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Master Loan Participation Purchase And Sale Agreement

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Sectors: Financial Services
Governing Law: California , View California State Laws
Effective Date: May 01, 2009
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MASTER LOAN PARTICIPATION PURCHASE AND SALE AGREEMENT

(NON-RECOURSE)



This MASTER LOAN PARTICIPATION PURCHASE AND SALE AGREEMENT (NON-RECOURSE) (the " Agreement") dated and effective as of May 1, 2009 , is between MINISTRY PARTNERS INVESTMENT COMPANY, LLC (the "Seller"), a California limited liability company, and WESTERN FEDERAL CREDIT UNION (the " Buyer"), a federal credit union.



WHEREAS, Seller and Buyer desire to enter into this Agreement wherein Seller may sell to Buyer and Buyer may buy from Seller certain loan participations (the "Loan Participations") on a non-recourse basis from time to time pursuant to the terms and conditions set forth herein;



WHEREAS the Loan Participations sold and purchased under this Agreement may be Loan Participations in Seller's portfolio or Loan Participations that will be closed by the Seller in the future;



NOW, THEREFORE, in consideration of the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Seller and the Buyer, intending to be legally bound, agree as follows:



I. PURCHASE AND SALE OF LOAN PARTICIPATIONS



A. Purchase and Sale of Loan Participations After Execution of this Agreement .



1. Subject to the terms and conditions of this Agreement, as of the purchase date for each Loan Participation, Seller hereby sells, assigns, transfers and conveys to Buyer, without recourse, and Buyer hereby purchases from Seller as of the purchase date, all right, title and interest of Seller in and to the following:



(a) the Loan Participations described in the Loan Participation Purchase Certificates to be issued in accordance with Section I.B.1.;


(b) the collateral pledged to secure the Loan Participations;


(c) all right, title and interest of Seller in, to and under any lien securing the payment owing under such Loan Participations;


(d) all documents evidencing the terms and agreements of the respective Loan Participations sold under this Agreement, documents evidencing a security interest for such Loan Participations and documents pertaining to the loan underwriting (collectively, "Loan Documents"). Loan Documents include copies of the promissory note and the documentation required to comply with any agreed underwriting standards between Buyer and Seller (e.g., loan application and verifications, financial statements, security instrument, appraisals, etc.). Loan Documents also include the documents used and relied upon to underwrite the respective Loan Participations;


(e) all insurance policies and any related insurance proceeds with respect to such Loan Participations, all actions and causes of action associated with the Loan Participations;


(f) all income and proceeds of the foregoing (less any servicing fees); and


(g) any escrow account related to such Loan Participations and all amounts from time to time credited to and the proceeds of such account.










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2. It is the intention of the parties that each Loan Participation sold pursuant to this Agreement constitutes a complete sale and assignment of all of the Seller's right, title and interest in, to and under, the Loan Participation to the Buyer and that the sold Loan Participations will not be a part of the Seller's estate in the event of any liquidation, reorganization or similar insolvency proceeding with respect to the Seller. Loan Participations sold pursuant to this Agreement are sold on a non-recourse basis. The parties agree and acknowledge that the sale of the Loan Participations on a non-recourse basis shall constitute a sale of the Seller's ownership interest in the loan and Loan Documents and shall in no way be construed as an extension of credit by the Buyer to Seller. Seller will reflect that the purchase of Loan Participations under this Agreement will be treated on its financial statements as a purchase of assets by Buyer and sale of assets by Seller.



3. By entering into this Agreement, the parties are not obligating themselves to either sell or purchase any Loan Participation. Unless a party specifically obligates itself to the other party by executing the Loan Participation Purchase Certificate, a copy of which is attached hereto as Exhibit "A", a party may defer the decision whether to purchase a Loan Participation until the specific loan is presented by the Seller.



4. The parties hereto agree that the parties to this Agreement shall be limited to state and federally chartered credit unions, credit union service organizations and federally insured institutions. Except as otherwise agreed by the parties, Buyer and Seller further acknowledge that the borrower under any Loan Documents for any Loan Participations purchased under this Agreement shall be a credit union member of either Buyer or Servicer (as hereinafter defined). Each party represents and covenants that any sale of Loan Participations under this Agreement shall be subject to and made in accordance with applicable rules and regulations imposed under the National Credit Union Act, including NCUA Regulation 701.22.



5. Upon Buyer's payment of the purchase price for any Loan Participations acquired under this Agreement, Buyer shall immediately become vested, to the extent of its Loan Participations interest, with beneficial ownership of its pro rata share of such loan. Buyer shall be deemed to be the holder of the equitable title to its pro rata share in each loan that is acquired under this Agreement.



B. Purchase Documents; Purchase Date .



1. Each Loan Participation sold under this Agreement shall be evidenced by a Loan Participation Purchase Certificate executed by both the Buyer and Seller. The Loan Participation Purchase Certificate shall be substantially in the form of Exhibit "A" attached hereto and shall identify the Loan Participation, the identity of the borrower, and the purchase date, and set forth all the economic terms of the Loan Participation purchase negotiated between the Seller and Buyer, including the price Buyer will pay for each participation interest. To the extent there are any inconsistencies between this Agreement and the Loan Participation Purchase Certificate which cannot be reasonably reconciled, the terms of the Loan Participation Purchase Certificate shall control.



2. Within two (2) business days of Buyer executing the Loan Participation Purchase Certificate and tendering all funds to purchase the Loan Participation, Seller will countersign and deliver the Loan Participation Purchase Certificate to Buyer.



3. Seller agrees, at its own expense, on the purchase date to indicate in its books and records that the Loan Participations have been sold to the Buyer.



4. A Loan Participation shall be deemed delivered to Buyer upon receipt of the countersigned Loan Participation Purchase Certificate from Seller.




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II. SELLER'S OBLIGATIONS, REPRESENTATIONS AND WARRANTIES



A. Representations Regarding Loans .



Seller represents and warrants to Buyer as to each Loan Participation sold under this Agreement that as of the date of Buyer's purchase of each loan identified in a Loan Participation Purchase Certificate (each a ?Loan"):



1. To Seller's knowledge, the Loan Documents have been duly executed by the borrower and trustor/mortgagor, acknowledged and recorded; each Loan is valid, the Loan Documents constitute the entire agreement between the borrower and trustor/mortgagor and the beneficiary mortgagee, and there is no verbal understanding, waiver, alteration, modification which would affect the terms of the Loan Documents except by written instrument delivered and expressly made known to the Buyer and recorded if recording is necessary to protect the interests of the Buyer. The substance of any such waiver, alteration, or modification has been approved by the title insurer, to the extent required by the policy, and its terms are reflected on the Loan Purchase Certificate. With respect to the Loan Documents, no obligor has been released by the Seller, or to the best of the Seller's knowledge, by anyone else, in whole or in part.



2. Seller is the sole owner of the Loan Participation and has authority to sell, transfer and assign the same on the terms set forth herein and in the Loan Participation Agreement. 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 unpaid principal balance of the Loan Participation 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. The Loan Participations are intended to be made or have been made in compliance with all applicable federal and state laws, rules and regulations.



5. No Loan is the subject of, and Seller is not aware of any facts which could give rise to litigation which could affect Buyer's ability to enforce the terms of the obligation or its rights under the mortgage documents.



6. There is in force for each Loan a paid-up title insurance policy on the Loan in an amount at least equal to the outstanding principal balance of the Loan.



7. The mortgage, deed of trust, or lien securing the Loan has not been satisfied, canceled, subordinated or rescinded, in whole or in part, and the collateral has not been released by Seller or, to the best of Seller's knowledge, by anyone else, nor has any instrument executed by Seller or, to the best of Seller's knowledge, by anyone else, that would effect any such release, cancellation, subordination or rescission.



8. The borrower has no rights of rescission, set-offs, counter-claims or defenses to the note or deed of trust/mortgage securing the note of arising from the acts and/or omissions of Seller.




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9. 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.



10. To Seller's knowledge, 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.



11. Seller shall not take any action inconsistent with the ownership interest of the Buyer or its assignee and any subsequent assignee or pledgee in the Loan Participations.



12. To the best of Seller's knowledge, there is no breach, violation or event of acceleration existing under the Loan and 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. Seller has not waived any default, breach, violation or event of acceleration.



13. There is in force for each Loan, valid hazard insurance policy coverage for any improved real property serving as collateral and, where applicable, valid flood insurance policy coverage.



14. Each Loan originated by Seller complied in all material respects with Seller's underwriting guidelines in effect at the time the Loan was originated, subject to exceptions made from time-to-time as permitted by Seller' s underwriting guidelines and policies or as otherwise approved by Buyer.



15. In the event the mortgage securing the Loan constitutes a deed of trust, a trustee, 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 Buyer to the trustee under the deed of trust, except in connection with a trustee's sale after default.



16. Seller has no knowledge of any violation of any local, state, or federal environmental law, rule, or regulation arising from toxic or hazardous substances affecting the real property collateral securing the Loans. Seller has no knowledge of any pending action or proceeding directly involving any real property collateral in which compliance with any environmental law, rule, or regulation is an issue.



B. Representations Regarding Seller .



Seller represents and warrants to Buyer that as of the date first set forth above and as of the date of Buyer's purchase of each Loan Participation hereunder:



1. Seller is duly organized, validly existing and in good standing under the laws of the state of its organization and is qualified and/or licensed as necessary to transact business, including the originating and selling of mortgage Loan Participations.



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 Loan Participations, nor the sale of the Loan Participations, 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 organization or operating agreement, 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 foregoing.




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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 Loan Participations to Buyer, except for the approval of the Seller as required under the Loan Participation Agreement.



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.



C. Breach of Seller's Representations and Warranties .



1. Upon discovery by the Buyer of a material breach of any of the representations or warranties set forth in II.A. and B. above, Buyer shall give prompt written notice to Seller no later than two (2) business days after such discovery. Within five (5) business days of its receipt of such notice of such material breach, the Seller shall be obligated to either (a) cure such breach; (b) purchase such Loan Participation from the Buyer at the applicable " Repurchase Amount", as that term is defined in subsection 2 below, or (c) purchase such Loan Participation from Buyer in exchange for one or more substitute Loan Participations. Nothing in this paragraph shall be construed to give the Seller any right, title or interest in and to any Loan Participation after the related purchase date or to require Seller to repurchase any Loan Participation due to the lack of future performance, decline in value or as a result of the related borrower's insolvency, credit loss or general inability to pay. The Seller hereby confirms and agrees that, with respect to a Loan Participation, from and after its purchase date, the Seller has no right, title or interest in such Loan and has no authority with respect to the collection, amendment, modification, adjustment, extension or cancellation of such Loan Participation, except to the extent of its capacity as Seller, as such term is defined in the Loan Participation Agreement.



2. For purposes of Section II.C. of this Agreement, the term " Repurchase Amount" shall mean an amount equal to the outstanding balance of such Loan Participation as of the date of such repurchase. Except in the event of a good faith dispute, the Repurchase Amount for any Loan Participation which is to be purchased by the Seller pursuant to Section II.C. shall be remitted by the Seller in immediately available funds to Buyer no later than two (2) business days following the date on which such obligation arises. Upon receipt, the Loan Participation shall be released to the Seller and the Buyer shall execute such documents and instruments of transfer or assignment as shall be reasonably requested by the Seller to effect the conveyance from the Buyer to the Seller.



3. This Section II.C. provides the sole remedies to Buyer, its successors and permitted assigns in respect of any deficiencies with respect to any breach of the warranties and representations set forth in Section II.A. and B. If the Seller defaults in its obligations set forth in Sections II.C.1. and II.C.2., or disputes its obligations, the Buyer (including, without limitation, its successors and permitted assigns) may take such action as is appropriate to enforce such payment or performance, including, without limitation, the institution and prosecution of appropriate proceedings.




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D. Notice Obligations .



1. Seller agrees to furnish written notice to Buyer within three (3) business days in the event that it learns or has any knowledge of the occurrence of an event of default under the Loan Documents that remains uncured after the giving of any notice, if required under the Loan Documents, or within three (3) business days after the expiration of any period in which borrower is required to cure such default.



2. In addition, Seller represents and warrants that after the execution of this Agreement, it shall immediately notify Buyer should Seller learn or have any knowledge of the following:



(a) Any change in the financial condition of the borrower, or of any co-maker, guarantor or endorser under the Loa
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