for this Agreement, Executive will receive consideration beyond that which he was already entitled to receive before executing this Agreement;
(b) Executive is hereby advised in writing by this Agreement to consult with an attorney before signing this Agreement;
(c) Executive was given a copy of this Agreement on [_________, 202__], and informed that he had [21] days within which to consider this Agreement and that if he wished to execute this Agreement prior to the expiration of such [21]-day period he will have done so voluntarily and with full knowledge that Executive is waiving his right to have [21] days to consider this Agreement; and that such [21]-day period to consider this Agreement would not and will not be re-started or extended based on any changes, whether material or immaterial, that are or were made to this Agreement in such [21]-day period after Executive received it;
(d) Executive was informed that he had seven days following the date of execution of this Agreement in which to revoke this Agreement, and this Agreement will become null and void if Executive elects revocation during that time. Any revocation must be in writing and must be received by the Company during the seven-day revocation period. In the event that Executive exercises this revocation right, neither the Company nor Executive will have any obligation under this Agreement. Any notice of revocation should be sent by Executive in writing to the Company (attention [_____________]), [Address], so that it is received within the seven-day period following execution of this Agreement by Executive.
(e) Nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.
5. No Transferred Claims. Executive represents and warrants to the Company that Executive has not heretofore assigned or transferred to any person not a party to this Agreement any matter released in Section 1 above or any part or portion thereof. Company represents and warrants to Executive that neither it, nor any of its divisions, subsidiaries, parents, and affiliated corporations, past and present, or any of them, has assigned or transferred to any person not a party to this Agreement any matter released in Section 2 above or any part or portion thereof.
6. Miscellaneous. The following provisions shall apply for purposes of this Agreement:
(a) Number and Gender. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders.
(b) Section Headings. The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.
(c) Governing Law. This Agreement, and all questions relating to its validity, interpretation, performance and enforcement, as well as the legal relations hereby created between the parties hereto, shall be governed by and construed under, and interpreted and enforced in accordance with, the laws of the State of Florida, notwithstanding any Florida or other conflict of law provision to the contrary.
(d) Severability. If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.
(e) Modifications. This Agreement may not be amended, modified or changed (in whole or in part), except by a formal, definitive written agreement expressly referring to this Agreement, which agreement is executed by both of the parties hereto.
(f) Waiver. No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.
(g) Arbitration. Any controversy arising out of or relating to this Agreement shall be submitted to arbitration in accordance with the arbitration provisions of the Employment Agreement.
(h) Counterparts. This Agreement may be executed in counterparts, and each counterpart, when executed, shall have the efficacy of a signed original. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.
[Remainder of page intentionally left blank]
The undersigned have read and understand the consequences of this Agreement and voluntarily sign it.
EXECUTED this ________ day of ________ 20___, at ______________________ County, __________.
“EXECUTIVE”
Anthony Hsieh
EXECUTED this ________ day of ________ 20___, at ______________________ County, __________.
“COMPANY”
LOANDEPOT, INC.
By:
Name:
Title:
CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT
I, Anthony Hsieh, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of loanDepot, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Anthony Hsieh
Anthony Hsieh
Chief Executive Officer and President
Date: May 7, 2026
CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT
I, David Hayes, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of loanDepot, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ David Hayes
David Hayes
Chief Financial Officer
Date: May 7, 2026
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Anthony Hsieh, Chief Executive Officer of loanDepot, Inc. (the “Company”), hereby certify, that, to my knowledge:
1.the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 7, 2026
| | | | | | | | |
| /s/ Anthony Hsieh | |
| Anthony Hsieh | |
| Chief Executive Officer | |
| (Principal Executive Officer) | |
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, David Hayes, Chief Financial Officer of loanDepot, Inc. (the “Company”), hereby certify, that, to my knowledge:
1.the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 7, 2026
| | | | | | | | |
| /s/ David Hayes | |
| David Hayes | |
| Chief Financial Officer | |
| (Principal Financial Officer) | |