Exhibit 10.10
Loan Purchase
Agreement
This Agreement, dated as of
4/16, is made by and between Countrywide Home Loans, Inc., a
New York corporation (“Countrywide”), and Home Loan
Center, a CA 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 Loan.
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 Loan.
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 ballee letter or trust
receipt submitted with the Loan, as determined in the sole and
absolute discretion of Countrywide.
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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 Seller.
(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.
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(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 Loan.
(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
located.
(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