Mortgage Broker Agreement
THIS MORTGAGE BROKER AGREEMENT (this “Agreement”) is effective as of the
[______] day of [____________________], [___________], and is entered into at Sacramento,
California by and between Pala Financial Group, Inc., (“PFG”), a California corporation doing
3211 Sierra Oaks Dr, Sacramento, California 95864 and
[____________________] organized and existing under the laws of the state of California with a
place of business at
WHEREAS, Broker is in the business of originating loans for Borrowers for a fee or
WHEREAS, Pala Financial Group, Inc., (“PFG”) is in the business of funding eligible loans
secured by real property accordance with the terms of this Agreement.
NOW THEREFORE, in consideration of the mutual promises contained herein and other good
and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:
1. Submission of Loan Packages. Broker may submit Loan Packages to Pala Financial
Group, Inc. for consideration under such programs, terms and requirements as Pala Financial Group,
Inc. may establish from time to time. Without limiting the generality of the foregoing, Loan Packages
shall include copies of all disclosures, notices, brochures, advertising material or documents of any
other kind or nature that have been delivered to the proposed borrower by or on behalf of Broker.
The contents of all Loan Packages submitted to Pala Financial Group, Inc. shall become the property
of Pala Financial Group, Inc., and all information therein may be subject to Pala Financial Group,
Inc.’s independent verification.
2. Loan Approval. Nothing in this Agreement shall require Pala Financial Group, Inc. to
accept, approve and/or fund any proposed loan presented by Broker. Approval shall be solely within
Pala Financial Group, Inc.’s discretion. Pala Financial Group, Inc. shall have no duty to Broker under
this agreement; the standards, practice and procedure regarding the acceptance and evaluation of
Loan Packages shall be solely and absolutely within the province and control of Pala Financial
3. Compensation to Broker. All fees or other remuneration to Broker shall be paid by
Borrowers. Pala Financial Group, Inc. shall have no obligation to Broker for commissions, fees, or
remuneration of any kind. The Parties agree that the Broker Fee is compensation for Services
rendered and goods and facilities provided by Broker in connection with the origination, processing,
and/or closing of a Loan under this Agreement and shall:
a. be in amounts which bear a reasonable relationship to the Services rendered and
goods and facilities provided;
b. be based upon a good faith estimate of the fair market value of such Services,
goods and facilities;
c. not be in amounts deemed excessive or unreasonable under any Applicable
d. not be charged on an illegal or discriminatory basis.
4. Disclosure of Fees. All such Broker Fees shall be disclosed on the GFE and the HUD-1
Uniform Settlement Statement in accordance with Applicable Requirements and paid in accordance
with this Agreement. No fee shall be owed to Broker on any Loan Submission unless and until a
related Loan has funded and closed. If requested by the Mortgagor and supported by the appraisal,
such brokerage fee can be financed in the Loan and paid to Broker on behalf of the Mortgagor at or
after Closing; provided, however, that in all events such compensation shall be disclosed on the GFE
and the HUD-1 Uniform Settlement Statement in accordance with Applicable Requirements. Broker
acknowledges and agrees that it may not receive a Broker Fee or other fees that in excess of amounts
disclosed on the GFE in accordance with Applicable Requirements. Any such excess amounts will be
reduced to conform to the applicable GFE at closing. Broker also agrees to itemize all components of
its fees and compensation in accordance with Lender requirements.
5. Corrective Changes. Broker hereby grants consent to Pala Financial Group, Inc. to cure
any deficiencies or errors to the documents in either the Loan Submission and/or the documents
assigned to Pala Financial Group, Inc. in connection with the origination, closing, funding or delivery
to Pala Financial Group, Inc. of any Loan.
6. Status of Broker. Broker’s status under this Agreement is that of an independent
contractor. Nothing in this Agreement shall be construed as making Broker a partner, agent,
representative, or employee of Pala Financial Group, Inc. Broker shall not hold out as such, nor shall
it use the name of Pala Financial Group, Inc. in any form of advertising. Broker shall have no
authority to, and shall not, make any statement or representation purporting to be on behalf of Pala
Financial Group, Inc., or bind, or attempt to bind, Pala Financial Group, Inc. in any way.
7. Warranties of Broker. Broker represents and warrants to Pala Financial Group, Inc. that:
a. Broker is properly licensed for all activities related to this Agreement, proof of
which shall be submitted at the request of Pala Financial Group, Inc. from time to time. No
litigation or disciplinary proceedings are pending against Broker.
b. To the best of Broker’s knowledge, after diligent review and inquiry, all statements
or information contained in any Loan Package submitted to Pala Financial Group, Inc. are
true and accurate and no facts or circumstances are omitted, the absence of which makes the
statements or information therein misleading. The warranty herein extends to the entirety of
the Loan Package without regard to the source of the information or statements therein
contained. Broker will promptly disclose to Pala Financial Group, Inc. any information
acquired after the submission of a Loan Package to Pala Financial Group, Inc. that conflicts
with, contradicts, or otherwise casts doubt on the accuracy of any statement or information in
the Loan Package.
c. Broker will comply with all applicable laws, rules, and regulations, and
amendments thereto, including without limitation the Truth-in-Lending Act and Regulation Z
issued there under; the Fair Credit Reporting Act; the Equal Credit Opportunity Act and
Regulation B issued there under; the Real Estate Settlement Procedures Act and Regulation
X issued there under; the Real Property Loan Law; and all applicable State statutes and
regulations. Proof of compliance shall be submitted on demand by Pala Financial Group, Inc.
d. Broker will not take any action or make any statement inconsistent with Broker’s
authority under this Agreement.
e. Broker will immediately notify Pala Financial Group, Inc. if any of the foregoing
warranties and representations that are or become untrue at any time and
8. Enforceability of Loan. The Loan, when made by Pala Financial Group, Inc., will not be
usury, nor will the operation of any of the terms of the Note or the Mortgage Instrument, or the
subject to any right of rescission, set-off, counterclaim or defense, including the defense of exercise
of any right there under, render the Loan unenforceable, in whole or in part, or subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury, as a result of any act,
error or omission of Broker or of any other Person of which Broker is aware.
9. Privacy. Except as otherwise agreed by the Parties and permitted by the Privacy
Requirements, Broker shall:
a. use Customer Information only for the express purposes set forth in this
b. disclose Customer Information to Persons only as necessary to implement of the
provisions hereof in a manner consistent with the Privacy Requirements.
Each Party shall assess, manage, and control risks relating to the security and confidentiality of
Customer Information, and shall implement the standards relating to such risks in the manner set
forth in the Interagency Guidelines. Each Party shall comply with the Privacy Requirements
applicable to such Party.
10. Information Security. Broker shall take all necessary precautions to assure compliance
with this Agreement by any third parties with whom Broker is transacting business. Broker shall be
responsible for any activities conducted on Lender’s website or systems using log-in identification
assigned to Broker by Lender, whether or not conducted by Broker, and will not allow any other
Person to use the assigned log-in identification or improperly access Pala Financial Group, Inc.’s
website or systems. Broker shall immediately notify Lender of any critical situation that might put
Lender’s systems and networks at risk.
11. Amendments. Pala Financial Group, Inc. may modify or amend this Agreement and the
Guidelines any time by providing written notice thereof to Broker. Such amendment shall be
effective upon receipt by Broker. If such amendment affects the substantive rights of Broker
hereunder, such amendment shall operate prospectively only. If Broker refuses to accept any such
amendment, Pala Financial Group, Inc. may terminate this Agreement immediately without notice
thereof to Broker. Broker may not amend this Agreement except by an instrument in writing signed
on behalf of each of the Parties.
12. Indemnification. In addition to any other rights and remedies that Pala Financial Group,
Inc. may have, Broker shall indemnify and hold Pala Financial Group, Inc., its stockholders, affiliates
and respective officers, directors, employees and agents, harmless from and against, and shall
reimburse it or them for, any repurchase demand by an Investor, any losses (including pair-off fees
and loss of Servicing Rights), damages, deficiencies, claims, causes of action or expenses of any
nature (including reasonable attorney's fees) incurred before or after any Closing Date to the extent
(a) any misrepresentation made by Broker, or any breach of warranty by Broker, contained in
this Agreement, or in any schedule, exhibit, report, statement or certificate furnished by
Broker pursuant to this Agreement, irrespective of any actual or constructive knowledge by
Broker of such misrepresentation;
(b) the non-fulfillment or non-performance of any covenant, obligation, duty, requirement,
condition or action required of Broker pursuant to this Agreement; or
(c) any fraud in connection with any Loan Submission or the origination of any Loan,
whether or not as a result of any act or omission of Broker, or any employee, representative,
independent contractor or agent of Broker.
13. Termination of Agreement. This Agreement may be terminated at any time by written
notice by either party, provided that the warranties and obligations of Broker herein as to any activity
pursuant to this Agreement prior to termination shall survive such termination.
14. Successors and Assigns in interest. Inasmuch as Loans are regularly transferred in
whole or in part after closing, the rights of Pala Financial Group, Inc. herein shall inure to the benefit
of any such successor and assigns in interest to Pala Financial Group, Inc.
15. Entire Agreement. This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter contained in it and supersedes all prior and contemporaneous
agreements, representations, and understandings of the parties. No supplement, modification, or
amendment of this Agreement shall be binding unless executed in writing by all parties.
16. Waiver of Breach. Failure by Pala Financial Group, Inc. to exercise any right or remedy
provided for herein in the event of breach by Broker shall not act as a waiver of such right or remedy
in the event of a subsequent breach of the same or similar nature.
17. Entity Status; Personal Guaranty. If Broker is not a natural person, the undersigned
warrants that he/she has authority to execute this agreement on behalf of Broker, and
PERSONALLY GUARANTEES the warranties and obligations of Broker herein.
18. Governing Law and Venue. This Agreement shall be governed by the laws of the State
of California. Any action in regard to this Agreement shall be brought in the Superior Court of the
State of California for Sacramento County.
19. Attorneys Fees. If the event of any action or proceeding to enforce the rights and
obligations herein, the prevailing party shall be entitled to the costs of said action or proceeding and
reasonable attorney fees.
Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION RELATING TO OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS AGREEMENT AND ANY DOCUMENT TO BE EXECUTED IN
CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTION OF EITHER
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR PALA FINANCIAL GROUP,
INC. TO ENTER INTO THIS AGREEMENT.
IN WITNESSES WHEREOF, each of the undersigned Parties to this Broker Agreement
has caused this Agreement to be duly executed by a duly authorized representative, all as of the date
first above written.
“BROKER” PALA FINANCIAL GROUP, INC.
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