Conventional Loan Purchase

LOAN PURCHASE AGREEMENT







This Agreement, dated as of September 25, 1998, is made by and between Countrywide Home Loans, Inc., a New York corporation ("Countrywide"), and E-Loan, Inc. , a California corporation ("Seller"), for mutual considerations set forth herein.



Countrywide agrees to purchase certain loans secured by real property, together with the servicing thereof (the "Loans"), from Seller under Countrywide's mortgage loan programs, and Seller agrees to sell to Countrywide certain such Loans pursuant to the terms and conditions set forth herein and in Countrywide's Correspondent Lending Division Loan Purchase Program Seller's Manual, as amended from time to time (the "Manual"). In connection therewith, the parties agree as follows:



1. ELIGIBLE LOANS

A. Only those Loans fully complying with the standards for Conforming

Conventional, Jumbo Conventional, Government and Second Mortgage Loan

Programs set forth in the Mortgage Programs section of the Manual are

eligible for purchase under this Agreement. Seller must be approved,

qualified and/or licensed to originate such Loans.



B. Seller shall fully underwrite each Loan prior to submission to

Countrywide in accordance with Underwriting Guidelines and Lending

Requirements sections of the Manual, or, if available, use a

Countrywide-approved automated underwriting system for underwriting the



C. Seller shall be responsible for assuring that Loans submitted to

Countrywide comply with all terms and conditions of this Agreement and

the Manual.



2. COMMITMENT TO PURCHASE LOANS

The procedure pursuant to which Seller may commit to sell a Loan to

Countrywide is detailed in the Loan Registration section of the Manual.

For purposes of this Agreement, Countrywide and Seller define a best

effort commitment to be a mandatory commitment if the Loan closes.

Countrywide will confirm the conditions of the sale of the Loan to

Countrywide by delivering a confirmation ("Commitment") to Seller which

sets forth the terms of the transaction, including the price Countrywide

will pay for each Loan, as determined pursuant to the Pricing standards

set forth in the Manual (the "Purchase Price"). The terms of the

Commitment, including the Purchase Price, shall be in effect for the

period of time requested by Seller and approved by Countrywide (the

"Commitment Period"). If Seller is approved by Countrywide to sell Loans

to Countrywide on a bulk sale basis, Countrywide and Seller shall execute

the Addendum to Loan Purchase Agreement (Bulk Sales) which shall be

attached to and incorporated into this Agreement by reference.



3. UNDERWRITING AND PROPERTY APPRAISAL

A. Countrywide shall have the right, but not the obligation, to underwrite

any Loan submitted for purchase pursuant to this Agreement, or

otherwise insure that any Loan submitted for purchase complies with all

terms and conditions of this Agreement and the Manual; provided that

neither the existence nor the exercise of this right shall affect in

any way Seller's obligations hereunder, including without limitation,

Seller's repurchase obligations under Section 7 hereof and Seller's

hold harmless obligations under Section 9 hereof. The applicable

procedures are set forth in the Prior Approval section of the Manual.



B. Seller shall deliver to Countrywide an appraisal of the real estate

security for each such Loan, signed by a qualified appraiser, as

defined in the Manual, prior to Countrywide's approval to purchase such









4. DELIVERY OF LOAN DOCUMENTATION

A Loan shall be deemed delivered to Countrywide if: (A) it is received by

Countrywide within the Commitment Period; (B) it is in compliance with the

requirements set forth in the Delivery of Closed Loans and Funding

Documentation sections of the Manual; and (C) there are no outstanding

conditions which would prevent Countrywide from funding the purchase of

the Loan. Failure by Seller to deliver to Countrywide within 120 days from

the date a Loan was purchased one or more of the original documents

specified in the Delivery of Closed Loans section of the Manual shall

result in assessment by Countrywide of a fee of $50 per month for each

month, after the initial 120 day period, during which one or more of such

documents is outstanding, i.e., has not been delivered to Countrywide for

any period of time during the month. Such fee shall be $50 regardless of

the number of such documents. Failure by Seller to deliver to Countrywide

one or more of the original documents specified in the Delivery of Closed

Loans section of the Manual within 270 days from the date the Loan was

purchased by Countrywide shall obligate Seller to repurchase the Loan

pursuant to the provisions of Section 7 of this Agreement.



5. PAYMENT OF PURCHASE PRICE AND SELLER'S WIRE INSTRUCTIONS

Countrywide shall, after receipt of a Loan documentation package which

fully complies with the requirements of the Manual, deliver the Purchase

Price (less any fees or discounts due to Countrywide) set forth in the

applicable Commitment to Seller in accordance with Seller's wire

instructions or in accordance with any bailee letter or trust receipt

submitted with the Loan, as determined in the sole and absolute discretion

of Countrywide.



6. SELLER'S OBLIGATIONS, REPRESENTATIONS AND WARRANTIES

A. Seller represents and warrants to Countrywide as to each Loan offered

for sale under this Agreement that as of the date of Countrywide's

purchase of such Loan:



(1) The Loan documents have been duly executed by the

trustor/mortgagor, acknowledged and recorded; each Loan is valid

and complies with all criteria contained in the Manual; the note

and deed of trust/mortgage constitute the entire Agreement

between the trustor/mortgagor and the beneficiary/mortgagee, and

there is no verbal understanding or written modification which

would affect the terms of the note or the deed of trust/mortgage

except by written instrument delivered and expressly made known

to the beneficiary/mortgagee and recorded if recording is

necessary to protect the interests of the beneficiary/mortgagee.



(2) Seller is the sole owner of the Loan and has authority to sell,

transfer and assign the same on the terms set forth herein and in

the Manual. There has been no assignment, sale or hypothecation

thereof by Seller, except the usual hypothecation of the

documents in connection with Seller's normal banking transactions

in the conduct of its business.



(3) The full principal amount of the Loan has been advanced to the

trustor/mortgagor, either by payment directly to such person or

by payment made on such person's request or approval. The unpaid

principal balance of the Loan is as represented by Seller. All

costs, fees and expenses incurred in making, closing and

recording the Loan have been paid. No part of the mortgaged

property has been released from the lien of the Loan, the terms

of the Loan have in no way been changed or modified, and the Loan

is current and not in default.



(4) Each Loan is a valid first lien or, if specifically approved by

Countrywide, a valid second lien on the mortgaged property, and

the mortgaged property is free and clear of all encumbrances and

liens having priority over the lien of such Loan, except for the

first lien, if applicable, and liens for real estate taxes and

special assessments not yet due and payable and those exceptions

allowed in connection with Government Loans and other exceptions

set forth in the Manual.



(5) The mortgaged property is free and clear of all mechanics' and

materialmen's liens or liens in the nature thereof, and no rights

are outstanding that under law could give rise to any such lien,

nor is Seller aware of any facts which could give rise to any

such lien.









(6) Each Loan which Seller represents to be insured or guaranteed is,

or will within 120 days from the date of delivery of such Loan to

Countrywide be, so insured or guaranteed. No action has been

taken or failed to have been taken which has resulted or will

result in an exclusion from, denial of, or defense to, coverage

under such insurance or guarantee; and all conditions within the

control of Seller as to the validity of the insurance or guaranty

as required by the National Housing Act of 1934 and the rules and

regulations thereunder, or as required by the Servicemen's

Readjustment Act of 1944 and the rules and regulations

thereunder, or imposed by the mortgage insurance companies or

other insurers have been properly satisfied, and said insurance

or guaranty is valid and enforceable.



(7) All federal and state laws, rules and regulations applicable to

the mortgage Loans have been complied with, including but not

limited to: the Real Estate Settlement Procedures Act, the Flood

Disaster Protection Act, the Federal Consumer Credit Protection

Act including the Truth-in-Lending and Equal Credit Opportunity

Acts, and all applicable statutes or regulations governing fraud,

lack of consideration, unconscionability, consumer credit

transactions or interest charges.



(8) No Loan is the subject of, and Seller is not aware of any facts

which could give rise to, litigation which could affect

Countrywide's ability to enforce the terms of the obligation or

its rights under the mortgage documents.



(9) There is in force for each Loan either (a) a paid-up title

insurance policy on the Loan issued by a Countrywide approved

title company in an amount at least equal to the outstanding

principal balance of the Loan or (b) an attorney's mortgage lien

opinion. (Negatively amortizing loans require additional

coverage.)



(10) There is in force for each Loan valid hazard insurance policy

coverage and, where applicable, valid flood insurance policy

coverage, and such coverages meet the requirements of Countrywide

specified in the Manual.



(11) Seller will record the corporate assignment in the name of

Countrywide Home Loans, Inc., at the time the deed of

trust/mortgage is recorded, and the assignment of the Loan from

Seller to Countrywide shall be valid and enforceable.



(12) The borrower has no rights of rescission, set-offs,

counter-claims or defenses to the note or deed of trust/mortgage

securing the note arising from the acts and/or omissions of



(13) Seller has no knowledge that any improvement located on or being

part of the mortgaged property is in violation of any applicable

zoning law or regulation.



(14) All improvements included for the purpose of determining the

appraised value of the mortgaged property lie wholly within the

boundaries and building restriction lines of such property, and

no improvements on adjoining properties encroach upon the

mortgaged property.



(15) There is no proceeding pending for total or partial condemnation

of any mortgaged property and said property is free of

substantial damage (including, but not limited to, any damage by

fire, earthquake, windstorm, vandalism or other casualty) and in

good repair.



(16) Seller has no knowledge of any circumstances or conditions with

respect to any Loan, mortgaged property, trustor/mortgagor or

trustor's/mortgagor's credit standing that reasonably could be

expected to cause private institutional investors to regard any

Loan as an unacceptable investment, cause any Loan to become

delinquent or adversely affect the value or marketability of the



(17) All documents submitted are genuine. All other representations as

to each such Loan are true and correct and meet the requirements

and specifications of all parts of this Agreement and the Manual.









B. Seller represents and warrants to Countrywide that as of the date first

set forth above and as of the date of Countrywide's purchase of each Loan

hereunder:



(1) Seller is duly organized, validly existing and in good standing

under the laws of its state of incorporation and is qualified

and/or licensed as necessary to transact business, including the

originating and selling of mortgage loans, and is in good

standing in each state where the property securing a Loan is



(2) Seller has the full power and authority to hold and sell each

Loan; and neither the execution and delivery of this Agreement,

nor the acquisition or origination of the Loans, nor the sale of

the Loans, nor the consummation of the transactions contemplated

herein, nor the fulfillment of or compliance with the terms and

conditions of this Agreement will conflict with, or result in a

breach of any term, condition or provision of, Seller's

certificate of incorporation or by-laws, any license held by

Seller or governing Seller's activities or any agreement to which

Seller is a party or by which Seller is bound, or constitute a

material default or result in an acceleration under any of the



(3) No consent, approval, authorization or order of any court,

governmental body or any other person or entity is required for

the execution, delivery and performance by Seller of this

Agreement, including but not limited to, the sale of the Loans to



(4) Neither Seller nor its agents know of any Suit, action,

arbitration or legal or administrative or other proceeding

pending or threatened against Seller which would affect its

ability to perform its obligations under this Agreement.



(5) Seller is not a party to, bound by or in breach or violation of

any agreement or instrument, or subject to or in violation of any

statute, order or regulation of any court, regulatory body,

administrative agency or governmental body having jurisdiction

over it, which materially and adversely affects, or may in the

future materially and adversely affect, the ability of Seller to

perform its obligations under this Agreement or the Manual,

including, without limitation, Seller's repurchase and

indemnification obligations pursuant to Sections 7, 8 and 9 of

this Agreement.



7. SELLER'S REPURCHASE OBLIGATIONS

A. Seller shall repurchase any Loan sold to Countrywide pursuant to this

Agreement within twenty business days of receipt of written notice from

Countrywide of any of the following circumstances (the "Repurchase

Obligation"):



(1) Seller fails to deliver to Countrywide within 270 days from the

date each Loan was purchased the original documents specified in

the Delivery of Closed Loans section of the Manual.



(2) Countrywide determines that there is any evidence of fraud in the

origination of the Loan or in the sale of the Loan to Countrywide

or that any matter in the mortgage loan file is not true and



(3) If Countrywide determines the Loan is not eligible for GNMA, FNMA

or FHLMC pool participation or whole loan purchase or purchase by

a private investor, or, if Countrywide has sold such Loan in

whole or in part to GNMA, FNMA, FHLMC or a private investor, and

GNMA, FNMA, FHLMC or the private investor requires Countrywide to

repurchase said interest or reimburse it for losses, or the

mortgage insurer denies coverage on the Loan; provided the reason

for such ineligibility, repurchase, reimbursement or denial shall

be due to a failure of the Loan to meet requirements specified in

the Manual at the time of Countrywide's purchase of the Loan from







(4) If the first payment due Countrywide is not received by

Countrywide, whether from the borrower directly or forwarded by

Seller if the Borrower has submitted the payment to Seller, by

the last day of the month in which it is due, and, in addition,

at any time within the first twelve months after the Loan has

been purchased by Countrywide, the Borrower is 90 days delinquent

with respect to a monthly payment. For this purpose a Borrower

shall be considered to be 90 days delinquent on a monthly payment

if it is not received by Countrywide by the last day of the third

month, regardless of the number of days in the month. For

example, if the Borrower has not made his/her January payment by

the last day of March, the Borrower shall be considered 90 days

delinquent with respect to the January payment. Seller shall not

have the right to advance funds for or on behalf of a Borrower

for any delinquent payment or to otherwise make funds available

to any Borrower to avoid or cure a default by the Borrower. A

payment for which Countrywide deducted funds at the time it

purchased the Loan from Seller shall not be considered the first

payment due Countrywide.



(5) Seller fails to observe or perform or b ...