MORTGAGE BROKER/ADVISOR REVERSE MORTGAGE APPLICANT ASSISTANCE AGREEMENT
This Mortgage Broker/Advisor Applicant Assistance Agreement (the “Agreement”) is made this __________ day of ________________, 200__ by and between ______________________________________, a _________________ corporation with its principal place of business at ____________________________________________________ (the “Advisor”) and ________________________, a ___________ corporation with its principal place of business at ____________________________________________________ (the “Broker”) (collectively, the “parties”). A. Advisor wishes to provide, for a fee, certain advisory services to persons interested in applying for one- to four-family reverse mortgage loans (“Applicants”), including reverse mortgage loans to be insured by the Federal Housing Administration (the “FHA”) under its Home Equity Conversion Mortgage (“HECM”) program; B. Broker works with one or more lenders who make reverse mortgage loans, including HECM reverse mortgage loans, to eligible Applicants (“Lender(s)”); C. Advisor desires to confirm the terms and conditions under which Broker is willing to permit the payment by Applicants to Advisor of the fee for such services (the “Applicant Assistance Fee”) as part of the origination fee Broker will earn in connection with such reverse mortgage loans; and D. Broker is willing to permit the payment of the Applicant Assistance Fee under the terms and conditions described in this Agreement, which terms and conditions are acceptable to Advisor. The parties hereto hereby agree as follows: ARTICLE I COVENANTS AND ACKNOWLEDGMENTS 1.1 As to each reverse mortgage loan application for which Advisor intends to provide advisory services to Applicant(s) (hereinafter, “Applicant” shall mean both a single Applicant applying separately for such a loan or more than one Applicant applying for the same mortgage loan jointly), Advisor will enter into a written agreement with the Applicant describing the assistance that Advisor agrees to provide to the Applicant in connection with the application for a HECM or other reverse mortgage loan (the “Applicant Assistance Services”) and confirming the amount of the Applicant Assistance Fee the Applicant agrees shall be paid to the Advisor for providing the Applicant Assistance Services. Advisor acknowledges that the Applicant Assistance Fee shall be included by Broker as part of the origination fee that Broker will earn in connection with the HECM or other reverse mortgage loan. The written agreement shall be in the form of the Applicant Assistance Agreement (the “Applicant Assistance Agreement”) attached hereto as Exhibit A, or in a substantially similar form. 1.2 Advisor agrees to provide a fully executed, original Applicant Assistance Agreement to Broker in connection with each loan application as to which Advisor intends to be paid the Applicant Assistance Fee, and Advisor acknowledges and agrees that such Applicant Assistance Agreement may be provided by Broker to Lenders, the FHA and others. 1.3 Advisor agrees, in good faith and to the best of its ability, to provide all Applicants the following Application Assistance Services: • • • • Advise and educate Applicant on the mortgage loan process generally and specifically about reverse mortgage products, including HECM reverse mortgage products and any unique issues with HECMs; Advise and educate Applicant on the features, availability, benefits, typical costs and obligations of reverse mortgage loans, including HECMs; Advise Applicant on the potential financial implications of reverse mortgages, the factors affecting qualification, and generally on the amount of benefit for which the Applicant may qualify; Assist Applicant in understanding credit problems that may arise in connection with a reverse mortgage;
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Provide Applicant with telephone numbers and web sites for independent resources to obtain more information about reverse mortgages; Advise and educate the Applicant regarding how the condition of the Applicant’s home may impact qualification and use of the loan proceeds as well as the Applicant’s continuing obligation to maintain the structural integrity, good repair and condition of the home after the loan’s closing; Direct Applicant to and advise Applicant of counseling resources available in connection with reverse mortgages; Advise Applicant with respect to questions raised by Applicant in the process of completing an application for a HECM or other reverse mortgage product and other document, forms or materials to be submitted to Lender(s)/Broker; Advise Applicant regarding any certificate or acknowledgment of counseling or other educational processes required by Broker or a Lender to be submitted by Applicant; Assist Applicant as they complete Applicant’s HECM or reverse mortgage loan application, and during the processing, underwriting and closing of Applicant’s HECM or other reverse mortgage loan request; Maintain regular contact with the Applicant and the Broker; and Participate in the loan closing, if requested by the Applicant.
1.4 Advisor agrees to accept, as full payment for the Applicant Assistance Services, the Applicant Assistance Fee, and Advisor agrees that it will not accept or receive, directly or indirectly, any other payment, compensation or thing of value from the Applicant or any other person for the provision of the Applicant Assistance Services or otherwise related to the HECM or other reverse mortgage loan. 1.5 Consistent with the applicable requirements of the FHA and/or the HECM or other reverse mortgage loan investor and with the additional requirements as described below, Broker agrees to pay to Advisor, or to arrange for the remittance to Advisor, the Applicant Assistance Fee, denominated as such, upon the settlement, closing and funding of each HECM or other reverse mortgage loan with respect to which the Advisor has provided Applicant Assistance Services under the terms of the Applicant Assistance Agreement and this Agreement (an “AdvisorAssisted Loan”). The Applicant Assistance Fee shall not exceed an amount equal to twenty-five percent (25%) the origination fee for such loan, or such other amount as is agreed by the parties to be reasonable market-based compensation for the Applicant Assistance Services (and is supported by an appropriate valuation analysis evidencing same) (the “Maximum Permitted Fee Amount”). For FHA-insured HECM reverse mortgage loans, such origination fee shall not exceed the amount permitted by FHA regulations. The parties acknowledge that the Maximum Permitted Fee Amount describes the maximum amount the Broker agrees it will compensate Advisor for providing Applicant Assistance Services in connection with a HECM or other reverse mortgage loan originated by Broker; that neither Applicant nor Advisor is obligated to agree, in the Applicant Assistance Agreement, to the payment to Advisor of such Maximum Permitted Fee Amount; and that it is only the fee in the amount agreed to by the Applicant in the Applicant Agreement that will be paid by Broker to Advisor for providing the Applicant Assistance Services. 1.7 Advisor acknowledges and agrees that, as between Broker and Advisor, the Advisor-Assisted HECM or other reverse mortgage loan shall be originated by Broker, and not by Advisor; that Broker, not Advisor, shall take the application from Applicant; that Advisor shall provide only the Applicant Assistance Services in connection with the origination of such loans; and that such loans will be funded and closed by a third-party Lender. 1.8 Advisor acknowledges and agrees that it shall be engaged independently by the Applicant(s) to whom it agrees in the Applicant Assistance Agreement to provide the Applicant Assistance Services. 1.9 Advisor shall obtain and maintain in full force and effect, and satisfy at all times related eligibility criteria in order to maintain in full force and effect, without material impairment, suspension or revocation, the “Advisor’s Licenses and Exemptions” as described in Section 2.1 below. 1.10 Advisor shall comply with all applicable regulatory requirements with respect to the performance of its obligations under this Agreement, including, without limitation, federal and state laws and regulations. Any disclosures required by law or regulation to be made by Advisor shall be made by Advisor. 2
ARTICLE II REPRESENTATIONS, WARRANTIES AND COVENANTS OF ADVISOR Advisor represents and warrants as follows, acknowledging that each such representation and warranty is made as of the date of execution hereof, the date Advisor provides each Applicant Assistance Agreement to Broker, and the date each Advisor-Assisted HECM or other reverse mortgage loan is closed, funded and settled: 2.1 Advisor is and shall continue to be duly organized, validly existing and in good standing under the laws of its state of incorporation. Advisor has and shall continue to maintain in full force and effect all necessary licenses, approvals, registrations and certifications, including mortgage broker or originator licenses as may be required, or is duly exempt therefrom in all appropriate jurisdictions to conduct all its activities as described in this Agreement and the Applicant Agreement (collectively, “Advisor’s Licenses and Exemptions”). 2.2 Advisor has all requisite corporate power, authority and capacity to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement, and any related agreements or instruments and the consummation of the transactions contemplated hereby and thereby, each has been duly and validly authorized by all necessary corporate action. This Agreement and any related agreements or instruments each constitute a valid and legally binding agreement of Advisor enforceable in accordance with its terms. 2.3 The execution, delivery and performance of this Agreement, and any related agreements or instruments by Advisor, its compliance with the terms hereof and thereof, and consummation of the transactions contemplated hereby and thereby, will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by, or require any additional approval under its Articles of Incorporation, Bylaws, or any instrument or agreement to which it is a party or by which it is bound or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it. 2.4 No representation, warranty or written statement made by Advisor in this Agreement or in the Applicant Agreement is inaccurate, untrue, incomplete or misleading in any material respect. 2.5 Advisor is neither owned nor controlled by Broker, and there is no financial interest between Advisor and Broker except as described in this Agreement. 2.6 Advisor has the requisite knowledge and expertise to enable it to provide the Applicant Assistance Services. 2.7 No termination of this Agreement shall release Advisor from liability for its own misrepresentation or for any breach by it prior to such termination of any covenant, agreement, representation or warranty contained herein. ARTICLE III REPRESENTATION AND WARRANTIES OF BROKER Broker represents and warrants as follows, acknowledging that each such representation and warranty is made as of the date of execution hereof, the date Advisor provides each Applicant Assistance Agreement to Broker and the date each Advisor-Assisted HECM or other reverse mortgage loan is closed, funded and settled: 3.1 Broker is duly organized and validly existing under the laws of the United States of America. Broker is qualified to transact business in each jurisdiction in which such qualification is deemed necessary. 3.2 Broker has all requisite corporate power, authority and capacity to enter into this Agreement and to perform the obligations required of it hereunder. The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, each have been duly and validly authorized by all necessary action by Broker. This Agreement constitutes a valid and legally binding agreement of Broker enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or other laws or equitable principles affecting the enforcement of creditor’s rights generally. 3
3.3 The execution, delivery and performance of this Agreement by Broker, its compliance with the terms hereof and the consummation of the transactions contemplated hereby, will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its Articles of Incorporation, Bylaws or any instrument or agreement to which it is a party or by which it is bound. 3.4 No termination of this Agreement shall release Broker from liability for its own misrepresentation or for any breach by it prior to such termination of any covenant, agreement, representation or warranty contained herein. ARTICLE IV MISCELLANEOUS 4.1 The representations, warranties, covenants and agreements contained herein shall survive the execution of this Agreement, and shall not terminate, notwithstanding the termination of this Agreement. 4.2 hereto. This Agreement may not be amended except by an instrument in writing signed by each of the parties
4.3 This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and their respective permitted successors and assigns. Advisor shall not assign this Agreement or any rights hereunder, including, without limitation, the right to receive compensation or money due hereunder. Advisor shall not delegate any duty hereunder. 4.4 Advisor is not, and shall not represent to Applicants or third parties that it is acting as an agent for and/or on behalf of any Lender to whom Broker submits a reverse mortgage. 4.5 Advisor shall not use Broker’s or any Lenders’ name, trademarks or service marks in any manner, including, without limitation, in any advertising or marketing materials; provided, however, Advisor may use Broker’s or Lender’s name when orally describing or discussing Broker’s services or Lender’s reverse mortgage loan products with Applicants. 4.6 Advisor shall not be obligated to submit any or all Applicant(s) to whom it provides Advisory Assistance Services Advisors to Broker, it being understood that this is a non-exclusive agreement. 4.7 Each party shall comply with all federal, state and local laws, rules, regulations and ordinances governing or relating to privacy rights in connection with its performance under this Agreement including, without limitation, the Gramm-Leach-Bliley Act (“GLBA”) and its implementing regulations. Each party shall implement such physical and other security measures as shall be necessary to (a) ensure the security and confidentiality of the “nonpublic personal information” of the “customers” and “consumers” (as those terms are defined in GLBA) of either party which it holds, (b) protect against any threats or hazards to the security and integrity of such nonpublic personal information, and (c) protect against any unauthorized access to or use of such nonpublic personal information. 4.8 Advisor acknowledges and agrees that Broker may communicate with Advisor and provide Advisor with information related to this Agreement or otherwise by any means legally permissible, including, without limitation, telephone, electronic mail and facsimile. To the extent Broker is required by applicable law to obtain Advisor’s prior consent to receive such communications from Broker via any such means, Advisor hereby grants Broker such prior consent for any such applicable law and Broker shall not be required to obtain any additional consents from Advisor. By way of example but not limitation, Advisor consents and agrees that Broker may provide Advisor with Loan pricing information and other information related to Lenders’ Loan programs to the electronic email address and/or facsimile number provided by Advisor in Section 4.13 herein or any other electronic email address and/or facsimile number that Advisor may provide to Broker for such purpose and that Broker shall not be required to obtain any additional consents from Advisor.
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4.9 Advisor and Broker agree that all information, documentation, knowledge and data about the other party that is amassed, obtained or developed by and between the parties shall, unless specifically designated otherwise, be treated as proprietary and confidential information to be held in strict confidence and not to be disclosed to any third party unless written authorization to make such disclosure has been given by the appropriate party, or unless required by a lawful order of a governmental or judicial entity. The parties further agree that any such proprietary and confidential information acquired during the course of this Agreement shall continue to be treated as proprietary and confidential information following termination of this Agreement. 4.10 The parties agree that the requirement of confidentiality under this Agreement also applies to their respective employees and agents. Each party shall use its best efforts to assure that its employees and agents adhere to the confidentiality requirements set forth herein. It is agreed by the parties, however, that use and disclosure of proprietary and confidential information by employees to the extent necessary to carry out the terms and purposes of this Agreement, including disclosure to the Office of the Comptroller of the Currency or other Broker governmental regulators and Broker’s or any Lender’s outside auditors, is acceptable. [Note: The parties may make reasonable revisions to the remaining “boilerplate” provisions in this Article IV, provided such revisions do not conflict with the Reverse Mortgage Broker Advisor Guidelines or the parties’ respective rights and obligations under this Agreement.] 4.11 This Agreement may be terminated at any time (i) by mutual written consent of the parties or (ii) by either party, for any or no cause, upon thirty (30) days written notice to the other party. In the event of such termination of this Agreement, Broker shall remit any Applicant Assistance Fee that Broker committed to pay to Advisor prior to such termination, and thereafter Broker shall not be required to pay any further Applicant Assistance Fees to Advisor. 4.12 This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of _____________, without regard to its conflict of laws principles. In the event of any lawsuit or other proceeding relating to this Agreement, each party hereby consents to jurisdiction in the state and federal courts located in the County of _____________, State of _____________. 4.13 Except where telephonic instructions or notices are authorized herein to be given, all notices, demands, instructions and other communications required or permitted to be given to or made upon any party hereto shall be in writing and mailed (registered or certified mail, return receipt requested, postage prepaid), sent by overnight courier (charges prepaid), or sent by facsimile (and confirmed by return facsimile), or personally delivered, addressed to the respective party at the address or facsimile number set forth below: To Broker: _________________________ _________________________ _________________________ Attn.: _________________________ Telephone: _________________________ Facsimile: _________________________ Electronic Mail: _________________________ _________________________ _________________________ _________________________ Attn.: _________________________ Telephone: _________________________ Facsimile: _________________________ Electronic Mail: _________________________
To Advisor:
Notices delivered personally shall be effective upon delivery. Notices transmitted by facsimile shall be effective when transmitted. Notices delivered by registered or certified mail shall be effective on the date set forth on the
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receipt of registered or certified mail, or the third business day after mailing, whichever is earlier. Each party shall provide written notice to the other of a change in its address, telephone number or facsimile number. 4.14 If any term, clause or provision of this Agreement shall be deemed invalid or unenforceable for any reason, the remainder of this Agreement shall remain valid and enforceable in accordance with its terms. The invalidity or unenforceability of any term, clause or provision in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 4.15 The parties hereto each agree to use commercially reasonable efforts to cooperate fully with each other to perform all their duties hereunder and effectuate the purposes and intents of this Agreement; such cooperation shall include, but shall not be limited to, the correction of errors that may have arisen in connection with the origination of any Loan and provision of any and all information that may be requested regarding any of the Loans underwritten pursuant to this Agreement. 4.16 If any claim, legal action or any arbitration or other proceeding is brought for the enforcement of this Agreement or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees and other costs incurred in that claim, action or proceeding, in addition to any other relief to which such party may be entitled. 4.17 This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument. Facsimile signatures shall be deemed valid and binding to the same extent as the original.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.
ADVISOR [LEGAL NAME OF ADVISOR]
BROKER [LEGAL NAME OF BROKER]
By: __________________________ Name: _______________________ Title: ________________________ Date: ________________________
By: __________________________ Name: _______________________ Title: ________________________ Date: ________________________
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EXHIBIT A ADVISOR/APPLICANT REVERSE MORTGAGE ASSISTANCE AGREEMENT (MODEL FORM)
TO: Applicant(s) _______________________________________________________________ (“You” or “Applicant(s)”) [Insert Name of Advisor] with its principal place of business at [Insert Advisor’s address] , as agent for [Insert Name of Mortgage Broker] under its Broker Advisor Reverse Mortgage Assistance Program (“We”, “Us” or “Advisor”), understand that You may be considering applying for a Home Equity Conversion Mortgage (“HECM”) or other reverse mortgage loan. We want to be of assistance to You as You consider the HECM or other reverse mortgage loans that may be available to You. We propose to provide the following Applicant Assistance Services to You: 1. To advise and educate You on the mortgage loan process generally and specifically about reverse mortgage products, including HECM reverse mortgage products and any unique issues with HECMs; 2. To advise and educate You on the features, availability, benefits, typical costs and obligations of reverse mortgage loans, including HECMs; 3. To advise You regarding the potential financial implications of reverse mortgages, the factors affecting qualification, and generally on the amount of benefit for which the Applicant may qualify; 4. To assist You in understanding credit problems that may arise in connection with a reverse mortgage; 5. To provide You with telephone numbers and web sites for independent resources to obtain more information about reverse mortgages; 6. To advise and educate You regarding how the condition of your home may impact qualification and use of the loan proceeds as well as your continuing obligation to maintain the structural integrity, good repair and condition of the home after the loan’s closing; 7. To direct You to and advise You of counseling resources available in connection with reverse mortgages; 8. To advise You with respect to questions You have in the process of completing a HECM or other reverse mortgage loan application and other documents, forms or materials to be submitted to lender(s)/mortgage broker(s); 9. To advise You with respect to any certificate or acknowledgment of counseling or other educational processes required by such mortgage broker(s)/lender(s); and 10. To assist You in dealing with such lender(s)/mortgage broker(s) as they complete your HECM or reverse mortgage loan application, and during the processing, underwriting and closing of your HECM or other reverse mortgage loan request. We propose that We be paid an Applicant Assistance Fee for providing the Applicant Assistance Services to You, but only if a HECM or other reverse mortgage loan is made to You by a lender. If no HECM or other reverse mortgage loan is made to You, no Applicant Assistance Fee will be paid to Us. For a HECM, the Applicant Assistance Fee will be included in the origination fee for your HECM loan, and it may be financed in its entirety as part of the loan if you so request. The Applicant Assistance Fee will be _________________ . You acknowledge, understand and agree that mortgage broker(s) and lender(s) may share with Us information related to your application as they process and underwrite it, so that We may be able to provide the Applicant Assistance Services to You. You also acknowledge, understand and agree that a decision to make or not to make a HECM or other reverse mortgage loan to You may only be made by such lender(s); that We do not make, process or underwrite HECM or other reverse mortgage loans; and that We do not guarantee that any lender(s) to which your application may be submitted will make the requested loan to You. We do not represent a particular lender and there is no financial interest between Us and any mortgage broker that We may assist You in dealing with. 7
If You have any questions about our proposed Applicant Assistance Services or our proposed Applicant Assistance Fee, or do not fully understand them or this Agreement, please let Us know. If You want to independently engage us to provide the Applicant Assistance Services, and if You agree that We may be paid the Applicant Assistance Fee as part of the origination fee if a HECM or other reverse mortgage loan is originated for You, please sign this Agreement below.
ADVISOR ______________________________
By: __________________________ Name: _______________________ Title: ________________________ Date: ________________________
THE UNDERSIGNED APPLICANT(S) AGREE THAT THE APPLICANT ASSISTANCE FEE DESCRIBED ABOVE MAY BE PAID TO THE MORTGAGE ADVISOR IDENTIFIED ABOVE AS PART OF THE ORIGINATION FEE FOR A HECM OR OTHER REVERSE MORTGAGE LOAN.
Applicant: ___________________________________ Applicant: ___________________________________ Applicant: ___________________________________ Applicant: ___________________________________
Date: ___________ Date: ___________ Date: ___________ Date: ___________
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