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Doral Financial - Mortgage Loan Origination And Servicing Agreement
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EXHIBIT 10.28
MORTGAGE LOAN ORIGINATION AND SERVICING AGREEMENT
by and among
PUERTO RICO HOUSING BANK AND FINANCE AGENCY,
DORAL FINANCIAL CORPORATION
and
BANCO POPULAR DE PUERTO RICO
Dated December 23, 1997
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Affordable Housing Mortgage Subsidy Program
Portfolio IV (Stage 3)
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TABLE OF CONTENTS
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ARTICLE I - DEFINITIONS; REPRESENTATIONS AND WARRANTIES;
FEES; CONDITIONS................................................ 3
Section 1.1 Definitions .................................. 3
Section 1.2 General Representations and Warranties
of Mortgage Lender............................ 3
Section 1.3 Representations and Warranties of
Escrow Agent.................................. 5
Section 1.4 Representations and Warranties
of the Agency................................. 6
Section 1.5 Fees ......................................... 6
Section 1.6 Conditions Precedent ......................... 7
ARTICLE II - ORIGINATION OF MORTGAGE LOANS............................... 8
Section 2.1. Commitment.................................... 8
Section 2.2. Condition Precedent to All
Mortgage Loans................................ 10
Section 2.3. Compliance with Commitment;
Non-Assignability; Progress Reports........... 10
Section 2.4. Developer Responsibilities;
Loan Applications............................. 11
Section 2.5. Origination Fee............................... 12
Section 2.6. Satisfaction of Commitment;
Reduction of Commitment....................... 12
Section 2.7. Delivery Period; Extension of
Origination Period............................ 13
Section 2.8. Acquisition Cost.............................. 15
Section 2.9. Income Limits................................. 15
Section 2.10. Mortgage Terms................................ 15
Section 2.11. Prohibition of Discrimination................. 15
Section 2.12. Mortgage Loan Warranties...................... 16
Section 2.13. FNMA, GNMA and FHLMC Program.................. 18
Section 2.14. Certain Remedies with Respect to
Mortgage Loans................................ 18
Section 2.15. Covenants of the Mortgage Lender.............. 21
Section 2.16. Right to Sell Mortgage Loans
and Mortgage Certificates..................... 22
ARTICLE III - MORTGAGE LENDER DUTIES..................................... 23
Section 3.1. Act 87 Endorsements........................... 23
Section 3.2. Advances by Mortgage Lender of
Act 124 Subsidy Amount........................ 23
Section 3.3. Servicing of Mortgage Loans................... 23
Section 3.4. Pooling of Mortgage Loans; Transfer
to FNMA, GNMA or FHLMC........................ 24
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Section 3.5. Disbursement of Funds by Escrow Agent......... 24
Section 3.6. Foreclosure Under Act 87...................... 24
Section 3.7. Subsidy Escrow Account........................ 25
Section 3.8. Form of Mortgage.............................. 25
ARTICLE IV - RESIGNATION AND TERMINATION OF MORTGAGE LENDER.............. 25
Section 4.1. Mortgage Lender Resignation................... 25
Section 4.2. Involuntary Termination of the
Mortgage Lender............................... 26
Section 4.3. Transfer of Terminated Mortgage
Lender's Servicing............................ 28
Section 4.4. Mortgage Lender's Excused Nonperformance...... 29
Section 4.5. Indemnification............................... 29
Section 4.6. No Liability for Removal of the
Mortgage Lender............................... 30
Section 4.7. No Remedy Exclusive........................... 30
ARTICLE V - MISCELLANEOUS................................................ 30
Section 5.1. Notices 30
Section 5.2. Severability.................................. 30
Section 5.3. Further Assurances and Corrective
Instruments................................... 31
Section 5.4. Effect of Covenants; Further Acts............. 31
Section 5.5. No Rights Conferred on Others................. 31
Section 5.6. Limitation on Liability of Parties............ 31
Section 5.7. Survival of Obligations and Covenants......... 31
Section 5.8. Contract Documents............................ 32
Section 5.9. Applicable Law................................ 32
Section 5.10. Assignment.................................... 32
Section 5.11. Successors and Assigns........................ 32
Section 5.12. Counterparts.................................. 33
Exhibit A - Eligible Projects
B - Form of Opinion of Mortgage Lender Counsel
C - Drawing Schedule
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FORM 124-15
PUERTO RICO HOUSING BANK AND FINANCE AGENCY
AFFORDABLE HOUSING MORTGAGE SUBSIDY PROGRAM
PORTFOLIO IV (STAGE 3)
MORTGAGE LOAN ORIGINATION AND SERVICING AGREEMENT
THIS AGREEMENT is entered into as of this 23rd day of December, 1997 by and among DORAL FINANCIAL CORPORATION, a Puerto Rico corporation (the "Mortgage Lender"), BANCO POPULAR DE PUERTO RICO, as escrow agent (the "Escrow Agent") under an escrow agreement related to the Mortgage Loans (as hereinafter defined) to be originated and serviced under this Agreement, and the PUERTO RICO HOUSING BANK AND FINANCE AGENCY, a public instrumentality of the Commonwealth of Puerto Rico and a body corporate and politic duly organized and existing pursuant to Act No. 146 of the Legislature of Puerto Rico approved on June 30, 1961, as amended (the "Agency").
WITNESSETH:
WHEREAS, pursuant to Act No. 124 of the Legislative Assembly of Puerto Rico, approved December 10, 1993, as amended, and Regulation No. 5049, approved March 15, 1994, as amended ("Act 124"), the Act 124 Affordable Housing Mortgage Subsidy Program (the "Act 124 Program") was established to help low and moderate income persons and families defray the cost of acquiring an Eligible Residence (as hereinafter defined) and to reduce the cost to the homebuyer of the monthly installments due on mortgage loans that are made to finance the acquisition of Eligible Residences (the "Mortgage Loans");
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WHEREAS, Act No. 47 of the Legislative Assembly of Puerto Rico, approved June 26, 1987, as amended, and the regulations approved thereunder provide that developers who construct low and moderate income residences may qualify to receive tax incentives;
WHEREAS, under Act No. 87 of the Legislative Assembly of Puerto Rico, approved June 25, 1965, as amended ("Act 87"), and the regulations approved thereunder, the Agency is authorized to insure Mortgage Loans;
WHEREAS, the Department of Housing has entered or will enter into certain commitments with Developers (as hereinafter defined) to build or substantially rehabilitate Eligible Residences in specified Eligible Projects (as hereinafter defined);
WHEREAS, the Mortgage Lender has agreed to originate and fund SIXTY MILLION DOLLARS ($60,000,000) aggregate principal amount of Mortgage Loans required by these Eligible Projects, which, at the option of the Mortgage Lender, may be packaged by the Mortgage Lender into Mortgage Certificates (as hereinafter defined); and
WHEREAS, the Mortgage Lender is familiar with the Act 124 Program, understands its goals and objectives, and is willing to comply with the obligations imposed upon it hereunder to originate SIXTY MILLION DOLLARS ($60,000,000) aggregate principal amount of Mortgage Loans pursuant to the requirements of the Program and, at its option, to package them into Mortgage Certificates;
NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the undersigned Mortgage Lender, the Escrow Agent, and the Agency agree as follows:
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ARTICLE I
DEFINITIONS; REPRESENTATIONS AND WARRANTIES; FEES; CONDITIONS
SECTION I.1. DEFINITIONS. All words and terms defined in the Procedural Guide dated as of December 1, 1997 adopted for the Act 124 Program Porfolio IV (Stage 3), which Procedural Guide is incorporated herein by reference, are used herein as so defined, unless otherwise defined herein.
SECTION I.2. GENERAL REPRESENTATIONS AND WARRANTIES OF MORTGAGE LENDER. The Mortgage Lender hereby represents and warrants to the Agency and the Escrow Agent as of the date hereof and as of the date of each Closing as follows:
(a) The Mortgage Lender is a duly organized and existing mortgage lending institution in good standing under the laws governing its creation and existence and is in good standing and duly authorized and qualified to transact in Puerto Rico any and all business contemplated by this Agreement and possesses all requisite authority, power, licenses, permits and franchises to conduct its business and to execute, deliver and comply with its obligations under the terms of this Agreement, the execution, delivery and performance of which have been duly authorized by all necessary action.
(b) The execution and delivery of this Agreement in the manner contemplated herein by the Mortgage Lender and the performance and compliance with the terms hereof by the Mortgage Lender will not violate (i) the instruments creating the Mortgage Lender or governing its operations, or (ii) any laws that could have any material adverse effect whatsoever upon the validity, performance or enforceability of any of the terms of this Agreement
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applicable to the Mortgage Lender, and will not constitute a material default thereunder.
(c) The execution and delivery of this Agreement by the Mortgage Lender in the manner contemplated herein and the performance and compliance with the terms hereof by it do not require the consent or approval of any governmental authority or, if such consent or approval is required, it has been obtained.
(d) This Agreement, when duly executed and delivered by the Mortgage Lender, will constitute a valid, legal and binding obligation of the Mortgage Lender, enforceable in accordance with its terms, except as the enforcement hereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors' rights generally.
(e) The Mortgage Lender (i) is now and will at all times be an approved mortgagee under Act 87 of June 25, 1965, as amended, and (ii) is now (1) a FNMA-approved seller and servicer, (2) a GNMA approved issuer and servicer of GNMA Certificates, or (3) a FHLMC approved seller and servicer.
(f) The Mortgage Lender will comply with the non-discrimination provisions of (i) the Civil Rights Act of 1964, and the regulations pursuant thereto, (ii) Executive Order No. 11246, Equal Employment Opportunity, dated September 24, 1965, (iii) the Equal Credit Opportunity Act, as amended, and (iv) to the extent applicable, the regulations promulgated by the Puerto Rico Department of Consumer Affairs, the Puerto Rico Interest Rate Regulatory Board and the Financial Board.
(g) Except as provided under this Agreement, the Mortgage Lender has not, directly or indirectly, in connection with the transactions contemplated by this Agreement, contracted or entered into any agreement with any other mortgage lender or any
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other person or institution (except the Agency and the Escrow Agent or its agents) with respect to any aspect of its participation in the Act 124 Program other than agreements with Developers designated by the Agency under this Agreement regarding the commitment hereunder to finance the acquisition of Eligible Residences located in Eligible Projects constructed or to be constructed by such Developers. In particular, the Mortgage Lender warrants that prior to the delivery of this Agreement to the Agency, it has not agreed with any other mortgage lender or any other person or institution as to the amount of Mortgage Loans it would commit and agree to originate under the Act 124 Program, other than as provided in the preceding sentence with respect to agreements with Developers. Additionally, the Mortgage Lender represents that it has not entered into any formal or informal agreement or arrangement with any real estate broker or mortgage broker involving the origination of the Mortgage Loans under the Act 124 Program. In no event will the Agency or the Escrow Agent be liable for any fees or commissions which may be due to or claimed by any such broker pursuant to any agreement entered into in contravention of this representation.
(h) No information, officer's certificate, statement furnished in writing, or report required hereunder, delivered to the Agency or the Escrow Agent by the Mortgage Lender will, to the knowledge of the Mortgage Lender, contain any untrue statement of a material fact or omit a material fact necessary to make the information, certificate, statement or report not misleading.
SECTION I.3. REPRESENTATIONS AND WARRANTIES OF ESCROW AGENT. The Escrow Agent hereby represents and warrants to the Agency and the Mortgage Lender as follows:
(a) The Escrow Agent is duly organized, validly existing and in good standing under the laws governing its creation and
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existence and is duly authorized and qualified to conduct business in Puerto Rico and to perform the duties required of it hereunder.
(b) The execution and delivery of this Agreement by the Escrow Agent in the manner contemplated herein and the performance and compliance with the terms hereof by the Escrow Agent will not violate the Escrow Agreement and do not require the consent or approval of any governmental authority or, if such consent or approval is required, it has been obtained.
(c) This Agreement has been duly executed and delivered by the Escrow Agent.
SECTION I.4. REPRESENTATIONS AND WARRANTIES OF THE AGENCY. The Agency hereby represents and warrants to the Escrow Agent and the Mortgage Lender as follows:
(a) The Agency is a duly authorized and validly existing public corporation and instrumentality of Puerto Rico created pursuant to Act No. 146 of June 30, 1961, and is duly authorized to perform the duties required of the Agency hereunder.
(b) The execution and delivery of this Agreement by the Agency in the manner contemplated herein and the performance and compliance with the terms hereof by the Agency will not violate any applicable laws and regulations.
(c) This Agreement has been duly executed and delivered by the Agency.
(d) The obligations of the Agency under the Escrow Agreement and this Agreement are valid, legal and binding obligations of the Agency.
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SECTION I.5. FEES. Upon the execution of this Agreement and satisfaction of the conditions set forth in Section 1.6 hereof, the Agency agrees to pay to the Mortgage Lender a commitment fee in the amount of ONE MILLION EIGHT HUNDRED THOUSAND DOLLARS ($1,800,000) (the "Commitment Fee") and a hedging fee in the amount of TWO MILLION SEVEN HUNDRED THOUSAND DOLLARS ($2,700,000) (the "Hedging Fee"). If the Maximum Commitment Amount (as hereinafter defined) is not used in full by the Developers designated by the Agency to originate Mortgage Loans under this Agreement during the Origination Period (including any extensions thereto pursuant to Section 2.7 hereof) for any reason, within fifteen (15) days after the expiration of the Origination Period, the Agency shall be entitled to receive a rebate from the Mortgage Lender of the Commitment Fee in an amount equal to one percent (1%) of such portion of the Maximum Commitment Amount that is not used to originate Mortgage Loans under this Agreement. Such amount shall be reimbursed with interest thereon from the date hereof to the date of reimbursement of such amount at an annual rate of interest equal to five point eight seven five percent (5.875%). Interest shall be computed on the basis of a year of three hundred and sixty (360) days consisting of twelve (12) thirty (30)-day months.
SECTION I.6. CONDITIONS PRECEDENT. The obligations of the Mortgage Lender and the Agency hereunder are subject to the satisfaction of the conditions set forth in subsections (a) and (b) below, respectively:
(a) The Mortgage Lender shall have received the following in form reasonably satisfactory to the Mortgage Lender:
(i) a copy, certified by the Secretary of the Agency, of the resolution of the Secretary of Housing authorizing the execution of the Escrow Agreement and this Agreement;
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(ii) an executed copy of the Escrow Agreement;
(iii) a copy of the Procedural Guide;
(iv) a Subsidy Analysis (as such term is defined in the Escrow Agreement) dated as of the date hereof;
(v) an executed copy of a letter agreement between the Agency and Popular Securities, Inc. providing for the payment of a structuring fee to Popular Securities, Inc. in connection with the transaction contemplated hereunder;
(vi) an opinion of counsel to the Agency to the effect that (A) the execution of this Agreement has been duly and validly authorized by the Agency, and (B) this Agreement is a valid and binding obligation of the Agency enforceable in accordance with its terms, except as such enforcement may be limited by laws relating to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights; and
(vii) a Mortgage Insurance Commitment to the Mortgage Lender pursuant to Act 87.
(b) The Agency shall have received one or more opinions of counsel to the Mortgage Lender that together cover the matters set forth in Exhibit B attached hereto.
ARTICLE II
ORIGINATION OF MORTGAGE LOANS
SECTION II.1. COMMITMENT. Subject to the terms and conditions hereof and in reliance upon the representations and war-
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ranties set forth in this Agreement, the Mortgage Lender agrees to make Mortgage Loans with respect to the Eligible Projects identified in Exhibit A hereto from time to time during the period from the date hereof up to and including the last day of the Origination Period (including any extensions thereto pursuant to Section 2.7), the aggregate principal amount of which shall not be less than the Commitment Amount for each Eligible Project; provided, however, that the aggregate principal amount of the Mortgage Loans originated by the Mortgage Lender with respect to the Eligible Projects that are subject to this Agreement shall not exceed SIXTY MILLION DOLLARS ($60,000,000) (the "Maximum Commitment Amount"); provided further, that the Mortgage Lender shall not originate Mortgage Loans in an aggregate principal amount exceeding the amounts set forth in Exhibit C hereto sooner that the dates indicated in such Exhibit C and shall not originate Mortgage Loans in any Subsidy Rate Category in an amount greater than that contemplated by the Procedural Guide. Each Mortgage Loan made by the Mortgage Lender under this Agreement shall reduce the amount of the Maximum Commitment Amount by the original principal amount of such Mortgage Loan. The Mortgage Loans are to be made by the Mortgage Lender with respect to each Eligible Project pursuant to this Agreement, after approval by the Agency as hereinafter required, and shall be in all respects in accordance with the provisions of the Act 124 Program and the Procedural Guide. No Mortgage Loan shall be entitled to Act 124 Subsidy under the Act 124 Program unless the applicable Mortgage File has been submitted to the Agency for its review and the Mortgage Loan has been approved by the Agency pursuant to Sections 4.12 and 4.13 of the Procedural Guide. The Commitment Amount for each Eligible Project set forth in Exhibit A is equal to the aggregate original principal balances of the Mortgage Loans encumbering Eligible Residences in the Eligible Project that are required to be delivered under the Act 124 Program by the Developer under its Developer Commitment Letter.
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During the Origination Period the Agency may substitute any of the Eligible Projects identified in Exhibit A hereto with other Eligible Projects, if the Agency determines that the Eligible Project being substituted will not be able to comply with its commitment to deliver Eligible Residences under the Program within the applicable Commitment Period; provided, however, that the aggregate Commitment Amount for the Eligible Projects subject to this Agreement may never exceed the Maximum Commitment Amount and that the Delivery Period for each Eligible Project may not extend beyond the end of the Origination Period (as may be extended by the Agency pursuant to Section 2.7 of this Agreement). After any such substitution, the Mortgage Lender shall be obligated to make Mortgage Loans for the Eligible Residences within the Delivery Period with respect to any new Eligible Project designated by the Agency pursuant to this Section.
SECTION II.2. CONDITION PRECEDENT TO ALL MORTGAGE LOANS. The obligation of the Mortgage Lender to make a Mortgage Loan hereunder shall be subject to the condition precedent that on the Closing Date of such Mortgage Loan the interest paid or payable on such Mortgage Loan shall be excludable from the gross income of the recipient thereof under the applicable provisions of Act No. 120 of October 31, 1994, as amended.
SECTION II.3. COMPLIANCE WITH COMMITMENT; NON-ASSIGNABILITY; PROGRESS REPORTS. Assuming that the Developer of an Eligible Project completes the Eligible Residences required by its Developer Commitment Letter, obtains all required permits for their sale, and identifies a sufficient number of Act 124 Purchasers and Non-Subsidized Purchasers for such Eligible Residences, the Mortgage Lender shall fulfill its commitment to the Agency to originate Mortgage Loans by the end of the Delivery Period (as described in
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Section 2.7 hereof). During the Origination Period, the Mortgage Lender may not, without the written consent of the Agency and of the corresponding Developer, assign all or a portion of its rights and obligations to originate Mortgage Loans hereunder to another mortgage lender for the purpose of ultimately fulfilling its obligations hereunder. The Mortgage Lender's request for consent to such assignment shall set forth the terms and conditions of the assignment and the identity of the proposed assignee or assignees, all of which must be acceptable to the Agency in its sole and absolute discretion. Such assignment shall be made in accordance with the Procedural Guide. In no event, without the written consent of the Agency, may the Mortgage Lender charge or receive any fee or remuneration with respect to any such assignment.
On the first day of the third month following the date of this Agreement and within the first five (5) days of each month thereafter, the Mortgage Lender shall deliver to the Agency an Origination Progress Report evidencing, with respect to the preceding month, on a cumulative-to-date basis and by Eligible Project, which shall be completed in a manner satisfactory to the Agency: (i) the total number and principal amount of Mortgage Loans originated by the Mortgage Lender under this Agreement, broken down, if applicable, by Subsidy Rate Category, (ii) the total number and principal amount of Mortgage Loans originated by the Mortgage Lender that have not yet been submitted to the Agency for its approval under Sections 4.12 and 4.13 of the Procedural Guide, broken down, if applicable, by Subsidy Rate Category,(iii) the number of Mortgage Loan commitments to Act 124 Purchasers and Non-Subsidized Purchasers, and (iv) such additional information as the Agency may require from time to time, including information with respect to Developers and Eligible Projects affecting timely completion of Eligible Residences and timely origination of Mortgage Loans under this Agreement.
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SECTION II.4. DEVELOPER RESPONSIBILITIES; LOAN APPLICATIONS. The Agency hereby represents that the Developer of each Eligible Project has received approval from the Secretary of Housing for the construction of Eligible Residences in the Eligible Project under the Act 124 Program. The Developer is responsible for the construction of the Eligible Residences within a specified time and must identify Act 124 Purchasers and Non-Subsidized Purchasers for the completed Eligible Residences. The Mortgage Lender shall cooperate with and assist the Developer in identifying Act 124 Purchasers and Non-Subsidized Purchasers. Once a prospective Act 124 Purchaser or Non-Subsidized Purchaser has been identified, the Mortgage Lender will promptly process all required credit and loan documents so that the Developer can sell the Eligible Residences promptly upon completion and so that the Mortgage Lender can originate Mortgage Loans in the Commitment Amount within the Delivery Period.
SECTION II.5. ORIGINATION FEE. The Mortgage Lender shall be entitled to charge an Origination Fee with respect to each Mortgage Loan not exceeding two percent (2%) of the principal amount of each Mortgage Loan. The Origination Fee will be paid by the Mortgagor as a closing expense.
SECTION II.6. SATISFACTION OF COMMITMENT; REDUCTION OF COMMITMENT. The making by the Mortgage Lender of Mortgage Loans covering Eligible Residences in the Eligible Projects identified in Exhibit A hereto having a total aggregate principal amount that is not less than the Maximum Commitment Amount will be deemed by the Agency to constitute compliance with the Mortgage Lender's obligations hereunder; provided, however, that the Mortgage Lender shall not be required to originate Mortgage Loans under this Agreement to the extent that a Developer fails to complete the construction of Eligible Residences in an Eligible Project within
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the Origination Period or to the extent that sufficient Act 124 Purchasers within each Subsidy Rate Category and Non-Subsidized Purchasers cannot be identified by the Developer and the Mortgage Lender for the Eligible Residences within such period. The Mortgage Lender agrees to use its best efforts to assist the Developer in identifying sufficient Act 124 Purchases and Non-Subsidized Purchasers for the Eligible Residences within each Eligible Project. The Mortgage Lender shall include in each Origination Progress Report delivered to the Agency pursuant to Section 2.3 any information available to the Mortgage Lender as to delays encountered by any Developer in completion of construction of Eligible Residences in Eligible Projects covered by this Agreement.
Should the Agency determine, in its sole discretion, based on Origination Progress Reports, visual inspection, or otherwise, that the Mortgage Lender will not be able to fulfill its commitment to originate Mortgage Loans with respect to such Eligible Residences as a result of any failure by the Mortgage Lender to duly observe or perform any of the covenants or agreements of the Mortgage Lender to be observed or performed under this Agreement which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Mortgage Lender by the Agency or the Escrow Agent, the Agency in its sole discretion may reduce the unfunded Maximum Commitment Amount for the Eligible Projects hereunder with respect to the Mortgage Lender. Such reduction shall not relieve the Mortgage Lender of any liability for failing to comply with the terms hereof. In such event the Agency may reassign such unfunded Commitment Amount to another Eligible Project, Developer or mortgage lender, in its sole and absolute discretion.
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SECTION II.7. DELIVERY PERIOD; EXTENSION OF ORIGINATION PERIOD. (a) The Mortgage Lender shall be obligated to make Mortgage Loans in an aggregate amount equal to the Eligible Project's Commitment Amount within the applicable Delivery Period for each Eligible Project, which period shall be the two year period commencing on the Commitment Date. To the extent that a Developer meets its responsibilities under Section 2.4 hereof within the applicable Delivery Period, the Mortgage Lender shall be obligated to originate and fund Mortgage Loans for the Commitment Amount for the relevant Eligible Project.
If the Mortgage Lender is unable to originate and fund Mortgage Loans for an Eligible Project within the Delivery Period due to a Developer's failure to meet its responsibilities as set forth in Section 2.4 (but not as a result of the Mortgage Lender's delay in processing loan applications and qualifying Act 124 Purchasers and Non-Subsidized Purchasers or closing Mortgage Loans) and if such Developer later completes the Eligible Residences and identifies Act 124 Purchasers and Non-Subsidized Purchasers within the Origination Period, the Mortgage Lender shall use its best efforts to originate under this Agreement Mortgage Loans for such Eligible Residences closed after the Delivery Period and prior to the end of the Origination Period.
(b) The parties hereto hereby agree that the Origination Period may be extended until December 31, 2000, subject to the following conditions:
(i) Not less than fifteen (15) days prior to the expiration of the Origination Period, the Agency shall notify the Mortgage Lender of its intention to extend the expiration date of the Origination Period, such notification to include the Eligible Projects that will be subject to such extension and the aggregate
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Commitment Amount for such Eligible Projects that the Agency desires to be available for the origination of Mortgage Loans under this Agreement during the extension (the "Extension Commitment Amount"); provided, however, that the Extension Commitment Amount shall not exceed the available balance of the Maximum Commitment Amount that has not been used as of the last day of the Origination Period to make Mortgage Loans to finance Eligible Residences within Eligible Projects that are subject to this Agreement;
(ii) The Mortgage Lender shall have received a fee (the "Extension Fee") in an amount equal to two percent (2%) of the amount of the Extension Commitment Amount; and
(iii) The Mortgage Lender will not be obligated to make Mortgage Loans during the extension of the Origination Period (A) with an aggregate principal amount exceeding FIFTEEN MILLION DOLLARS ($15,000,000), during the period commencing on March 1, 2000, and ending on August 31, 2000, and (B) with an aggregate principal amount exceeding the lesser of (x) the available balance of such FIFTEEN MILLION DOLLARS ($15,000,000) that has not been used as of August 31, 2000 to originate Mortgage Loans hereunder and (y) SIX MILLION DOLLARS ($6,000,000), during the period commencing on September 1, 2000 and ending on December 31, 2000.
SECTION II.8. ACQUISITION COST. The Acquisition Cost limits shall be as set forth in the Procedural Guide.
SECTION II.9. INCOME LIMITS. The Income Limit to qualify as Act 124 Purchasers and Non-Subsidized Purchasers shall be as set forth in the Procedural Guide.
SECTION II.10. MORTGAGE TERMS. Each Mortgage Loan shall be made at the Mortgage Loan Rate of six point five percent (6.50%) per annum and shall have such other terms and conditions as may be specified in the Procedural Guide.
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SECTION II.11. PROHIBITION OF DISCRIMINATION. The Mortgage Lender shall consider all applications for Mortgage Loans for Eligible Project(s) in the order in which they are received on a fair and equal basis and will not arbitrarily vary the terms of a loan or the application procedures therefor or arbitrarily reject a Mortgage Loan applicant because of his race, color, religion, national origin, age, sex, or marital status. The Mortgage Lender shall not enter into any agreement or arrangement with any person, firm or corporation to issue Mortgage Loans for an Eligible Project to prefer any applicant or group of applicants for Mortgage Loans over any other applicant or group of applicants for such loans, except as may be required to restrict sales of Eligible Residences to Act 124 Purchasers and Non-Subsidized Purchasers in order to meet the objectives of the Act 124 Program. In accepting, evaluating and acting upon such applications, the Mortgage Lender shall comply, if applicable, with the Federal Equal Credit Opportunity Act and Regulation B promulgated thereunder. All applications for Mortgage Loans and evidence of actions taken with respect thereto shall be retained by the Mortgage Lender for at least twenty-five (25) months from the date of the application.
SECTION II.12. MORTGAGE LOAN WARRANTIES. The Mortgage Lender shall be deemed to warrant to the Agency at the time of making of each Mortgage Loan pursuant to this Agreement that:
(a) to the knowledge of the Mortgage Lender after complying with the requirements of the Procedural Guide, the Mortgage Loan has been made to an Act 124 Purchaser or Non-Subsidized Purchaser to finance an Eligible Residence meeting all the applicable requirements of the Procedural Guide;
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(b) the Mortgage Loan meets all the terms and conditions for a Mortgage Loan set forth in the Procedural Guide and has been processed in accordance with the provisions of the Procedural Guide;
(c) the Mortgage Lender has no knowledge of any material misstatement or omission in the material provided by the Act 124 Purchaser or Non-Subsidized Purchaser under the Mortgage Loan or by the Mortgage Lender in connection with the Mortgage Loan;
(d) the terms and conditions of and descriptions contained in the Mortgage Note and plat of survey, deed, Mortgage, title insurance policy, mortgage insurance policy, hazard insurance policies and other related documents are consistent with the application of the Act 124 Purchaser or Non-Subsidized Purchaser and with each other, all signatures to such documents are genuine and, to the knowledge of the Mortgage Lender, the Mortgage Note, Mortgage and all other contracts or agreements entered into in connection therewith are valid and binding upon the parties thereto and enforceable against each party in accordance with their respective terms;
(e) the Mortgage Lender has not advanced funds (or directly or indirectly induced or solicited any advance of funds by any other person), other than as permitte...
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