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E-Loan - WHOLESALE LENDING AGMNT.
WHOLESALE LENDING AGREEMENT
THIS AGREEMENT is made and entered into as of March 6, 1998, between UNION FEDERAL SAVINGS BANK OF INDIANAPOLIS, a federally chartered savings bank with its principal offices located in Indianapolis, Indiana (hereinafter "UFSB"), and E - Loan, Inc. with its principal offices located at Palo Alto, California (hereinafter "Client Mortgage Company" or "CMC") under the following circumstances:
A. UFSB is engaged in the business of, among other activities, purchasing and/or funding mortgage loans on residential real estate ("Mortgage Loans") and reselling such loans in the secondary mortgage market. CMC is engaged in the business of negotiating Mortgage Loans and performing certain residential mortgage application functions on behalf of Mortgagors in exchange for a fee or other consideration.
B. During the term of this Agreement, UFSB will advise CMC of UFSB's various FHA, VA, and Conventional Mortgage Loan products as well as select Bond Program Mortgage Loan products, and CMC intends, from time to time, to offer to UFSB for purchase and/or funding certain FHA, VA, and Conventional Mortgage Loans as well as select Bond Program Mortgage Loans which fall within the parameters of UFSB's said Mortgage Loan products.
NOW, THEREFORE, in consideration of the mutual agreements and covenants hereinafter set forth, the parties agree as follows:
ARTICLE I
All words and phrases defined in this Article 1 (except as herein otherwise expressly provided or unless the context otherwise requires) shall, for the purposes of this Agreement, have the respective meanings specified in this Article:
1.01. "Agreement" means this Wholesale Lending Agreement and any
written and agreed to amendments or modifications hereto signed by both
UFSB and CMC.
1.02. "Bond Authority" means a federal, state or local authority
established for the purpose of making residential mortgage loans to low
and moderate income borrowers at below market interest rates and/or
upon other terms and conditions favorable to the borrowers and issuing
bonds or other obligations to fund such loans.
1.03. "Bond Program" means a qualified single family residential
mortgage loan program of a local, state or federal housing authority
under which residential mortgage loans are made available to low and
moderate income borrowers at below market interest rates and/or upon
other terms and conditions favorable to the borrowers.
1.04. "Business Day" or "Day" means any day of the week other than a
Saturday, Sunday, or a legal holiday or a bank holiday in the State of
1.05. "Defect" means a breach in any respect of any representation or
warranty herein contained with respect to a Mortgage Loan or any
failure by CMC to comply with any covenant herein contained with
respect to a Mortgage Loan which could reasonably be expected to result
in a loss or damage to UFSB or a subsequent purchaser of such Mortgage
1.06. "Defective Loan" means any Mortgage Loan that contains a Defect.
1.07. "FHLMC" means Federal Home Loan Mortgage Corporation.
1.08. "FIRREA" means the Financial Institutions Reform, Recovery and
Enforcement Act of 1989.
1.09. "FNMA" means the Federal National Mortgage Association or any
successor thereto.
1.10. "GNMA" means the Government National Mortgage Association or any
successor thereto.
1.11. "Mortgage" means a valid and enforceable Mortgage, Deed of Trust,
or other Security Instrument creating a first lien upon described real
property improved by a one-to-four family dwelling which secures a
Mortgage Note.
1.12. "Mortgage Documents" means all documents specified in the
Wholesale Seller Guide pertaining to a particular Mortgage Loan.
1.13. "Mortgage Loan" means an individual mortgage loan which is the
subject to this Agreement.
1.14. "Mortgage Loans" means the mortgage loans which are the subject
of this Agreement.
1.15. "Mortgage Loan Application" or "Mortgage Loan Applications" means
an application for a Mortgage Loan processed by CMC in accordance with
the provisions of the Wholesale Seller Guide and the terms of this
1.16. "Mortgage Note" means a written promise to pay a sum of money at
a stated interest rate during a specified term that is secured by a
Mortgage Loan.
1.17. "Mortgagor" means the obligor on a Mortgage Note.
1.18. "Repurchase" means CMC's purchase of a Mortgage Loan from UFSB
that was previously sold to UFSB from CMC.
1.19. "RESPA" means the Real Estate Settlement Procedures Act of 1974
(12 U.S.C. 2601, et seq.), as amended from time to time.
1.20. "Servicing Rights" or "Servicing" means the right, title, and
interest in and to the servicing of the Mortgage Loans and the
maintenance and servicing of the escrow accounts, along with the right
to receive the servicing fee income and any and all ancillary income
arising from or connected to any Mortgage Loan.
1.21. "Wholesale Seller Guide" means a manual prepared by UFSB, and
amended from time to time, which contains the terms and conditions
under which UFSB has agreed to purchase and/or fund Mortgage Loans from
CMC as well as practices and procedures which UFSB will require CMC to
implement and follow with respect to those Mortgage Loans offered for
sale and/or funding to UFSB.
ARTICLE II
Purchase and/or Funding of Loans
2.01. PURCHASE AND/OR FUNDING OF LOANS BY UFSB. UFSB agrees to purchase and/or fund certain Mortgage Loans from CMC; provided the following requirements are met:
(a) Immediately upon payment by UFSB of the purchase price of each
such Mortgage Loan so purchased and/or funded, all rights,
title and interest (including all Servicing Rights) in said
Mortgage Loans shall be assigned from CMC to UFSB;
(b) All FHA, VA, Conventional and select Bond Program Mortgage
Loans shall have been closed in the name of CMC unless another
name is specifically authorized by UFSB; and
(c) All such Mortgage Loans shall meet the UFSB's lending
requirements as set forth herein or in the Wholesale Seller
2.02. UFSB LOAN REQUIREMENTS. UFSB will advise CMC from time to time regarding the types of FHA, VA and conventional Mortgage Loan products ("Qualified Products") it is interested in purchasing and/or funding, including, without limitation, information concerning interest rates, loan limits, loan-to-value ratios, points, fees, and underwriting requirements. Any commitment from UFSB to CMC to purchase and/or fund any Mortgage Loan or Mortgage Loans or Mortgage Loan Applications will be issued in accordance with UFSB's current lending policy. Such commitment will be in writing and the terms of such commitment will be applicable only to the Mortgage Loan or Mortgage Loans specified therein. UFSB may, at its sole discretion, cancel or discontinue any of the Qualified Products, with or without notice to CMC. UFSB will attempt to give reasonable advance notice of such changes but shall have no obligation to do so. CMC agrees to follow the practices and procedures set forth in the Wholesale Seller's Guide. The terms and provisions contained in the Wholesale Seller Guide are incorporated herein as though set out in full.
2.03. PRICING OF LOANS; LOCK-IN RATES. UFSB will provide price protection for the Mortgage Loans it agrees to purchase and/or fund hereunder in the form of a lock-in according to its lock-in policies set forth in the Wholesale Seller Guide. The time at which the interest rate for a Mortgage Loan is locked-in shall be solely at CMC's option. However, a Mortgage Loan with a lock-in interest rate must be presented to UFSB for purchase and/or funding at the locked-in price within the lock-in period. For purposes of this Agreement, the "lock-in period" shall be determined in accordance with the provisions of the Wholesale Seller Guide. If such Mortgage Loan is not presented to UFSB's Wholesale Branch at the address noted in the Wholesale Seller Guide within the lock-in period, Said Loan will be re-priced at UFSB's option. Transfer by CMC of a locked-in Mortgage Loan during the lock-in period to an entity other than UFSB shall constitute a violation of this Agreement, and CMC shall be liable for any loss sustained as a result thereof by UFSB. In addition, CMC shall notify UFSB immediately should any commitment for a locked-in Mortgage Loan be canceled, withdrawn, or otherwise determined not to be set for purchase and/or funding by UFSB.
Article III
Warranties and Representations
3.01. CMC'S WARRANTIES AND REPRESENTATIONS. CMC hereby warrants, represents and covenants to UFSB with regard to each Mortgage Loan submitted to UFSB for underwriting, purchase and/or funding that the following are true, complete and correct as of the date of such submission as if such warranties, representations and covenants are again made by CMC on those dates:
(a) CMC is duly organized, validly existing and in good standing
under the laws of each jurisdiction in which it originates
Mortgage Loans delivered to UFSB pursuant to this Agreement
and has complied with all applicable statutes, laws, rules and
regulations, orders and decrees of all federal, state, county
and municipal authorities. CMC further has qualified,
registered and obtained all licenses and taken all other
requisite action required in order to originate any Mortgage
Loans delivered to UFSB pursuant to this Agreement. The
execution and delivery of this Agreement and the transactions
contemplated hereby are duly authorized and binding on CMC;
(b) All Mortgage Loans CMC submits to UFSB have met all
requirements of federal, state, or local laws, including, but
not limited to, Usury, Truth-In-Lending, Real Estate
Settlement Procedures, Consumer Credit Protection, Equal
Credit Opportunity, Loan Disclosure Laws, the Flood Disaster
Protection Act, and the Fair Credit Reporting Act and CMC
shall maintain in its possession, available for UFSB's
inspection, and shall deliver to UFSB upon demand, evidence of
compliance with all such requirements;
(c) CMC has no knowledge of any circumstances or conditions with
respect to the Mortgage Loan submitted to UFSB for
underwriting, purchase and/or funding, the mortgaged property,
the mortgagor or the mortgagor's credit standing that can be
reasonably expected to cause institutional investors to regard
the Mortgage Loan as an unacceptable investment, cause the
Mortgage Loan to become delinquent or adversely affect the
value or marketability of the Mortgage Loan;
(d) With regard to FHA or VA insured Mortgage Loans, the Federal
Housing Commissioner or VA, as applicable, has or will issue
his Mortgage Insurance Certificate or Loan Guaranty
Certificate; and payment due on the mortgage insurance premium
has been paid to the insuring authority; nothing has been done
or omitted, and no circumstances exist, the effect of which
act, omission or circumstance would invalidate the contract of
insurance with the FHA or VA as applicable; and the Mortgage
Loan complies with the regulations of the FHA or VA as
applicable;
(e) All of the appraisers selected by CMC who have performed
appraisals in connection with the Mortgage Loans submitted to
UFSB for purchase and/or funding have been properly licensed
and are currently approved in accordance with the provisions
of the Wholesale Seller Guide;
(f) The appraisal submitted in connection with each Mortgage Loan
meets the requirements of FIRREA and USPAP;
(g) The underwriting for each Mortgage Loan, if performed by CMC,
has been performed in accordance with the provisions of the
Wholesale Seller Guide and the terms of this Agreement;
(h) No legal actions are pending or threatened which might affect
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