MortgageAmerica, Inc. Wholesale Lending
This Correspondent Agreement (“Agreement”) is entered into this __________ day of
____________________, 20____ by and between MortgageAmerica, Inc., Birmingham, AL (“MAI”) and
________________________________________, ______________, ___ (“Correspondent”).
MAI wishes to acquire real estate mortgage loans with servicing rights from Correspondent and Correspondent
wishes to transfer such loans with servicing rights to MAI from time to time.
Correspondent wishes to become eligible to sell to MAI closed, mortgage loans on a servicing released basis.
A closed mortgage loan is a loan arising out of loan application package which is closed in the
Correspondent’s name with the Correspondent’s own disbursed Funds and is thereafter transferred to MAI and
which is evidenced and secured by mortgages, deeds of trust, or other security instruments (each a “security
Instrument”) on residential real property (the “Mortgaged Property”).
Therefore, MAI and Correspondent, each in consideration of the others’ agreements hereinafter set forth, agree
MAI shall purchase real estate mortgage loans with servicing rights (“Loans”) from Correspondent, and
Correspondent shall sell Loans to MAI from time to time based on all of the terms, conditions and provisions
of MAI’s Wholesale Lending Guide (“GUIDE”), and the GUIDE is incorporated herein by this reference.
This agreement is a non-exclusive arrangement whereby the Correspondent will solicit prospective borrowers
for residential mortgage loans and MAI will underwrite, and upon its approval, fund such loans closing in the
name of the Correspondent with a transfer of the loan to MAI.
2. WARRANTIES AND REPRESENTATIONS:
Correspondent warrants, represents, and covenants to MAI, its successors, and assignees that the following are
true, complete, and correct with regard to each loan submitted to MAI, as of the date of such submission to
MAI, and as of the date of purchase of the Loan by MAI (“Purchase Date”):
2 .1 True and Correct. Neither this Agreement nor any statement, report, or other document
furnished or to be furnished pursuant to this Agreement contains any untrue statement of fact,
or omits any statement of fact that would make the statements contained therein misleading.
All of the information contained in the Correspondent’s Application submitted to MAI is true
2 .2 Correspondent is duly organized, validly existing, and in good standing under the laws
governing its creation and existence. Correspondent has the power to own its assets and to
transact the business in which it is presently engaged. Correspondent is duly qualified to
conduct its business in each jurisdiction in which Correspondent originates Mortgage Loans
and in each jurisdiction in which any related Mortgaged Property is located in if the laws of
such jurisdictions require qualification to conduct business of the type conducted by
Correspondent. Correspondent and its employees and representatives have all licenses,
authorizations, and approvals required to originate the Mortgage Loans, and none have been
suspended, revoked, or restricted in any way.
2 .3 Correspondent has the full power and authority to execute and deliver this Agreement and to
perform its obligation in accordance with the requirements set forth. The execution, delivery
and performance of this Agreement by the Correspondent and the consummation of the
transactions contemplated herein have been duly and validly authorized. This Agreement has
been duly executed by Correspondent and is, or upon delivery will be, a legal, valid and
binding obligation of Correspondent enforceable in accordance with its terms, subject only to
applicable bankruptcy, reorganization, insolvency, moratorium, or other similar laws
affecting creditor rights generally.
2 .4 Each loan has been originated, processed, and closed by Correspondent in accordance with
prudent lending standards and meets all of MAI’s requirements, as set forth in the GUIDE or
as otherwise communicated to Correspondent.
2 .5 Correspondent has made diligent inquiry into all material facts and circumstances in the
making of the loan, including all material representations of the mortgagor and all submitted
documents are genuine and valid and contain no material errors and no misstatement of
2 .6 With regard to any FHA-insured or VA-guaranteed loan, the Correspondent has complied
with all requirements and regulations of the insuring or guaranteeing agency or company.
2 .7 Correspondent shall not take any action, cause any action or permit any action to be taken by
any of its employees, or any other independent contractor working on Correspondent’s behalf,
to in any manner solicit the prepayment or refinance of any mortgage by any borrower, in
whole or in part.
2 .8 The property serving as collateral for the loan has not been damaged by fire, waste, wind,
flood or any other cause; the value of such property has not been adversely affected as of the
purchase date; and the Correspondent has not been advised that the mortgaged property will
be condemned. Improvements comply with all rules and regulations of any applicable
governmental authority or agency, and requirements as to completion of any on-site or off-
site improvements and disbursements of escrow funds have been, or will be, complied with.
The improvements are located on the subject property and there are no encroachments.
2 .9 The note and mortgage are good, valid and enforceable instruments, free of defect or
objection, and are supported by all documents required by applicable governmental agencies
and/or secondary market investors (“Investor”). There are no defaults in any of the
documents evidencing or securing the loan, and there are no events which with notice or the
passage of time could constitute such default. The obligation secured by said mortgage is not
usurious or in violation of any law which governs the rate or amount of interest and any other
charges, which can be charged or paid, on the obligation.
2.10 The full principal amount of the loan has been advanced to the mortgagor, either by payment
direct to the mortgagor or by payment made on mortgagor’s request or approval. The unpaid
principal balance is as stated in the note. All costs, fees and expenses incurred in making,
closing and recording the loan have been paid. Premiums on the title insurance policy, hazard
insurance policy and, if applicable, flood insurance policy have been paid, with each meeting
the requirements and specifications of MAI and, if applicable, the insuring or guaranteeing
2.11 The mortgage is a first lien and is duly recorded. No part of the mortgaged property has been
released from the lien of the mortgage and there are no unpaid taxes, ground rents, water
charges, sewer rents, assessments or other outstanding charges affecting the lien of the first
mortgage on the mortgaged premises. Improvements are free and clear of title liens recorded
before the assignment to MAI. No waiver, alteration, or modification in any respect has been
made of the terms and provisions of the note or mortgage or other documents nor have the
same been satisfied, subordinated, modified, or released in whole or in part.
2.12 The Correspondent has good title to the mortgage and authority to sell, transfer, and assign
the same. The assignment of the mortgage and the endorsement of the respective note from
the Correspondent to MAI are valid, sufficient, and enforceable.
2.13 All local, state and federal statutes applicable to the origination and closing of the loan have
been strictly satisfied.
3. RESPONSIBILITIES AND BENEFITS:
It is the intention of Correspondent and MAI that MAI be entitled to rely on Correspondent’s representations
and warranties without regard to any act or omission of MAI, and no underwriting review, processing, closing,
auditing, knowledge, or other involvement or opportunity by MAI with respect to the Loan shall affect in any
way either the representations and warranties made by the Correspondent to MAI or the responsibilities and
obligations of Correspondent to MAI hereunder. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their successors and assigns.
4. BREACH OF WARRANTIES AND REPRESENTATIONS:
Upon discovery of a breach of any of the warranties and representations set forth in Section 2, or of the
covenants set forth in the GUIDE, the party discovering such breach shall give written notice to the other.
Correspondent shall have thirty (30) days following its discovery or its receipt of notice of any such breach to
cure such breach to the reasonable satisfaction of MAI. If in the reasonable judgment of MAI such breach
cannot be cured within such thirty (30) day period, or is incapable of being cured, Correspondent shall, at the
request of MAI, proceed to repurchase the affected Loan at the Repurchase Price as defined in Section 5.3.
Correspondent agrees at its sole expense to defend any action brought against MAI or any subsequent assignee
in respect to any breach of the warranties and representations and to indemnify and save them harmless against
any loss or damage.
5. LIABILITIES AND REMEDIES:
If Correspondent fails to meet all of the requirements of this Agreement concerning any Loan within the time
periods specified therefore, MAI may elect, at its sole discretion, any one or more of the following remedies:
5 .1 Cure. Correspondent may be required to cure the error. The error must be cured within
thirty (30) days of MAI’s notice to Correspondent;
5 .2 Indemnification. In the event of any breach of warranty or representation, covenant or
agreement made by Correspondent, MAI may require Correspondent to indemnify and hold
MAI and its affiliates, and each of its officers, employees and agents, harmless from all
losses, damages, penalties, fines, costs or expenses of any nature (including loss of
marketability and attorneys’ fees). Correspondent agrees to pay an indemnification fee to
MAI for each such Loan upon MAI’s demand. In the event MAI elects indemnification, it
is understood that MAI does not, at any time during the life of the Loan, waive its right
to require repurchase by Correspondent, and Correspondent may be required to
repurchase such Loan. This indemnification shall survive any termination or
cancellation of this Agreement;
5 .3 Repurchase. Correspondent agrees to pay to MAI promptly upon demand such amounts as
may be required by MAI to repurchase from Investor any loans required to be removed by
Investor because of origination defects, material misstatements of facts, or failure by
Correspondent to fully comply in all respects with guidelines and requirements. All
repurchases shall be (i) at its then unpaid principle balance plus any unpaid accrued interest to
the date of repurchase, or (ii) at the price which MAI paid for the Loan, or (iii) at the price
plus attendant costs that MAI must pay to repurchase the loan if it has been sold (whichever
of the three (3) is greater), plus MAI’s costs attributable to the Loan, less any escrow balances
held by MAI, collectively referred to herein as “Repurchase Price”; and all repurchases shall
be completed within thirty (30) days following receipt of written notice from MAI to
repurchase. Upon the occurrence of any of the following events, Correspondent agrees to
immediately repurchase the related Loan (or Property, if title thereto is held by MAI), at the
5.3.1 Correspondent fails to provide all of the documentation required by MAI and/or fails
to satisfy all other requirements of this Agreement within ninety (90) days following
the Purchase Date. Such date, if agreed upon by MAI, may be extended to a date one
hundred and twenty (120) days following the Purchase Date for documents sent out
for recording, but not yet returned due to delays solely within the applicable
recording office. If MAI agrees to accept any outstanding documents after the
initial ninety (90) days following the Purchase Date, a penalty of $100 per month
outstanding will be assessed;
5.3.2 In the reasonable judgment of MAI, the related mortgage insurance or guaranty
certificate cannot be obtained, or any required mortgage insurance or guaranty,
lapses, is rescinded, or claim thereon is denied or not paid (except for the negligence
5.3.3 MAI repurchases any Loan previously conveyed, transferred, or assigned by MAI to
any third party due to defects which existed prior to, or arose as a result of an
occurrence on or before the Purchase Date;
5.3.4 The loan file or credit file contains any fraudulent document or was enabled by
fraudulent activity regardless of whether known to the Correspondent or not, or
whether or not such Loan is delinquent. Please see attached Fraud Policy to review
MAI’s Zero Tolerance Fraud Policy;
5.3.5 The Loan qualifies as a “high cost loan”, “Section 32” loan, or is in anyway
considered a predatory loan under applicable state and federal laws.
5 .4 Reconveyance. Upon repurchase by Correspondent, MAI will endorse the Mortgage Note
without recourse and execute a recordable assignment of the Mortgage, or Deed if applicable,
and reasonably cooperate in the transfer of the Loan or Property and all information relating
thereto to the Correspondent.
5 .5 First Payment Default. With respect to Loans underwritten and approved by MAI or by
MAI’s agency approved delegated underwriter, if such Loan is subject to a First Payment
Default (payment not made within 30 days of the due date of the first scheduled monthly
payment due MAI, its successors, or assigns) then Correspondent shall: (a) pay MAI $2,500
for FHA or VA loans, or $1,000 for Conventional Loans, as reimbursement for administrative
expenses, and (b) return any yield spread premium paid to Correspondent in reference to such
5 .6 Early Loan Pre-Payment (Refinance of Existing Loans): Any loan paid off within the first
one hundred and twenty (120) days from the purchase date by MAI is considered an
exceptional early pre-payment. Upon receipt of notice from MAI of any such prepayment the
Correspondent shall: (a) pay MAI $500 for reimbursement of administrative expenses; (b)
return the yield spread premiums, commissions, and any other consideration paid by MAI.
Sale of the residence or refinance of the loan by another lending entity with no involvement
shall be exempt.
If the fee and yield spread premiums are not received by MAI within thirty (30) days of
notification, then any fees due MAI will be withheld from compensations due to the
Correspondent on any subsequent transactions until the amount is refunded in full.
5 .7 Remedies not Exclusive. The remedies set forth in Section 5, in other sections of this
Agreement, and in the GUIDE, are in addition to and not to the exclusion of any and all rights
and remedies available to MAI at law or in equity including specific performance.
6. INSPECTION AND REMEDIES:
MAI shall, during regular business hours, have the right to inspect and make copies from Correspondent’s
records of documents concerning Loans that are the subject of this Agreement. In the event of any breach or
threatened breach by Correspondent of any of the provisions of this Agreement, MAI shall have all rights and
remedies at law and in equity which are available for such breach or threatened breach, including but not
limited to, injunctive relief, recovery of damages, and specific performance. Correspondent shall reimburse
MAI for all of its reasonable costs and expenses, including attorney fees, expended by MAI in pursuing its
rights and remedies under this Agreement.
7. MAI WHOLESALE LENDING GUIDE:
Correspondent acknowledges the receipt of a full copy of the MAI Wholesale Lending Guide (“GUIDE”). The
GUIDE and any revisions or amendments to the GUIDE are incorporated by reference and made a part of this
Agreement. Any revision of or amendments to the GUIDE shall be effective from the time that Correspondent
receives written copies thereof.
8 .1 Protection of Trademark: Correspondent agrees that it will not use, market, or appropriate in
any manner any of MAI’s trademark, trade names, or service marks without a duly granted
license from MAI.
As a result of its relationship with MAI and access to the GUIDE, Correspondent will learn or
have access to various trade secrets, confidential and proprietary methods, techniques,
processes, applications, approaches, and other information of MAI in various forms, which
information is used or is useful in the conduct of MAI’s business, including MAI’s
origination, purchase, sale, and servicing of mortgage products (all such information is
collectively referred to herein as “Confidential Information”). Correspondent acknowledges
that such Confidential Information is the exclusive property of MAI. Correspondent shall
not, at any time, regardless of if, when, and how, directly or indirectly use, disclose, publish,
reveal, copy, disseminate, or otherwise make available such confidential information, other
than as expressly set forth herein or to the extent required by applicable law.
Correspondent is an independent contractor and Correspondent shall not make any
representations that Correspondent is an agent for or on behalf of MAI. Correspondent may
not execute any documents on behalf of MAI or make any commitment on behalf of MAI.
Except as otherwise required by law or as consented to by MAI, Correspondent, its
employees, and agents, shall not disclose the existence of this Agreement or its relationship
with MAI and shall keep all communications between Correspondent and MAI confidential.
8 .2 Financial Statements: Correspondent shall, so often as MAI may reasonably request, but
no less often than once each year (within 90 days after Correspondent’s fiscal year end)
submit to MAI financial statements for the previous 12-month period that accurately reflect
and completely disclose the financial condition of the Correspondent.
8 .3 Additional Items/ Compliance: Correspondent warrants that it will provide, or cause to be
provided additional mortgage loan documents as required for the sale or insuring of the Loan
as reasonably requested by MAI.
Correspondent acknowledges and understands that MAI is required to comply with all state
and federal regulations, and is subject to federal oversight pursuant to its relationships with
FHA, VA, Fannie Mae, Freddie Mac, Ginnie Mae and others. Correspondent agrees to
cooperate with and assist MAI in conducting its compliance audit program. Correspondent
agrees to provide any or all Mortgage Loan Files or Loan Application Packages submitted to,
or acquired by MAI for inspection, copying, or audit upon reasonable notice of not less than
three (3) business days during normal business hours by an authorized auditor or employee of
8 .4 Changes In Policy: Correspondent acknowledges and agrees that MAI may from time to time
make changes, additions, or modifications to its policies, procedures, and underwriting
standards. Furthermore, Correspondent understands that those changes, additions, or
modifications shall be immediately binding upon Correspondent’s receipt of notice of the
changes as if expressly contained in this Agreement.
This Agreement may be terminated by either party by giving written notice to the other party and such
termination shall be effective immediately. The representations and warranties of the Correspondent set forth
herein shall survive the termination of this Agreement and the obligations of the Correspondent with respect to
all loans submitted or processed under this Agreement shall also survive termination. Any rights MAI and
Correspondent may have acquired prior to termination hereunder into, or regarding any Loan or Loans will not
be affected by termination.
This Agreement and all matters arising out of or related to it shall be governed by and construed and
interpreted in accordance with the internal laws (and not the law of conflicts) of the State of Alabama.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement by their duly authorized officers on
the date and year first mentioned above.
MortgageAmerica, Inc. _________________________________
Alan Hecklinski Printed:_________________________
Vice President Title:___________________________
Wholesale Lending Manager Date: __________________________