Document Sample
					                          SMART CORRESPONDENT PROGRAM
A SMART-Correspondent is a customer who has been approved to close loans in their name, utilizing their own funds with
SMART Options for underwriting and closing document preparation outlined below. The Correspondent is not required to
disclose yield spread premium.
The difference between a SMART-Correspondent and true Correspondent is a true Correspondent, at their own expense;
submits the loan to a staff or company paid underwriter, obtains the approval, prepares the closing documents, obtains final
documentation including recorded security instruments and final title policies, and provides any corrections to final
documentation, while Coastal absorbs most if not all of the “correspondent” expenses for SMART Correspondents.
SMART-Correspondents are preferred customers with the financial backing to fund their own products.
Coastal does not collect any fees upfront. All other monies are distributed to the SMART-Correspondent including escrows,
interim interest, MIP Premium, VA Funding Fee and all fees they have requested we collect from them.
The closing package is reviewed within 72 hours of receipt. After the closing package is reviewed in Charlotte, the SMART-
Correspondent is Sent a “FUNDING STATUS REPORT” which lists any outstanding items required prior to us “funding” them.
Once the SMART-Correspondent has sent all required items, post-closing sends them a “PURCHASE ADVICE” which breaks
down the monies we will wire to the SMART-Correspondent to “fund” the loan.
        Unpaid Principal Balance
        Less               Administration Fee (Fee Schedule posted @ - Help – Closing)
        Less               MERS Registration Fee
        Less               Flood Certification (unless correspondent orders flood)
        Plus               SMART-Correspondent Compensation
        Less               SMART-Correspondent Discount
        Plus               Interim Interest
        Less               Interest Credit
        Less               FHA UFMIP
                           NOTE: VA Funding Fee must be paid by Lender in a Correspondent Transaction (Loan Guaranty
                           Certificate must also be obtained by Lender & provided to Coastal upon receipt (this is due to
                           limitations within VA’s electronic registration)
        Plus               MIP Credit
        Less               Escrow Balance
        Less               Buydown Subsidy (if not included in pricing)
        Less               Financed Discount Points

        For a Total        NET FUNDING AMT
    •   Compare the savings to a True Correspondent transaction:
               o   Shorter Lock Terms. You must disburse by expiration date in lieu of delivering by expiration date.
               o   Tax Service Fee
               o   Quality Control
               o   Cost of Running AUS
               o   Underwriting Fees
               o   Underwriting Liability
               o   MERS Registration
               o   Delivery Costs
               o   Cost of Recording Assignment
               o   Expense for obtaining Trailing Documents and resulting late penalties if not obtained in a timely manner
               o   Government Loans: Remittance of Fees, Insuring, and Liability if not insured in a timely manner
               o   Additional Representations and Warrants

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               SMART CORRESPONDENT PROGRAM – Details
1.        Submit your file to Coastal for Underwriting
2.        After you receive your approval, Complete & Fax the SMART-Correspondent Fee Sheet & Closing
          Package Request posted on - Help – SMART Correspondents
3.        Coastal prepares the closing package
4.        Closing package is returned to Coastal by the Closing Agent
5.        If applicable, Closing Agent is instructed to send the Note to your Warehouse Bank
6.        Coastal reviews the closing package within 72 hours of receipt of package
7.        Coastal sends you either:
          a. Deficiency notification – Lists all items required for funding
          b. Purchase Advice

NOTE:         If you close VA (Dept. of Veterans Affairs) loans as a SMART correspondent:
     1.      Provide evidence Funding Fee Paid
     2.      Submit loan to VA for Loan Guaranty
     3.      Provide Coastal with Loan Guaranty Certificate

T.I.D.E. Status Notifications:
1.   Disbursed – When Coastal confirms loan has closed
2. Credit Ready – When Coastal Assigns to Post-Closing
3. Post-Closing Received – When Coastal Receives Original Closing Package
4. Collateral Received – When Coastal Receives Original note
5. Investor Suspended – Deficiencies Identified – Funding Delayed. Coastal will send you a Funding Status
   Report Notification for your action.
6. Post-Closing Complete – When all Deficiencies have been cleared
7. Collateral Approved – Funds have been requested
8. Funded – Funds have been wired

Contact Information for Reimbursement of Funds:
If you have NOT received notification regarding deficiencies or funding authorization within 72 hours of
receipt of the closed loan package by Coastal Charlotte, please e-mail for
status. Include the Application #, Borrower Last Name, Property Address and Closing/Disbursement dates.

If No Deficiencies, loan will normally fund within 4 business days of our receipt of original note.

We can also assist you in becoming an FHA Approved Loan Correspondent –
See details at - HELP – FHA Sponsorship

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 CFG Account Executive: ________________________________________________
Coastal Funding Group conducts a variety of quality checks on the principal officers. Such checks may include, but
are not limited to: References, Credit Report, BackGround Searches, Financial Strength, etc. Coastal Funding Group
seeks relationships that meet high ethical and quality standards. Contact Your Account Executive if you have any
questions or concerns regarding qualifications.
 √    Item                                                                                               Required
      Cover Letter With Company Description (N/A if approved as Broker)                                     √
      Completed Correspondent Lending Application                                                           √
      Completed Correspondent Agreement                                                                     √
      If you wish to participate - Include $100 Sponsorship Fee payable to Department of
      Veterans Affairs OR Evidence of VA Prior Approval Authority.
      Resume(s) of Principal Officer(s) – Minimum of 2 years “A” paper loan origination
      Reference Information from Two Investors
      (n/a if your company is currently approved with Coastal as a Broker)
      Copy of Filed Articles of Incorporation (Corp) or Articles of Organization (LLC) including
      filing stamp
      Any Amendments to Articles                                                                            √
      Previous Year Financials – N/A State or Federally Chartered Financial Institution or HUD
      Approved Mortgagee or HUD Approved Correspondent
      Signed YTD Balance Sheet and P&L – N/A State or Federally Chartered Financial
      Institution or HUD Approved Mortgagee or HUD Approved Correspondent
      Declarations Pages of Insurance Policies                                                              √
               Errors & Omissions or General Liability - $300,000 Minimum Coverage Amount                   √
               Fidelity Bond Coverage - $300,000 Minimum Coverage Amount                                    √
      Quality Control Process & Procedures for Mortgage Lending - N/A State or Federally
      Chartered Financial Institution
      Completed E-Mail and Fax Consent Form                                                                 √
      Wiring Instructions                                                                                   √
      Completed & Authorized Corporate Resolution (N/A – LLC)                                               √
      Signed Consequences of Loan Fraud                                                                     √
      Copy of Current License(s), State Certification or Exemption for All States for which you
      seek approval
      Evidence of CURRENT Surety Bond Coverage                                                              √
      Signed Acknowledgment (Coastal’s Instructions to Warehouse Bank) N/A if closing with
      own funds
      Signed Acknowledgment of Expectations                                                                 √
                                                              Acct Executive: ________________

                              Correspondent Lending Application

Company Name: _________________________________________________________________
DBA: _________________________________________________________________________
Street Address: ________________________________________________________________
Mailing Address (if different): ____________________________________________________
City: _________________________________              State: ________ ZIP: _________________
Phone: ________________________                      Fax: _________________________________
Please indicate your Company's Classification:
___ Mortgage Banker             ___ Savings & Loan            ___ Thrift
___ Finance Company             ___ Commercial Bank           ___ Credit Union
___ Other: Describe: _____________________________________________________________

Tax Id: _______________________________ Organized Under Laws of: _______________
Date f In   p   ti n:
D t of Incorporation: ___________________            Fi   l Year End : _______________________
                                                     Fiscal Y    Ends:
Parent Company: ________________________________________________________________
Principal Contacts:   Name:                          Title:                        Phone:
President: ______________________________________________________________________
Operations: ____________________________________________________________________
Processing: _____________________________________________________________________
Closing: _______________________________________________________________________
Post-Closing: ___________________________________________________________________
Primary Contact: ________________________________________________________________
Approved With:          Yes        No        Seller Identification #             Approval Date
Fannie Mae
Freddie Mac
MI Co:
MI Co:
WAREHOUSE LINE: Please provide the following information regarding your warehouse line(s):
              Institution:              Amount of Line:          Contact Name:             Contact Phone Number:

Please provide the information regarding your company's mortgage loan volume.
1. Originations
Please provide the following information regarding the applicant's origination history:
Fiscal Year      Agency Eligible #      Agency Eligible $$     ALT A #   ALT A $$    SubPrime#       SubPrime $$

Prev Yr 1
Prev Yr 2

2. Investors - Please provide performance summary reports from each.
Provide the information on the investors that purchased the four largest dollar amounts of your mortgage
loans sold in the last 12 months.
        Investor                # of Loans           Principal Balance           Contact            Phone Number:

Provide the following information for your company's insurance coverage:
                 Type                  Amt of Coverage                   Carrier                     Expiration
Errors & Omissions Coverage
Fidelity Insurance Coverage
General Liability Coverage
Other: _________________

1. Which Mortgage Origination Software do you Use? _____________________________________
2. Do you utilize (check all that apply) ___ DU on the Web ___ DO on the Web
              ___ DirectSubmit               ___ LP on the Internet       ___ eMagic        ___AU Central
              ___ Other: _____________________________________________________________
3. What is your web address? ______________________________________________________
* If Yes - Please explain                                                                                      Yes          No
Was your company ever suspended from selling or servicing mortgages by any investor?

Was your company ever suspended by FHA, VA, FNMA, or FHLMC or MI Company?

Has your company had unfavorable findings (including, but not limited to a finding that the company
violated any applicable law with regard to mortgage operations or servicing activities included in any
audit, examination, or report by FHA, VA, FNMA, FHLMC, or any State or Federal reglatory or
investigators agency?)

Has any officer, director, or principal been affiliated with any company/business that was
suspended by FHA, VA, FNMA, FHLMC and/or subject to any voluntary or involuntary bankruptcy
Has your company or any officer, director, or principal of your company ever been sued or been a
party in a lawsuit in which it is alleged that your company violated applicable law(s) governing
mortgage loan origination or servicing?


 The undersigned declares that the statements set forth herein and in any documents provided to Coastal Mortgage Services, Inc.
d/b/a Coastal Funding Group, in connection with this application are true and factual to the undersigned's best knowledge, after due
 inquiry. The undersigned hereby authorizes Coastal Mortgage Services, Inc. d/b/a Coastal Funding Group to obtain verification of
  the information disclosed from any lawful source and authorizes Coastal Mortgage Services, Inc. d/b/a Coastal Funding Group to
obtain any other information it may deem necessary about the named company and its principals from any sources, including but not
                                   limited to any investor, agency, credit bureau or PMI company.

COMPANY NAME: __________________________________________________________________________

SIGNATURE OF CORPORATE OFFICER: _____________________________                                DATE: ___________________

NAME: ___________________________________________________________________________________

TITLE: ___________________________________________________________________________________

E-MAIL ADDRESS: _________________________________________________________________________

_____          Correspondent Agreement - Executed
_____          Copy of Agency Approvals (FHA, VA, etc.)
_____          Resume's of Principal Officers
_____          Most Recent Two Years Audited Financial Statements
_____          Declarations Page(s) of Insurance Policies
               _____      Errors & Omissions
               _____      Fidelity
               _____      General Liability
               _____      Other: ________________________________
_____          Copy of Quality Control Program Guidelines
_____          Wiring Instructions
_____          Corporate Resolution Stating the Persons with Authority to Sell Loans & Sign Documents
_____          Enduring POA for Signing of Assignments
_____          Copy of Current License, State Certification or Exemption for all States as applicable.
_____          Acknowledgment of Expectations
                                         CORRESPONDENT AGREEMENT
                               For Purchase and Sale of Residential Mortgage Loans

This Correspondent Agreement (“Agreement”) is made and entered into as of the _____ day of ______________,
______, by and between Coastal Mortgage Services, Inc., d/b/a Coastal Funding Group and Coastal Mortgage
Services, Inc. d/b/a Coastal Home Equity (“CMS”), and ____________________________________________
(“Correspondent”), a ______________________ __________________________________.
                     (State)                        (i.e., corporation, LLC, Thrift, Bank, etc.)

Coastal Mortgage Services, Inc. will be referenced collectively throughout this document as “CMS”.


This Agreement is entered into with reference to and includes the following:

A. CMS is engaged, among other things, in the business of originating, processing, closing, funding and selling
   mortgage loans. CMS operates its wholesale lending business as a d/b/a, namely Coastal Funding Group and as a
   d/b/a namely Coastal Home Equity. The d/b/a companies operate a correspondent lending operation pursuant
   to which CMS buys residential mortgage loans, secured by real property, from various Correspondent sellers.

B. Correspondent is engaged in the business of originating, processing, closing and selling residential mortgage

C. Correspondent, as applicable is a mortgagee approved, and will remain approved, by the
   _____ Federal Housing Administration of the Dept. of Housing and Urban Development (FHA).
   _____ Department of Veterans’ Affairs (VA)
   _____ Federal National Mortgage Association (Fannie Mae)
   _____ Federal Home Loan Mortgage Corporation (FHLMC)
   and/or any governmental or quasi-governmental agency or insurer which is engaged in the mortgage lending
   industry. In the event that any other approval is required to be obtained in order to originate, process, close,
   fund, or service any Loan (hereinafter defined), Correspondent agrees to take whatever action is required to
   obtain such approval.

D. CMS desires from time to time to purchase from Correspondent, and Correspondent desires to sell, one-to-
   four family, first and second lien residential mortgage loans (individually a “Loan”) made to individual borrowers
   (individually, a “Borrower”), closed in Correspondent’s name, on a servicing released basis, upon such terms and
   conditions as set forth in this Agreement and as required by: rate sheets, written updates provided or posted
   on the website: (“Website”), underwriters, closing instructions, and post-purchase
   documentation requests.

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E. The purchase price for the Loan shall be an amount equal to:
   Principal Balance + Any Service Release Premium – Any Correspondent Discount +/- interest adjustment –
   Administration Fee (includes: UW Fee, Doc Prep, Tax Service, Flood Certification, Commitment Fee and MERS
   Registration Fee) – Escrow Account Balance – Buydown Subsidy – Tax Service Fee – Life of Loan Flood
   Certification Fee +/- any other adjustments as necessary. NOTE: Correspondent will net fund the closing
   agent for Tax Service Fee and Flood Service Fee and Coastal.
   CMS will act as an Agent of the Correspondent by preparing the Closing Documentation and reviewing all Closing
   Documentation from the Closing Agent. CMS will issue a funding number to the Closing Agent upon
   review/approval of all documentation required for review/approval prior to disbursement. CMS will not
   purchase a loan from Correspondent until all required documentation is received.

F. MARI and MIDEX release
   Correspondent understands that CMS performs quality control reviews of the Mortgage Loans that
   Correspondent submits to CMS. Correspondent hereby consents to the release of information about any loan
   application that is believed to contain misrepresentations and/or irregularities. Correspondent agrees and
   gives its consent that it and its employees may be named as the originating entity or loan officers on such
   loans, whether or not Correspondent or its employees are implicated in the misrepresentations and/or
   irregularities. Correspondent hereby releases and agrees to hold harmless CMS, Mortgage Asset Research
   Institute, Inc. (“MARI”), all Mortgage Industry Data Exchange (“MIDEX”) subscribers and any trade
   associations that endorse the MIDEX system from all liability for damages, losses, costs, and expenses that
   may arise from the reporting or use of any information submitted by CMS or any other MIDEX subscriber to
   MARI, recorded in the MIDEX system, and used in any way by CMS or any other MIDEX subscriber.

In consideration of the above recitals and the mutual covenants and promises contained herein, and intending to be
legally bound, the parties do hereby agree as follows:


This Agreement shall be effective as of ___________________, and shall continue until terminated by either
party.                                       (CMS Use)


   a) This Agreement may be terminated by either party without penalty or cause upon 15 days written notice to
      other party. Termination shall not affect the obligations of Correspondent with respect to Section 3(f), 6,
      7, 8, 9, 10, and 14.

   b) In addition, CMS or any of its affiliates shall have the right to terminate this Agreement immediately by
      notice in writing to Correspondent in the event of any of the following:

       i)   Correspondent defaults in any of its obligations under this Agreement or any other Agreements
            between Correspondent and CMS, and such default is not cured within ten (10) business days after
            notice to Correspondent of such default.
       ii) Correspondent fails to deliver acceptable loans to CMS, under the terms and conditions of this
       iii) Correspondent shall initiate or suffer any proceedings of insolvency or reorganization under the
            bankruptcy code, or other federal or state receivership laws, or make any common law assignment for
            the benefit of creditors, or be unable to pay its debts as the same become due;
       iv) Correspondent assigns or attempts to assign its rights and obligations hereunder;

 1/13/2006                                        Page 2 of 10                          Initials _________
     v) Correspondent by operation of law becomes unable to faithfully perform its duties pursuant to this
         Agreement; or
     vi) CMS or any of its affiliates, suffer any involuntary sale or execution upon any interest in any Loan
         purchased hereunder and such is the result of any act or omission (intentional or unintentional) on the
         part of the Correspondent.

  c) Termination shall not affect the obligations of Correspondent with respect to any event occurring before
     termination. However, termination of this Agreement, except under Paragraph 2(a), shall be deemed to be
     for or with cause, and CMS, at its option, shall have the right to cancel any open Loan registration
     confirmation(s) or other commitment Agreements.

  d) CMS may immediately suspend all registrations and lock-ins and may refuse to fund any or all Mortgage
     Loans, pending the cure, to CMS’s satisfaction, of any breach of this document.

  e) Correspondent agrees that in the event of a breach by Correspondent of this Agreement or any other
     Agreement between CMS, or any of its affiliates, and Correspondent, or upon the default of Correspondent
     under any instrument payable to CMS, or any of its affiliates, or upon failure of Correspondent to pay any
     amounts due CMS, or any of its affiliates, CMS, or any of its affiliates, shall have the immediate right to
     set-off from and against any amounts otherwise due or payable Correspondent.


  a) Correspondent will assist prospective Borrowers in completing credit applications and such other documents
     in the form designated by CMS and as CMS may require for Loans that meet the then current underwriting
     standards and loan policies of CMS. Correspondent will promptly submit all information generated pursuant
     to such application to CMS for its review and approval.

  b) Correspondent is NOT authorized as a delegated underwriter and must send all loans to Coastal Funding
     Group or an authorized contract underwriting service for underwriting approval. Correspondent shall obtain
     real estate appraisals only from those appraisers, which are licensed or certified according to state law
     requirements and do not appear on Non-Approved Appraiser list posted on the Website. All appraisals
     must meet secondary market requirements and in addition, satisfy all requirements mandated by state and
     federal law. Correspondent will not be responsible for errors in determining loan eligibility according to
     CMS guidelines for approval decisions made by underwriting provided that information and documentation
     provided by Correspondent to such underwriter does not otherwise violate any terms, conditions,
     representation or warranties under the Correspondent Agreement.

     For any loan program requiring Automated Underwriting Findings via Loan Prospector® or Desktop
     Originator®, the Correspondent will provide such findings with their loan package for underwriting and
     make such corrections as required by the underwriter via resubmission to the appropriate Automated
     System. CMS posts on the Website, whether CMS or the Correspondent will be responsible for the cost of
     the Automated Underwriting Decision as well as the Automated options available to the Correspondent.

  c) Correspondent, at its own expense, shall furnish to CMS, all credit data, financial statements, real estate
     information, and such additional items as CMS, from time to time, may require. In addition, Correspondent,
     at its own expense, shall perform such other functions as CMS may require to close, fund, and complete the
     loan transaction.

  d) Prior to purchase of the Loan by CMS and after purchase, if required, Correspondent agrees to execute
     such assignments, endorsements, or other documentation necessary to transfer ownership of the Loan to

1/13/2006                                        Page 3 of 10                         Initials _________
       CMS and/or such other assignee as may be designated by CMS, concurrent with the closing of such Loan or
       as CMS may otherwise direct. CMS requires an executed Enduring Power of Attorney for Assignments.
       This document allows an officer of CMS to assign loans from Correspondent to CMS. The CMS officer will
       sign Correspondent’s officer’s name (per the Enduring Power of Attorney) to Note Endorsements or any
       other document required to complete the loan assignment.

   e) Correspondent shall close and disburse the Loan no later than the Rate Lock Expiration provided by CMS
      for the particular Loan or be subject to repricing by CMS. Correspondent shall deliver to CMS all final
      Loan documents required by CMS prior to the expiration date of the Funding Status Report or be subject
      to repricing by CMS.

   f) If Correspondent fails to make proper and timely required delivery in connection with any registration or
      reservation (“registration”), the parties agree and acknowledge that CMS, or any of its affiliates, will
      suffer damages, including, but not necessarily limited to, the decline in market value of the Loan,
      underwriting costs, document preparation costs, investment losses, obligations to investors to whom a
      registered Loan has been committed, and legal costs incurred as a result of non-delivery and enforcement
      of CMS’ rights. Correspondent shall be liable for all such damages and other damages incurred by CMS, or
      any of its affiliates, in addition to any other rights, remedies or damages of CMS at law, in equity or under
      this Agreement.

   g) All loans which Correspondent desires to sell to CMS, or any of its affiliates, under this Agreement must
      be registered with CMS. Following acceptance by CMS, or any of its affiliates, of a registered Loan,
      Correspondent shall be obligated to deliver the Loan to CMS in accordance with the terms and conditions of
      this Agreement.


Subsequent to Loan purchase, CMS may reverify appraisals, credit reports, and other information as it may
determine necessary at CMS’ expense in order to assure itself of the correctness of information in each Loan file.


Correspondent may retain, to the extent permitted by state, federal and local law and the requirements of the
applicable investors, a processing fee, an origination fee and all lawful discounts collected in excess of the CMS
quoted price. CMS may withhold, set off, and apply any fees otherwise due and payable to Correspondent to any
obligations of Correspondent to CMS, or any of its affiliates. In no event shall any compensation be paid to
Correspondent unless a loan is funded by CMS or any of its affiliates. CMS has the right to withhold any fees or
payments until the Loan file is complete and Correspondent has performed its obligations hereunder.


Each Loan shall be subject to all representations and warranties specified in this Agreement, including any other
documents or conduct of the parties with respect thereto, including without limitation, CMS, its affiliates,
successors and assigns. This Agreement shall exclusively govern the rights of the parties hereto despite the fact
that the Loan will be subsequent to this Agreement. Each representation and warranty herein shall survive the
purchase of a Loan and shall insure to the benefit of CMS, its affiliates, successors and assigns.

 1/13/2006                                        Page 4 of 10                           Initials _________

Correspondent covenants, represents and warrants to CMS that:

   a) It is a duly organized entity, validity existing and in good standing under the laws of the jurisdiction of its
      formation stated in the first paragraph of this Agreement and it has power and authority to engage in the
      business of originating loans where the property securing each such mortgage loan is located and that it has
      taken all required corporate action to enter into the Correspondent Agreement and to perform the
      transactions contemplated thereunder and hereunder, and having done so, it has full power and authority to
      enter into the Correspondent Agreement, and any other documents which may be contemplated by the
      Correspondent Agreement, to perform all of its obligations under the correspondent Agreement and to
      consummate and carry out all other actions contemplated by the Correspondent Agreement. Correspondent
      and each of its directors, officers, agents, and employees have acquired and will, during the term of the
      Correspondent Agreement, maintain all necessary licenses and qualifications to transact its business.
      Correspondent shall submit to CMS copies of all such licenses on an annual basis or as requested by CMS.

   b) Correspondent agrees to make current audited financial statements available to CMS upon request, and in
      any case, within ninety (90) days after the completion of each fiscal year of Correspondent. CMS will rely
      on these statements as part of its determination of whether to continue to purchase loans under the
      Correspondent Agreement. Correspondent also agrees to make interim monthly or quarterly certified
      financial statements available to CMS upon request.

   c) Correspondent agrees it will not use for its own benefit or will not disclose to any person or entity
      confidential information relating to CMS which it has acquired or which it may acquire during the term of
      the Correspondent Agreement.

   d) Correspondent has in full force and effect and will continue to maintain a fidelity bond and an errors and
      omissions policy or policies or mortgage banker’s blanket bond covering all its activities hereunder, in an
      amount and with terms acceptable to CMS and shall provide to CMS, on an annual basis or as required by
      CMS or any state in which Correspondent or CMS are engaged in business activity, satisfactory evidence

   e) Neither the execution, performance of the Correspondent Agreement by Correspondent nor any action
      contemplated by Correspondent in connection herewith, violates or results in any violation of any provision
      of the Correspondent’s charter, certificate or articles of incorporation or bylaws, or any judgment, decree,
      order, writ, injunction, determination, award, law, statute, regulation, rule, or any other Agreement or
      obligation of any kind to which the Correspondent is a party or by which it or its property is bound.

   f) Correspondent has at all times complied in material respects with applicable local, state and federal laws
      including but not limited to all applicable predatory and abusive lending laws.


With respect to each loan registered under the Correspondent Agreement, the Correspondent makes the following
warranties and representations, which shall be true at the time of registration and/or also at the time of delivery
or purchase of the loan and which shall survive the purchase thereof by CMS, its successors and assigns.

 1/13/2006                                         Page 5 of 10                           Initials _________
  a) Correspondent shall have good title to and shall be the sole owner and holder of each loan, free and clear of
     any pledge, lien, or any other encumbrance of any nature and has authority to sell, transfer, and assign the
     same on the terms set forth herein, in the Correspondent Agreement.

  b) Correspondent Acknowledges CMS shall have relied upon the representations and warranties expressed in
     the Correspondent Agreement. All of the Correspondent’s representations and warranties, as well as each
     borrower’s representations are true as of the date of execution of the Correspondent Agreement and shall
     be true as of the date of purchase by CMS of each loan.

  c) All signatures, names, social security numbers, addresses, amounts, credit and employment information,
     asset information, including gift funds, property appraisal, and other statements of fact contained in and
     associated with the loan transaction are complete, accurate, true, correct, and genuine in all material

  d) All notes are properly executed, in a negotiable form and are valid and enforceable in accordance with their

  e) Each mortgage securing each loan shall and does conform to Program Guidelines and is in the form required
     by CMS and has been duly executed by the mortgagor, and each such mortgage has been duly acknowledged
     and recorded in the correct jurisdiction and is valid and enforceable in accordance with its terms, securing
     an enforceable 1st lien.

  f) The improvements are free and clear of liens other than that securing the loan and were completed in full
     compliance with the ordinances and regulations of any governmental jurisdiction or agency having
     jurisdiction thereof and that such improvements presently comply with such ordinances and regulations.

  g) Each loan shall be secured by a 1st or 2nd lien (as applicable) upon the real property described in the
     mortgage securing such loan.

  h) The full principal amount of the loan has been advanced to the mortgagor. All costs, fees and expenses
     incurred in making and closing the loan, and in recording the mortgage have been paid; no part of the
     mortgaged property has been released from the lien of the mortgage; the terms of the loan, including the
     mortgage have in no way been changed or modified, and the loan is current and not in default.

  i)   The unpaid balance of each loan is as stated, the note and any such guarantees have been duly executed and
       the obligation of all such parties for such amount is valid and enforceable.

  j)   All applicable local, state, and federal laws, rules, and regulations have been complied with, including but not
       limited to all applicable predatory and abusive lending laws, and all conditions within the control of
       Correspondent as to the validity of the insurance or guaranty as required by the National Housing Act of
       1934, as amended, and the rules and regulation thereunder, or by the mortgage insurance companies, have
       been properly satisfied, and said insurance or guaranty is valid and enforceable.

  k) For each loan, CMS will provide a Life of Loan Flood Certification. For a property located in a Special Flood
     Hazard area as designated by the Federal Emergency Management Agency, proof that a flood insurance
     policy with minimum coverage as required by CMS will be required. Evidence of flood insurance on Second
     lien mortgage loans and Home Equity loans will require coverage sufficient to cover both liens.

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  l)   A current American Land Title Association (ALTA), or any other state applicable land and title association,
       mortgagee’s title insurance policy regarding each loan, and insuring the lien of the mortgage securing the
       loan in its original principal amount is, and shall be, effective at the time of the origination of the mortgage
       loan and shall remain valid and in full force and effect; such ALTA policy shall be issued by a title insurer
       acceptable to Fannie Mae and Freddie Mac, and such title insurer shall be qualified to do business in the
       jurisdiction in which the real property securing the loan is located.

  m) The assignment for the loan and mortgage from Correspondent to CMS is valid and legally enforceable.

  n) The property evaluation document properly identifies the property by address and legal description and
     provides the certification that the property is or is not in a flood hazard area.

  o) As of the loan delivery date, all real property taxes and assessments due and payable for the real property
     subject to the mortgage securing the loan shall be current and paid in full, and there shall be no delinquent
     tax or assessment lien against such real property.

  p) All documents submitted are genuine, and all other representations as to each loan are true and correct and
     meet or shall meet the requirements and specifications of all parts of the Correspondent Agreement and
     Correspondent is not aware of any defects in the loan, material damage to the property or other facts, the
     disclosure of which would be necessary to make any representation or warranty herein not materially

  q) Correspondent warrants that for each mortgage loan it shall have the sole power and authority to convey
     and release the servicing rights for such mortgage loan, and that no other party has claimed, will claim, or
     be entitled to any servicing rights with respect to the mortgage loan. Further, Correspondent represents
     and warrants that it has ability to service the loans and payment if CMS does not purchase the loan prior to
     the time that a first payment is due.

  r) There are no bankruptcy, foreclosure, or litigation suits pending or threatened against any of the
     borrowers, Correspondent, its principals or agents that was involved with the Loans purchased by CMS in
     any capacity.

  s) There are and will be no claims or defenses as to the loan by reason of any act or omission of
     Correspondent or its directors, officers, agents, employees.

  t) Correspondent has no adverse information concerning the borrower, which it has not communicated in
     writing to CMS.

  u) The loan has not been brokered to Correspondent by other lenders.

  v) There is no undisclosed secondary financing involved in the transaction; and the borrower’s required equity
     has been paid from the borrower’s own funds, unless otherwise pre-approved in writing by CMS.

  w) The borrower received the face amount of the note, and the loan transaction is free from usury or claim of

1/13/2006                                           Page 7 of 10                            Initials _________
   x) There are no hazardous substances in or on the property, except for small quantities that are generally
      recognized to be appropriate to normal residential use; nor is the present use of the property in violation
      of any Environmental Law.

   y) Each loan is current in all payments required in accordance with the terms of the note and security
      instrument as of the date transferred to CMS.

   z) The loan documents and the transaction comply in all respects with CMS’s requirements and with all
      applicable federal, state, and local laws and regulations including, but not limited to all applicable predatory
      and abusive lending laws, fair housing, anti-redlining, equal credit opportunity, truth-in-lending, real estate
      settlement procedures, fair credit reporting, privacy and every other prohibition against unlawful
      discrimination in residential lending or governing consumer credit, and also including without limitation, the
      following, as amended: the Fair Housing Act, the Home Mortgage Disclosure Act, the Community
      Reinvestment Act, the Financial Institutions Reform Recovery and Enforcement Act of 1989, the Real
      Estate Settlement and Procedure Act of 1974 (including Regulation X), the Flood Disaster Protection Act
      of 1973, the national Flood Insurance Reform Act of 1994, the Equal Credit Opportunity Act (including
      Regulation B), the Fair Credit Reporting Act, the Right to Financial Privacy Act, the consumer Credit
      Protection Act, the Gramm Leach Bliley Act of 1999 and the Truth in Lending Act (including Regulation Z).
      Correspondent, by signing and accepting the Correspondent Agreement, warrants that all loans delivered
      under the Correspondent Agreement were so originated and do comply with all applicable State and Federal
      law and regulations, and that none of the mortgage loans are High Cost as defined by the applicable
      predatory and abusive lending laws.

   aa) Documentary evidence sufficient to substantiate such compliance shall be contained in each respective loan
       file. Upon CMS request, correspondent shall provide to CMS evidence in form and substance satisfactory
       to CMS, of any action taken by Correspondent to comply with such laws, including, without limitation,
       notices and disclosures furnished to or signed by an applicant or borrower.


Correspondent acknowledges that CMS, and its affiliates, shall have relied upon the representations and warranties
expressed in this Agreement. All of Correspondent’s representations and warranties are and shall be true and shall
survive as provided in paragraph 7 herein. No representation or warranty made by Correspondent in connection
with the purchase of each Loan by CMS, or any of its affiliates, contains any untrue statement of any material fact
or fails to state any material fact necessary to make such representation or warranty not misleading.

In addition to any other remedies of CMS set forth herein, Correspondent shall repurchase applicable Loans and
shall indemnify and hold CMS, and its affiliates, harmless from losses (including the loss of servicing rights),
damages, deficiencies, claims or expenses (including reasonable attorney’s fees) incurred by CMS, or any of its

In addition to all other remedies available to it, CMS, and its affiliates, shall be entitled to offset any amounts it
owes Correspondent by any amounts Correspondent is required to pay to CMS, or any of its affiliates, under this
section. The indemnity provided in this Section shall remain in full force and effect regardless of any investigation
made by CMS, or any of its affiliates, or its representatives or any cancellation of this Agreement, and shall
survive this Agreement as to each Loan for so long as any amount due from the Borrower remains outstanding and
unpaid. Upon receipt of notice of claim covered by any indemnity or other indemnity in this Agreement, whether
such claim appears to be valid or not, Correspondent shall immediately assume the representation of CMS, or any
of its affiliates, and the defense of such claim at its own cost and expense to the satisfaction of CMS, with

 1/13/2006                                          Page 8 of 10                           Initials _________
counsel approved by CMS, and Correspondent shall be directly responsible for the payment of any settlement,
award or judgment relating to such claim.


If any legal action or proceeding is brought for the enforcement of this Agreement, or because of an alleged
dispute, breach or default in connection with any of the provisions of this Agreement, the successful or prevailing
party shall be entitled to immediately recover from the other party, its costs, plus reasonable attorney’s fees
incurred in such actions(s) or proceeding(s) in addition to any other relief to which it may be entitled. Except as
expressly provided hereunder to the contrary, each party shall bear its own costs and expenses incurred in
connection with the preparation of this Agreement and the performance of the obligations contemplated hereby.

After consultation with counsel, and with knowledge of the consequences, Correspondent and CMS hereby waive all
rights to demand a jury trial and agree that all suits shall be heard by a judge only.


CMS’s delay or failure to enforce any provision of this Agreement shall not constitute a waiver of that provision or
any other provision or Agreement with Correspondent.

All remedies afforded by this Agreement shall be cumulative and in addition to all other remedies provided herein
or afforded by law or in equity.


CMS shall have the right to amend this Agreement with written and/or electronic notice to the Correspondent. At
CMS’s request, Correspondent shall acknowledge changes to the Agreement in writing, but Correspondent’s failure
to provide written acknowledgment of any amendment shall not impair the enforceability of such amendment.


Correspondent shall not assign this Agreement or any of its rights hereunder. Neither shall Correspondent
delegate any duty hereunder without the prior written consent of CMS. Correspondent acknowledges that CMS
may assign any or all of its rights under this Agreement and/or the Related Documents to any of its affiliates.


In the event that any loan purchased by CMS from Correspondent, is subsequently paid in full within 120 days of
Loan Closing Date, Correspondent agrees to refund all Servicing Release Premium (minimum $500) paid
Correspondent within 10 days of notification of said payoff.

 1/13/2006                                         Page 9 of 10                           Initials _________
IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate as of the day and year first
above written.


____________________________________                   Coastal Mortgage Services, Inc. d/b/a Coastal
Company Name                                           Funding Group

____________________________________                   ____________________________________
Signature                    Date                      Signature                    Date

____________________________________                   ____________________________________
Typed Name                                             Typed Name

____________________________________                   ____________________________________
Title                                                  Title


_______________________________________________________              Name/Department

_______________________________________________________               Address

_______________________________________________________               Address

_______________________________________________________               Phone #

_______________________________________________________               Fax #

_______________________________________________________               E-Mail Address

1/13/2006                                    Page 10 of 10                        Initials _________
                      Fax and E-Mail Consent Form
                        (ALL FIELDS REQUIRED)

Company Name:_____________________________________________

Broker Code:_______________________________________________

Fax Numbers:_______________________________________________

E-Mail Addresses:___________________________________________

I understand that by providing ALL of my fax numbers and e-mail addresses,
I consent to receive faxes and/or e-mails sent by or on behalf of Coastal
Funding Group(its subsidiaries and affiliates).

Signature:______________________________ Date:_______________

Street Address 1:___________________________________________

Street Address 2:___________________________________________

City:______________________         State:________       Zip:__________


I, ___________________________________________________________________________________
organized and existing under the laws of the State of _________________________________________
do hereby, certify that at the meeting of the Board of Directors of said Corporation, was held on
the______________ day of _______________, 20_______ at which a quorum was present and voting,
the following Resolution was unanimously adopted and that said Resolution is now in full force and

BE IT RESOLVED THAT __________________________________________________________
is authorized to execute the Wholesale Mortgage Purchase Agreement with Coastal Funding Group,
dated __________________________________.

BE IT FURTHER RESOLVED that any one of those officers of this Corporation as noted below are
authorized to make, execute and deliver on behalf of this Corporation and as its act and deed any and all
loan documents pursuant to Loans to bind the Corporation in matters involving the sale of mortgage loans
to Coastal Funding Group:

                         ____________________________________                   ___________________
                         Signature                                              Title

                         ____________________________________                   ___________________
                         Signature                                              Title

                         ____________________________________                   ___________________
                         Signature                                              Title

                         ____________________________________                   ___________________
                         Signature                                              Title

          IN WITNESS WHEREOF, the said ________________________________________________,
          has hereunto affixed the seal of the said Corporation this ________day of ___________,20____



                                                                                  Corporate Resolution 01/11/00
                        3300 Battleground Ave., Suite 401, Greensboro, North Carolina 27410

                              CONSEQUENCES OF LOAN FRAUD

The consequences of residential loan fraud are far reaching and expensive. Coastal Funding Group warrants the
quality of our loan production to our investors. Fraudulent loans may not be sold in the secondary market for
home mortgages. If a loan is discovered to be fraudulent after its sale, Coastal Funding Group could be
obligated to repurchase the loan from our investor. Fraudulent loans harm our reputation and strain our
relationships with our investors and mortgage insurance carriers.

The consequences to those who participate in loan fraud are even more severe. Following is a list of a few of
the-repercussions that may be experienced.

To the originator/broker/lender:

1.   Criminal prosecution which may result in possible fines and imprisonment.
2.   Revocation of license.
3.   Inability to access lenders caused by the exchange of legally permissible information between lenders;
     mortgage insurance companies; FHLMC, FNMA, and other investors; police agencies; and state and
     federal regulatory agencies including the Department of Real Estate (DRE), and the Department of Housing
     and Urban Development (HUD).
4.   Civil action by Coastal Funding Group.
5.   Loss of approved broker or correspondent lender status with Coastal Funding Group.
6.   Broker acknowledges any incident of fraud or suspected fraud; whether knowingly or unknowingly
     submitted to Coastal by broker; may be reported by Coastal to one or more companies/ agencies in business
     to report such information.

To the borrower:

1.   Acceleration of debt as mandated in the security instrument (Deed of Trust or Mortgage).
2.   Criminal prosecution which may result in possible fines and imprisonment.
3.   Civil action by Coastal Funding Group.
4.   Civil action by other parties to the transaction such as seller or real estate agent/broker.
5.   Termination of employment.
6.   Forfeiture of any professional license.
7.   Adverse, long term effect on credit history.

I have read the foregoing. I understand and accept Coastal Funding Group’s policy on Loan Fraud.


        BY: ________________________________________________________________________

                                                                                                    Loan Fraud 01/27/03

Do you use a warehouse bank? _______ (Y or N)

Does your warehouse bank require the note come to them? (Y, N or n/a)
If Yes, then please complete the acknowledgment below.

Does your Warehouse Bank require a MERS Assignment? ___ (Y, N, or n/a)

The first payment will come to Coastal Mortgage Services. If this is not
acceptable, we will be unable to complete the SMART setup.


  • Please instruct your Warehouse Bank to Send the ORIGINAL NOTE for
    receipt by Coastal no later than five (5) business days after Closing

  • Send to:              Coastal Mortgage Services, Inc.
                          ATTN: Post-Closing
                          11230 Carmel Commons Blvd.
                          Charlotte, NC 28226-3920

I hereby acknowledge receipt of this information:

Signature                      Printed Name, Title                      Date

Keep next page for your records and return this first page, signed original to

• Please instruct your Warehouse Bank to Send the ORIGINAL NOTE for
  receipt by Coastal no later than five (5) business days after Closing

• Send to:            Coastal Mortgage Services, Inc.
                      ATTN: Post-Closing
                      11230 Carmel Commons Blvd.
                      Charlotte, NC 28226-3920

Coastal Funding Group wishes all prospective new broker partners acknowledge the
following prior to final consideration for Approval in an effort to ensure you are in
agreement with specific requirements to maintain a broker/partner relationship.

   •   Approved brokers are required to maintain a 70% locked loan to pull through ratio.

   •   Automated Underwriting usage will be analyzed by Coastal Funding Monthly and
       abuse of Coastal’s willingness to pay for these transactions will result in T.I.D.E.
       access to LP and DU being removed.

   •   Customer has read the terms of the Wholesale Purchase Agreement as it relates to
       Termination of the Relationship either by the Broker or by Coastal.


Signature                                 Date
Typed Name:


               3300 Battleground Avenue, Suite 401, Greensboro, NC 27410
           Phone: 336-545-5565 Toll Free 877-386-3234 Fax: 336-540-8918
                   Schedule of Fees – SMART CORRESPONDENTS
               Effective for Applications Taken on or After 4/13/2009

SMART CORRESPONDENT              (Coastal Prepares Docs)

$521  Administration Fee (Includes Tax Service Fee, AUS Transaction, Underwriting, Doc Prep, Quality Control
                           & Post-Closing
$13   Flood Certification effective 6/1/2008
$6.95 MERS effective 2/23/2009


$75   Re-Draw Fee
$6.50 Georgia Per Loan Fee (If property is in Georgia)

SMART CORRESPONDENT UTILIZING BROKER DOCS®                          (Coastal Underwrites)

$486  Administration Fee (Includes Tax Service Fee, AUS Transaction, Underwriting, Quality Control & Post
$6.95 MERS effective 2/23/2009