AllQuest Home Mortgage Corporation
BANKERS PROGRAM AGREEMENT
This Mortgage Correspondent Agreement (this “Agreement”) is made this _____
Day of __________________, 20__, between AllQuest Home Mortgage Corp., with its
Principal office located at 6110 Pinemont Drive, Suite 220, Houston Texas, 77092 (“Buyer”)
and_________________________________ (“Seller”), with its principal office located at
WHEREAS, Buyer desires to purchase certain Mortgage Loans (as hereinafter Defined)
together with the servicing thereof from Seller in connection with Buyer’s Various Mortgage Loan
Programs ( as hereinafter defined), and Seller desires to sell to Buyer certain such Mortgage Loans
pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises and mutual undertakings contained herein
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Buyer and Seller, intending to be legally bound, agree as follows:
“Agency” or Agencies” means the Federal National Mortgage Association, the Federal Home
Loan Mortgage Corporation, and the Government National Mortgage Association, or any of them.
“Applicable Requirements” means all applicable standards, requirement, guidelines, policies
and procedures of Buyer and any applicable Agencies and Third Party Investors.
“Borrower” means the person or persons who submit a Mortgage Loan application to, and
receive a Mortgage Loan from, Seller, and who are liable to Seller for the Mortgage Loan Amount
pursuant to the Note.
“Closing” means the funding of a Mortgage Loan by Seller.
“Closing Package” means all of the Mortgage Loan Documents and any other information or
materials prescribed by the Applicable Requirements, before Buyer will pay the Purchase Price for a
“Laws” means all federal, state, county, local and foreign laws, regulations, licensing
requirements, ordinances, codes, rules and orders that may be applicable to Seller’s business and ability
to perform its obligations hereunder, all as may be amended or supplemented from time to time.
“Mortgage” means the document or documents evidencing security in the Mortgage Property
for the repayment of a Borrower’s Note, including without limitation any mortgage, deed of trust, deed
to secure debt or security deed.
“Mortgage Loan Amount” means the face amount of the Note for any Mortgage Loan delivered
under Section 3.2 of this Agreement.
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“Mortgage Loan Documents” means the Note, the Mortgage and any and all other documents
or materials which are required to be maintained or prepared by Seller pursuant to this Agreement and
“Mortgage Loan Program” or Mortgage Loan Programs: means the criteria established by Buyer
from time to time which prescribe certain Mortgage Loans eligible for purchase by Buyer in accordance
with the terms of this Agreement.
“Mortgage Property” means the property encumbered by the Mortgage.
“Note” means the promissory note evidencing Borrower’s obligation to repay a Mortgage Loan.
“Note Rate” means the stated interest rate on a Note.
“Notice” means the notice to be provided pursuant to Section 9.3 of this Agreement.
“Post Closing Review” means the review described in Section 4.2 of this Agreement.
“Post Closing Suspense” means the status of a Mortgage Loan described in Section 4.3 of this
“Purchase Price” means the price to be paid for a Mortgage Loan by Buyer as described in
Section 3.2 hereinafter.
“Servicing Rights” means those rights associated with a Mortgage Loan, to collect the monthly
payments of principal and interest, escrowed amounts, late charges, prepayment penalties and all other
fees related to the Mortgage Loan, including without limitation all income related to any ancillary
products or services.
“Third Part Investor” means any purchaser of Mortgage Loans from Buyer identified as a “Third
Party Investor” or in writing by Buyer to Seller.
“Underwrite” or “Underwriting” means the examination of a Borrower’s Mortgage Loan
application, credit history, income and financial resources for the purposes of determining whether to
extend credit to a Borrower.
2.1 Buyer will purchase only those Mortgage Loans eligible for purchase pursuant to the various
Mortgage Loan Programs established by Buyer from time to time, which fully comply with the
standards and criteria of the applicable Mortgage Loan Program.
2.2 Seller acknowledges that Buyer reserves the right to alter, add, or delete any Mortgage Loan
Program, and Seller accepts responsibility for knowing which Mortgage Loan programs are
offered by Buyer at any given time.
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2.3 Buyer reserves the right to use the standards and guidelines of any Third Party Investor and the
Agencies and to incorporate such standards and guidelines into any of Buyer’s Mortgage Loan
2.4 Seller shall be responsible for ensuring that a Mortgage Loan submitted to Buyer complies with
all the terms and conditions of the applicable Mortgage Loan Program at the time such
Mortgage Loan is delivered to and purchased by Buyer.
DUTIES OF THE SELLER
3.1 Seller shall originate Mortgage Loans at its offices in its own name and shall be responsible for
(a) providing Mortgage Loan applications and related disclosures required by any and all Laws to
Mortgage Loan applicants, and (b) obtaining executed Mortgage Loan applications and
3.2 Seller shall submit each Mortgage Loan application with Lender in a manner to be
communicated to the Seller in writing by the Lender, from time to time. Such methods of
communication may include, but are not limited to, electronic, facsimile or written. Seller shall
submit for each Mortgage Loan application to Lender the fully completed Seller disclosure(s)
which have been signed as of the date of application by the applicant and the Seller; the
application signed by the applicant; and such credit, financial and other information as set forth
by the Lender from time to time. Seller shall assist Lender in obtaining any additional
information needed by Lender or to otherwise facilitate underwriting and closing of the loan
3.3 In addition to taking the information from applicant, filling out the application and providing and
explaining the Seller disclosure(s), Seller shall, for every loan, perform services, including, but
not limited to, all of the following services:
(a) analyzing the applicant's income and debt and pre‐qualifying the prospective applicant to
determine the maximum Mortgage Loan that the prospective applicant can afford;
(b) educating the applicant in the home buying and financing process, advising the applicant
about the different types of loan products available, and demonstrating how closing costs
and monthly payments would vary under each product;
(c) collecting financial information (e.g., tax returns, bank statements) and other related
documents that are part of the application process;
(d) initiating/ordering VOEs (verifications of employment) and VODs (verifications of deposits);
(e) initiating/ordering requests for mortgage and other loan verifications;
(f) initiating/ordering appraisals through The Yellow Sign (an Appraisal Management
Company). The Yellow Sign is an affiliate business of AllQuest Home Mortgage Corporation;
(g) initiating/ordering inspections or engineering reports;
(h) providing disclosures (Truth in Lending, Good Faith Estimate, others) to prospective
applicants as required by applicable laws;
(i) assisting applicants in understanding and addressing credit problems;
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(j) maintaining regular contact with applicants, real estate agents, and Lender between
application and closing to apprise them of the status of the application and to gather any
additional information as needed;
(k) ordering legal documents (e.g., title reports);
(l) determining whether the property is located in a flood zone or ordering such service;
(m) participating in the loan closing;
(n) analyzing the information provided by applicant and confirming that the applicant’s
application complies with applicable laws; and
(o) providing such other services as may be required by a particular loan transaction..
3.4 Seller shall comply with any and all Laws applicable to the Mortgage Loans, as they may be
amended from time to time, including without limitation:
(a) Real Estate Settlement Procedures act, 12 U.S.C.A. 2601, et seq. and HUD Regulation X,
24 CFR 3500 (“RESPA”);
(b) Equal Credit Opportunity Act, 15 U.S.C.A. 1691, et seq. and Regulation B, 12 CFR 202
(c) Fair Credit Reporting Act, 15 U.S.C.A. 1681 et seq. and any regulations issued
(d) Truth in Lending Act, 15 U.S.C.A. 1601, et seq. and Regulation Z, 12 CFR 226 (“TILA”);
(e) The Flood Disaster Protection Act, 42 U.S.C.A. 4001, et seq. (“FDPA”).
3.5 Any fee payable to Seller for its provision of goods, services or facilities for certain Mortgage
Loans, shall be paid in accordance with the terms of this Agreement and applicable law, and only
in connection with a particular Mortgage Loan, if each of the following conditions is met.
(a) Seller has actually provided necessary goods, services and/or facilities in connection with the
(b) Seller is in compliance with all applicable federal, state and local laws and regulations and all
of the terms of this Agreement and has submitted fully executed copies of all required
disclosures with the Mortgage Loan application;
(c) With respect to each application, Seller and applicant have completed and executed a Good
Faith Estimate (“GFE”) which complies with the Real Estate Settlement Procedures Act and
contains all applicable fees and charges and itemizes the dollar amount of compensation
that will be paid to the Seller. Lender shall rely on Seller GFE in completing its own GFE.
Seller’s compensation may not be greater than the amount set forth in the Seller completed
(d) Seller has performed, at a minimum, any services required under Section 2.3 of this
(e) Any lender‐paid compensation, when combined with other applicant paid compensation in
connection with the origination of the Mortgage Loan, shall not be greater than that
allowed under applicable state, federal and local law. Total compensation earned by Seller
from all sources will constitute a reasonable payment for the goods, facilities and services
actually provided by the Seller and Seller will not retain duplicative payments for any of
those goods, fees or services
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(f) Seller will pay Buyer an Underwriting/Administration Fee as set by Buyer to cover the cost of
Underwriting and Closing the loan. The actual payment of this fee by Seller will be through
a reduction in Purchase Price for the amount of the fee.
3.6 Seller shall be responsible for all communications with applicants. Seller shall promptly deliver
to such applicants any documents prepared by Lender and intended for delivery to applicants
regardless of the manner in which such documents are delivered to the Seller.
3.7 If Seller has collected any fees from an applicant, including any fees payable to a third party, in
connection with a Mortgage Loan that is rescinded by the applicant pursuant to applicable state
or federal law or regulation, Seller shall promptly refund all such fees that are required to be
refunded to the applicant.
3.8 The Purchase Price of a Mortgage Loan will be determined based upon the pricing and terms
available and confirmed by Buyer the day of Loan Lock. Purchase Price may be subject to
adjustments if the Mortgage Loan is Repriced or Extended/Relocked, not delivered within the
specified timeframe, or changed from the original (locked) terms of the loan.
UNDERWRITING, CLOSING AND INSURING
4.1 Buyer or its agent shall underwrite every Mortgage Loan application in accordance with the
terms of this Agreement. Buyer shall have no obligation to approve or close a Mortgage Loan
which in its sole discretion does not meet Buyer's underwriting requirements. In making its
determination, Buyer expressly disclaims any conclusions Seller may draw as to the general
quality or acceptability of the Mortgage Loan application. Buyer retains sole and absolute
discretion to reject any Mortgage Loan application which does not comply with the terms and
conditions of this Agreement, or for any reason whatsoever (except any reason prohibited by
Law), and to set the terms and conditions of any approval of a Mortgage Loan application. Buyer
shall notify Seller of the disposition of a Mortgage Loan application. Seller may not represent
that Buyer has approved or will approve any Mortgage Loan application until Buyer informs
Seller that it has done so. If Buyer declines any Mortgage Loan application, Seller shall notify the
applicant promptly upon receipt of notice of Buyer’s decision and deliver the required adverse
action notice to the applicant in accordance with applicable state, federal and local laws. Seller
shall also maintain evidence that the adverse action notice was received by applicant; provided,
however, that Seller shall not be required to notify the applicant of Buyer’s declination in any
case where another Buyer has committed to originate the Mortgage Loan. Buyer will have no
obligation or liability to Seller for any Mortgage Loan which is not closed by Buyer nor for any
delays in the processing of any Mortgage Loan applications.
4.2 Buyer shall proceed to the closing of the Mortgage Loan under the terms and conditions of its
approval. Buyer shall prepare the closing package and close the Mortgage Loan in the Seller’s
name and with the Seller’s funds.
4.3 Buyer will insure (as required) all loans it underwrites for Seller and obtain the Mortgage
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5.1 Buyer shall, after any Post Closing Review, pay to Seller in accordance with Seller’s wire
instructions (i) the Purchase Price established by Section 3.8 and adjusted, if applicable,
multiplied by (ii) the Mortgage Loan Amount. If as a result of its Post Closing Review, Buyer
rejects a Mortgage Loan, it shall return all Mortgage Loan Documents to Seller and shall not pay
the Purchase Price.
5.2 The payment of the Purchase Price by Buyer for any Mortgage Loan shall in no way relieve Seller
from or constitute a waiver of any of Buyer’s requirement for any Mortgage Loan or from the
representations and warranties made as to every Mortgage Loan under the terms of this
Agreement, or from any requirements of any Third Party Investor or Agency, or from the
obligations to repurchase under article 14 hereof.
5.3 All Mortgage Loans sold to Buyer pursuant to this Agreement shall be sold with all Servicing
Rights released to Buyer.
5.4 All of the fees collected by Seller in the origination of the Mortgage Loan including, but not
limited to any, credit report fee, appraisal fee, and Mortgage Loan application fee shall belong
solely to Seller, and Buyer shall have no right whatsoever to any portion of the fees paid by the
Mortgage Loan applicants.
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
Seller hereby represents warrants and covenants to Buyer as follows:
6.1 Seller has all requisite power and authority to execute and enter into this Agreement and to
perform the obligations required of the hereunder. The execution and delivery of this
Agreement and all documents, instruments and agreements required to be executed by Seller
pursuant hereto, and the consummation of the transactions contemplated hereby, have each
been duly and validly authorized by all necessary action of Seller. This Agreement constitutes a
valid, legal and binding agreement of Seller enforceable by Buyer in accordance with its terms
subject to bankruptcy, insolvency, reorganization, receivership or other laws affecting rights of
creditors generally, and general equity principles.
6.2 Seller is: (a) a ____________________ (insert form of business organization) and is duly
organized, validly existing and in good standing under the laws of
__________________________ (if applicable); (b) qualified to do business in
__________________________ and in any other jurisdiction in which such qualification is
required or where Seller maintains an office or does substantial business; and is in compliance
with any and all necessary licensing requirements of the Laws of all such states, or is validly
6.3 The execution, delivery and performance of this Agreement by Seller, and compliance with the
terms hereof and consummation of the transactions contemplated hereby will not violate,
conflict with, result in a breach of, give rise to any right of termination, cancellation or
acceleration under, constitute a default under, be prohibited by or require any additional
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approval under: (i) Seller’s charter, by‐laws, partnership agreement or other organizational
documents, (ii) any other material instrument or agreement to which Seller is a party or by
which Seller bound or which affects this Agreement, or (iii) any and all Laws, orders, injunctions
or decrees applicable to Seller.
6.4 Seller possesses and will maintain at all times while this Agreement is in effect any and all
necessary licenses and/or filings and permits required by any and all Laws necessary to conduct
the business contemplated by the terms of this Agreement. Further, Seller represents that it
employs or will employ a sufficient number of knowledgeable and capable individuals to
perform the services required by this Agreement.
6.5 Neither Seller nor its agents know of any suit, action, arbitration or legal or administrative or
other proceeding pending or threatened against Seller which is material or would affect its
ability to perform its obligations under this Agreement.
6.6 Unless otherwise agreed to in writing, Seller possesses and shall maintain, at no expense to
Buyer, during the term of this Agreement, fidelity bond coverage and errors and omissions
insurance, and shall furnish evidence of such coverage upon execution of this Agreement and
from time to time as requested by Buyer. Seller shall notify Buyer of changes thereto or
cancellations thereof. Such policies shall be in reasonable amounts, with acceptable standard
coverage, satisfactory to Buyer.
6.7 No consent, approval, authorization or order of any court, government body or any other
person or entity is required for execution, delivery and performance by Seller of this Agreement,
including but not limited to, the sale of the Mortgage Loans to Buyer.
6.8 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 statue, 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, including, without limitation, Seller’s repurchase
and indemnification obligations pursuant to Articles 7, 13 and 14 hereof.
6.9 Neither this Agreement nor any statement, report or other document furnished or to be
furnished by Seller pursuant to this Agreement or in connection with the transactions
contemplated hereby contains any untrue statement of fact or omits to state a fact necessary to
make the statements contained therein not misleading.
6.10 The consummation of the transactions contemplated by this Agreement are in the ordinary
course of business of Seller, and the transfer, assignment and conveyance of the Mortgage
Loans pursuant to this Agreement are not subject to bulk transfer or any similar statutory
provisions in effect in any applicable jurisdiction.
6.11 Seller will maintain a net worth not less than five hundred thousand dollars ($500,000.) as
reflected by Seller’s most recent Audited Financial Statements prepared in accordance with
Generally Accepted Accounting Principles as provided to Buyer.
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7.1 The parties to this agreement agree to submit to final and binding arbitration any and all
disputes, claims (whether tort, contract, statutory or otherwise), and disagreements concerning
the interpretation or application of this agreement following the rules of the American
Arbitration Association. Arbitration in effect at the time any such dispute arises shall govern.
Arbitration must be commenced by the aggrieved party within sixty (60) days of the date that
the events occurred forming the basis for the dispute. Arbitration shall be the exclusive remedy
available under this agreement. The parties agree that a state or federal court may be utilized
to enforce an arbitration award.
8.1 Seller shall hold Buyer harmless and shall indemnify Buyer from and against any and all suits,
costs, damages, losses, fees, penalties, fines, forfeitures and claims, including without limitation
reasonable attorney’s fees (“Losses”), arising out of or in connection with any negligence, fraud
or a material omission on the part of Seller in connection with any Mortgage Loan submitted to
Buyer for sale under this Agreement. Seller’s obligation to Buyer in this regard shall remain
effective after Buyer purchases any Mortgage Loan. This paragraph shall not modify Seller’s
obligations contained elsewhere in this Agreement.
8.2 Seller shall hold Buyer harmless and indemnify Buyer from and against any and all Losses arising
out of or in connection with a breach by Seller of any covenant, condition, term, obligation,
under this Agreement, Applicable Requirements or in any other written statement, certificate or
Mortgage Loan Document furnished by Seller pursuant to this Agreement.
8.3 Seller shall hold Buyer harmless and shall indemnify Buyer from and against any and all Losses
arising out of or in connection with any one or more of the items set forth in Article 14 hereof.
8.4 Seller shall hold Buyer harmless and shall indemnify Buyer from and against any and all Losses
arising out of or in any way related to Seller’s breach of any representation or warranty set forth
in article 13 and article 7 of this Agreement.
8.5 The obligations of Seller arising under this Article 8 shall survive any sale or assignment of any
Loan by Buyer to any third party or any suspension of Seller hereunder or any termination of
COMPLIANCE WITH LAW; STANDARD OF CARE
9.1 Notwithstanding anything else to the contrary contained in this Agreement, Seller shall comply
with Applicable Requirements, any and all applicable Laws, and generally accepted prudent
mortgage banking practices and, in any event, shall exercise a degree of care that is usual and
customary in the industry and is no less than that exercised with respect to similar functions it
performs for itself.
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9.2 Seller shall within 5 days advise Buyer, in writing, of any pending or threatened action, by way of
a proceeding otherwise, to revoke or limit any license, permit, authorization or approval issued
or granted by any federal, state or local government or quasi‐governmental body, or any agency
or instrumentality thereof, necessary for Seller to conduct its business, or to impose any penalty
or other disciplinary sanction in connection therewith, or any other sanction that would
materially affect Seller’s business.
9.3 Seller shall furnish Buyer and its representatives with any necessary information and data
concerning the affairs of Seller, as Buyer may reasonably request, including without limitation
information regarding the status of its licenses, permits, authorizations and approvals necessary
for the conduct of its business as well as copies of such documents. Seller shall annually (within
90 days after the end of Seller’s Fiscal Year) furnish to Buyer copies of audited statements of its
financial condition together with such other information bearing upon Seller’s financial
condition together with such other information bearing upon Seller’s financial condition as
Buyer may reasonably request; provided, however, if such Seller is not required by applicable
Laws to prepare audited financial statements and does not otherwise possess audited financial
statements, Seller may provide such other statements of its financial condition as deemed
acceptable by the Buyer in its reasonable discretion. Further, Seller shall immediately advise
Buyer, in writing, of any inquiries by Third Party Investors, Agencies or other regulatory agencies
with respect to any Mortgage Loan. In addition, in the event Seller receives any letter, notice, or
other writing (“Notice”) from a Third Party Investor or Agency or any other regulatory agency
with respect to any Mortgage Loan sold to Buyer, seller shall (a) advise Buyer immediately of
such Notice and (b) deliver a copy of the Notice to Buyer; provided, however, that Seller shall
not be required to advise or deliver a copy of any such Notice to Buyer where prohibited by
9.4 In the event that Seller receives any complaints with respect to any Mortgage Loan, Seller shall
immediately notify Buyer of complaint. Further, if the complaint is in written form, Seller, upon
receipt of the complaint, shall immediately forward it to Buyer. Seller shall fully cooperate with
Buyer to resolve any disputes with Buyer’s customers.
BOOKS AND RECORDS; ACCESS
10.1 For so long as Seller maintains files of Mortgage Loan Documents, it shall prepare and maintain
the files in accordance with applicable Laws and any Applicable Requirements.
10.2 During the term of this Agreement and within five (5) years after the termination of this
Agreement, upon twenty‐four (24) hours notice, Seller shall give Buyer, its employees, and its
representatives, including without limitation internal and external auditors, quality control
auditors, attorney and regulatory agency examiners, full access, during normal business hours,
to audit and inspect the files of Mortgage Loan Documents, and the books, records, reports,
statistics and other documents of Seller relating to the Mortgage Loans and to Seller’s
processing and closing procedures, and its communications with Buyer. In addition, Seller will
fully cooperate with Buyer, its auditors and/or regulatory examiner in any audit of Buyer and in
any regulatory examination of Buyer.
10.3 Seller and Buyer shall keep and maintain a complete and accurate account, satisfactory to
Buyer, of all funds collected and paid relating to the Mortgage Loans.
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11.1 This Agreement may be terminated with or without cause by Buyer or Seller upon ten (10) days
written notice to the other party, but such termination shall not in any respect change or modify
the obligations of the parties with respect to (a) Mortgage Loan applications which have been
registered and locked with Buyer prior to the date of termination or (b) Seller’s obligations
under Articles 8 and 14 hereof accruing prior to the date of termination. All representations,
warranties, indemnity obligations, solicitation covenants, and other remedies available to the
Buyer under this Agreement, at law or in equity, will survive termination of this Agreement.
11.2 Notwithstanding anything to the contrary herein, Buyer may terminate this Agreement
immediately, upon written notice to Seller, if Seller (a) defaults in the performance of its
obligations under this Agreement, (b) breaches any representation, warranty or any other
provision of this Agreement, (c) fails to maintain any license required by applicable Law, (d) if
any Law makes it unlawful for Buyer and Seller to do business in accordance with the terms of
this Agreement, or (e) if Seller fails to maintain a net worth not less than five hundred thousand
RELATIONSHIP OF THE PARTIES
12.1 Nothing herein contained shall be deemed or construed to create a partnership or joint venture
between the parties.
REPRESENTATIONS AND WARRANTIES
AS TO MORTGAGE LOANS
Seller represents and warrants to Buyer as to each Mortgage Loan offered for sale under this
Agreement, as of the date of Buyer’s purchase of such Mortgage Loan, that:
13.1 The Mortgage Loan Documents have been duly and properly executed, acknowledged and
recorded by Borrower, and each are a valid, legal and binding obligation of the Borrower thereof
enforceable in accordance with the terms thereof. All parties to the Mortgage Loan Documents
had legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage
Loan Documents. Each Mortgage Loan complies with all Applicable Requirements. The Note
and Mortgage constitute the agreement between Borrower and Seller; Borrower is the true and
only obligor on the Mortgage Loan and is the actual and legitimate party in interest thereon.
There is not verbal understanding or written modification which would affect the terms of the
Note or Mortgage except by written instrument delivered and expressly made known to Seller
which has been recorded if necessary to protect the interest of Seller.
13.2 Seller is the sole owner of the Mortgage Loan, has good and marketable title thereto and has
authority to sell, transfer and assign the same, and the Mortgage Loan is not subject to any
assignment, sale or hypothecation by Seller. Following the sale of the Mortgage Loan to Buyer
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hereunder, Buyer will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest.
13.3 The full principal amount of the Mortgage Loan has been advanced to Borrower, either by
payment directly to such Borrower or by payment made on such Borrower’s request or
approval. The unpaid balance of the Mortgage Loan is as represented by Seller. All costs, fees
and expenses incurred in making, closing and recording the Mortgage Loan have been paid. No
part of the Mortgage Property has been released from the lien of the Mortgage, the terms of
the Mortgage Loan have in no way been changed or modified, and the Mortgage Loan is current
and not in default.
13.4 The Mortgage Loan Documents submitted for Underwriting were not falsified and contain no
untrue statement of material fact or omit to state a material fact required to be stated therein
or necessary to make the information and statements therein not misleading. No fraud was
committed in connection with the origination of the Mortgage Loan.
13.5 Each Mortgage is a valid first lien on the Mortgage Property, and the Mortgage Property is free
and clear of all encumbrances and any other liens having priority over the lien of such Mortgage.
13.6 The Mortgage Property is free and clear of all mechanics’ and materialmen’s liens or other liens
in the nature thereof, and no rights are outstanding that under any Laws could give rise to any
such lien, nor is Seller aware of any facts which could give rise to any such lien.
13.7 The appraisal of the Mortgage Property was ordered and obtained through The Yellow Sign
Company and is on a form acceptable to Buyer, sets forth the appraised value of the related
Mortgage Property, and was made in connection with the origination of the related Mortgage
Loan and signed prior to the approval of the Mortgage Loan by the appraiser approved by Buyer
who, to the best of Seller’s knowledge, had no interest, direct or indirect, in the Mortgage
Property or any loan made on the security thereof, and whose compensation was in no way
affected by the approval or disapproval of the application for the Mortgage Loan.
13.8 Any and all Laws applicable to the Mortgage Loans have been complied with.
13.9 The Mortgage Loan is not the subject of litigation which could affect Buyer’s ability to enforce
the terms of the Note or its other rights under the Mortgage Loan.
13.10 There is in force for each Mortgage Loan a paid‐up American Land Title Association (ALTA)
mortgagee’s title insurance policy of the type of insurance acceptable by Buyer issued by a title
insurer qualified to do business in the jurisdiction in which the Mortgage Property is located
insuring Buyer and its successors and assigns as to the first priority lien of the Mortgage in the
amount at least equal to the outstanding principal balance of the Mortgage Loan.
13.11 There is in force for each Mortgage Loan a hazard insurance policy, where applicable, meeting
the requirements of Buyer.
13.12 Seller will record an assignment of mortgage in the name of Buyer at the time the Mortgage is
recorded, and such assignment from Seller to Buyer is valid and enforceable.
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13.13 Borrower has no rights of rescission, set‐offs, counter‐claims or defenses to the Note or
Mortgage securing the Note arising from the acts and/or omissions of Seller in the origination,
processing or closing of the Mortgage Loan.
13.14 Seller has no knowledge that any improvement located on or being part of the Mortgage
Property is in violation of any Laws.
13.15 All improvements included for the purpose of determining the appraised value of the Mortgage
Property lie wholly within the boundaries and building restriction lines of such Mortgage
Property, and no improvements on adjoining properties encroach upon the Mortgage Property.
13.16 There are no proceedings pending for total or partial condemnation of any of the Mortgage
Property and the Mortgage Property is free of substantial damage (including but not limited to,
any damage by fire, windstorm, vandalism or other casualty) and is in good repair.
13.17 Seller has no knowledge of any circumstances or conditions with respect to any Mortgage Loan,
Mortgage Property, Borrower or Borrower’s credit standing that reasonably could be expected
to cause any Third Party Investor or Agency to regard any Mortgage Loan as an unacceptable
investment, cause any Mortgage Loan to become delinquent or adversely affect the value or
marketability of the Mortgage Loan.
13.18 All Mortgage Loan Documents submitted to Buyer are genuine and complete in all respects,
enforceable against Borrower in accordance with their terms. All other representations as to
each such Mortgage Loan are true and correct and meet the requirements and specifications of
all parts of this Agreement and the Applicable Requirements.
13.19 Each Mortgage Loan which Seller represents to be insured by a private mortgage insurance
company is so insured with an insurer which has either been approved by the Federal National
Mortgage Association or the Federal Home Loan Mortgage Corporation, or, otherwise has been
approved by Buyer and each Mortgage Loan which Seller represents to be insured by the
Federal Housing Administration (“FHA”) or to be guaranteed by the Veterans Administration
(“VA”) is so insured by the FHA under the National Housing Act or guaranteed by the VA
pursuant to the Servicemen’s Readjustment Act of 1944 or Chapter 37 of Title 38 of the United
States Code or other applicable laws or regulations and such insurance or guaranty is valid and
enforceable in accordance with its terms.
13.20 The consideration received by Seller upon sale of any Mortgage Loan under this Agreement
constitutes fair consideration and reasonably equivalent value for the Mortgage Loan.
13.21 No other party has any option or right of first refusal or other arrangement to acquire directly or
indirectly any Mortgage Loan offered to Buyer for purchase.
13.22 Seller has not made, directly or indirectly, any payment on the Mortgage Loan or on any other
loan of Borrower from any other person or entity. Seller has also not made any agreement with
any Borrower providing for any variation of the Note Rate, schedule of payment or other terms
and conditions of the Mortgage Loan. Seller has not received a request for approval of or notice
of any proposed assumption, loss draft or payoff of the Mortgage Loan.
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13.23 No collateral purporting to secure the Mortgage Loan has been repossessed or disposed of or
foreclosed against Seller.
13.24 The Seller has complied with all applicable anti‐money laundering laws and regulations,
including without limitation the USA Patriot Act of 2003, and the laws and regulations
administered by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”),
which prohibit dealings with certain countries, territories, entities and individuals named in
OFAC’s Sanction Programs and on Specially Designated Nationals and Blocked Persons List
(collectively, the “Anti‐Money Laundering Laws”). The Seller has established an anti‐money
laundering compliance program to the extent required by the Anti‐Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each Mortgage Loan
for purposes of the Anti‐Money Laundering Laws, including with respect to the legitimacy of the
applicable Borrower and the origin of the assets used by said Borrower to purchase the property
in question, and maintains, and will maintain sufficient information to identify the applicable
Borrower for purposes of the Anti‐Money Laundering Laws.
13.25 Borrower has not notified Seller, and Seller has no knowledge of any relief requested or allowed
to a Borrower under the Service Members’ Relief Act or any other federal or state law that
would have the effect of suspending or reducing the Borrower’s payment obligation under a
Mortgage Loan or that would prevent or restrict the ability of Buyer to commence or continue
with foreclosure of the collateral securing a Mortgage Loan or any other remedies available
under the Mortgage Loan Documents.
13.26 No Mortgage Loan is subject to the requirements of the Home Ownership and Equity Protection
Act of 1994. No Mortgage Loan is classified as a “high cost,” “threshold,” “covered,” “abusive”
or “predatory” loan or a similar loan under any applicable state, federal or local law (or similar
classified loan using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high interest rates, points
13.27 No Borrower was encouraged or required to select a loan product offered by Seller which is a
higher cost product designed for less creditworthy borrowers, unless at the time of the
Mortgage Loan’s origination, such Borrower did not qualify taking into account credit history
and debt to income ratios for a lower cost credit product then offered by Seller.
13.28 No property securing a Loan is in a zip code declared by the Federal Emergency Management
Agency (“FEMA”) as being an “Individual Assistance” property or “Category 1” property (or such
similar term(s) or classification(s) that may be used by FEMA from time to time).
13.29 Each of the above representations and warranties (a) applies to all Mortgage Loans sold by
Seller to Buyer, (b) is for the benefit of Buyer and its successors and assigns, (c) continues in full
force and effect for so long as the Mortgage Loan remains outstanding and for such time that
Buyer is subject to any risk of loss or liability as to any Mortgage Loan purchased from Seller,
and (d) is in addition to any other specific representations or warranties contained elsewhere
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OBLIGATION TO REPURCHASE
Seller shall repurchase any Mortgage Loan sold to Buyer pursuant to this Agreement within ten
(10) business days of receipt of written notice from Buyer of any of the following circumstances,
regardless of whether Borrower is making payments on the Mortgage Loan:
14.1 Buyer’s audit procedure reveals any evidence of fraud, material misrepresentation or omission
in the origination of the Mortgage Loan or in the sale of the Mortgage Loan to Buyer or that any
matter in the Mortgage Loan file is not true and correct;
14.2 If Buyer determines the Mortgage Loan is not eligible under the Mortgage Loan Program for
which it was registered by Seller;
14.3 A Mortgage Loan becomes two (2) or more monthly payments past due (delinquent) within four
(4) months from the date of Buyer’s purchase of such Mortgage Loan from Seller. Funds
deducted by Buyer at time of purchase which represent payments due, including the next
payment due following the purchase, will not constitute payments made by Borrower for
purposes of calculating delinquency under this provision. For purposes of this Section 14.3, a
Mortgage Loan becoming two (2) monthly payments past due means a Mortgage Loan with
respect to which Borrower has failed to pay monthly payments, including all sums as required by
the Note, and two (2) payments remain unpaid on the second day of the second month;
14.4 Seller fails to observe or perform or breaches in any material respect any of the representations,
warranties, covenants or other obligations contained in this Agreement or the Applicable
14.5 Any FHA insurance, VA Guaranty, or private mortgage insurance insuring or guaranteeing the
Mortgage Loan lapses as a result of any act or omission by Seller; and
14.6 Buyer is required to repurchase any Mortgage Loan sold to an Agency or a Third Party Investor,
or placed or pledged by Buyer in an Agency mortgage pool or Third Party Investor pool due to a
deficiency in or with respect to the Mortgage Loan Documents.
15.1 Repurchases pursuant to Article 14 hereof shall be priced as follows:
(a) The original Purchase Price including any servicing release premium paid, but not less
than par, less principal reduction after original purchase by Buyer; plus
(b) All interest accrued but unpaid at the Note Rate on the principal balance of the
Mortgage Loan from the date of the sale to Buyer through and including the first day of the
month following the month the repurchase is made; plus
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(c) All expenses, including but not limited to reasonable fees and expenses of counsel
incurred by Buyer in enforcing Seller’s obligation to repurchase such Mortgage Loan.
15.2 Upon any such repurchase of Mortgage Loans by Seller, Buyer shall endorse the Note(s) and
shall assign the Mortgage(s) in recordable form to Seller, without representations and
warranties, whether express or implied, and without recourse to Buyer.
16.1 All customer information in the possession of either party (“Customer Information”) is and shall
remain confidential and proprietary information of each party except (i) as otherwise set forth in
this Agreement; and (ii) information independently obtained by the parties and not derived in
any manner from information obtained under or in connection with this Agreement.
16.2 The parties agree to comply with all applicable consumer privacy laws (any and all federal, state
and local statues, regulations and rules applicable to the protection and privacy of consumer
information, including but not limited to the privacy provisions of the Gramm‐Leach‐Bliley Act,
15 U.S.C. § 6801 et seq.) (the “Privacy Requirements”) and implementation of appropriate
measures designed to safeguard Customer Information (an “Information Security Program”).
16.3 The parties shall not disclose any Customer Information to any person or entity, other than the
employees, agents, contractors and affiliates of the parties who have a need to know such
16.4 The parties shall maintain at all times an Information Security Program.
16.5 The parties 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 Establishing Information Security Standards, Section 216
of the Fair and Accurate Transaction Act (including its implementing regulations) as well as any
amendments thereto or other applicable regulations regarding safeguarding information
enacted or released by any regulatory agency having jurisdiction over Seller.
16.6 Without limiting the scope of the above, the parties shall use at least the same physical and
other security measures to protect all Customer Information in such parties’ possession or
control, as the parties use for their own confidential and propriety information.
16.7 If Buyer provides an account number to Seller to enable the parties to carry out the purposes of
the Agreement, Seller shall (i) use such account number only for such specific purpose and for
no other purpose; and (ii) destroy all records relating to such account number upon Buyer’s
16.8 In no event shall Seller use any account number to (i) market any product or service of Seller or
any other person or entity (other than Buyer); or (ii) initiate charges to any customer’s Mortgage
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16.9 From time to time upon Buyer’s request, Seller shall allow Buyer during normal business hours
to inspect Seller’s books and records relating to Seller’s: (i) compliance with the Privacy
Requirements; and (ii) Information Security Program.
16.10 The parties shall comply with all Privacy Requirements and shall immediately notify the other
party if there is a breach of its security related to the customers of the other party so that they
may be notified in accordance with any applicable Privacy Requirements.
17.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Texas, without regard to its choice of law principles.
17.2 Section Headings. Section headings are for reference only and shall not affect the interpretation
or meaning of any provision of this Agreement.
17.3 Entire Agreement. This Agreement and any agreement, document or instrument attached
hereto or referred to herein integrates all the terms and conditions mentioned herein or
incidental hereto and supersedes all oral negotiations or prior writings in respect to the subject
matter hereof and thereof. In the event of any conflict between the terms, conditions and
provisions of this Agreement and any such agreement, document or instrument, the terms,
conditions and provisions of this Agreement shall prevail.
17.4 Term. The term of this Agreement shall commence as of the date hereof and shall extend until
the termination of this Agreement pursuant to Article 11 of this Agreement.
17.5 Assignment. This Agreement shall insure to the benefit of and be binding upon the parties
hereto and their successors and assigns. This Agreement is not assignable by Seller without the
prior written consent of Buyer.
17.6 Modification and Waiver. No termination, cancellation, modification, amendment, deletion,
addition or other change in this Agreement, or any provision hereof, or waiver of any right or
remedy herein provided, shall be effective for any purpose unless specifically set forth in writing
signed by the party or parties to be bound thereby. The waiver of any right or remedy in respect
of any one occasion shall not be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.
17.7 Jurisdiction. Any action arising out of this Agreement or the transaction contemplated hereby
may be instituted in any state or federal court located in the State of Texas, without regard to
choice of law provisions thereof. Further, each party expressly waives any objection which such
party may have to the laying of venue of any such action, and irrevocably submits to the
jurisdiction of any such court and agrees to be fully bound by any final unappealed decision of
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17.8 Severability. If any provision or part of this Agreement is deemed invalid or unenforceable under
applicable Laws, the remainder of this Agreement shall not be affected thereby, and shall be
fully enforceable to the extent of the valid portions thereof.
17.9 Confidentiality. Seller understands that all information provided to Seller in connection with this
Agreement is confidential and proprietary to Buyer. Seller agrees to keep in confidence and not
disclose to any third party, duplicate, or use for the benefit of any third party, any such
information given to Seller, and agrees to return all documents and other media containing such
information to Buyer upon termination of this Agreement. Seller further agrees not to sell,
transfer or otherwise give to any person or firm, or otherwise use, directly or indirectly, any
compilation or list of Borrowers.
17.10 Survival of Warranties. The representations, warranties, covenants, agreements and every other
obligation contained in this Agreement shall survive the transactions provided for herein and
shall be fully applicable whether or not Buyer relies thereon or has knowledge of any facts at
17.11 Solicitation. Seller shall not (and Seller shall cause each affiliate of Seller to not), directly or
indirectly, solicit or cause to be solicited any Borrower for the purpose of prepaying a Mortgage
Loan in whole or part for a period of one (1) year after the sale of such Mortgage Loan to Buyer
except with the written permission of Buyer and provided that nothing in this paragraph will
prevent Seller from general solicitations in its marketplace for Mortgage Loans.
17.12 Advertising and Trademark. Seller shall not engage in any form of advertising whatsoever
utilizing either the name of Buyer or any subsidiaries or affiliates of Buyer or any of the product
names, trade names, symbols or trademarks of any Buyer’s loan products, unless specifically
licensed to do so in writing.
17.13 Expenses. Each party shall pay its own expenses incident to this Agreement and the transactions
contemplated hereby, including, but not limited to, all fees of its counsel and accountants,
whether or not any of the transactions contemplated shall be consummated.
17.14 Limited Power of Attorney. Seller hereby irrevocably appoints Buyer, its successors and assigns,
its attorney in fact, with full power of substitution in the name of Seller or otherwise, whether in
relation to real, personal, tangible or intangible property, to do any or all of the following: to
demand, sue for, receive, collect, sign, endorse, assign or compromise any and all promissory
notes, checks, money orders or monies due on any Mortgage Loans sold to Buyer (except a
Mortgage Loan which has been repurchased by Seller pursuant to Article 14 hereof), and to
receive, sign, endorse, or assign any orders, certificates, insurance policies and all benefits under
any other instruments or documents as from time to time may be necessary or appropriate to
accomplish the sales and transfers provided for by this agreement; (b) to enforce, cancel,
release or discharge the Mortgage Loans; and (c) to exercise or perform any act, power or duty
that Seller has or would have in connection with the Mortgage Loans purchased by Buyer or
which are reasonable in order to protect Buyer’s interest in the Mortgage Property. Seller
agrees that the foregoing powers are irrevocable and coupled with an interest. Seller will, at
Buyer’s request, execute appropriate separate instruments evidencing the foregoing powers.
17.15 Modifications of Obligations. Buyer may, without any notice to Seller, extend, compromise,
renew, release, modify, adjust or alter, by operation of law or otherwise, any obligation of a
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Borrower or other persons obligated under a Mortgage Loan without releasing or otherwise
affecting the obligations of Seller with respect to such Mortgage Loan or otherwise under this
17.16 Brokers. Each party represents and warrants that there are no claims for brokerage commissions
or finders’ fees or other claims for money from any agent or similar intermediary in connection
with Seller’s entering into this Agreement with Buyer, and each party agrees to indemnify and
hold harmless the other party with respect to any and all liability for any such fee or commission
which is required to be paid to any such agent or broker.
17.17 Agreement Fairly Construed. This Agreement shall be construed fairly as to both parties and not
in favor of or against either party, regardless of which party prepared this Agreement.
17.18 Good Faith Dealing. The parties hereto agree to deal in good faith with each other at all times.
17.19 Notices. All notices and other communications under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered by hand, by overnight courier or by registered or
certified mail, return receipt requested, postage prepaid, addressed to the parties at the
following addresses (or at other such addresses as shall be specified by like notice):
(a) If to Buyer, to:
AllQuest Home Mortgage Corporation
6110 Pinemont Drive, Suite 220, Houston TX 77092
Attention: _Paul Weber__
(b) If to Seller, to:
[Signature page follows]
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IN WITNESS WHEREOF, each of the undersigned parties has caused this
Agreement to be duly executed under seal and delivered by its duly authorized officers, all as of the date
first above written.
BUYER: ALLQUEST HOME MORTGAGE CORPORATION
Print Name: __________________________
Rev ‐ 12‐2011