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					WHOLESALE BROKER GUIDE
EFFECTIVE DATE: January 11, 2011 v.8




BANK OF
INTERNET

Wholesale Broker guide 1/11/2011 v.8   Page 1
BROKER GUIDE - PURPOSE AND USE




SECTION 1

ORIGINATION

1.1. PRODUCT DESCRIPTIONS

1.1.1. INTERMEDIATE FIXED -TERM ARMS (LIBOR)

1.2. PRODUCT OPTIONS

1.2.1. INTEREST ONLY

1.2.2. PREPAYMENT PENALTIES

1.3. LOAN PROGRAMS

1.3.1. FULLY DOCUMENTED LOAN PROGRAM

1.3.2. PLEDGED ASSET LOAN PROGRAM




SECTION 2

UNDERWRITING

2.1. GENERAL UNDERWRITING GUIDELINES

2.1.1. UNDERWRITING REVIEW

2.1.2. UNDERWRITING NOTES

2.2. PROPERTY QUALIFICATION

2.2.1. PROPERTY ELIGIBILITY

2.2.2. PROPERTY NOTES

2.2.3. APPRAISAL AND APPRAISER REQUIREMENTS



Wholesale Broker guide 1/11/2011 v.8           Page 2
2.2.4. APPRAISAL MANAGEMENT

2.2.5. INTRODUCTION AND SUMMARY

2.2.6 POLICY & PROCEDURE DETAIL

2.3. BORROWER QUALIFICATION

2.3.1. BORROWER ELIGIBILITY

2.3.2. LIQUIDITY RESERVE REQUIREMENTS

2.3.3. INCOME VERIFICATION

2.3.4. CREDIT VERIFICATION

2.3.5. MORTGAGE VERIFICATION

2.3.6. ASSET VERIFICATION

2.3.7. BORROWER COMPENSATING FACTORS

2.3.8. BORROWER NOTES

2.4. MISCELLANEOUS

2.4.1. TITLE ENDORSEMENTS

2.4.2. INVESTMENT PROPERTY

2.4.3. REFINANCES

2.4.4. SUBORDINATE FINANCING

2.4.5. SECTION REMOVED

2.4.6. USE OF AUTOMATED UNDERWRITING SYSTEMS

2.4.7. QUALITY CONTROL

2.4.8. PREDATORY LENDING

2.4.9. EARLY PAY -OFF PROTECTION




Wholesale Broker guide 1/11/2011 v.8           Page 3
SECTION 3

PRICING LOCK

3.1. RATE LOCK POLICIES & PROCEDURES

3.1.1. INTRODUCTION AND SUMMARY

3.1.2. POLICY AND PROCEDURES DETAIL

3.2. RATE LOCK RENGEOTIATIONS AND FLOAT-DOWNS

3.2.1. INTRODUCTION AND SUMMARY

3.2.2 POLICY & PROCEDURES DETAIL

3.3. EXCEPTION REQUESTS

3.3.1. SUMMARY OF POLICIES

3.3.2. POLICY AND PROCEDURES DETAIL

3.4. RATE LOCK EXPIRATION DATE

3.5. WORST CASE PRICING CALCULATION

3.6. RATE LOCK CHANGES ANS ADJUSTMENTS

3.7. PROGRAM EXCEPTIONS

3.8. EXCEPTION REQUEST FORM




SECTION 4

4.0 PLEDGED ASSET LOAN PROGRAM

4.1 PLEDGED ASSET LOAN PROGRAM TRAINING MANUAL

4.1.1. PLEDGED ASSET Loan FLOW CHART

4.1.2. PRE-APPROVAL

4.1.3. FINAL- APPROVAL

4.2. PROCEDURE



Wholesale Broker guide 1/11/2011 v.8             Page 4
4.2.1. BOFI CREDIT APPROVAL

4.2.2. PRE-APPROVE PLEDGE COLLATERAL ACCOUNT CONTROL AGREEMENT

4.2.3. PRE-APPROVE ASSET APPROVAL

4.2.4. PLEDGE DOCUMENTS

4.2.5. PLEDGE CVOLLATERAL ACCOUNT CONTROL AGREEMENT

4.2.6. PLEDGE AGREEMENT

4.2.7. STATEMENT OF PURPOSE – FEDERAL FORM U-1 (for banks)

4.2.8. CONTACT INFORMATION SHEET

4.3. TIPS FOR A SUCCESSFUL PLEDGE AND SATISFIED BORROWER

4.4. ELIGIBLE SECURITIES

4.4.1. ELIGIBLE ASSETS

4.4.2. NON-ELIGIBLE ASSETS

4.5. PROPOSED ASSET FORM

4.6. SAMPLE PLEDGE AGREEMENT

4.7. STATEMENT OF PURPOSE (FED FORM U-1)

4.8. CONTACT INFORMATION SHEET




SECTION 5

BROKER ELIGIBILITY

5.1. BROKER ELIGIBILITY

5.1.1. APPROVAL PROCESS

5.1.2. BASIC QUALIFICATIONS

5.2. BROKER REVIEW

5.2.1. ANNUAL RECERTIFICATION



Wholesale Broker guide 1/11/2011 v.8                             Page 5
SECTION 6

FILE SUBMISSION AND PURCHASE

6.1. DOCUMENT AND FILE DELIVERY / PURCHASING PROCEDURES

6.1.1. SUBMISSION OF LOAN FILE

6.1.2. TBD

6.1.3. TBD

6.1.4. FOLLOW-UP DOCUMENT POLICY

6.1.5. RESUBMISSION OF SUSPENDED/DENIED LOAN PACKAGES OR EXPIRED LOCKS

6.1.6. SECTION LEFT BLANK

6.1.7. SECTION LEFT BLANK

6.1.8. WET FUNDING STATES FUNDING PROCEDURES

6.1.9. DRY / GOOD FUNDING STATES FUNDING PROCEDURES

6.2. LEGAL AND CLOSING DOCUMENT REQUIREMENTS

6.2.1. LEGAL DOCUMENTS

6.2.2. SECTION LEFT BLANK

6.2.3. SECTION LEFT BLANK

6.2.4. REGULATORY COMPLIANCE

6.2.5. TAX SERVICE CONTRACT / FLOOD HAZARD CERTIFICATION

6.2.6. INCOME TAX RETURN VALIDATION

6.2.7. NOTICE OF RIGHT TO CANCEL

6.2.8. HUD-1

6.2.9. APPRAISAL

6.2.10. INSURANCE AND TAXES

6.2.11. ESCROW ACCOUNTS

6.3 SERVICING



Wholesale Broker guide 1/11/2011 v.8                                     Page 6
6.3.1. MISDIRECTED BORROWER PAYMENTS

6.3.2. SECTION LEFT BLANK

6.3.3. PREPAYMENT REFUND

6.3.4. EARLY PAY-OFF PROTECTION




SECTION 7

CONFIDENTIALITY

7.1. CONFIDENTIALITY




SECTION 8

DEFINED TERMS

8.1. DEFINED TERMS




SECTION 9

EXHIBITS

EXHIBIT A BOFI ADDRESSES

TITLE POLICY ENDORSEMENTS BROKEN OUT BY STATE




Wholesale Broker guide 1/11/2011 v.8            Page 7
BROKER GUIDE
The purpose of this Broker Guide is to provide a summary of the basic documentation and
information requirements for submitting Eligible Loans under the Bank of Internet USA (BofI)
Broker Program. Use of this Guide is restricted to the Broker and the Broker’s employees.

Please note that this Broker Guide is neither all-inclusive, nor is it intended to replace, amend, or
otherwise alter the terms of the Broker Agreement or other applicable agreements. The
underwriting guidelines contained herein simply provide a standard.

Exceptions to FICO scores, LTVs, ratios, reserves, loan amounts, and other guidelines are
considered on a case-by-case basis with other strong compensating factors on the loan.
Exceptions must be prior approved by Bank of Internet.

The definitions of the defined terms used in this Broker Guide are outlined in Section 7.

Bank of Internet
12777 High Bluff Drive, Suite 100
San Diego, CA 92130
Phone (858) 350-6203
www.bofi.com




Wholesale Broker guide 1/11/2011 v.8                                                                Page 8
SECTION 1




Origination




Wholesale Broker guide 1/11/2011 v.8   Page 9
1.1. PRODUCT DESCRIPTIONS
1.1.1. INTERMEDIATE FIXED -TERM ARMS (LIBOR)
Product Description:        Intermediate Fixed -Term ARM with an initial fixed period of five or seven
                            years.

Initial Rate:               Initial rate is fixed for the initial period, and adjusts to the relevant index
                            plus margin on the first change date and every six or 12 months
                            thereafter, consistent with the term of the index.

Indices:                    One-Year LIBOR (average of London Interbank Offered Rate for one-year
                            U.S. dollar deposits in the London market, based on quotations of major
                            banks).

                            Six-Month LIBOR (average of London Interbank Offered Rate for six-
                            month U.S. dollar deposits in the London market, based on quotations of
                            major banks).

                            (Note - Select the appropriate index that matches the selected loan
                            program adjustment period)

Term:                       Amortization term is 30 years.

Rates/Margin/Caps:          For current rates, margins, and interest rate caps, consult the BofI Daily
                            Rate Sheet.

Interest Only:              Interest-only options are available on loans up to 60% LTV. (See Section
                            1.2.1).

Prepayment Penalty:         Loans are generally priced with a 1-year or 2-year soft prepayment
                            penalty. Please see rate sheet for details.

Assumable:                  No

Buy downs:                  Not allowed.

Convertibility:             Non convertible.

Loan Amounts:               Refer to Section 1.3.1, Loan Programs, for LTVs and loan amounts.

Property Types:             SFR /PUD /CONDOS / 2-4 Units owner-occupied primary residence,
                            second homes and investment properties. Condominiums are limited to
                            those in geographic areas where Condominiums are common and
                            customary, as determined by BofI. See section 2.2.1 Property Eligibility
                            for details.

Wholesale Broker guide 1/11/2011 v.8                                                                      Page 10
Seller Contributions:       Refer to FNMA Guidelines.

Floor Rate:                 All ARM’s have a floor rate minimum provision that can vary, please see
                            rate sheet for details.

Qualifying Rate:            The qualifying rate shall be the start rate using the fully-amortized
                            payment of principal, interest, taxes, and insurance.




1.2. PRODUCT OPTIONS
1.2.1. INTEREST ONLY
BofI will fund Eligible Loans with interest only periods of up to Five years (Please consult the BofI
Daily Rate Sheet). BofI requires a minimum of 25 years of remaining amortization on all Eligible
Loans. BofI may charge a fee or price adjustment for loans with the interest only option.




1.2.2. PREPAYMENT PENALTIES
Prepayment Penalties (PPPs) are optional to the borrower; however, all loans are priced with a 1-
year or 2-year soft prepayment penalty as allowed by law. The BofI Rate Sheet contains the price
and parameters of the prepayment penalties. All prepayment penalties must comply with state
and local laws.

The prepayment penalties for BofI loans are 2% of principal on all products. A 20% principal
curtailment is allowable and may be required in some areas.

    1. States where PPPs are not allowed:

AK, AL, AR, DC, IA, KS, LA, MA, MD, ME, MI, MN, MO, NJ, NM, NY, OH, RI, TN, TX, VT, WI, WV

    2. States where PPPs OF 2% of Unpaid Principal Balance (UPPB) with 20% curtailment for 3
       year option is available:

AZ, CA, CO, CT, DE, FL, GA, HI, ID, IN, KY, MT, MS, NC, ND, NE, NH, NV, OK, OR, PA, SC, SD, UT, VA,
WA, WY.

    3. States where above reference PPPs are allowed with limitations:

         IL - Note rates must be less than 8%

Note: No exception on pre-payment guidelines.


Wholesale Broker guide 1/11/2011 v.8                                                                    Page 11
Wholesale Broker guide 1/11/2011 v.8   Page 12
Wholesale Broker guide 1/11/2011 v.8   Page 13
1.3. LOAN PROGRAMS
1.3.1. FULLY DOCUMENTED LOAN PROGRAM
The following LTVs and loan amounts are applicable for all Intermediate Fixed Term ARM loan
programs.

FULL DOCUMENTATION:

Primary or Second Home Owner Occupied                        Non –Owner

Purchase, Rate/Term Refi, or Cash Out                        Purchase, Rate /Term Refi or Cash Out

LTV      CLTV      Max Loan            Cash Out              LTV     CLTV    Max Loan         Cash Out

70       75        $1,000,000          Not Allowed           50      50      $1,000,000       15% of

65       70        $2,000,000          15% of loan amount    loan amount

60       65        $3,000,000          15% of loan amount    SFR’s, Condo’s & 2-4 unit

55       60        $5,000,000          15% of loan amount

Refinance reduce LTVs by 5%

Second Homes - Reduce LTV/CLTV by 10%

Condo’s – max LTV/CLTV is 60%

Investment property 2-4 Units – Reduce LTV/CLTV by 10%



Primary or Second Home Owner Occupied                        Non –Owner

FICO:                       * Minimum credit score is 680 for Owner Occupied & Second Home –
                            Primary Borrower, 680 for co-borrower.

                            * Minimum credit score is 720 for non-owner occupied both borrowers.

                            FICOs less than the required minimum may be considered on an
                            exception basis with compensating factors including, but not limited to,
                            low debt-to-income ratios, job stability, reserves, and overall good credit
                            history (with the exception of recent minor derogatory credit
                            information).

DTI:                        35/40


Wholesale Broker guide 1/11/2011 v.8                                                                   Page 14
Minimum verified liquidity after closing required:

Borrower Requirements:

                   Loan Amount                     Documentation           Amount of Reserves

                   Up to $5,000,000                Full                  12 months total debt
                                                                         service
                                                                         6 months from 401K/SEP
                                                                         OK at 70% of fully vested
                                                                         amount – business funds
                                                                         can be used for reserves
                                                                         – see section 2.3.6
Eligible Properties:        Primary residence, second homes, and investment properties

Eligible Programs:          All BofI Portfolio Jumbo Products and Product Options




Wholesale Broker guide 1/11/2011 v.8                                                            Page 15
1.3.2. PLEDGED ASSET LOAN PROGRAM
The Pledged Asset Loan Program allows up to 90% financing of the property value (the lesser of
the appraised value or the purchase price). By pledging Eligible Assets, a borrower eliminates the
need to liquidate assets to obtain the cash needed for a down payment, avoids capital gains taxes
associated with such liquidation, maintains a more liquid position, and continues to benefit from
any future earned interest, dividends, and appreciation in their pledged assets.

The proceeds from a loan, including cash-out refinances, may not be used to purchase, carry, or
trade any assets, or to repay any debt used to purchase, carry or trade assets, pledged under the
Pledged Assets Loan Program. See Section 4.0. through 4.8. for Training and Forms for Pledged
Asset Loans.

Borrower Requirements:                 The obligor (the party that pledges the Eligible Assets) does not
                                       have to be the borrower nor does the obligor need to have a
                                       family relation to the borrower. However, BofI, at its sole
                                       discretion, will determine eligible obligors based on obligor’s
                                       relationship to borrower and circumstances.

Eligible Properties:                   Residences, Second Homes, and Investment Properties

                                       Not available in Washington DC, West Virginia, and Virginia.

                                       Maximum LTV for PAL in New York State is 85% if loan amount is
                                       $250,000 or less.

Eligible Programs & products: Only BofI Portfolio Jumbo Loan programs and product options are
                              eligible.

Documentation:                         Pledged Asset Loan Program loans must be submitted for
                                       approval PRIOR to closing to ensure that they are eligible for
                                       funding. BofI must review and pre- approve all pledge documents
                                       including, but not limited to, any Pledged Asset Loan Program
                                       calculation worksheet, the Pledge Agreement, and the Account
                                       Control Agreement.

                                        ·   The borrower /obligor must execute the Pledge Agreement
                                            prior to loan funding.
                                        ·   The securities intermediary must execute the Account
                                            Control Agreement prior to loan funding.

Eligible Assets:                       Eligible Assets include stocks, bonds, and mutual funds. See the
                                       Pledged Asset Loan Program Policy for complete requirements.



Wholesale Broker guide 1/11/2011 v.8                                                                       Page 16
                                       Eligible Assets must be managed by an Investment Broker/Dealer
                                       or Bank of Internet/BofI.

                                       Eligible Assets must be held in an account based in the US, either
                                       by a US entity or the US branch of a foreign entity.

                                       Eligible Assets do not include assets bought on margin, options,
                                       warrants, IRA assets, 401K assets, annuities, insurance benefits,
                                       529 or other education savings plans. See the Pledged Asset Loan
                                       Program Policy for complete requirements.

                                       BofI, at its sole discretion, will determine eligible assets to be
                                       pledged and acceptable securities intermediaries.

Pledge Account:                        The obligor may be permitted to trade in the pledged account.

                                       Pledged accounts may be released after 36 months, at BofI’s
                                       discretion, if a new appraisal shows the current LTV is equal to or
                                       less than original Effective LTV. Borrower must be current on loan
                                       payments with no delinquencies in the last 12 months.

                                       BofI may authorize at its discretion, release of any pledge amount
                                       in excess of the Initial Pledge Amount.

                                        ·   The Securities intermediary that manages the account must
                                            be preapproved by BofI for each loan.
                                        ·   Only one account held at a single securities intermediary can
                                            be pledged. The Base Pledge Amount equals the equity
                                            requirement percentage multiplied by the property.

Pledge Amount:                         The Base Pledge Amount equals the equity requirement
                                       percentage multiplied by the property value; minus any equity or
                                       down payment.

                                       The Initial Pledge Amount equals the Base Pledge Amount
                                       multiplied by Two hundred percent (200%).

                                       The Minimum Pledge Amount equals the Base Pledge Amount
                                       multiplied by one hundred sixty eight percent (168%).

                                        ·   A Pledged Asset Account funded with 100% Cash Equivalent
                                            Assets has an Initial Pledge Amount and Minimum Pledge
                                            Amount equal to 100% of the Base Pledge Amount.
                                        ·   Throughout the term of the pledge agreement, the obligor
                                            will be required to maintain a Pledge Account value equal to


Wholesale Broker guide 1/11/2011 v.8                                                                        Page 17
                                       or above the Initial Pledge Amount. If the Pledged Account
                                       value ever falls to or below the Minimum Pledge Amount,
                                       the obligor will immediately be required to bring the
                                       Pledged Account value equal to or above the Initial Pledge
                                       Amount.




Wholesale Broker guide 1/11/2011 v.8                                                                Page 18
SECTION 2




UNDERWRITING




Wholesale Broker guide 1/11/2011 v.8   Page 19
2.1. GENERAL UNDERWRITING GUIDELINES
2.1.1. UNDERWRITING REVIEW
BofI adheres to these guidelines, except where no guidelines are noted please refer to FNMA
standards. Broker shall ensure compliance with all state and federal regulatory compliance
procedures/laws.

Contact Broker Operations for details on submitting loan files.

Broker will be notified of loan acceptance, suspension, or denial by phone, electronic mail or fax.

2.1.2. UNDERWRITING NOTES
Maximum Loan Amount:                   BofI will close and fund valid first lien mortgages in accordance
                                       with the loan amount matrix, which may be increased with an
                                       approved exception request. See LTV Matrix or section 1.3.1 of
                                       Guide.

Loan Purpose:                          Subject to any individual program's limitations, BofI’s loan
                                       programs may be used for purchase money, rate /term refinance,
                                       and cash -out refinance transactions. Funds may be used for
                                       primary residences, second homes, and investor properties.

Down Payment Assistance:               A gift of non-cash equity is not allowed between family members.

Cash Reserves Requirements: See LTV Matrix or Section 2.3.2 of Guide

Self- Employed (definition):           Self- employed is defined as having a business ownership interest
                                       of 25% or more and receiving income from that business. If self
                                       employed, IRS Form 4506-T and Borrower's Certification as well
                                       as Authorization is required.

Trailing Secondary Wage Earner's Income:      Secondary wage earners income will be
                              considered if the borrower is being relocated by current
                              employer. All other requirements follow FNMA guidelines.

Non Purchasing Spouse:                 If married and applicant purchases as sole and separate property,
                                       BofI follows FNMA's guidelines.

Rate/Term Refinances:                  Rate/Term refinances may include only the following amounts:

                                        ·   Unpaid principal balance of the existing first lien.
                                        ·   Non recurring closing costs, points and pre -paid items.


Wholesale Broker guide 1/11/2011 v.8                                                                       Page 20
                                        ·   Purchase money, 2nd lien mortgages, as evidenced by a
                                            HUD-1 dated from original purchase transaction. Payoff of
                                            non purchase money second is considered cash-out if a draw
                                            has been taken in the last 12 months.
                                        ·   Rounded to the nearest $100, not to exceed applicable LTV
                                            ratios.
                                        ·   Incidental cash to the borrower may not exceed applicable
                                            FNMA guidelines for conforming loan amounts and 2%, but
                                            in no case greater than $20,000, for non-conforming loan
                                            amounts.

Verification Documents:                Verifications must be 90 days current at the time of closing (new
                                       and existing construction). We may require updated documents
                                       prior to the funding of the loan.

Credit Scores:              All Eligible Loans have the following minimum credit scores:

                                        ·   Minimum credit score is 680 for Owner Occupied
                                        ·   Minimum Credit Score of 680 for Co-Borrower O/O
                                        ·   Minimum Credit Score is 720 for Non-Owner Occupied

                            Middle Credit Score from the Primary Wage Earner will be used to
                            determine program eligibility.

                            FICOs less than the required minimum may be considered on an
                            exception basis with compensating factors including, but not limited to
                            low debt -to income ratio, job stability, reserves and overall good credit
                            history with the exception of recent minor derogatory credit information.

FNMA Guidelines:            BofI follows FNMA guidelines when a situation is not covered by BofI
                            guidelines.

BofI underwriting guidelines: Periodic announcements or releases issued by FNMA will be
                       followed by BofI until they are incorporated into BofI’s underwriting
                       updates. IN ALL CASES, BofI’s guidelines have precedence over FNMA
                       guidelines if any conflict occurs.




Wholesale Broker guide 1/11/2011 v.8                                                                   Page 21
2.2. PROPERTY QUALIFICATION
2.2.1. PROPERTY ELIGIBILITY

Acceptable Properties: Single Family Properties will be accepted. The mortgaged premises must
                       be a detached or semi- detached dwelling, row housing, or unit within a
                       condominium project, Co-op or planned unit development (PUD) (see
                       below for specific condo and PUD requirements). Loans with a land value
                       greater than the dwelling value will also be considered on a case -by -case
                       basis.

                            Unacceptable properties include manufactured, modular or mobile
                            homes, raw land, commercial property, multifamily housing greater than
                            four units, and working farms. Unique properties such as geodesic domes,
                            earth homes, A- frames, etc., will not be considered.

                            If the property has been listed in the last 12 months, a rate and term
                            refinance is available prepayment penalty (if allowed by law) and par
                            pricing will be required. Value to be based on the lesser of appraised
                            value or lowest listed sales price.

                            Cash Out – there is a 12 month seasoning requirement before a borrower
                            can receive cash out on any value increase. The lower of the original
                            purchase price or appraised value will be used. These transactions are
                            considered on a case by case basis.

                            Listed Property – a property must be off the market for a minimum of 12
                            months before receiving cash out on a refinance.

                            Owner builder – Owner/builder cash out refi is considered a non-arms
                            length transaction and will be considered on an exception basis only.

Minimum Property Size: None. Should be sufficient living area for purchase or tenants in the
                     area and include comps of similar size.

Rural Properties:           Loans secured by rural properties that consist of contiguous parcels
                            without regard to acreage, where the primary dwelling represents at least
                            70% of the total appraised value, are acceptable. Loans secured by rural
                            properties with primary dwellings representing less than 70% of the total
                            appraised value will be accepted under the following situations:




Wholesale Broker guide 1/11/2011 v.8                                                                 Page 22
Percent of Total                            Deduct from

Value Represented                           Standard

By Dwelling_______________________LTV_________

70% or greater                              0%

60% - 69.99%                                5%

50% - 59.99%                                10%

40% - 49.99%                                15%

30% - 39.99%                                20%

                            For example: if the standard LTV for a loan is 60% and the dwelling
                            represents 50% of the total appraised value, the maximum LTV allowed
                            will be 50%.

Agricultural Purposes: Residential properties that are partially used for agricultural purposes are
                       eligible if the agricultural activities represent the borrower's hobby. A
                       hobby is defined as an activity that generates less than 10% of the
                       borrower's gross income.

Condominiums:               Condominiums are limited to those geographic areas where
                            condominiums are common and customary, as determined by BofI.
                            Condo-tels are on a case by case basis

                            All loans secured by condominiums require a completed project
                            questionnaire.

                            Bank of Internet will accept condominium projects that meet
                            FNMA/FHLMC project requirements.

Tenants in Common            BofI does not recognize fractional interests; therefore, each borrower is
                            responsible for the entire loan balance and not the portion shown
                            on the TIC Agreement.




Wholesale Broker guide 1/11/2011 v.8                                                                Page 23
2.2.2. PROPERTY NOTES
Property Insurance:         Hazard and flood insurance (if applicable) will be required.

Improvements to Properties: BofI requires that all improvements to properties meet FNMA
                     specifications. Real property must be generally owned “fee simple” to be
                     acceptable collateral; leaseholds are acceptable on a case by case basis.

Property Reports:            A termite inspection report will be required for purchase money
                            mortgages if it is required by the real estate sales contract. Termite
                            inspections will otherwise not be required unless (i) contractually
                            required or recommended by the appraiser as a result of a visual
                            inspection, (ii) if the subject property is situated on a pillar and post
                            foundation (iii) if the property is in a known area of infestation.

Mold Inspection Report:       A mold inspection report will be required if mold or dampness is
                      referenced in the appraisal.

Private Road Maintenance:    A private road maintenance agreement will be required if the
                     subject property is accessed by a private road.

Well Certification:         A water purity test will be required on all Purchase transactions if the
                            subject property utilizes a private well without a Community
                            Maintenance Agreement. A potable/health authority certification will be
                            required on all private water systems. The report must indicate that the,
                            water is potable and has a bacteria level of less than 2.2%.

Plot Survey:                A plot survey is required at closing in jurisdictions where such surveys are
                            available only as needed to clear any survey exceptions noted on the title
                            commitment – preliminary title report. BofI will not close or fund any
                            Eligible Loan with a survey exception noted in the final title insurance
                            policy.




Wholesale Broker guide 1/11/2011 v.8                                                                    Page 24
2.2.3. APPRAISAL AND APPRAISER REQUIREMENTS
Loan Amounts $650,000 & Under:

                                       Loan Amounts of $650,000 and under require one full
                                       1004 with at least 3 closed comps 2 of those comps
                                       should be less than three months old.

Over $650,000 to $1,000,000:

                                       Appraisal must include six closed sales, one pending sale,
                                       and two listings all no older than 3 months. If a pending
                                       sale is not available, an additional listing may be
                                       substituted.

Loan Amounts Over $1,000,000:

                                       Loan amounts, over $1,000,000 require two full 1004
                                       appraisals. Each appraisal must include five closed sales,
                                       one pending sale, and two listings, all no older than 3
                                       months. If a pending sale is not available, an additional
                                       listing may be substituted. The comps should include a
                                       brief narrative of each of the five comparables, including
                                       how they relate to the subject. The appraisal must clearly
                                       state how each comparable was weighted.


Fees:
                                       Note that the fees for appraisals may vary depending on
                            the
                                       complexity of the appraisal, rural property designation,
                                       remote
                                       locations, high acreage and appraisals with values over
                                       $1,000,000. Please contact BofI for “out of the ordinary”
                                       price
                                       quotes.

Days on Market:
                                       The number of “days on market” for comparables must be
                                       listed.

Valid Period:

                                       An appraisal report is valid for three (3) months from date
                                       of valuation. An appraisal report with a recertification of
                                       value and two (2) additional comparables is valid for six
                                       (6) months from date of valuation.


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Appraiser Requirements:

                                       Appraisals must be HVCC compliant.

                                       The appraisal must meet all other appraisal requirements
                                       per the guidelines.

                                       Appraiser is required to be a certified appraiser with 5
                                       years of experience. Appraiser is required to be
                                       geographically located with its offices within 25 miles of
                                       the subject property.

Appraisal Requirements:

The appraisal must conform to FNMA and USPAP guidelines. Any appraisal item that is
noncompliant with FNMA requirements must be addressed by an appraiser's
comments.

                                       The appraisal must contain the following:

                                              A 3 -year sales history and property history (with
                                              renovations and additions) of the subject property.

                                              12 -month history for comparables.

                                              An estimated "market time" for the subject
                                       property.

                                              Interior photos are required for at least the
                                              kitchen, living room, one bathroom, and one
                                              bedroom for loans greater than $1,000,000.

                                              Any appraisal report based on an interior
                                              inspection is now required by Fannie Mae to
                                              include photographs of the property’s interior.[2]
                                              The report must include photographs of the main
                                              living area, the kitchen and every bathroom. It
                                              must also include photographs of “examples of
                                              physical deterioration, if present.” And it must
                                              include photographs of “examples of recent
                                              updates, such as restoration, remodeling, and
                                              renovation, if present.”

                                              Include a copy of the appraiser’s license and E&O
                                              insurance in each submitted loan file.

                                              Submit forms 216 and 1007 with each investment
                                              property loan.

FNMA Compliant:

                                              A sketch of the floor plan and comparable map.

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                                       An overview of "current market conditions."

                                       Narrative description of the property emphasizing
                                       the positive and negative features of the home.

                                       Note whether or not the subject property is listed
                                       for sale or lease. Note the terms of the lease, if
                                       applicable.

                                       Colored photos required on all loans and must be
                                       included in the submitted loan file.

                                       Show net and gross adjustments for all comps.

                                       Pending and Listing comps must be in grid format
                                       with adjustments applied

                                       Additional compliancy changes:

                                       Use of foreclosure sales and short sales as
                                       comparables. “[I]f the appraiser believes a
                                       foreclosure sale or a short sale is an appropriate
                                       comparable, then the appraiser must identify and
                                       consider any differences from the subject property,
                                       such as the condition of the property and whether
                                       any stigma has been associated with it. The
                                       appraiser cannot assume it is equal to the subject
                                       property. A foreclosure or short sale property may
                                       be in worse condition when compared to the
                                       subject property, especially if the subject property
                                       is new construction or was recently renovated

                                       Seller Concessions


                                        “Lenders are reminded that excessive sales
                                       concessions can artificially inflate the sales price of
                                       a property, which can then lead to an inflated
                                       market value. Particular attention should be given
                                       to unusual sales or financing concessions to ensure
                                       that they are properly accounted for in the
                                       appraisal report.”


                                       Data and verification sources

                                       Fannie Mae’s appraisal forms require that the
                                       appraiser list both data sources and verification
                                       sources with respect to comparable sales selected
                                       by the appraiser.




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                                       Seller concessions

                                       Excessive sales concessions can artificially inflate
                                       the sales price of a property, which can then lead
                                       to an inflated market value. Attention should be
                                       given to unusual sales or financing concessions to
                                       ensure that they are properly accounted for in the
                                       appraisal report. Appraisals must reflect an opinion
                                       of market value after adjustments for any special
                                       or creative financing or sales concessions have
                                       been made, such as interest rate buy-downs
                                       or payment of condo or homeowners’
                                       association fees.

Reductions to Allowable LTV:

                                       Maximum financing may not be available for the
                                       following properties: rural properties in area less
                                       than 25% built-up, for properties at the low or
                                       high end of the value range for the neighborhood,
                                       for properties in neighborhoods with declining
                                       market values or an over- supply of housing, nor
                                       areas with a marketing time of over six months. A
                                       reduction to LTV may be required for each of the
                                       above existent factors.

Rural Properties:

                                       Residential Appraisal (1004) or Narrative Appraisal
                                       is required and must include value for all acreage
                                       used as security.


2.2.4. Appraisal Management

2.2.5. Introduction and Summary

The following Policies and Procedures answer a few common questions regarding
appraisals and addresses new requirements as the new Home Valuation Code of
Conduct (HVCC) took effect May 1, 2009.

2.2.6. Policy and Procedure Detail
Process:
                               1. The customer should be informed of the full
                               amount of the appraisal cost.
                               2. The AMC selected by BofI charges the
                               customer’s credit card when processing the
                               request.

Managing Appraisal Information:



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To maintain the quality of the pipeline and application pull-through percentage (%),
every Brokers Sales and Ops employee needs to be aware of the specific regulation
and must adhere to the following policies:

                                       Wholesale Broker guide/12/1/2010 v.7 Page 29

                                       1. Processors will forward the Appraisal to the
                                       broker and customer(s), as soon as the appraisal
                                       is received and reviewed.

                                       2. Broker needs to be proactive when you know
                                       the email has been sent and call the customer.
                                       Remember, the Broker is still responsible for
                                       managing the customer.

                                       3. No one should refer to the AMC as “our
                                       appraisal company”. The AMC should be referred
                                       to as the independent third party appraisal
                                       management firm that BofI engages to outsource
                                       appraisal requests. Appraisers are independent
                                       contractors of the AMC not BofI.

                                       4. Production staff with the Broker should never
                                       contact the appraiser directly.

                                       5. Brokers do potentially have an obligation to
                                       explain all potential upside and downside in
                                       disputing a value, and may discuss these with a
                                       customer. However, Broker should never coach a
                                       customer to ask for a Value Reconsideration (Value
                                       Dispute).

                                       6. If specifically asked about disputing a value,
                                       Broker should inform the customer to send a
                                       formal email to the loan’s Processor/Broker
                                       Operations Department.

                                       7. Brokers and Processors should be clear to
                                       customers that disputes seldom produce gains,
                                       and could likely create a delay which will cause
                                       them to see a rate lock extension fee.

                                       8. If received, the Processor will coordinate the
                                       Dispute Request with the AMC.

                                       9. Brokers/Borrowers will be responsible for any
                                       extension fees required when a Dispute Request is
                                       submitted.

                                       10. If the Appraiser and/or AMC do not alter a
                                       value based on a Dispute Request, there will be no
                                       further action unless the customer wishes to order
                                       and pay for a second appraisal (with a new

Wholesale Broker guide 1/11/2011 v.8                                                       Page 29
                                          appraiser), along with any likely rate lock
                                          extension fees.

                                          11. We have seen very few Value Reconsiderations
                                          returned with an increase in value.

                                          12. If appraisal is ordered and the value comes in
                                          under or over the estimate of value and the loan
                                          amount will change, a “changed circumstance” will
                                          have occurred and BofI will provide a new GFE to
                                          the borrower.




2.3. BORROWER QUALIFICATION
2.3.1. BORROWER ELIGIBILITY
BofI will fund Eligible Loans made to natural persons only. The borrower must have reached the
age at which the mortgage Note can be legally enforced in the jurisdiction in which the property is
located. There is no maximum age limit for a borrower.

BofI checks borrowers against any information databases including but not limited to OFAC, NCIC,
etc. Results of these checks may impact qualification.

2.3.2. LIQUIDITY RESERVE REQUIREMENTS
Borrower Requirements:

                   Loan Amount                     Documentation             Amount of Reserves

                   O/O Up to $5,000,000            Full                      12 months total debt
                                                                             service
                                                                             6 months from 401K/SEP
                                                                             OK at 70% of fully vested
                                                                             amount


If current primary residence is listed for sale but not sold, an additional six (6) months of PITI (for
the listed property) cash reserves are required to not count the housing payment in the DTI
calculation. If market timing appears to be longer than 6 months, BofI reserves the right to
require additional months of cash reserves. Reserves may vary depending on geographic area
and marketing times.



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Any cash-out proceeds cannot be used to meet reserve requirements. Proceeds from secured or
unsecured loans are also not allowed.

For liquidity purposes, 70% of IRA, 401(k)/SEP, retirement plans, etc. can be included as reserve
requirements for reserves of up to 6 months. The balance should be available in liquid sources.




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2.3.3. INCOME VERIFICATION
General Guidelines:                    A borrower must demonstrate a history of receiving stable
                                       income from employment or other sources and a reasonable
                                       expectation that the income will continue to be received in the
                                       foreseeable future (usually for at least 3 years). Methods of
                                       verifying income and the required documentation are outlined
                                       below. The required length of employment and verified income
                                       may vary. See individual program guidelines for specific
                                       requirements. A stable employment history may consist of
                                       different jobs, so long as they are in the same or related line of
                                       work.

                                       Additional income sources other than primary employment or
                                       business income must be verified in an appropriate manner and
                                       should include the prior twelve -month history and the likelihood
                                       of continuation for at least three years. These sources include,
                                       but are not limited to:

                                        ·   Fixed income such as Social Security, VA benefits, pensions,
                                            disability Benefits, annuities, etc.;
                                        ·   Rental income;
                                        ·   Alimony, child support or separate maintenance;
                                        ·   Notes receivable; and
                                        ·   Trust income

                                       Additional income sources other than primary employment or
                                       business income must be verified in an appropriate manner and
                                       should include the prior twelve -month history and the likelihood
                                       of continuation for at least three years. These sources include but
                                       are not limited to:

                                        ·   Overtime, bonus and commission income;
                                        ·   Part-time/second job income
                                        ·   Dividend/interest income

                                       If borrower has an investment portfolio but only draws the
                                       income necessary to meet monthly obligations but additional
                                       income could be derived from that source the underwriter may
                                       use a depletion of assets calculation to offset the monthly debt.
                                       Any required reserves or down payment would first be deducted
                                       from the asset balance.



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                                        If a borrower is a US Citizen and earns income outside of the US,
                                       the income generated outside of the US will be considered on a
                                       case by case basis. Borrowers should provide the most recent 2
                                       years of US tax returns and all documentation of income as
                                       required by the Country where the borrower earns an income.

                                       Unacceptable sources of income include, but are not limited to:

                                        ·   Income not reported to the IRS; Education benefits;
                                        ·   One-time capital gains;
                                        ·   Refund of federal, state or local income taxes;
                                        ·   Rent for boarder(s) in owner occupied single family
                                            dwellings:

Salaried/Hourly Wage Employees:     Current paystubs/payroll earnings statements that cover
                            the borrower's earnings for the most recent 30 -day period and
                            W2s from the most recent two-year period are required. BofI will
                            complete a verbal verification of employment.

                                       We require copies of signed individual federal tax returns with all
                                       schedules for the most recent two-year period.

                                       A signed IRS form 4506-T and Borrower's Certification and
                                       Authorization will be required for all loans. BofI will execute the
                                       4506-T and review the transcripts prior to the final underwriting
                                       approval and funding of the mortgage loan.

                                       Income from day care (e.g., baby-sitting) will only be considered
                                       on a case-by-case basis.

Self Employed Borrowers                A signed individual Federal Income Tax Return (Form 1040) with
                                       all schedules for the most recent two-year period will be
                                       required. A signed year-to-date income (P&L) statement, if
                                       beyond the first quarter of the new fiscal year as determined by
                                       tax returns, is also required. If the Borrower has a 25% or greater
                                       ownership interest in a corporation, limited liability Company,
                                       partnership, or limited partnership, signed business Federal
                                       Income Tax Returns (Forms 1120, 1120S, 1065, K -1, etc.) with all
                                       schedules for the most recent two (2) year period will be
                                       required.

                                       Borrower must provide evidence of existence of established
                                       business. If a business has been in existence for less than two



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                                       years, proof must be provided that the Borrower was previously
                                       in the same line of work for at least two years.

                                       The Borrower must sign IRS Form 4506-T for all, Eligible Loans,
                                       and Borrower's signed and dated tax returns must be in the
                                       underwriting file.

                                       No more than one third (1/3) of the funds required for down
                                       payment, closing costs, and or reserves can come from a
                                       borrowers business account.

                                       Verbal VOE required within 5 days of closing.

Self–employed Borrowers Standards of Verification:

                   Self Employed Investors

                                       Borrowers whose income is generated primarily through real
                                       estate investments and is claimed on Schedule D of the Federal
                                       Income Tax Return (form 1040) may provide 3 years' tax returns
                                       as verification of income and a signed year -to-date income (P&L)
                                       statement if beyond the first quarter of the new fiscal year as
                                       determined by tax returns is also required and demonstrate the
                                       likelihood of continuation of income for at least three years. (All
                                       borrowers are required to execute and submit a 4506-T at
                                       application regardless of income documentation. The lender will
                                       process the 4506-T prior to final underwrite and it will be used as
                                       part of the final file underwriting decision process.)




                   Borrowers who self prepare tax returns and do not employ a CPA

                                       Borrowers who prepare their own tax returns may submit those
                                       returns for consideration on fully documented loans.

                                       Borrowers who prepare their own tax returns and whose
                                       individual State law does not require a business license, must
                                       provide 2 years self prepared Federal Income Tax Return (form
                                       1040) as verification of income and a signed year-to-date income
                                       (P&L) statement if beyond the first quarter of the new fiscal year
                                       as determined by tax returns is also required. Existence of
                                       business must be verified through an independent third party,


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                                       such as a telephone listing and supporting invoice evidencing
                                       listing for 2+ years, executed lease agreement for commercial
                                       space with verification from landlord for 2+ years, print ad,
                                       membership in organizations or other supporting 3rd party
                                       documentation. (BofI to verify existence and viability of business
                                       through 3rd party verification tools.)




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2.3.4. CREDIT VERIFICATION
Credit Report Format:                  Credit Reports must be standard RMCR’s or a report from at least
                                       three national repositories (i.e. tri-merge) and must include a
                                       public record search. Credit history must be reviewed for the 24
                                       months preceding the loan application.

DTI Calculation Generally:             The monthly payments as reflected on the credit report will be
                                       used to calculate the DTI ratio. If no monthly payment is indicated
                                       or if other form of verification is not provided, five percent (5%)
                                       of the outstanding principal balance on the account will be used.
                                       In any case, the monthly payment used in calculating the DTI ratio
                                       should be the greater of the payment as listed on the credit
                                       report (or other form of verification) or five percent (5%) of the
                                       outstanding principal balance.

                                       Installment debt/liabilities with less than 10 months remaining
                                       may be excluded in the DTI calculation except for the following
                                       account types:

                                        ·   Automobile Leases;

                                       Pay -downs to less than 10 months are not allowed on revolving
                                       credit simply to avoid inclusion of the debt in the DTI ratio.

                                       Liabilities may be paid off to assist in qualifying the borrower.

                                       If current primary residence is listed for sale but not sold, the
                                       payment can be excluded from the DTI calculation with the
                                       following: Copy of current listing agreement (must be good for at
                                       least 6 more months) and an additional six (6) months of the
                                       listed property's PITI cash reserves over and above loan program
                                       reserve requirements. Additional reserves may be required
                                       depending on geographic area and marketing times.

Co-signed Debts:                       Co-signed debts will not be counted in the DTI ratio if sufficient
                                       proof is provided that the Co-Signed primary debtor makes the
                                       payments. A minimum of twelve consecutive months of cancelled
                                       Debt checks may be required from the primary debtor evidencing
                                       the proper payment amount payable to the proper creditor. If
                                       any late payments occurred on co-signed debt, they will be
                                       counted against the primary debtor in the credit rating.




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Ex-Spouse Debts:                       If divorce documents state the ex-spouse is responsible for a
                                       debt, the monthly payments and any late payments made since
                                       the agreement will not count against the borrower. Borrower
                                       must provide a copy of recorded quit claim deed for any
                                       mortgage debts from the ex-spouse.

Deferred Student Loans:                Deferred loan payments must be included as a recurring monthly
                                       expense. If a payment is not indicated on the borrower's credit
                                       report, a copy of the borrower's payment letter or forbearance
                                       agreement is required to determine the payment amount to use
                                       in calculating the borrower's total monthly obligations.

Major Consumer Credit:                 Major consumer credit is defined as installment and revolving
                                       credit with original balances or credit limits in excess of $1,500,
                                       including auto loans, boat loans, major credit cards (VISA,
                                       MasterCard, Discover, etc.), and mortgages and home equity
                                       lines, if not on the subject property (i.e., mortgages on second
                                       homes or rental property).

Minor Consumer Credit:                 Minor consumer credit is defined as installment and revolving
                                       credit with original balances or limits less than $1,500, including
                                       department stores and gasoline company credit cards, utility
                                       company accounts, etc.

Adverse Credit:                        All charge-off, repossessions, collections, judgments and liens
                                       must be paid off or satisfied in writing by the Borrower. The age
                                       of these types of adverse credit is counted from the date of
                                       occurrence. Collections and Judgments greater than $5000.00
                                       should always be paid off prior to or at closing unless a valid
                                       dispute exists and is fully verified and documented.

Bankruptcy/Foreclosure/Compromise of Debt: Generally, none are preferred. However, all
                            bankruptcies and foreclosures submissions must be satisfactorily
                            explained in writing by the Borrower, a five-year history of re-
                            established, clean credit since the discharge of the bankruptcy is
                            required and the LTV maximum is 50%. Any LTV over that will be
                            considered on an exception basis only. In many cases, proof that
                            creditors were repaid will also be required.

Consumer Credit Counseling (Previous Participant): Borrowers that have completed a credit
                              counseling program will be considered as long as there is a
                              minimum of 48 months seasoning on re-established credit since
                              the credit counseling was terminated. The re- established credit
                              may not include accounts paid through credit counseling.

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Credit History:                        For Borrower(s) to be eligible for BofI loans, they must exhibit at
                                       least four active major consumer credit and /or mortgage
                                       accounts. Borrower(s) with no credit history may be considered
                                       on a case-by-case basis. Four types of non-traditional
                                       credit/payment histories will be required such as car insurance,
                                       cell phone, utility accounts, etc.




2.3.5. MORTGAGE VERIFICATION
Mortgage Payment History:              All mortgage payment histories must be verified (computer
                                       generated or typed, not handwritten) for the past 12 months by
                                       one of the following methods:

                                        ·   Verification of Mortgage(VOM);
                                        ·   Statement or payment history from the lender/servicer;
                                        ·   Credit Report; or
                                        ·   Cancelled checks (legible) from the Borrower for the past 12
                                            months.

Rental Payment History:                If the Borrower previously rented, a 12 -month rental history
                                       must be verified by:

                                        ·   Verification of Rents from a management company (VOR);
                                        ·   Statement from the landlord; or
                                        ·   Cancelled rent checks (legible) from the Borrower for the
                                            past 12 months.

Mortgage Delinquencies:                Mortgage delinquencies will be evaluated in the following
                                       manner:

                                       Refinances: Mortgage delinquencies to be counted toward the
                                       mortgage credit rating will be those on the subject property only.
                                       Mortgage delinquencies on other properties will be counted in
                                       the major consumer credit rating. If the subject property is
                                       currently owned free and clear, the mortgage credit rating is not
                                       applicable.

                                       Purchases: The mortgage delinquencies to be counted toward
                                       the mortgage credit rating will be those on the Borrower's
                                       previous or current primary residence. If the Borrower previously



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                                       rented, the rental payment history for the prior 12 months will be
                                       used in place of the mortgage rating.

2.3.6. ASSET VERIFICATION
Asset Verification Required:           Assets for reserve requirements must be properly verified on all
                                       transactions. Asset verification is required for cash-out refinances
                                       and may not include the cash-out amount.

Acceptable Asset Verification: Acceptable asset verification for checking, savings, or money
                               market accounts includes a Verification of Deposit (VOD) with a
                               two-month average balance for each account or two months of
                               recent consecutive statements for each account.

Gift Funds:                            Gifts from immediate family members are only allowed for
                                       purchase money transactions involving primary residences. A gift
                                       letter signed and dated by the donor is required and must include
                                       the amount of the gift funds and that no repayment is expected
                                       or implied. Verification of receipt of the gift funds by the
                                       Borrower is required through deposit receipt or bank statement.
                                       Five percent (5 of the monies paid must be from the Borrower's
                                       own funds unless a family member gifts 20% or more. This
                                       requirement may only be waived by BofI.

Third Party Funds:                     Contributions from interested parties such as the Seller, Builder,
                                       Realtor, etc., are allowed for purchase transactions involving
                                       primary residences, second homes and investment properties.
                                       The amount of the contribution must conform to FNMA
                                       guidelines.

Business Accounts:                     Business Accounts are an acceptable source of funds provided a
                                       signed letter from the Borrower's CPA is included in the loan file
                                       which attests that the borrower can access the funds and that
                                       withdrawal of funds from that account will not negatively impact
                                       the daily operations of the business. No more than 33.33% of the
                                       total assets for down payment, closing costs and /or reserves can
                                       come from business accounts. The borrower must be at least 50%
                                       owner of the business and available assets will be limited to
                                       his/her percentage of ownership in the business.

Acceptable Assets:                     Additional acceptable sources of funds if properly verified,
                                       include, but are not limited to:

                                 ·     U.S. Savings Bonds               Stocks /bonds /mutual funds

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                                 ·     Repayment of a loan             Sale of Property or Real Property
                                 ·     IRA/Keogh Accounts              Trade equity
                                 ·     Trust Accounts                  Deposit on Sales Contract

Unacceptable Assets:                   Unacceptable sources of funds include, but are not limited to:

                                 ·     Credit card advances
                                 ·     Cash on hand
                                 ·     Gift of equity
                                 ·     Any borrowed funds not secured by an asset
                                 ·     Sweat Equity

Lease /Purchase Transactions: In a lease/purchase option transaction where the purchase
                              option is being exercised, the original lease/purchase option
                              agreement must have had a maximum term of at least 12
                              months. Only the amount of rent paid in excess of proven market
                              rents for the area may be applied toward the required down
                              payment. The property appraiser must determine the market
                              rents as of the time the original lease/purchase option agreement
                              was created and went into effect.

Minimum Reserves:                      Borrowed funds and gift funds cannot be used for reserves. See
                                       program guidelines for specifics.




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2.3.7. BORROWER COMPENSATING FACTORS
Borrowers may have compensating factors to be considered. For example, a Borrower's DTI ratio
may be slightly above BofI guidelines or a Borrower's only adverse credit may be on a very minor
account such as a $500 credit line at a department store or a recent $200 collection account for
past due parking tickets. The more minor or isolated the problem, the less it should be
considered.

This is especially true if there is strong off setting or compensating factors involved. The following
is a list of compensating factors that should be considered on every loan:

                                 ·     Low LTV and good property reflecting pride of ownership;
                                 ·     Adverse credit is minor or isolated and does not reflect
                                       Borrower's true credit pattern;
                                 ·     Excellent payment history on mortgage(s) and major consumer
                                       credit;
                                 ·     Employment/income stability and/or potential;
                                 ·     Length of time in residence;
                                 ·     Good residual income (difference between Borrower's gross
                                       monthly income and total monthly obligations). Minimum
                                       acceptable residual income may vary based on a wage scale, cost
                                       of living, etc.;
                                 ·     Significant reduction in monthly housing expense; and
                                 ·     Excellent verified cash reserves.

2.3.8. BORROWER NOTES
Non –Owner Occupied and Second Homes: For non-owner occupied properties and second
                            homes, borrower may own a total of four mortgaged one-to four-
                            unit properties, including the subject property and borrower's
                            primary residence. Borrower must have excellent credit and job
                            stability. Contact BofI for exceptions.

                                       A property may be considered a second home if:

                                 ·     It is at least 60 miles from the borrower's primary residence or
                                 ·     It is located in a vacation /resort area or
                                 ·     The borrower does not own any other real estate in the same
                                       area

                                       If a loan fails to meet requirements, all guidelines for Non-Owner
                                       Occupied properties will apply.



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Number of Loans:                       BofI will only fund one owner occupied loan and one second
                                       home loan, or one non–owner occupied loan per borrower, to be
                                       delivered under any of the BofI loan products. The maximum
                                       number of loans per borrower is two (2) with one being an owner
                                       occupied loan.

Non-Occupant Co-Mortgagors: Non occupying co-mortgagors will be allowed on transactions
                            involving primary residences only. A full credit package is
                            required on the co- mortgagor. In the event of a refinance, the
                            co-mortgagor must already be named on the title and obligated
                            on the current mortgage. Exceptions will be addressed on a case-
                            by-case basis. The co- mortgagor's credit profile must be as good
                            as or better than the primary Borrower. All income and
                            obligations of the Borrower must be considered in the
                            underwriting of the loan and must fall within the maximum
                            allowable DTI ratio guidelines. The co-mortgagor must sign and
                            execute all mortgage documents and will be jointly obligated on
                            the note.

Non-Permanent Resident Aliens and Permanent Resident Aliens:           Non permanent resident
                             aliens will be acceptable on primary residence and second home
                             loans only. The maximum LTV is 70%. Social Security card and
                             work visa, are required. BofI follows FNMA guidelines concerning
                             Permanent Resident Aliens. Foreign nationals will be considered
                             on a case by case basis with verifiable credit references and valid
                             VISA.

Property held for sale:                If current primary residence is listed for sale but not sold, the
                                       payment can be excluded from the DTI calculation. A copy of the
                                       current listing agreement (must be good for at least 6 more
                                       months) and an additional six (6) months of reserves for the listed
                                       property's PITI is required over and above loan program reserve
                                       requirements. Additional reserves may be required depending on
                                       the geographic area and marketing times.

Annuity Payments:                      Annuity payment calculations are acceptable as income for
                                       retired borrowers (60 years or older). Market investment yields
                                       and a maximum age of 85 will be used for the calculation.

Eligible Ownership Types:              Real property must be owned in fee simple or in leasehold to be
                                       considered acceptable collateral. Leaseholds will only be
                                       acceptable on a case by case basis.



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2.4. MISCELLANEOUS
2.4.1. TITLE ENDORSEMENTS
The standard Endorsements we use are 8.1, and 9. For PUDs’- Alta 5, For Condos -Alta 4 (the
standard for State is State specific). See the entire list of endorsements broken out by State
under exhibits in the Exhibit Section 9.2. of this guide.

2.4.2. INVESTMENT PROPERTY
Property Types:                        Eligible property types include SFR,2-4 unit, and Condo. (See
                                       section 1.1.1 and sections 1.3.1 for specifics on pricing and LTV)

Loan Types:                            Eligible loan types include all BofI Intermediate Fixed Term
                                       ARM’s.

                                       Full documented loans only.

Investment Property Guidelines:

                                 ·     Maximum LTV/CLTV is 50%/50%
                                 ·     At least 6 months of rent loss insurance is required on any loan
                                       for which the borrower does not have documented landlord
                                       experience.
                                 ·     Rental income for the subject property may be used for
                                       qualifying. BofI will accept FNMA's 75% rule based on a fully
                                       executed lease, an average of two years' income documented
                                       with tax returns, or 75% of the lowest market rent shown on a
                                       comparable rent schedule.
                                 ·     Comparable rent schedules are not required if the full payment of
                                       the subject property is included in the DTI ratio.
                                 ·     Prior landlord experience is required for borrowers to purchase
                                       an investment property and to use rental income to qualify on
                                       our subject property.
                                 ·     BofI will only allow one investment property per borrower to be
                                       financed by Bank of Internet.




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2.4.3. REFINANCES
Non- Purchase Money Seconds: Payoffs of non purchase money seconds will be considered a
                            cash-out refinance regardless of seasoning.

Cash -out on Recent Purchases or New Construction: Bofi requires that the Borrower(s)
                              has/have been in title to the subject property for a minimum of
                              twelve months before any cash-out to use the new appraised
                              value. Loans that are held free and clear may be eligible on an
                              exception basis. See also Seasoning Requirements. Cash-out on
                              new construction requires acquisition cost verification. Cash-out
                              cannot exceed the amount of documented personal funds used
                              toward the construction of the home by the borrower. If
                              borrower is also the builder, please call BofI as guidelines may
                              differ.

Incidental Cash Limit:                 If incidental cash-out involved in a rate/term refinance exceeds
                                       applicable FNMA guidelines for conforming loan amounts, or the
                                       lesser of 2% or $20,000 for non-conforming loan amounts, the
                                       loan shall be considered a cash-out refinance. Cash-out is defined
                                       as any amount paid out of settlement proceeds that are not
                                       applied to valid loans secured by the subject property or
                                       acceptable closing costs. This includes the payoff of credit cards,
                                       installment loans, etc., as well as cash paid to the Borrower. The
                                       principal balance can be paid down at closing on an exception
                                       basis only and must have prior approval from BofI.

Owner/Builder Refinances:              If the borrower is the builder or general contractor, and the
                                       property has been newly constructed within the past 12 months,
                                       acquisition cost must be documented for either a rate/term
                                       refinance or a cash-out refinance. Cash-out will be considered on
                                       an exception basis only. This will be defined as a "Non-Arms
                                       Length" transaction.

Use of Proceeds:                       Cash-out refinances should include an explanation of the use of
                                       the proceeds.

Seasoning Requirements:                 If the borrower has been on title less than one year, the lesser of
                                       the sales price or appraised value will be used to calculate LTV for
                                       all refinance transactions. If no sales price is available, LTV will be
                                       reduced by 10% from maximum allowable LTV for a particular
                                       program.



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                                       Properties that have been recently listed (within the past 12
                                       months) must:

                                 ·     Eligible for Rate and Term refinances only if loan includes a three
                                       (3)year prepayment penalty (if allowed by law) AND/OR
                                 ·     BofI will only pay par price

                                       Value will be based on the lesser of the lowest list price or
                                       appraised value.




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2.4.4. SUBORDINATE FINANCING
Subordinate financing is acceptable on certain transactions. Repayment terms must provide for
regular monthly payments to cover at least interest due with a minimum five (5) year term unless
fully amortized. The following are unacceptable types of secondary financing: Subordinate
financing, subject to buy down plan, or programs that allow for negative amortization. Payments
calculated on HELOCs will be based on the balance disbursed.

2.4.5 SECTION REMOVED
2.4.6. QUALITY CONTROL
BofI and/or its agents will conduct pre-funding and post-funding quality control reviews, paid for
by BofI, on loans submitted by Brokers. BofI may require copy packages to be sent to BofI or its
designee. Notwithstanding any Quality Control reviews conducted by BofI and/or its agents,
Broker should maintain its own internal Quality Control Plan and Procedures.

2.4.7. PREDATORY LENDING
BofI will not fund any loan that could be classified as "high cost," "covered," "threshold," or
otherwise identified as "predatory," under any applicable federal, state or municipal law.

BofI will not fund loans for which borrowers have been inappropriately steered, or loans that
could be classified as "flipped," or loan refinances that do not provide a "net tangible benefit" to
the borrower.

2.4.8. EARLY PAY OFF PROTECTION
Bank of Internet, in its standard review of mortgage loans, may see evidence that a particular loan
is prone to early pay-off due to a property being listed for sale or a history of property "flipping"
by the borrower. In those instances, we may require the Broker to add additional "early pay-off'
protection which could be in the form of:

A borrower prepayment penalty (must be allowable in the state where the property is located) or,
a reduction of the price paid for the loan.

Any loan that has been funded within the last 12 months by Bank of Internet will need prior
approval with the lock desk before it can be locked again. BofI reserves the right to limit the price
paid on any un- seasoned (less than 12 months) BofI loan.




Wholesale Broker guide 1/11/2011 v.8                                                                   Page 46
SECTION 3




PRICING & LOCK




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3.1. Rate Lock Policies and Procedures
3.1.1. Introduction and Summary
The following P&Ps relate to locking in a single family, first mortgage transaction.

Bank of Internet (“BofI”) has established pricing and rate lock policies designed to provide a
balance between offering competitive secondary market execution options to our partners and
assuming reasonable interest rate risk. Accordingly, Brokers may execute a variety of rate lock
options prior to BofI’s final approval of the Loan.

Loans rate locked with “BofI” must comply with the provisions and guidelines of our Wholesale
Broker Guide. BofI reserves the right to refuse to fund any Loan that does not meet the terms and
conditions of these provisions and guidelines.

Due to the potential for extreme volatility in the secondary market, BofI reserves the right to
modify or discontinue pricing parameters and policies without prior notification. The foregoing
notwithstanding, every attempt will be made to implement future pricing policy and process
changes via advance notification.


3.1.2. Policy and Procedure Detail

Policy and Procedure Detail
Lock Desk Days and Hours:                Rate Locks will be accepted Monday through Friday from
                                         the time a Rate Sheet is posted until 4:00pm PST. Any
                                         lock requests received after the assigned time will be
                                         priced and locked on the following day.

Lock Requests:                           Lock requests should be emailed to lockdesk@bofi.com

Max Price Limitations:                   All applications will be subject to a max rebate of the
                                         lender fees and escrow fees COMBINED. If a lock is
                                         requested above this amount, it will be denied and will be
                                         subject to market movement until a new lock has been
                                         received by the lock desk.

Lock Confirmations:                      The lock desk will email confirmations to the address
                                         provided on the lock request form within the same
                                         business day. It is recommended that the broker keep
                                         track of their lock confirmation. It is not BofI’s
                                         responsibility to monitor lock expirations.


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3.2. Rate Lock re-negotiations
3.2.1. Introduction and Summary
Rate lock re-negotiations will be granted under the following terms and conditions.

3.2.2. Policy and Procedure Detail
Under this program, the rate may only be re-negotiated one time.

Under certain market conditions, BofI will consider a re-negotiation of a locked rate.

The minimum market movement needed before BofI will consider renegotiating the rate is 1.00%
in price for the same product and lock term.

At BofI’s discretion and depending on market conditions, some products at times will not be
eligible for negotiation regardless of market move. The Lock Desk will be able to assist you with
negotiable products.

Client must have a pull through and delivery rate that is acceptable to BofI, in its discretion.

Client must close and disburse the negotiated loan within 10 calendar days and BofI will change
the Lock Expiration to reflect this.

The price difference between the original Ratesheet date and the current Ratesheet at the
renegotiated rate (for the same product and lock term) will be split with Client. The new
negotiated price will not exceed the original quoted price.



Rate Lock and Fee exceptions, concessions and waivers:         Products or programs exceeding
                                      guidelines in effect require a product exception prior to
                                      rate lock. Please refer to BofI Exception Process, Section
                                      3.3. for information on obtaining an exception.

Intra-Day Pricing Changes:                Intra-day price changes may occur at any time with no
                                          advance notice depending on market movement. In
                                          addition, BofI reserves the right to stop accepting rate
                                          locks and not quote prices based upon business
                                          requirements.




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Lock Periods and Expirations Dates:      BofI offers the following lock periods to the customer:
           · 15 days
           · 21 days
           · 30 days
           · 45 days


Loans must fund by the final day of the lock period and be fully recordable the next business day.
The rescission period (including the funding date) must be included within the lock period, and
under no circumstances may the Right of Rescission be waived to satisfy this requirement. If not,
the lock must be extended (see below).

A 15-day lock requires that the loan be ready for final approval from the underwriter and
completion of all “prior to doc” conditions. The loan amount will not be able to be changed after
it is locked.

A 21-day lock requires a full package submission before a rate can be locked.

A 30 day lock requires a full package submission within 7 days of the rate lock.

A 45 day lock requires a full package submission within 20 days of the rate lock.

NOTE: A minimum of a 45 day lock must be taken if the loan has subordinate financing, vesting in
an entity or pledged asset. Lock extension fees will still apply if loan cannot fund within the 45
day period.

Lock Extensions - the broker must be aware and agree that they will be responsible for any
extension costs if the loan cannot fund within the lock period.

All pre-locks (21 days or more) are subject to change once the file has been underwritten if details
of the loan change from what was provided on the lock request. Essentially, a “rate sheet” is
being locked. If loan data changes impact the risk profile of the loan or the loan terms, the
associated lock price may change. See other changes



3.3. Exception Requests
3.3.1. Summary of Policy
Any exception requests must be submitted to secondary on the Exception Request Form,
attached form (see the end of this Section 3 for a sample form) with all applicable sections and
fields completed.

3.3.2. Policy and Procedure Detail

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Broker to fill out fields pertaining to the type of exception they are requesting. The Exception
Request form should be used under the following situations:

    ·    Fee waiver or partial fee concession
    ·    Rate Lock extension requests- If requested BofI cover it
    ·    Rate renegotiations
    ·    Rate Renegotiation applications



3.4. Rate Lock Expiration Date
The Rate lock expiration date is determined by the date the loan is locked with BofI and is based
upon actual calendar days.

Example: A loan rate locked for 15 days on January 15th would expire on January 30th at midnight.

If the Rate lock expiration date, as stated on the Rate lock Confirmation falls on a weekend or
BANK OF INTERNET observed holiday, the expiration date will automatically roll to the next
business day.

Example: A loan rate locked for 15 days on February 4th would expire on February 18th at
midnight, however since this is a BOI observed holiday, the Rate lock would expire on February
19th at midnight.

Lock Extensions / Expired Locks / Relocks: For locks to be eligible for a one-time extension, the
lock desk must be notified prior to the lock expiration date. Rate lock extension requests should
be emailed to lockdesk@bofi.com.

A lock extension fee will be applied, as follows, to the price:
    · 3 days = +.125 price adjustment/add-on/cost
    · 7 days = + .25 price adjustment/add-on/cost
    · 15 days = + .50 price adjustment/add-on/cost
    · 30 days = +.75 price adjustment/add-on/cost


A re-lock will be required for any loan that has expired or has already been extended once. If a
loan reverts back to a “floating/unlocked” status because the rate lock has expired, it will be up to
the Ops manager to decide whether the loan will continue to be processed. Depending on
capacity, loans with locks will get priority over those without.

Re-locks will reflect worse case price (the worse of the price on the original lock date or current
available price using same lock period as comparison) plus a .125 price adjustment/add-on/cost.
Exceptions can be made to this policy on a loan by loan basis. The broker must wait 60 days if they
would like to receive current market pricing.




Wholesale Broker guide 1/11/2011 v.8                                                                Page 51
**NOTE: If a re-lock is requested within 30 days of the original expiration, the pricing will be
based on the worse pricing of; current market +.125 or original pricing + .75.

3.5. Worse Case Pricing Calculation
Worse case pricing is determined by comparing the most recent, effective total price as stated on
the Rate lock Confirmation to the current total market price in effect and selecting the lower
rebate (Example #1) or higher discount (Example #2) for a specified note rate. Note that loan
level feature price adjustments such as escrow waiver, property type, documentation types, FICO
scores, etc. used in determining worse case pricing are based upon currently posted pricing and
not the pricing used when originally calculating the total price (Example #3)

         Example #1 – Jumbo ARM program with Premium

         Most recent effective Rate & Rate lock Confirmation price: 6.00% at (1.00)

         Current market equivalent Rate and Price: 6.00% at (.500)

         Worse Case Pricing is 6.00% at (.50).

         Example #2 – Jumbo ARM program with Discount

         Most recent effective Rate & Rate lock Confirmation price: 5.50% at .50

         Current market equivalent Rate and Price: 5.50% at 1.500

         Worse Case Pricing is 5.50% at 1.50.

         Example #3 – Jumbo ARM program with second home adjustment.

         Original Base Rate & Price:                      6.00% at (1.00)

         Less Second Home Pricing Adjustment:                           .50

         Effective Rate & Rate lock Confirmation price:   6.00% at (.50)

         Current market equivalent Base Rate and Price: 6.00% at 101.00

         Less Second Home Pricing Adjustment:                            1.00

         Current market equivalent Rate & Price:          6.00% at    0.00

         Worse Case Pricing is 6.00% at 0 (Par).




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3.6. Rate Lock Changes and Adjustments
Broker must provide BofI with all the required Loan information at the time of rate lock. All Rate
Locks must have a valid property address to become effective. Any loan locked without a valid
property address will be subject to worse case pricing upon submitting address correction.

Brokers are obligated to notify BofI of any changes made to critical loan fields required to
validate, approve and price a loan. Changes to this information after a rate lock confirmation has
been granted, will result in BofI’s re-pricing of the loan. Certain changes will require a re-price
based on the worse case pricing calculation. These changes include but are not limited to:

    §    Primary Borrower Change
    §    Social Security Number
    §    Address / Property Change

Loan amount changes have a tolerance of 2% of the original loan amount. Any changes outside of
the tolerance amount are subject to an additional re-price calculation under the following
circumstances.

    §    If loan amount increases and market price has decreased
    §    If loan amount decreased and market price has increased

Though the above scenarios may not exist on a particular loan, it may still require re-pricing if the
loan level adjustments are affected by the loan amount change.

Example: If the initial locked Loan amount is $100,000 and the Commitment is Best Efforts
Delivery Commitment, the Loan amount tolerance limit is $95,000 to $105,000. A change in Loan
amount to $80,000 calculates to an out of tolerance amount of $15,000 ($95k – $80k). This
$15,000 variance in delivery amount would be subject to the over tolerance calculation. If the
original price of the Loan was 100.00 and the current market price for the same delivery is 101.00,
then an OOT fee or pricing adjustment would apply based on the grid above (Loan amount down
and market price up). The fee is calculated on the $15k over tolerance balance at a 100 basis point
loss (price move from 100.00 to 101.00) and would equal ($150.00). A ($150.00) change in value
on an $80,000 Loan would equate to a price adjustment of -18.8 basis points. Therefore, 18.8
basis points would be deducted from the final Loan price.



3.7. Program Exceptions
Products or programs exceeding guidelines in effect require a product exception prior to rate lock.
i.e. DTI >40%, FICO < 680, CLTV > 75%. Please refer to BofI Exception Process for information on
obtaining an exception.



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Wholesale Broker guide 1/11/2011 v.8   Page 54
SECTION 4




PLEDGED
ASSET LOAN




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4.0. PLEDGED ASSET LOAN PROGRAM
The Pledged Asset Loan Program allows up to 90% financing of the property value (the lesser of
the appraised value or the purchase price). By pledging Eligible Assets, a borrower eliminates the
need to liquidate assets to obtain the cash needed for a down payment, avoids capital gains taxes
associated with such liquidation, maintains a more liquid position and continues to benefit from
any future earned interest, dividends and appreciation in their pledged assets.

The proceeds from a loan, including cash-out refinances, may not be used to purchase, carry, or
trade any assets, or to repay any debt used to purchase, carry or trade assets, pledged under the
Pledged Assets Loan Program. See Section 4.0. through 4.8. for Training and Forms for Pledged
Asset Loans.

Borrower Requirements:                 The obligor (the party that pledges the Eligible Assets) does not
                                       have to be the borrower nor does the obligor need to have a
                                       family relation to the borrower. However, BofI, at its sole
                                       discretion, will determine eligible obligors based on obligors
                                       relationship to borrower and circumstances.

Eligible Properties:                   Residences, Second Homes and Investment Properties

                                       Not available in Washington DC, West Virginia, and Virginia.

                                       Maximum LTV for PAL in New York State is 85% if loan amount is
                                       $250,000 or less.

Eligible Programs & products: Only BofI Portfolio Jumbo Loan programs and product options are
                              eligible.

Documentation:                         Pledged Asset Loan Program loans must be submitted for
                                       approval PRIOR to closing to ensure that they are eligible for
                                       funding. BofI must review and pre- approve all pledge documents
                                       including, but not limited to, any Pledged Asset Loan Program
                                       calculation worksheet, the Pledge Agreement, and the Account
                                       Control Agreement.

                                        ·   The borrower /obligor must execute the Pledge Agreement
                                            prior to loan funding.
                                        ·   The securities intermediary must execute the Account
                                            Control Agreement prior to loan funding.

Eligible Assets:                       Eligible Assets include stocks, bonds and mutual funds. See the
                                       Pledged Asset Loan Program Policy for complete requirements.

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                                       Eligible Assets must be managed by an Investment Broker/Dealer
                                       or Bank of Internet/BofI.

                                       Eligible Assets must be held in an account based in the US, either
                                       by a US entity or the US branch of a foreign entity.

                                       Eligible Assets do not include assets bought on margin, options,
                                       warrants, IRA assets, 401K assets, annuities, insurance benefits,
                                       529 or other education savings plans. See the Pledged Asset Loan
                                       Program Policy for complete requirements.

                                       BofI, at its sole discretion, will determine eligible assets to be
                                       pledged and acceptable securities intermediaries.

Pledge Account:                        The obligor may be permitted to trade in the pledged account.

                                       Pledged accounts may be released after 36 months, at BofI’s
                                       discretion, if a new appraisal shows the current LTV is equal to or
                                       less than original Effective LTV. Borrower must be current on loan
                                       payments with no delinquencies in the last 12 months.

                                       BofI may authorize at its discretion, release of any pledge amount
                                       in excess of the Initial Pledge Amount.

                                        ·   The Securities intermediary that manages the account must
                                            be preapproved by BofI for each loan.
                                        ·   Only one account held at a single securities intermediary can
                                            be pledged. The Base Pledge Amount equals the equity
                                            requirement percentage multiplied by the property.

Pledge Amount:                         The Base Pledge Amount equals the equity requirement
                                       percentage multiplied by the property value; minus any equity or
                                       down payment (a down payment is not required).

                                       The Initial Pledge, Amount equals the Base Pledge Amount
                                       multiplied by Two hundred percent (200%).

                                       The Minimum Pledge Amount equals the Base Pledge Amount
                                       multiplied by one hundred sixty eight percent (168%).

                                        ·   A Pledged Asset Account funded with 100% Cash Equivalent
                                            Assets has an Initial Pledge Amount and Minimum Pledge
                                            Amount equal to 100% of the Base Pledge Amount.
                                        ·   Throughout the term of the pledge agreement, the obligor
                                            will be required to maintain a Pledge Account value equal to


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                                       or above the Initial Pledge Amount. If the Pledged Account
                                       value ever falls to or below the Minimum Pledge Amount,
                                       the obligor will immediately be required to bring the
                                       Pledged Account value equal to or above the Initial Pledge
                                       Amount.




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             4.1. BofI PLEDGE ASSET LOAN
              PROGRAM TRAINING BOOK




   The information contained within this document is for training purposes
         only. Each Pledged Asset must be individually pre-approved.




Wholesale Broker guide 1/11/2011 v.8                                         Page 59
4.1.1. PLEDGED ASSET FLOW CHART

Pledged Asset - Credit Approval                                     Pledged Asset – Pledge
Documentation

         The pledge Assets and pledge documentation must be approved before the loan
         transaction can be closed, and separately from the pre-approval credit approval.

         The approval may involve negotiations with the securities intermediary which can take
         several weeks, depending on the responsiveness of the securities intermediary. See
         Section 1.3.2. for additional Pledged Asset Loan Information.

4.1.2. PRE-APPROVAL The following are the steps:

                                       A)   BofI Credit Approval

                                            All files must receive credit approval from a BofI
                                            underwriter before the pledge can be processed.



                                   B)       Collateral Account control Agreement Approval (See-
                            Sample)

                                            ·   This Pledge form comes directly from the securities
                                                intermediary or BofI for its own Pledge Accounts.
                                            ·   Must obtain a copy of this Agreement & provide an
                                                Unexecuted draft copy for BofI approval.
                                            ·   Handle the negotiations with the securities
                                                intermediary regarding any changes to the
                                                agreement that may be required.
                                            ·   This process can take several weeks depending on the
                                                responsiveness of the intermediary.

                                       C)   Asset Approval



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                                       ·   BofI must approve the assets that will be moved into
                                           the pledge account.
                                       ·   1. Use the “Proposed Asset Form” (See Sample)
                                       ·    a) List each asset that will be moved into the pledge
                                           acct
                                       ·    b) Must be typed & submitted in Excel format
                                       ·   2. Provide a current account statement from the
                                           securities intermediary
                                       ·   3. If in trust or other entity, provide trust or entity
                                           documents for approval.




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Wholesale Broker guide 1/11/2011 v.8   Page 62
4.1.3. FINAL APPROVAL
                                       D)   PLEDGE DOCUMENTS REQUIRED

                                            ·    ORIGINAL OF EACH of the below documents must be
                                                 provided before the pledge can receive final
                                                 approval.



                                            1) Pledge Collateral Account Control Agreement
                                                    a. must be signed by the securities
                                                        intermediary, lender and the account holder
                                                        – processor to secure
                                                    b. Create 2 original fully executed and signed
                                                        agreements, one for BofI and one for the
                                                        securities intermediary.
                                            2) Pledge Agreement
                                                    a. This document grants lender a security
                                                        interest in the pledged assets. It is signed by
                                                        lender and the account holders.
                                                    b. Complete Agreement
                                            3) Statement of Purpose – Federal Form G-3
                                                    a. This is a federally required form and is signed
                                                        by lender and the account holder(s).
                                            4) Contact Information Sheet
                                                    a. This form identifies the contact information
                                                        for the account holder(s), borrower (if
                                                        different) and the security intermediary, and
                                                        must be completed in its entirety.




Wholesale Broker guide 1/11/2011 v.8                                                                 Page 63
4.2. PROCEDURE




Wholesale Broker guide 1/11/2011 v.8   Page 64
4.2. PROCEDURE

The pledged assets and pledge documentation must be approved before the loan transaction can
be closed, and separately from the preapproval credit approval.

The approval may involve negotiations by you with the securities intermediary which can take
several weeks, depending on the responsiveness of the securities intermediary.

Steps for the pledge PRE-approval are as follows:

4.2.1. A. BofI Credit Approval
              ·    All pledge files must receive credit approval from a BofI Underwriter before the
                   pledge can be processed. Contact BofI’s Underwriting Department for correct
                   procedure.
4.2.2. B. Pledged Collateral Account Control Agreement Approval
              ·    This form will come directly from the securities intermediary and you must obtain
                   a copy of this agreement and provide an unexecuted draft copy to BofI for
                   approval.
              ·    You will be responsible for facilitating the negotiations with the securities
                   intermediary regarding any changes to the agreement that may be required by
                   BofI.
              ·    This negotiation process can take several weeks depending on the responsiveness
                   of the securities intermediary.
4.2.3. C. Asset Approval
              BofI must approve the assets that will be moved into the pledge account. Please
              provide:

              1. Proposed Asset Form
                 Form Attached

              ·  List each asset that will be moved into the pledged account.
              ·  MUST be TYPED and submitted in EXCEL format. Contact BofI for the electronic
                 Excel form.
              2. A current account statement from the securities intermediary.
              3. Should the account statement be held in the name of a trust or other entity,
                 provide the trust or entity documents for approval.




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4.2.4. D. Pledge Documents
          · A fully executed ORIGINAL OF EACH of the below documents must be
                   provided before the pledge can receive a final approval from BofI.
              ·    Copies of the unsigned completed drafts should be submitted for review and pre-
                   approval and for confirmation that everything is filled out correctly prior to
                   execution.
4.2.5.             1. ) Pledged Collateral Account Control Agreement
                        See “B” Above

                        ·   This Agreement must be signed by the securities intermediary, lender and
                            the account holder(s).
                        ·   You are responsible for coordinating the signatures for the securities
                            intermediary and the account holder.
                        ·   Create 2 original fully executed and signed agreements: one for BofI and
                            one for securities intermediary.
4.2.6.             2.) Pledge Agreement
                        FORM ATTACHED

                        This document grants lender a security interest in the pledged asset. This
                        document is signed by lender and the account holder(s).
                        You will need to complete:
                        a) Date
                        b) Lender Name
                        c) “Obligor” is the account holder(s)
                        d) “Borrower” is the name of qualifying borrower(s)
                        e) “Mortgagor” is the name that will appear on title
                        f) “Mortgaged Property” is the property address of the property being
                            financed
                        g) “Loan Amount” is the total dollar amount being financed
                        h) “Pledged Account No.” is the account number of the pledge account
                        i) The “Base Pledge Amount” is the amount BEFORE you calculate the 200%
                        j) Exhibit A (page 12) must be completed to list the assets to be pledged




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4.2.7.             3.) Statement of Purpose – Federal Form U-1 (for banks)
                        FORM ATTACHED

                        This is a federally required form and is signed by lender and the account
                        holder(s).

                        On page 1 – Include the Name of the Bank “Bank of Internet USA” on the top
                        of the Form.

                        a)   Part 1, #1 - the “credit being extended” is the total amount of the loan
                        b)   Part 1, #2 - “no” must be checked for item 2
                        c)   Part 1, #2 - the reason can simply be “real estate financing”
                        d)   the account holder(s) must sign at the bottom

                        On page 2

                        a) leave part II, item 1 through 3 blank
4.2.8.             4.) Contact Information Sheet
                        FORM ATTACHED

                        This form identifies the contact information for the account holder(s),
                        borrower (if different) and the security intermediary, and must be completed
                        in its entirety.




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4.3.      Tips for a successful Pledge and a Satisfied Borrower
              ·    Not all securities intermediaries are acceptable and some that were acceptable before
                   may not necessarily be acceptable presently. Be sure to contact BofI to discuss the status
                   of a company before proceeding.
              ·    You and your client are responsible for facilitating negotiations or otherwise coordinating
                   with the securities intermediary.
              ·    Only one account at a single securities intermediary can be pledged.
              ·    The proposed Asset Form MUST be typed and MUST be submitted via email in excel
                   format. Any handwritten forms, Adobe or other formatted copies will be returned.
              ·    If a CD is to be pledged, the financial institution MUST be able to provide lender with a
                   monthly statement and the CD must have an “evergreen” or automatic renewal provision.
                   If these requirements cannot be met, the CD is not acceptable.
              ·    Submit the loan to BofI for the full amount desired. As an example, if a borrower is going
                   to buy a $1,000,000 home and is going to pledge securities instead of putting money
                   down, upload the loan to reflect the 100% LTV and a loan amount of $1,000,000.
              ·    BofI MUST have the fully executed original of each pledge document. These originals are
                   required prior to closing.
              ·    NEVER have your client move assets to a new securities intermediary until after BofI has
                   confirmed that all parties have approved the control agreement.
              ·    Remember, this is not a normal loan transaction, and most likely you will not have the
                   “luxury” of only going to the borrower once for everything that is needed to approve the
                   loan. The borrower and/or the account holder must be involved in the process.
              ·    Who is named on the account? The pledge documents are signed by the named account
                   holder only, which in some cases may not be your borrower. If the account is in the name
                   of a trust, then the trustee will sign the pledge; if the account is in the name of an entity,
                   then it will be the designated manager or officer of that entity.
              ·     If the account is in the name of a trust or other entity, that trust/entity must be pre-
                   approved by BofI before the account will be accepted.
              ·    The security interest in the pledged account will be a first lien position on the entire
                   account. You will want to make sure that the account holder knows that ALL assets in the
                   account will be pledged, and therefore, not accessible to them for liquidation purposes
                   without the lender’s prior approval. Many account holders who pledge assets choose to
                   move the assets to be pledged into a sub-account.
              ·    The pledge documents are based on the account number and specific assets in the actual
                   account to be pledged. If the person who is pledging assets has multiple accounts or is
                   moving assets in order to pledge a smaller account, be sure to provide the current
                   statement that applies ONLY to the specific account to be pledged.
              ·    The securities intermediary may have different forms of an account control agreement for
                   the different types of accounts they offer. You should instruct the account holder or asset
                   manager to obtain the account control agreement that applies to the type of account to
                   be pledged. If you try to do it yourself, you may get one that is not the appropriate one
                   for the customer’s type of account.




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4.4. ELIGIBLE SECURITIES




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                                       ELIGIBLE SECURITIES
Assets for each loan must be pre-approved by providing a completed proposed asset
form. Please contact the loan department for more information.

4.4.1. Eligible Assets include:
              ·    Stocks listed on NYSE, AMEX, or NASDAQ with either a share price greater
                   than or equal to $5, or a market capitalization of at least $1 Billion.
              ·    U.S. Dollar denominated mutual funds.
              ·    Interest paying corporate debt rated no lower than Moody’s Aa2 or S&P
                   AA.
              ·    Corporate zero coupons rated no lower than Moody’s Aa2 or S&P AA.
              ·    Interest paying municipal debt rated no lower than Moody’s Aa2 or S&P
                   AA.
              ·    Municipal zero coupon debt rated no lower than Moody’s Aa2 or S&P AA.
              ·    Bills, notes, and bonds guaranteed by the full faith and credit of the United
                   States Government.
              ·    Debt securities issued by Government Sponsored Enterprises or agencies
                   of the United States Government, including FNMA, FHLMC, FFCB, TVA and
                   FHLBs.
              ·    Mortgage pass-through certificates issued by FNMA, FHMLC, or GNMA.
              ·    Zero Coupon bonds guaranteed by the full faith and credit of the United
                   States Government.
              ·    Certificates of Deposit.
              ·    Money Market Funds.
              ·    Other securities or financial instruments deemed eligible in BofI’s sole and
                   absolute discretion.
              ·    Cash
4.4.2. Eligible Assets does not include:
              ·    Options.
              ·    Warrants.
              ·    Stocks purchased on Margin, including stocks purchased with the proceeds
                   of a mortgage loan.
              ·    When issued securities.
              ·    Any securities that are not either (i) registered upon issuance under the
                   Securities Act of 1933 or (ii) exempt from registrations thereunder.

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              ·      Any security or financial instrument held in an IRA, 401(k) or profit sharing
                     plan, 529 or other educational savings plan, annuity or life insurances.
              ·      Any security or financial instrument deemed ineligible in BofI’s sole and
                     absolute discretion.

In addition, Eligible Assets does not include:

              (i)       Any shares that have been held in the Account for 30 or fewer days
                        issued by an open-end investment company (other than shares
                        resulting from dividend reinvestment) as to which the Securities
                        Intermediary or any affiliate participated as a member of the seller
                        group or syndicate: or

              (ii)      Any shares of any other new issue with respect to which the Securities
                        Intermediary or any affiliate participated as a member of the selling
                        group or syndicated, until the earlier of (a) the date that such shares
                        have been held in the Account for at least 30 days, provided that such
                        participation in such offering has been completed, or (b) the date
                        which is 30 days after the date on which such participation in such
                        offering was completed.




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4.5. PROPOSED ASSET FORM




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4.6. SAMPLE PLEDGE AGREEMENT




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                                       PLEDGE AGREEMENT
PLEDGE AGREEMENT (“Agreement”), dated ______________,
between___________________

and its successors or assigns (the “Lender”), and the Obligor(s) identified below (the
“obligor”).

                                        PRELIMINARY STATEMENT

 The Lender is originating a Mortgage Loan (hereinafter defined) to the Borrower
identified below, secured by a mortgage or deed of trust by the Mortgagor identified
below on the real property located at the address and in the original principal amount as
set forth below. In connection with the Mortgage Loan, the Obligor has agreed to pledge
collateral for the Mortgage Loan to the Lender, which includes a security interest in the
Account (hereinafter defined) maintained at the Securities Intermediary (hereinafter
defined).

Obligor(s):
_____________________________________________________________________

Borrower(s), if different than Obligor:
_____________________________________________

Mortgagor(s), if different than Obligor:
______________________________________________

Mortgaged Property:
____________________________________________________________

_________________________________________________________________________

Loan Amount:
$_________________________________________________________________

Pledged Account
No:_____________________________________________________________

When this Pledge Agreement is signed, the value of the securities and cash in the Account
must be at least equal to the Initial Pledge Amount (hereinafter defined).

In consideration of the mutual promises contained herein and for other good and
valuable consideration, the parties hereto agree as follows:

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Section1. Definitions.

For all purposes of this Agreement except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not otherwise defined herein
have the following meanings:

“Account” means the broker-managed account established and maintained by the
Obligor with the Securities Intermediary. Self-directed accounts are ineligible.

“Account Control Agreement” means the Pledge Collateral Account Control Agreement or
an alternative form of such agreement provided by a Securities Intermediary and
approved by the Lender.

“Base Pledge Amount” means $_____________. The percentage of equity required
under the Lender’s underwriting guidelines multiplied by the Property Value, minus any
down payment or equity. For example, a loan program with a maximum LTV of 80%
would have an equity requirement of 20%. That 20% multiplied by the Property Value,
minus any down payment or equity, is the Base Pledge Amount.

“Borrower” means the Obligor unless identified as a different person in the Preliminary
Statement.

“Business Day” means any day other than (i) a Saturday or Sunday, or (ii) a day on which
banking institutions in the State of California are authorized or obligated by law or
executive order to be closed.

“Cash Pledged Collateral” has the meaning set forth in Section 8(b).

“Eligible Assets” means the securities listed on Exhibit B.

“Effective LTV” means the percentage obtained by subtracting the Base Pledge Amount
from the Loan Amount, then dividing by the Property Value.

“Entitlement Order” means any instruction or direction given to the Securities
Intermediary to liquidate any Financial Asset, to withdraw any Financial Asset from the
Account or to cancel any open orders, and any other “entitlement order” as such term is
defined by section 8-102 (a)(8) of the New York UCC.

 “Financial Asset” means “financial asset” as defined by Section 8-102(a)(9) of the New
York UCC with the effect of the Financial Asset election under Section 2(a) of this
Agreement and includes without limitation any security, interest, obligation, contract or
other property whatsoever credited to the Account. This includes without limitation
stock, bonds, money market funds, mutual funds, checks, promissory notes, and cash.

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“Initial Pledge Amount” means the market value of securities and cash in the Account as
of the date of this Agreement that is at least equal to the sum of (1) for securities
included, Two Hundred percent (200%) of the value of the securities in the Account used
to meet the Base Pledge Amount and (2) for cash included, One hundred percent (100%)
of the value of cash in the Account used to meet the Base Pledge Amount.

“Loan Amount” means the amount set forth in the Preliminary Statement and as
evidenced by the mortgage note.

“Maintenance Pledge Amount” means the market value of securities and cash in the
Account that is at least to the sum of (1) for securities included, One Hundred Sixty Eight
percent (168%) of the value of the securities in the Account used to meet the Base
Pledge Amount and (2) for cash included, One Hundred percent (100%) of the value of
cash in the Account used to meet the Base Pledge Amount.

“Mortgage” means the Mortgage or Deed of Trust from the Mortgagor to the Lender,
which Mortgage encumbers the Mortgaged Property and secures the Mortgage Loan.

“Mortgage Loan” means an individual mortgage loan and all rights with respect thereto,
evidenced by a mortgage note and secured by a Mortgage encumbering the Mortgaged
Property.

“Mortgage Loan Documents” means a Note, Mortgage, Account Control Agreement,
Pledge Agreement, or any other documents executed by the Obligor, Borrower or
Mortgagor and delivered to the lender, evidencing or securing the Mortgage Loan.

“Mortgaged Property” means the underlying real property securing repayment of a
mortgage note, consisting of a fee simple interest in a single parcel of real property
improved by a residential dwelling or a qualified leasehold interest.

“Mortgagor” means the Obligor, unless identified as a different person or entity in the
Preliminary Statement.

“New York UCC” means the New York Uniform Commercial Code.

“Obligor” means the Obligor identified in the Preliminary Statement.

“Pledged Collateral” has the meaning set forth in Section 2(b)(i).

“Property Value” means the lesser of the appraised value or purchase price of the
Mortgaged Property, excluding personal property.




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“Security Entitlement” means the rights and privileges of the Obligor with respect to each
and all Financial Assets credited to the Account and “security entitlement” as defined in
Section 8102(a)(17) of the New York UCC.

“Securities Intermediary” means an approved Investment Broker/Dealer responsible for
managing the Account. The Securities Intermediary must execute an Account Control
Agreement for each Mortgage Loan originated under the Pledged Asset Loan Program.

Section 2. Security Interest in Account.

                   (a) Financial Asset election. The parties hereto hereby elect that each
                       item credited to the Account at any time, including without limitation
                       stocks, bonds, money market funds, mutual funds, checks, promissory
                       notes and cash, shall be treated as a Financial Asset. This election is
                       made for the purpose of simplifying and clarifying the creation and
                       perfection of a security interest in the Account.
                   (b) Security Interest.
                             i. As security for the obligations under the Mortgage Loan, the
                                Obligor hereby assigns, pledges, grants and conveys to the
                                lender all of the Obligor’s right, title and interest in the
                                Account and all Security Entitlements therein whether now
                                existing or hereafter acquired and all proceeds of any such
                                property (collectively , the “Pledged Collateral”). The Pledged
                                Collateral initially includes all assets set forth in Exhibit A and
                                Exhibit C.
                            ii. Except as expressly permitted in Section 5 of this Agreement,
                                the Obligor shall not sell, assign, transfer, or otherwise dispose
                                of, or grant any option with respect to, or pledge or otherwise
                                encumber or withdraw from the Account, the Pledged
                                Collateral or any interest therein.
                           iii. The Lender agrees with the Obligor that it will issue an
                                Entitlement Order only in accordance with the provisions of
                                this Agreement. If the lender grants a security interest in
                                Lender’s right, title and interest in the Pledged Collateral to
                                any Person, such Person may issue Entitlement Orders to the
                                Securities Intermediary without further consent by the Obligor.
                                Such Entitlement Orders shall be subject to the terms of this
                                Agreement.



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                   (c) Continuing Obligations of Obligor. The Obligor shall take all actions
                   necessary or requested by the Lender in order to assure that the Lender
                   has at all times, while this Agreement remains in effect, a continuing
                   perfected first priority lien and security interest in the Pledged Collateral.

                   (d) Responsibility for Account. Regardless of how the Account is titled,
                   including an Account titled in the name of the Lender for the benefit of the
                   Obligor, Obligor and Lender hereby agree that the Obligor owns the
                   Account. Obligor agrees that Lender shall not be responsible for any
                   diminution or loss of value of the Account or the assets contained therein
                   attributed to declines in the market value of the Account or because of any
                   restrictions on the Account contained in this Agreement. In addition, all
                   items of income, gain, expense, and loss recognized in the Account shall be
                   the responsibility of the Obligor and reported to the Internal Revenue
                   Service and all state and local taxing authorities under the name and
                   taxpayer identification of the Obligor.

Section 3. Representations and Warranties of the Obligor.

  The Obligor represents and warrants to the Lender as of the date hereof that:

                   (a) The Obligor has the full right, power and authority to make, execute
                       and deliver this Agreement.
                   (b) The Obligor is the sole legal and equitable owner of the Pledged
                       Collateral free and clear of any interest or lien of any third person or
                       other encumbrances whatsoever, except for the rights of the Lender
                       pursuant to this Agreement.
                   (c) The Security interests of the Lender hereunder are and shall at all times
                       be perfected and valid first priority security interests in the Pledged
                       Collateral.
                   (d) The Obligor has rights in the collateral in which the security interest is
                       being granted that are sufficient therefore, and value has been given
                       within the meaning of Section 9-203 of the New York UCC.
                   (e) The Pledged Collateral constituting Eligible Assets held in the Account
                       as of the date hereof has a market value of not less than the initial
                       Pledge Amount, and all such Eligible Assets have been in the Account
                       for at least seven (7) Business Days prior to the date hereof.
                   (f) The proceeds of the Mortgage Loan will not be used to purchase, carry
                       or trade any securities, or to repay any debt used to purchase, carry or


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                       trade securities, and the Obligor has duly executed the Federal Reserve
                       Form U-1 or G-3 so stating.
                   (g) The Obligor is not, and at no time will be, a controlling person within
                       the meaning of applicable securities law with respect to any Pledged
                       Collateral and no such Pledged Collateral is or at any time will be
                       subject to restrictions on distribution under such laws.
                   (h) The Account is not a self-directed account.

Section 4. Withdrawl or Liquidation of Pledged Collateral by Lender.

                   (a) Subject to applicable law, in the event the Obligor, Borrower or
                       Mortgagor, as applicable, is in default under or breaches any covenant
                       or agreement set forth in the Mortgage Loan Documents, then at any
                       time thereafter, unless and until such breach or default is cured, the
                       Obligor hereby authorizes the Lender to liquidate and/or withdraw any
                       Pledged Collateral from the Account, which shall be applied by the
                       Lender as follows: first, to all amounts owing under the Mortgage Loan
                       for fees, expenses and other amounts not representing interest or
                       principal; second, to accrued and unpaid interest on the Mortgage
                       Loan; and third, to the outstanding principal balance of the Mortgage
                       Loan. Subject to applicable law, if at the time of such default the
                       Pledged Collateral is greater than or equal to the Maintenance Pledge
                       Amount, then the Lender shall provide notice to the Obligor prior to
                       taking any action under this section 4. The Lender shall be entitled to
                       exercise any and all other remedies available to it pursuant to the
                       Mortgage Loan Documents, at law or in equity, including without
                       limitation foreclosing the Mortgage. The Lender shall have sole
                       discretion as to whether and when to exercise any of the remedies
                       under this Agreement and the Mortgage Loan Documents, as well as
                       the order in which any such remedies may be exercised.
                   (b) Liquidation and/or withdrawal of any Pledged Collateral by the Lender
                       from the Account, or the delay or failure to do so, shall not be deemed
                       (i) to cure any default pursuant to the Mortgage Loan Documents, (ii) a
                       tender of arrears or tender of performance sufficient to require
                       reinstatement of the Mortgage Loan, or (iii) a waiver of acceleration or
                       of the Lender’s right to accelerate the balance due under the Mortgage
                       Loan Documents, or to foreclose the Mortgage.
                   (c) In the event the Securities Intermediary provides notice of its intent to
                       terminate the Account Control Agreement, the Obligor shall, within 3

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                        business days, obtain a new Account Control Agreement upon terms
                        acceptable to the Lender or Lender may liquidate and/or withdraw any
                        Pledged Collateral from the Account.

Section 5. Limitations on Trading and Withdrawals by Obligor.

                   (a) Except upon the prior written consent of the Lender, the Obligor will
                       not (i) purchase any securities with funds in the Account other than
                       Eligible Assets, (ii) withdraw cash or securities or buy or sell Eligible
                       Assets other than as provided in sub clause (b) of this section 5, (iii)
                       borrow any funds on margin using any Pledged Collateral as collateral
                       or (iv) otherwise pledge, grant or permit to exist a security interest in
                       any Pledged Collateral. The Obligor acknowledges and agrees that the
                       Lender may impose additional limitations on any security or other
                       property which may be purchased with funds in the Account if the
                       Lender is not reasonably assured of a continuing perfected first priority
                       security interest in such security or other property. The Lender in its
                       sole discretion may revise the definition of Eligible Assets from time to
                       time by adding further restrictions or limitations on the types of
                       securities permitted, or by excluding specific securities, by providing
                       written notice thereof to the Obligor, but such revised definition shall
                       not apply retroactively to require the Obligor to dispose of any
                       securities in the Account not meeting the definition subsequent to such
                       change.
                   (b) Unless prohibited by the terms of the Account Control Agreement, the
                       Obligor may withdraw cash or securities from the Account, provided
                       the Account at all times maintains the Initial Pledge Amount and
                       provided that the Mortgagor has made all payments required pursuant
                       to the Mortgage Loan and is not in breach or default under the
                       Mortgage Loan Documents. In the event the Account falls below the
                       Initial Pledge Amount, the Obligor may not directly or indirectly
                       withdraw cash or securities from the Account.
                   (c) Unless prohibited by the terms of the Account Control Agreement, the
                       Obligor may, without the consent of the Lender, buy or sell any Eligible
                       Assets in the Account at any time, provided the value of the Pledged
                       Collateral does not fall below the Initial Pledge Amount. The Obligor
                       shall provide all electronic trade confirmations to Bank of
                       Internet________________________ or by mail to Pledged Loan
                       Accounting, Bank of Internet, 12777 High Bluff Drive, Suite 100, San

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                        Diego, CA 92130. Such trade shall be sent within 48 hours of such
                        trade.

Section 6. Value of Pledged Collateral.

The Obligor agrees that at all times hereafter the Pledged Collateral constituting Eligible
Assets in the Account will have a market value of not less than the Maintenance Pledge
Amount.

Section 7. Release of Pledge Collateral.

The Lender may, in its sole discretion, terminate and release security interest in the
Account upon the Obligor fulfilling either of the following:

7.1      Termination and release based upon appraisal:

         (a) Obligor submits a request in writing, no sooner than thirty six (36) months
         after the origination of the Mortgage Loan, to the Lender requesting that
         termination and release of its security interest in the Account be initiated;

         (b) Borrower is current on all the payments required by the terms of the
         Mortgage Loan with no delinquencies in the most recent twelve (12) months; and

         (c) Lender obtains an appraisal of the Mortgaged Property, at Obligor’s or
         borrowers expense , acceptable to the Lender, that evidences a loan to value ratio
         of the then outstanding balance on the Mortgage Loan to the appraised value that
         is less than the original Effective LTV.

7.2      Termination and release based on payment of principal:

         (a) Obligor submits a request in writing to the Lender requesting that termination
         and release of its security interest in the Account be initiated

         (b) Borrower is current on all payments required by the terms of the Mortgage
         Loan with either (i) no delinquencies in the most recent twelve (12) months or (ii)
         if the Mortgage Loan has been outstanding less than twelve (12) months, no
         delinquencies in the history of the Mortgage Loan; and

         (c) Lender obtains an appraisal of the Mortgaged Property, at Obligor’s or
         borrowers expense , acceptable to the Lender, that evidences a loan to value ratio
         of the then outstanding balance on the Mortgage Loan to the appraised value that
         is less than the original Effective LTV.



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Section 8.      Remedies

         (a) If at any time the aggregate market value of the Pledged Collateral shall be less
             than the Maintenance Pledge Amount and the Obligor has not, within three
             (3) Business Days, or such shorter period as Lender deems necessary due to
             market conditions, from the date on which the aggregate market value of the
             Pledged Collateral becomes less than the Maintenance Pledge Amount,
             deposited in the Account additional cash and/or Eligible Assets acceptable to
             the Lender with an aggregate market value sufficient to increase the aggregate
             market value of the Pledged Collateral to at least the Initial Pledge Amount,
             then the Lender may issue Entitlement Orders at its option, from time to time.
         (b) Any cash withdrawn by the Lender pursuant to the terms of this Agreement
             shall be held by or on behalf of the Lender as “Cash Pledged Collateral” until
             the earlier to occur of (i) the application of such funds to amounts owing
             under the Mortgage Loan, as more particularly set forth in Section 4, in the
             event of a default by the Borrower, Mortgagor, or Obligor, as applicable, under
             the Mortgage Loan Documents which is not timely cured after notice, if
             required, or (ii) upon the full repayment of all amounts owing under the
             Mortgage Loan. The Obligor acknowledges and agrees that any Cash Pledged
             Collateral will not be held in trust and may be commingled with other assets of
             or held by or on behalf of the lender. The Lender may invest the Cash Pledged
             Collateral in accordance with its normal cash management procedures. Any
             income or loss allocable to the investment of any cash Pledged Collateral shall
             be for the account of the Lender.
         (c) In lieu of investing the Cash Pledged Collateral with other assets of or held by
             or on behalf of the lender, the Lender may, at its option, elect to invest the
             Cash Pledged Collateral in money market mutual funds or in such other
             investments as the Lender deems appropriate. Upon liquidation, the Lender
             shall provide the Obligor with written notice that the Account has been
             liquidated and the date of such liquidation. Notwithstanding anything to the
             contrary contained herein, if the Borrower, Mortgagor or Obligor, as
             applicable, is not in default under the Mortgage Loan Documents, the Obligor
             may elect, by providing written notice to the Lender of such election, to have
             the funds from the liquidation applied to the outstanding principal balance of
             the Mortgage Loan.
         (d) In the event of default by the Borrower, Mortgagor or Obligor, as applicable,
             of any covenant or agreement contained in the Mortgage Loan Documents,
             which default is not timely cured after any required notice by the Lender to
             the Obligor, as more particularly set forth in Section 4, the Lender may, at its

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               option, withdraw cash from the Account and/or sell any other Pledged
               Collateral in the Account and apply any such cash and the proceeds of any
               such other Pledged Collateral, together with any Cash Pledged Collateral, up to
               the Loan Amount, as provided in Section 4. The Borrower shall remain liable
               for the unpaid principal balance of the Mortgage Loan in excess of any amount
               so applied. In addition to the foregoing, the Lender may exercise any and all
               other remedies available to it under the Mortgage Loan Documents. The
               Lender shall return any excess Cash Pledged Collateral to the Obligor when the
               Borrower cures all defaults under the Mortgage Loan Documents or upon full
               repayment of all amounts owing under the Mortgage Loan.
         (e)   The Lender may exercise any or all of the remedies set forth herein without
               notice of sale or other notice or advertisement, except as expressly provided
               herein. Any such sales may be made by the Lender, or the financial/securities
               intermediaries, or its affiliates on any exchange or other market where such
               business is usually transacted or at public or private sale. The Lender or its
               affiliates may be the purchaser for its own account. Notwithstanding the
               foregoing in the case of any Pledged Collateral consisting of securities that are
               no longer Eligible Assets because they are no longer traded on a national
               securities exchange, or a recognized over the counter market, the Lender shall
               not be a purchaser at a private sale without the consent of the Obligor. Any
               giving of prior demand or call or prior notice of the time and place of such sale
               shall not be considered a waiver of the Lender’s right to sell without any such
               demand, call or notice as herein provided.
         (f)   In addition to the rights and remedies set forth in this Agreement, the Lender
               shall have the right to exercise any one or more of the rights and remedies of a
               secured creditor under the New York UCC. All rights and remedies available to
               the Lender hereunder shall be cumulative and in addition to any and all other
               rights and remedies otherwise available to it at law, in equity or otherwise,
               and any one or more of such rights and remedies may be exercised
               simultaneously or successively.
         (g)   If 100% of the Pledged Collateral in the Account becomes cash, upon the
               request of the Obligor, the Lender may release to the Obligor any amount of
               cash in excess of the Base Pledge Amount.
         (h)   The Obligor shall be liable for (i) any penalty, premium, fee or other charge
               and (ii) any tax reporting and all monies payable with respect thereto, in each
               case that may arise from any early withdrawal or liquidation of the Pledged
               Collateral in connection with the Lender’s exercise of its rights and remedies
               under this Agreement.

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Section 9. Term of this Agreement.

This Agreement shall become effective when signed by the Obligor and the security
interest created herein shall attach upon funding of the Mortgage Loan and shall continue
in full force and effect until the outstanding principal balance of the Mortgage Loan has
been paid in full or the Lender’s security interest in the Account is terminated and
released pursuant to the terms of Section 7 of this Agreement.

Section 10. Lender

As used herein, the “Lender” refers to (i) the entity named as Lender herein, or (ii) any
entity to which the Mortgage Loan has been transferred or assigned by the Lender, or (iii)
any other entity to which the Mortgage Loan has been subsequently transferred or
assigned. In addition, if so directed by the Lender by written notice delivered to the
Securities Intermediary, the Securities Intermediary shall accept and act upon directions
given by any entity designated by the Lender in such notice as servicer of the Mortgage
Loan, as if directions were given by the Lender. Any notice designating a servicer shall
remain effective until revoked by the Lender by written notice delivered to Securities
Intermediary. Securities Intermediary shall accept and act upon directions only from such
parties as provided herein.

Section 11. Indemnification.

         (a) Neither the Lender nor any of its directors, officers agents or employees shall
             be liable for any action taken or omitted to be taken by it or them hereunder
             or in connection herewith except for its or their own gross negligence,
             material failure, to perform hereunder or material breach of their covenants,
             representations or warranties hereunder, lack of good faith or willful
             misconduct.
         (b) The Obligor agrees to indemnify and hold the Lender and its directors, officers,
             agents and employees harmless against any and all liabilities, obligations,
             losses, damages, penalties, actions, judgments, suits, costs, expenses or
             disbursements of any kind or nature whatsoever, including reasonable
             attorneys’ fees, that may be imposed on, incurred by, or asserted against the
             Lender in any way relating to or arising out of this Agreement or any action
             taken or not taken by the Lender hereunder, unless such liabilities, obligations,
             losses, damages, penalties, actions, judgments, suits, costs, expenses or
             disbursements were imposed on, incurred by or asserted against the Lender
             because of the material breach by the Lender of any of its obligations
             hereunder, or as a result of any gross negligence, lack of good faith or willful


Wholesale Broker guide 1/11/2011 v.8                                                        Page 85
              misconduct on the part of the Lender or any of its directors, officers, agents, or
              employees. The foregoing indemnification shall survive any termination of this
              Agreement.

Section 12. Miscellaneous.

         (a) Severability. If any provision of this Agreement shall for any reason
             whatsoever be held invalid, then to the fullest extent permitted by law such
             provision shall be deemed severable from the remaining provisions of this
             Agreement and shall in no way affect the validity or enforceability of the other
             provisions of this Agreement. If the invalidity of any part, provision,
             representation or warranty of this Agreement shall deprive any party of the
             economic benefit intended to be conferred by this Agreement, the parties
             shall negotiate, in good-faith, to develop a structure, the economic effect of
             which is nearly as possible the same as the economic effect of this Agreement
             without regard to such invalidity.
         (b) Counterparts. This Agreement may be executed in any number of
             counterparts, each of which so executed shall be deemed to be an original, but
             all counterparts shall together constitute but one and the same instrument.
         (c) Waiver. The Lender shall not by any act, delay, omission or otherwise be
             deemed to have waived any of its rights or remedies hereunder, and no waiver
             shall be valid unless in writing, signed by the Lender, and then only to the
             extent therein set forth. A waiver by the Lender of any right or remedy
             hereunder on any one occasion shall not be construed as a bar to any right or
             remedy which the Lender would otherwise have on any future occasion. No
             failure to exercise, nor any delay in exercising on the part of the Lender, any
             right, power or privilege hereunder, shall operate as a waiver thereof, nor shall
             any single or partial exercise of any right, power or privilege hereunder
             preclude any other or further exercise thereof or the exercise of any other
             right, power or privilege. The rights and remedies herein provided are
             cumulative and may be exercised singly or concurrently, and are not exclusive
             of any rights or remedies provided by law or equity.
         (d) Obligations Joint and Several. If there is more than one Obligor, their
             obligations hereunder are joint and several.
         (e) Headings. Section headings used herein are for convenience of reference
             only, are not part of this Agreement and are not to affect the constitution of or
             to be taken into consideration in interpreting this Agreement.




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         (f) Agreement Binding. This Agreement shall be binding upon the Obligor and
             the Obligor’s heirs and personal representatives and inure to the benefit of the
             Lender and its successors and assigns.
         (g) Entire Agreement. This Agreement, together with the Account Control
             Agreement and the Mortgage Loan Documents, constitute the entire
             agreement among the parties with respect to the subject matter hereof.
         (h) Amendment. This Agreement may be modified only by a written instrument
             executed by the Lender and the Obligor.
         (i) Choice of Law. This Agreement shall be governed by the laws of the State of
             New York.
         (j) Assignment. A successor or assignee of Lender’s rights and obligations under
             the Mortgage Loan will succeed to Lender’s rights and obligations under this
             Agreement.

         IN WITNESS WHEREOF, the parties have executed this Pledge Agreement the day
         and year first written above.

OBLIGOR:

_______________________________________



OBLIGOR:

_______________________________________




Lender:

By: ____________________________________




Wholesale Broker guide 1/11/2011 v.8                                                       Page 87
                                       EXHIBIT A
       SECURITIES OR CASH IN ACCOUNT AS OF THE DATE
                          HEREOF


PLEDGED ACCOUNT NO.:

NAME OF SECURITIES OR CASH                         AMOUNT OF SECURITIES OR
CASH




Wholesale Broker guide 1/11/2011 v.8                                         Page 88
                                          EXHIBIT B
                                       ELIGIBLE SECURITIES
Assets for each loan must be pre-approved by providing a completed proposed asset
form. Please contact the Loan Department for more information.

Eligible Assets include:

              ·    Stocks listed on NYSE, AMEX, or NASDAQ with either a share price greater
                   than or equal to $5, or a market capitalization of at least $1 Billion.
              ·    U.S. Dollar denominated mutual funds.
              ·    Interest paying corporate debt rated no lower than Moody’s Aa2 or S&P
                   AA.
              ·    Corporate zero coupons rated no lower than Moody’s Aa2 or S&P AA.
              ·    Interest paying municipal debt rated no lower than Moody’s Aa2 or S&P
                   AA.
              ·    Municipal zero coupon debt rated no lower than Moody’s Aa2 or S&P AA.
              ·    Bills, notes, and bonds guaranteed by the full faith and credit of the United
                   States Government.
              ·    Debt securities issued by Government Sponsored Enterprises or agencies
                   of the United States Government, including FNMA, FHLMC, FFCB, TVA and
                   FHLBs.
              ·    Mortgage pass-through certificates issued by FNMA, FHMLC, or GNMA.
              ·    Zero Coupon bonds guaranteed by the full faith and credit of the United
                   States Government.
              ·    Certificates of Deposit.
              ·    Money Market Funds.
              ·    Other securities or financial instruments deemed eligible in BofI’s sole and
                   absolute discretion.
              ·    Cash

Eligible Assets does not include:

              ·    Options.
              ·    Warrants.
              ·    Stocks purchased on Margin, including stocks purchased with the proceeds
                   of a mortgage loan.
              ·    When issued securities.

Wholesale Broker guide 1/11/2011 v.8                                                          Page 89
              ·    Any securities that are not either (i) registered upon issuance under the
                   Securities Act of 1933 or (ii) exempt from registrations thereunder.
              ·    Any security or financial instrument held in an IRA, 401(k) or profit sharing
                   plan, 529 or other educational savings plan, annuity or life insurances.
              ·    Any security or financial instrument deemed ineligible in BofI’s sole and
                   absolute discretion.

In addition, Eligible Assets does not include:

              ·    Any shares that have been held in the Account for 30 or fewer days issued
                   by an open-end investment company (other than shares resulting from
                   dividend reinvestment) as to which the Securities Intermediary or any
                   affiliate participated as a member of the seller group or syndicate: or

              ·    Any shares of any other new issue with respect to which the Securities
                   Intermediary or any affiliate participated as a member of the selling group
                   or syndicated, until the earlier of (a) the date that such shares have been
                   held in the Account for at least 30 days, provided that such participation in
                   such offering has been completed, or (b) the date which is 30 days after
                   the date on which such participation in such offering was completed.




Wholesale Broker guide 1/11/2011 v.8                                                           Page 90
                                       EXHIBIT C




Wholesale Broker guide 1/11/2011 v.8               Page 91
4.7. STATEMENT OF PURPOSE (Fed Form U-1)




Wholesale Broker guide 1/11/2011 v.8       Page 92
Wholesale Broker guide 1/11/2011 v.8   Page 93
Wholesale Broker guide 1/11/2011 v.8   Page 94
4.8. CONTACT INFORMATION SHEET




Wholesale Broker guide 1/11/2011 v.8   Page 95
                          CONTACT INFORMATION SHEET
Obligor(s) Name: _______________________________________________________________

Obligor(s) Mailing Address: _______________________________________________________

________________________________________________________________________________
_____

Home Phone #: _______________________________________________

Work Phone #: _______________________________________________

Cell Phone#:       _______________________________________________

Alternate Phone #:_____________________________________________

Email Address: _______________________________________________

Fax #: ______________________________________________________

Borrower(s) Name and Address (if different than Obligor):
_____________________________________

______________________________________________________________________________

Property Address: _______________________________________________________________

______________________________________________________________________________

Financial Broker Name: __________________________________________________________

Financial Brokerage:        ____________________________________________________________

Financial Brokerage Address:
        ______________________________________________________

______________________________________________________________________________

Phone #: ________________________________________________

Fax #: __________________________________________________

Email Address: ____________________________________________




Wholesale Broker guide 1/11/2011 v.8                                                  Page 96
SECTION 5




                          BROKER
              ELIGIBILITY


Wholesale Broker guide 1/11/2011 v.8   Page 97
5.1. BROKER ELIGIBILITY


5.1.1. APPROVAL PROCESS
In order to become an approved Broker, the Broker/mortgage originator must complete
and submit to BofI the Broker Application Package. (Sole Proprietorships are ineligible for
Broker approval) The Broker Application Package consists of the Broker Application and
the Broker Agreement. Once approved, the Broker must adhere to the Broker Guide.
Brokers should include in the Broker Application Package:

   ·    Completed Wholesale Lending Application/Profile signed and dated by all owners
        and authorized signors
   ·    Completed Broker Agreement, executed in the full name of the firm, signed and
        dated by an authorized individual of the firm
   ·    Current Licenses for the main office and all branch locations in all states, including
        individuals licenses, if required by a particular state or evidence of exception
   ·    Current up-to-date Resumes for all owners/principals, and senior management.
        Resumes should include positions held, job responsibilities and dates for positions
        /employment
   ·     Signed Authorization/Release for Business and Individuals form
   ·    Main Office Web Portal Access Form
   ·    Required Legal Documents:
            o If the firm is a corporation, submit a stamped/file copy of the Articles of
                Incorporation
            o If the Firm is a limited liability company, submit a stamped /file copy of the
                Membership Agreement
            o If the Firm is operating under any assumed fictitious, or DBA name, submit a
                copy of the properly filed/registered Partnership Agreement
            o If Broker uses a DBA, permission from the State Corporation Commission
                allowing use of the DBA is needed. If the DBA is used in multiple states,
                documentation is needed for each state.
            o Corporate Resolution or Officer’s Certificate – All 3 sections completed and
                signed
   ·    W-9 Form, signed by an authorized signer, indicating the firm’s main address,
        appropriate box checked (Individual/Corporation, Partnership), and the



Wholesale Broker guide 1/11/2011 v.8                                                        Page 98
        appropriate taxpayer identification number (TIN). The W-9 Form should be filled
        out in the full legal name of the firm – not the DBA name
   ·    Financial Statements for recent two years

Broker must notify BofI, in writing at time of application and after approval of any
pending, proposed, or actual change in direct or indirect ownership or control, whether
by sale, transfer, merger, consolidation, or otherwise, including but not limited to, a sale
of all or of any substantial portion of Broker’s assets. Broker must also notify BofI of any
change in name or reorganization of corporate form, whether or not such change
materially affects Broker’s business activities or financial condition , and of any material
change in Broker’s senior management. Upon receipt, satisfactory review, and
acceptance of completed documentation, BofI will execute and return a signed copy of
the Broker Agreement.

In certain cases, BofI reserves the right to request that the obligations of the Broker be
guaranteed by a third party or principals of the broker. In such case no agreements
executed by the Broker shall be effective until a Form of Guarantee is executed by the
guarantor(s). Broker shall provide or cause the guarantor to provide all information
and/or documentation required by BofI.

BofI reserves the right to request and /or review additional information regarding any
affiliate relationship maintained by the Broker with a title agency, attorney, settlement
agent, escrow company, real estate firm, or builder. Based on the information obtained
through our review process, BofI may choose not to work with a broker’s affiliated
companies.

Brokers who own 10% or less of an affiliated closing agent or title company may use that
affiliate for closing a personal loan/transaction.

5.1.2. BASIC QUALIFICATIONS

As may be required by state law, each broker must be authorized under state and/or
federal law to originate loans in each state in which loans are originated. Brokers in
California must be licensed as Real Estate Brokers by the Department of Real Estate or as
Mortgage Lenders by the Department of Corporations. CFL licensed companies are
ineligible for approval with BofI. Additional conditions or qualifications may be
implemented from time to time, at BofI’s sole discretion.



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5.2. BROKER REVIEW

5.2.1. ANNUAL RECERTIFICATION

For Brokers, within 60 days of the submission of the annual financial statements and
compliance certifications required by the Broker Agreement as amended by this Broker
Guide, BofI will evaluate the Broker’s financial condition.

Broker’s failure to submit such annual statements may automatically result in the
suspension or termination by BofI of Broker’s participation as an approved BofI Broker.

Upon BofI’s request, Broker must furnish to BofI any other periodic special, or other
reports or information as may be necessary, reasonable, or appropriate with respect to
Broker.

Any request for financial statements and reports must be in form and substance
acceptable to BofI.

BofI may also require such reports and financial information on an annual basis as to any
and all guarantors of Broker, and failure to provide such information may also result in
suspension or termination of Broker. In addition, the financial condition of personal
guarantors and the quality of Eligible Loans previously funded by BofI, among other
criteria, will also be reviewed periodically by BofI.

If after review of all relevant information BofI determines, in its sole and absolute
discretion, that the broker no longer qualifies for the BofI Broker Program, BofI may
terminate Broker’s participation in such program.

Notwithstanding the foregoing, the Broker shall not be relieved of its liabilities and
obligations with respect to transactions between BofI and Broker prior to such
termination.

If, during the annual recertification process it is determined that an active Broker(s)
minimum net worth has fallen below the minimum required net worth guidelines, BofI
will review and determine if the broker will be suspended from doing business with BofI
as a Broker and subsequently terminated.



Wholesale Broker guide 1/11/2011 v.8                                                  Page 100
SECTION 6




FILE SUBMISSION
AND FUNDING




Wholesale Broker guide 1/11/2011 v.8   Page 101
6.1. DOCUMENT AND FILE DELIVERY / FUNDING PROCEDURES
6.1.1. SUBMISSION OF LOAN FILE
Eligible Loan Applications offered for approval must be delivered to BofI and/or its imaging
vendor 15 days prior to the Lock Expiration date in a “ready to fund” condition. The preferred
method of delivery is a paperless file via an electronic image. However, BofI will accept bar-
coded or non bar-coded paper files.

6.1.2. & 6.1.3. TBD

This section has been intentionally left blank.


6.1.4. FOLLOW-UP DOCUMENT POLICY

It is up to the Broker to follow up on missing documentation and insure that all items are provided
to BOFI within the allowable time lines specified. Subject to counties with known recording
delays, follow-up documents, such as title policies, endorsements and assignments thereof, and
recorded security instruments, items must be delivered to BofI or its designated vendor by the
closing agent within 180 days from the date of the note. For documents not provided within the
180 day grace period, the loan will be in default under the terms of the Agreement, Mortgage File
Documents, and will become subject to the Purchase/Repurchase provisions as set out within the
Agreement.

BofI will provide the broker notification when additional documentation is required.

6.1.5. RESUBMISSION OF SUSPENDED/DENIED LOAN PACKAGES OR
EXPIRED LOCKS

All resubmissions will be processed as new loans. Resubmissions require new registration (BofI
Loan #). Since a resubmitted loan may be assigned to a different BofI reviewer, the loan may be
subject to additional conditions.

Expired locks that are resubmitted within 60 days of the previous expiration date will be priced as
of the original lock date or current market, which ever has the higher rate.

 All documentation that may have expired since the original decision must be updated. The new
credit package will have to include all suspension or denial conditions and must include a cover
letter explaining changes that have occurred which, in the Broker’s opinion, make the wholesale
loan now eligible for funding.



Wholesale Broker guide 1/11/2011 v.8                                                             Page 102
6.1.6. SECTION LEFT BLANK

6.1.7. SECTION LEFT BLANK

6.1.8. WET FUNDING STATES FUNDING PROCEDURES

Purchase Transactions & Refinances NOT subject to Right of Rescission

Funds will be wired and available at the time of settlement in the following states:
Alabama, Arkansas, Colorado, Connecticut, Delaware, District of Colombia, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York,
North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, South
Dakota, Tennessee, Texas, Vermont, Virginia, West Virginia and Wisconsin.

Refinance Transactions Subject to a Right of Rescission

Funds will be wired and available at the termination of the rescission period in the following
states:
Alabama, Arkansas, Colorado, Connecticut, Delaware, District of Colombia, Florida, Illinois,
Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan,
Minnesota, Mississippi, Missouri, Nebraska, New York, North Carolina, North Dakota, Ohio,
Oklahoma, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont,
Virginia, West Virginia and Wisconsin.

Funds will be wired and available at the time of settlement in the following states:
New Hampshire, New Jersey and Georgia.

6.1.9. DRY / GOOD FUNDING STATES FUNDING PROCEDURES

Purchase Transactions & Refinances NOT subject to Right of Rescission

Funds will be wired and available after receipt and review by the Loan Center of the fully executed
closing package in the following states:
Alaska, Arizona, California, Idaho, Hawaii, Montana, Nevada, Oregon, Utah, Washington and
Wyoming.

Refinance Transactions Subject to a Right of Rescission

Funds will be wired and available at the termination of the rescission period in the following
states:
Alaska, Arizona, California, Colorado, Idaho, Hawaii, Montana, Nevada, New Mexica, Oregon,
Utah, Washington and Wyoming.




Wholesale Broker guide 1/11/2011 v.8                                                             Page 103
6.2. LEGAL AND CLOSING DOCUMENT REQUIREMENTS

6.2.1. LEGAL DOCUMENTS

BofI provides a list of acceptable loan documents by product type.

Printed matter in any document must not be altered without prior approval. Correction
fluid is not acceptable. All parties executing the document(s) must initial all corrections.
Alternatives to preprinted forms must be authorized by BofI.

The following outline has been prepared to provide a summary of basic documentation
parameters:

Promissory Note

   1.) Date of note must agree with the date of all legal documents;
   2.) Address of subject property is correct, complete, and agrees with appraisal and
       title report;
   3.) Terms of the loan are correct and agree with the final loan approval, including loan
       amount, interest rate, loan term (first and last payments), principal and interest
       payment, and late charge and grace period;
   4.) Name and address of originating mortgagee is correct and complete and all
       Borrowers’ name(s) agree with the Purchase Contract (where applicable), and/or
       original, signed FNMA Form 1003;
   5.) Borrower must sign the note exactly as their name(s) appears (typed) on the
       signature line.


   6.) Note endorsement (in blank) has been fully executed by the Seller, is correct and
       complete, and
               is made payable to the order of:
                          (in blank)
               Its Successors and Assigns, Without Recourse
                        (Beneficiary Company Name as it appears on the Note)
               By:
                        Officer’s Name (must be typed)
   7.) Note form used is correct and is the most recent version for product type;
   8.) Change date is correct;
   9.) Periodic and lifetime caps are complete and correct;
   10.) Maximum and minimum lifetime interest rate is correct for product type (e.g.,
                        Minimum interest rate cannot be less than the start rate);
   11.) Margin is correct for product type and loan purpose; and
   12.) Addenda:

Wholesale Broker guide 1/11/2011 v.8                                                       Page 104
              a. Date agrees with note,
              b. Terms are correct and agree with the lock,
              c. Names of Borrower(s) agree with names shown on all other legal
                 documents,
              d. address of subject property is correct,
              e. Name and address of originating mortgagee is correct and complete.

Mortgage/Deed of Trust/Mortgage Security Deed

    1.) Copy must be complete, legible and certified as a true and correct copy with
        certifiers initials;
    2.) Document date agrees with other legal documents;
    3.) Names of Borrower(s) agrees with names shown on all other legal documents;
    4.) Subject to the law of the state where the property is located, all parties who are
        named in and have executed documents are/will be vested in title. All parties
        vested in title are named in and have executed the document. Additionally,
        parties who have an equitable interest in the mortgaged property (i.e., spouses)
        will be required to sign this document;
    5.) Name and address of originating mortgagee is correct and complete and agrees
        with Note;
    6.) Terms of loan are correct and agree with Note including loan amount, interest
        rate, loan term,
        (First and last payments) and principal and interest payments;
    7.) Legal description agrees with title policy commitment, abstract of title or
        equivalent title search;
    8.) Address of subject property is correct and complete and agrees with appraisal and
        title search;
    9.) All natural person Borrower(s) names agree with names on Purchase Contract, if
        applicable, and original signed FNMA Form 1003
        10. ) Notary acknowledgement is complete and correctly dated as of the date of
             the mortgage or later;
        11. ) Document form is correct for product type and state where property is
             located, and is most recent FNMA version required for closing;
        12. ) PUD Rider
                 a. Date agrees with security instrument,
                 b. Name of seller agrees with security agreement,
                 c. Project name agrees with legal description, title information and
                     appraisal, and
                 d. Is fully executed by Borrower(s);
        13. ) Condominium Rider
                 a. Date agrees with security instrument,
                 b. Name of seller agrees with security agreement,
                 c. Property address agrees with security instrument,


Wholesale Broker guide 1/11/2011 v.8                                                   Page 105
                 d. Project name agrees with legal description, title information and
                     appraisal, and
                 e. Is fully executed by borrower(s),
         14. ) Multifamily Properties (2-4 unit);
                 a. 2-4 Family Rider required,
                 b. Date agrees with security instrument,
                 c. Name of seller agrees with security instrument,
                 d. Property address agrees with security instrument, and
                 e. Is fully executed by Borrower(s);
         15. ) ARM Rider is required;
                 a. Date agrees with security instrument,
                 b. All data is correct;

Final Typed Loan Application (FNMA Form 1003)

         1) Final signed, fully executed FNMA Form 1003 application is in file, complete
            with executed addenda, if applicable, in addition to initial FNMA Form 1003
            application;
         2) The data in the final FNMA Form 1003 is consistent with the closing
            documents;
         3) The income, assets and liabilities are consistent with the original preliminary
            FNMA Form 1003;
         4) Occupancy certification indicated on FNMA Form 1003 is consistent with loan
            program.

Limited Power of Attorney

    1)   If Borrower(s) is not signing the documentation, a Limited Transaction-Specific
       Power of Attorney is required per FNMA guidelines.
    2) Limited Power of Attorneys are accepted for natural persons only and are not
       acceptable for Trustees or Entities unless prior approval by BofI’s Compliance
       Department has been received.
    3) The Power of Attorney;
            a. Will stipulate that the mortgagor(s) has appointed a specific individual to
               act as the attorney-in-fact,
            b. Will state that the purpose is to encumber, execute, mortgage, or
               hypothecate, and will be signed and dated by the mortgagors,
            c. Must include legal description of subject property. Legal description must
               agree with title policy/commitment, abstract of title or equivalent title
               search,
            d. Must have all signatures notarized,
            e. Must be approved by the title company, and be recorded either prior to, or
               concurrently with, the mortgage/Deed of Trust.


Wholesale Broker guide 1/11/2011 v.8                                                     Page 106
            f. May not be of record more than 6 months prior to the signing of loan
               documents, and
            g. Must reflect that the Borrower(s) names and the named assignee agree
               with all loan documents.
    4) If a Power of Attorney is used, the original or typed Loan Application (FNMA Form
       1003) must bear the live signature of the Borrower(s).
    5) Power of Attorney with an “X” signature;
            a. Must be witnessed by two people in addition to the notary public,
            b. Must be witnesses by one of the Borrowers, under the “X”,
            c. Must have signature of the witnesses next to the “X” signature.
            d. Must be signed by all witnesses noted in the notary journal, and
            e. Must contain a notarized statement of explanation for the circumstances
               in the loan package
            f. All General POA’s must have prior approval by BofI Compliance
               Department before closing/purchasing the transaction.

Title Insurance

Abstract of title or equivalent title report must be dated within 6 months of loan closing;

Vesting Requirements:
Purchase transactions must have evidence of chain of title from seller to Buyer
(Borrower),
   1) Refinance transactions must have evidence that title is vested in subject
       Borrower(s).;
   2) All vested parties have executed the security instrument and complied with all
       title requirements;
   3) If title has been conveyed within the most recent 12 month, additional
       documentation may be required to ensure acceptability of transaction;
   4) Title must be “Fee simple”; Leasehold property will have specific approval by BOFI
       prior to purchase; and
   5) Legal description must agree with all legal documents;
   6) Closing Insuring Protection Letter is required on each loan transaction. And must
       be made available to BOFI either prior to closing or during a post funding QC audit
       of the loan.

Title Insurance Exceptions

    1) Property Taxes, assessments and bonds must be paid current;
    2) Specific title endorsements must be obtained if necessary and if required by state
       law (e.g., not definable easements, mineral rights, etc.);
    3) All existing liens and judgments must have been paid or released;



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    4) Insurance endorsements have been obtained to cover right of surface entry if
       rights are not specifically waived in the legal description;
    5) Title exceptions are limited to those generally acceptable in the secondary market,
       as determined by BOFI in its sole discretion;
    6) Additional title endorsements may be required;
    7) A duly authorized agent of the issuing title insurance company must countersign
       title commitment;
    8) Amount of title insurance must be equivalent to the face amount of the Note; and
    9) Title Company and policy of title insurance must conform to FNMA requirements.

6.2.2. SECTION LEFT BLANK

6.2.3. SECTION LEFT BLANK

6.2.4. REGULATORY COMPLIANCE

 Broker must ensure regulatory compliance procedures are met and adhered to, which
include, but are not limited to, state, federal, and local regulatory compliance laws.

6.2.5. TAX SERVICE CONTRACT / FLOOD HAZARD CERTIFICATION

A Tax Service contract along with a “Life of Loan” Flood Hazard Certificate is required on
all loans from a nationally recognized company and is purchased by BOFI upon purchase
of a loan.

6.2.6. INCOME TAX RETURN VALIDATION

Broker must submit the original fully executed IRS Form 4506-T (Request for Transcript of
Tax Returns) in the loan package submitted to BOFI for each type of tax return that was
evaluated in the loan review /underwrite.

6.2.7. NOTICE OF RIGHT TO CANCEL
If a right to cancel is required, BofI will provide notice on the appropriate Rescission Form
as set forth in Appendix H of Regulation Z.

Saturday is included as a business day in calculating the three-day rescission period.
Sunday and the following holidays are not included in the three-day rescission period:

New Year’s Day                         Martin Luther King Day

Presidents Day                         Memorial Day


Wholesale Broker guide 1/11/2011 v.8                                                      Page 108
Independence Day                       Labor Day

Columbus Day                           Veterans Day

Thanksgiving Day                       Christmas Day

The three-day waiting period for expiration of the right to cancel will not be waived.
Ensure that right to cancel provisions follow specific state and federal requirements if
they differ from the foregoing.

6.2.8. HUD-1
The Final HUD-1 Settlement Statement is required on all transactions. It must be
executed by all Borrowers, including any addenda, and must be included in areas or states
not considered escrow closing areas. If loan is for a purchase transaction, seller must also
execute their portion. The HUD-1 must:

    ·    Be certified to be true and correct,
    ·    Reflect both borrower and seller information,
    ·    Show Borrower(s) and seller(s) names, title search, property address and/or that
         legal,
    ·    Description agrees with legal documentation,
    ·    Show that the name of lender agrees with Note,
    ·    Indicate sales price and earnest money deposit agree with purchase contract,
    ·    Reflect fees and amounts paid by either Buyer or Seller agree with purchase
         contract and
    ·    Legal documentation,
    ·    Confirm that the principal balance of new loan agrees with loan approval and
         promissory note,
    ·    Include all other fees required by law to be included on the HUD-1, and
    ·    If property taxes are due within 60 days of closing and the tax installment has
         been issued by the tax authority, the full tax installment must be collected and
         paid at closing. In addition, two months reserves must be collected at closing for
         taxes (where applicable under state law);

Secondary financing must agree with loan approval and conform to underwriter’s
requirements; and if prior approval is required, confirmation must be in file. A certified
copy of the second mortgage HUD-1 Settlement is required;

Credits to Borrower must indicate intent and/or purpose:


Wholesale Broker guide 1/11/2011 v.8                                                       Page 109
    ·    Closing costs must be differentiated as sales concessions or financing concessions,
    ·    Nonrecurring closing costs may not exceed actual costs and may not include pre-
         paid items,
    ·    Closing costs may not exceed maximum allowable contributions (two percent, six
         percent, or nine percent, depending on the loan-to-value ratio),
    ·    Credits for repairs and expenses must be supported, and
    ·    Borrower may receive an interest credit up to and including the seventh (7th)
         business day of the following month,
    ·    Excessive or disallowed credits may adversely impact the investment quality of the
         loan package,
    ·    All holdback amounts for repair(s) or completion(s) must be shown on the HUD-1,
    ·    Mortgage Insurance Premium paid (if required) must agree with MI
         Certificate/Policy,
    ·    Hazard Insurance Premium paid must agree with premium indicated on evidence
         of insurance,
    ·    Flood Insurance Premium paid (if required) must agree with receipt and
         application must be in file; sufficient funds must be collected to pay property
         taxes and insurance.
    ·    Monthly escrow for payments of taxes and insurance must equal one-twelfth
         (1/12) of annual payment,
    ·    Escrow for taxes and insurance on loans above 80% LTV are required unless
         prohibited by state law,
    ·    Aggregate adjustments for taxes and insurance must be calculated correctly and
         are always equal to a credit adjustment to the Borrower(s) (any aggregate
         adjustment showing as a debit on the settlement statement is NOT ALLOWED).

6.2.9. APPRAISAL
Original Uniform Residential Appraisal Report must:

    ·    Be in file, complete with original color photographs of subject property,
         comparable sales, and all addenda;
    ·    Property address must agree with closing documents, insurance policies, etc.;
    ·    Appraiser must indicate if property is located in a flood hazard area/zone; and
    ·    Ensure that the Final Value is on an “as is” basis and if appraisal is made subject to
         repairs or completion; the
    ·    File must contain the Certificate 442 evidence of completion with photos, which
         has been signed by the original appraiser and


Wholesale Broker guide 1/11/2011 v.8                                                        Page 110
    ·    Certificate of Occupancy.

See Section 2.2.3. for appraisal content requirements.

6.2.10. INSURANCE AND TAXES

Hazard Insurance for single family Detached Dwellings
Evidence of insurance must be acceptable to BOFI. Coverage must be 100% of the
insurable value of the improvements as is established by the property insurer, or the
unpaid principal balance of the mortgage, whichever is less, or there must be
replacement cost coverage equal to the cost of improvements.

Policy number must be indicated;

Evidence of insurance or insurance binder must agree with Note and show Borrower(s)
names and property address, that the mailing address is same as subject property (except
for rural areas where a P.O. Box is used, non owner-occupied or second home loans) and
the type of insurance agrees with loan program (an owner-occupied or second home
dwelling will reflect homeowner’s coverage and a non owner-occupied property will
reflect tenant coverage and a rent-loss insurance endorsement). If an evidence of
insurance or insurance binder is provided at closing, a policy must be issued and sent
within 30 days from date of issuance with the proper mortgagee clause to BOFI.

Generally, deductible amounts cannot exceed one percent of the policy face amount or
$1,000, whichever is less. Exceptions to deductibles must have approval by BOFI prior to
purchase of the loan transaction.

 Purchase transactions with escrow accounts require two months reserves, where
allowable under state law, plus the first year premium paid prior to or at the close of
escrow and a paid receipt is required if the premium is paid prior to closing; if paid
through escrow, the full first year premium must be shown as a disbursement on the
HUD-1 Settlement Statement;

Purchase transactions without escrow accounts require a paid receipt for the first year
premium, if paid prior to closing and if paid through escrow, the full first year premium
must be reflected as a disbursement on the HUD-1 Settlement Statement;

Refinances with escrow accounts require appropriate hazard insurance reserves based
upon the next due date of the premium. Refinances with escrow accounts for hazard
insurance require two months reserves, where allowable under state law, plus the first
year premium to be paid at or prior to loan closing when the policy expiration date is

Wholesale Broker guide 1/11/2011 v.8                                                        Page 111
within 60 days of closing. If the policy expiration date is more than 60 days after closing,
all premiums due since inception of the policy period, plus 2 months reserves must be
collected. A paid receipt is required if the premium is paid prior to closing. If paid through
escrow, the disbursement must be reflected on the HUD-1 Settlement Statement.

EXAMPLE: If the first payment is due November 1 and the insurance premium is due
January 1, then BOFI must collect 12 months of reserves;

Refinances without escrow accounts require evidence that the first year premium has
been paid if the policy expiration date is within 60 days of close of escrow or proof
borrower established monthly payment plan with insurance Co.; and

A copy of the Loan Sale Notification to insurance provider must be received and complete
(See Section Exhibit A for Mortgagee clause).

Hazard Insurance for Condominiums/PUD Developments
Acceptable evidence of insurance will be a certificate to the master policy;

Evidence of insurance must show that Borrower(s) names agree with Note and are shown
as additional insured, property address agrees with loan documents, Homeowner’s
Association is named as insured, policy number is indicated, and Mortgagee clause
provides for the policy to be assigned to “successors and/or assigns as their interest may
appear”, and HO-6 insurance which is different than standard homeowners insurance.

HO-6 protects your personal property from damage and loss from things like fire, smoke,
vandalism, theft, storms, lightning, theft, explosion, broken glass or volcanic eruptions.
However, it does not cover earthquakes, floods or hurricanes. This policy covers damage
to everything inside the walls of your condo, including fixtures, installations, kitchen
cabinets, flooring, light fixtures, plumbing fixtures, HVAC systems and built in appliances.

A copy of the Loan Sale Notification to insurance provider must be received and complete
(See 9.1 Exhibit A for Mortgagee Clause).

Flood Insurance
A copy of completed application with paid receipt is required;

Policy or application number must be indicated;

Borrower(s) names, property address, and/or unit number, must agree with Note;




Wholesale Broker guide 1/11/2011 v.8                                                       Page 112
Amount of coverage must be equal to the lesser of the principal balance or full insurable
value of the improvements and the maximum amount of flood insurance available (as
established by FEMA) has been purchased, and the maximum deductibles does not
exceed BOFI guidelines;

A copy of the Loan Sale Notification to insurance provider must be received and complete
(See Section 9.1 Exhibit A for Mortgagee Clause); and

If flood insurance is required, refinances with escrow accounts require two months
reserves plus the first year premium to be paid at or prior to loan closing when the policy
expiration date is within sixty (60) days of closing. If the policy expiration date is more
than sixty (60) days after closing, fourteen (14) months reserves must be collected at
closing. A paid receipt is required if the premium is paid prior to closing. If paid at
closing, the disbursement must be reflected on the HUD-1 Settlement Statement.

Refinances with escrow accounts require appropriate flood insurance reserves based
upon the next due date of the premium. Refinances with escrow accounts for flood
insurance require two months reserves, where allowable under state law, plus the first
year premium to be paid at or prior to loan closing when the policy expiration date is
within (60) days of closing. If the policy expiration date is more than sixty (60) days after
closing, all premiums due since inception of the policy period, plus two months reserves,
must be collected. A paid receipt is required if the premium is paid prior to closing. If
paid through escrow, the disbursement must be reflected on the HUD-1 Settlement
Statement. Example: If the first payment is due November 1 and the insurance premium
is due January 1, then BOFI must collect twelve (12) months of reserves;

Property Taxes
Proof that taxes have been paid and are current (i.e. annually, semi-annually, quarterly,
etc.);

Taxes and escrow accounts require the lesser of two months’ reserves or the maximum
amount of reserves allowed by state law plus proof the taxes are paid and are current
either prior to or at close of escrow when the taxes are due within sixty (60) days of
closing;

Loan must have the current tax bill evidencing tax ID#, warranting that all assessments
are current and are collected with the property taxes, and improvement bonds (excluding
Mello Roos) are paid in full;




Wholesale Broker guide 1/11/2011 v.8                                                      Page 113
Purchase transactions with escrow accounts require two months’ tax reserve, plus the
current bill paid prior to or at the close of escrow. If paid prior to closing, a paid receipt
will be required from the corresponding taxing authority;

Purchase transactions without escrow accounts require verification of taxes paid by either
a receipt from taxing authority or by an insurance verification;

Refinance with escrow accounts require appropriate reserves based upon the next due
date of taxes.

6.2.11. ESCROW ACCOUNTS
Loans with LTV’s eighty percent (80%) or less do not require tax and/or hazard impounds,
unless required by state law. If Flood Insurance and/or MI is required, loans must have
escrows as allowed by applicable state law. Escrow accounts will not be established for
the payment of homeowner’s association dues.

All requests for escrow disbursements made within the sixty (60) day window for
property taxes must be requested within ninety (90) days or may result in nonpayment.
All requests should be made to BOFI’s loan servicing department. (See 9.1 Exhibit A for
Servicing Departments Contact Info.).



6.3. SERVICING
6.3.1. MIS-DIRECTED BORROWER PAYMENTS
Broker shall within ten (10) business days of receipt forward any payments mistakenly
sent by borrower to Broker and notify borrower of their actions.

6.3.2. SECTION LEFT BLANK

6.3.3. PRE-PAYMENT PREMIUM REFUND
In the event an Eligible Loan Purchased by BOFI is prepaid in full by a borrower with one
hundred twenty (120) days of the funding of the Eligible Loan by BOFI, the Broker shall
pay the premium, if any, paid by BOFI to the Broker for such Eligible Loan.

In the event an Eligible Loan Purchase by BOFI is prepaid in part by a borrower within
ninety (90) days of the funding of the Eligible Loan by BOFI in any amount which, in the
aggregate, is less than 100% but greater than ten percent (10%) of the original principal


Wholesale Broker guide 1/11/2011 v.8                                                         Page 114
balance of the loan, the Broker shall pay BOFI a pro-rated portion of the premium, if any,
paid by BOFI to the Broker for such Eligible Loan. The payment shall be calculated by
dividing the aggregate prepayment amount by the original principal balance of the loan
and multiplying the result by the original premium amount.

6.3.4. EARLY PAY-OFF PROTECTION
Bank of Internet in its standard review of mortgage loans, may see evidence that a
particular loan is prone to early pay-off due to a property being listed for sale or a history
of property “flipping” by the borrower. In those instances, we may require additional
“early pay-off” protection which could be in the form of:

      ·    A three year borrower prepayment penalty (must be allowable in the state
           where the property is located) or
      ·    A lengthening of the 120-day return of premium clause to 180-days referenced in
           Section 6.3.3. titled “Prepayment Premium Refund” or
      ·    A reduction of the price paid for the loan.

Any loan that has been purchased within the last 12 months by BOFI will need prior
approval with the lock desk before it can be locked again. BOFI reserves the right to limit
the price paid on any un-seasoned (less than 12 months) BOFI loan.




Wholesale Broker guide 1/11/2011 v.8                                                       Page 115
SECTION 7

CONFIDENTIALITY




Wholesale Broker guide 1/11/2011 v.8   Page 116
7.1. CONFIDENTIALITY
The Broker and BofI acknowledge that they have a responsibility to their customers, whether
arising from or related to the Gramm Leach Bliley Act and the rules and regulations promulgated
there under, or under any other law, to keep records and information confidential and
proprietary. The Broker and BofI agree not to disclose, either directly or indirectly, to any person,
firm or corporation information of any kind, nature or description concerning such customers and
the Eligible Loans except as permitted by law.




Wholesale Broker guide 1/11/2011 v.8                                                              Page 117
SECTION 8




DEFINED
TERMS



Wholesale Broker guide 1/11/2011 v.8   Page 118
8.1. DEFINED TERMS
Account Control Agreement: The agreement between the Broker/Dealer and its assignee, the
Obligor and the Securities intermediary granting the Broker/Dealer and its assignee full control of
the Pledged Asset Account.

Additional Collateral: Those assets subject to a security interest pursuant to the Pledge
Agreement related to each Pledged Asset Loan.

Agency: FNMA.

Agency Eligible Loans: Eligible Loans that qualify under the rules and regulations of an Agency for
sale to such Agency.

Agreement: The Broker Agreement, including the Broker Guide and all documents in the Broker
Application Package, and all exhibits thereto, all of which are incorporated in the Agreement by
reference and made a part thereof and are an integral part of the Agreement, and all
amendments thereof and supplements or addenda thereto.

Annual Statement of Compliance:            An Officer’s certificate stating that (i) the Broker has
complied in all material respects with the provisions of this Broker Guide, (ii) a review of the
activities of the Broker during the preceding calendar year has been made under such supervision
of the officers signing such officer’s certificate, and (iii) to the best of such officer’s knowledge
based on such review, the Broker has fulfilled al of its obligations under this Broker Guide
throughout such calendar year, or, if there has been a default in the fulfillment of any such
obligation, specifically each such default known to such officer and the nature and status thereof
and the action being taken by the Broker to cure such default.

Applicants: The entities applying to BofI for approval pursuant to the terms of this Guide.

Base Pledge Amount: The percentage of equity required under BofI's underwriting guidelines
multiplied by the property value, minus any down payment or equity.

BofI: Bank of Internet USA, its successors and/or assigns.

BofI Broker Program: The Broker Program as described in this Broker Guide and the Agreement.

Broker: The lender of an Eligible Loan submitted to BofI pursuant to the terms of the Broker
Agreement and this Broker Guide.

Broker Application: The application to be completed by an applicant as set forth in this Broker
Guide.

Broker Application Package: The application package delivered to a broker which consists of the
Broker Application and Broker Agreement.


Wholesale Broker guide 1/11/2011 v.8                                                             Page 119
Broker Lock Reservation: Executed by BofI and the Broker which confirms the locked-in price and
rate.

Broker Guide or Guide: Bofi Broker Guide in effect t on the Effective Date, as amended, modified
or restated by Bofi, from time to time, in accordance with Section 1 of the Agreement.

Business Day: Any day that the banks in New York or the state in which our office operations are
located and are open for business to the public except a Saturday, Sunday, or federal holiday.

Closing Date: With respect to each sale and funding of an Eligible Loan hereunder, the date on
which BofI actually funds the Eligible Loan.

Commission: The United States Securities and Exchange Commission.

Condominium: A real estate project in which each unit owner has title to a unit in a building, an
undivided interest in the common areas of the project, and sometimes the exclusive use of
certain limited common areas. Condominium projects with mandatory rental pools or that
contain timeshare units are not eligible.

Co-op: A private, cooperative housing corporation, having only one class of stock outstanding,
which owns land and all or part of a building or buildings, including apartments, spaces used for
commercial purposes and common areas therein and whose board of directors authorizes the
sale of stock and the issuance of a Co-op Lease.

Credit Risk Advisor: Bank of Internet or such party designated by BofI.

Custodial Accounts: The Custodial Principal and Interest Account and the Custodial Taxes and
Insurance Account.

Debt-to-Income: The ratio of the borrower(s) debt to monthly income.

Default: Any default under the terms of the Agreement, this Guide.

Distribution Report: The reports required to be filed by asset backed issuers with the Commission
pursuant to the Exchange Act and the rules promulgated there under.

Effective Date: The date of the Agreement.

Eligible Assets: The assets as defined by the Pledge Agreement that are accepted as additional
collateral to secure, in part, an Eligible Loan.

Eligible Loan: A mortgage loan which satisfied the criteria set forth in this Guide which BofI agrees
to fund in accordance with the terms of the Agreement and this Guide.

Eligible Loan Repurchase Price: (i) The outstanding principal balance of the Eligible Funded Loan
as of the date of repurchase multiplied by the percentage of par paid for such Eligible Loan by BofI



Wholesale Broker guide 1/11/2011 v.8                                                             Page 120
plus (ii) accrued interest on such outstanding principal balance at the Mortgage Loan interest rate
from the date to which interest has last been paid and distributed to the date of repurchase.

Exchange Act: The Securities Exchange Act of 1934, as amended.

Form of Guaranty: The form of guaranty delivered by BofI to an Applicant to be executed by a
guarantor(s), as set forth in this Guide.

Funding Date: With respect to each Eligible Loan Application hereunder the date on which BofI
actually funds the Eligible Loan Application.

Guide: BofI’s Guide in effect on the Effective Date, as amended, modified or restated by BofI,
from time to time.

Initial Pledge Amount: The required market value of the Pledged Asset Account as of the date of
the Pledge Agreement. For Pledged Asset Accounts that are 100% non-cash equivalent assets, the
Initial Pledge Amount equals the Base Pledge Amount times 200%. For Pledged Asset Accounts
that are 100% cash equivalent assets, the Initial Pledge Amount equals the Base Pledge Amount.
Otherwise, the Initial Pledge Amount equals the Base Pledge Amount minus the value of cash
equivalent assets, multiplied by 200% plus the value of the cash equivalent assets. For example, if
the Base Pledge Amount is $100,000 and the borrower is pledging a $50,000 CD, the Initial Pledge
Amount equals $150,000 (($100,000 -$50,000) x 200% + $50,000).

Letter of Credit: A letter of credit permitting the beneficiary of such letter of credit to draw up to
the maximum amount available under such letter of credit upon presenting the documents
required by such letter of credit.

Minimum Pledge Amount: The value of the Pledged Asset Account that will trigger a Margin call
at which time the Obligor is required to bring the Pledged Account Value equal to or above the
Initial Pledge Amount. For Pledged Asset Accounts that are 100% non cash equivalent assets, the
Minimum Pledge Amount equals the Base Pledge Amount times 168%. For Pledged Asset
Accounts that are 100% cash equivalent assets, the Minimum Pledge Amount equals the Base
Pledge Amount. Otherwise, the Minimum Pledge Amount equals the Base Pledge Amount minus
the value of cash equivalent assets being pledged, multiplied by 168%, plus the value of the cash
equivalent assets.

Mortgage: The mortgage, mortgage deed, deed of trust, or other instrument creating a first lien
on or first priority ownership interest in an estate in fee simple in real property securing a
Mortgage Note including any assumption agreements or modifications relating thereto; except
that with respect to real property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely accepted practice, the mortgage, mortgage deed, deed of trust
or other instrument securing the Mortgage Note may secure and create a first lien upon a
leasehold estate of the Mortgagor, if the term of the leasehold estate expires at least ten (10)
years after the expiration of the term of the Mortgage.


Wholesale Broker guide 1/11/2011 v.8                                                              Page 121
Mortgage File: With respect to any Eligible Loan, a file pertaining to such Eligible Loan that
contains the mortgage documents pertaining to such Eligible Loan and any additional mortgage
documents pertaining to such Eligible Loan required to be added to such mortgage file.

Mortgage Interest Rate: As to each Eligible Loan at any time, the annual rate at which interest
accrues on such Eligible Loan at such time pursuant to the related Mortgage Note.

Mortgage Note: The promissory note or other evidence of the indebtedness of a Mortgagor
secured by a mortgage.

Mortgaged Property: The real property (or leasehold estate, if applicable) securing repayment of
the debt evidenced by a Mortgage Note pursuant to the related Mortgage.

Mortgagor: The obligor on a Mortgage Note or a person or entity who has executed a Mortgage.

Obligor: The named account holder(s) that pledge their security interest in the Pledged Asset
Account.

Pledge Agreement: The agreement between the Obligor and the Broker/Dealer and its assignee,
that grants to the Broker/Dealer and its assignee a security interest in the Additional Collateral as
additional security for such Pledged Asset Loan, which may incorporate the related Account
Control Agreement, as assigned by any intervening assignments to the last specific assignee
thereof and assigned in blank by such last specific assignee.

Pledged Asset Account: The account in which Additional Collateral is held to secure in part an
Eligible Loan, control of which is transferred hereunder to BoI.

Pledged Asset Loan: An Eligible Loan secured in part, by a Mortgaged Property and by Additional
Collateral pursuant to the Pledge Agreement.

Primary Wage Earner: The individual who earns the greater gross monthly income.

PUD (Planned Unit Development): A real estate project in which each owner has title to a
residential lot and building and a nonexclusive right to use the common areas of the project. The
owner may also have a right to exclusive use of certain parts of the common areas.

Purchase Contract: The purchase contract pursuant to which a mortgagee purchases a property
from the seller of such property.

Purchase Price: For each Eligible Loan, an amount determined in accordance with the applicable
loan lock confirmation and this Guide.

Rate Locks: The interest rate locked in by the MC as set forth in the Lock Form.

Regulatory Compliance Laws: All applicable federal, state and local laws, rules and regulations
applicable to the origination and servicing of mortgage loans.


Wholesale Broker guide 1/11/2011 v.8                                                             Page 122
Securities Act: The Securities Act of 1933, as amended.

Securities Intermediary: The approved investment broker/dealer responsible for managing the
Pledged Asset Account.

Securitized Loan: Any Eligible Loan which has been sold or transferred to a trust to be formed as
part of, or which has been pledged to a Trustee in connection with, a publicly issued and/or
privately placed, rated or unrated, mortgage-backed transaction, in each case retaining the entity
as servicer there under.

BofI: Bank of Internet, its successors and/or assigns.

Trust Agreement: Any trust agreement, pooling and servicing agreement, indenture or
comparable documents creating a Trust and/or otherwise effectuating a pass-through transfer.

Underwriting /Program Guidelines: BofI underwriting and program guidelines which may be
changed, from time to time, by BofI in its sole discretion.

Verified Reserves: All liquid assets plus 70% of verified retirement assets.

Warehouse Lender: Any lender providing financing from time to time to BofI for use by BofI in the
acquisition of Eligible Loans. Generally, BofI uses its own funds in the acquisition of Eligible
Loans.




Wholesale Broker guide 1/11/2011 v.8                                                          Page 123
SECTION 9




EXHIBITS




Wholesale Broker guide 1/11/2011 v.8   Page 124
9.1. EXHIBIT A
9.1.1. BANK OF INTERNET ADDRESSES:
GENERAL USE
12777 High Bluff Drive, Suite 100
San Diego, CA 92130
Toll Free: 877-541-2634
Direct: 858-350-6200
Fax: 858-350-0976
www.bofi.com

SERVICING CUSTOMER SERVICE, (PAYOFFS, COLLECTIONS, PAYMENTS, TAX BILLS)
12777 High Bluff Drive, Suite 100
San Diego, CA 92130
Toll Free: 866-923-7112
Fax: 858-764-9985
 Email: Loan-servicing@bofi.com


INSURANCE – LENDERS LOSS PAYABLE
Bank of Internet Mortgage Corporation and /or its Assigns
P.O.Box 919008
San Diego, CA 92191-9872


TO REFINANCE OR CHECK CURRENT RATES
877-541-2634
www.bofi.com
Bank of Internet




Wholesale Broker guide 1/11/2011 v.8                                      Page 125
9.2. TITLE POLICY ENDORSEMENTS BROKEN OUT BY STATE
 State        Endorsement ID           Endorsement Description
 AK           ARM                      ALTA 6 Adjustable (Variable) Rate
 AK           BALLOON                  FNMA Balloon Endorsement
 AK           CONDO                    ALTA 4 Condominium
 AK           COPY FEE                 Copies of Supporting Documents
 AK           EPA                      ALTA 8.1 Environmental Protection Lien
 AK           MH                       ALTA 7 Manufactured Housing
 AK           NEGATIVE                 ALTA 6.2 Negative Amortization
 AK           PUD                      ALTA 5 Planned Unit Development
 AK           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 AL           ARM                      ALTA 6 Adjustable (Variable) Rate
 AL           BALLOON                  FNMA Balloon Endorsement
 AL           CONDO                    ALTA 4 Condominium
 AL           EPA                      ALTA 8.1 Environmental Protection Lien
 AL           MH                       ALTA 7 Manufactured Housing
 AL           NEGATIVE                 ALTA 6.2 Negative Amortization
 AL           PUD                      ALTA 5 Planned Unit Development
 AL           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 AR           ARM                      ALTA 6 Adjustable (Variable) Rate
 AR           BALLOON                  FNMA Balloon Endorsement
 AR           CONDO                    ALTA 4 Condominium
 AR           CPL                      Closing Protection Letter
 AR           EPA                      Alta 8.1 Environmental Protection Lien
 AR           MH                       ALTA 7 Manufactured Housing
 AR           NEGATIVE                 ALTA 6.2 Negative Amortization
 AR           PUD                      ALTA 5 Planned Unit Development
 AR           REM                      Alta 9 Restrictions, Encroachments, Minerals
 AZ           ARM                      ALTA 6 Adjustable (Variable) Rate
 AZ           BALLOON                  FNMA Balloon Endorsement
 AZ           CONDO                    ALTA 4 Condominium
 AZ           EPA                      Alta 8.1 Environmental Protection Lien
 AZ           MH                       ALTA 7 Manufactured Housing
 AZ           NEGATIVE                 ALTA 6.2 Negative Amortization
 AZ           PUD                      ALTA 5 Planned Unit Development
 AZ           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 CA-1         ARM                      ALTA 6 Adjustable (Variable) Rate
 CA-1         BALLOON                  FNMA Balloon Endorsement
 CA-1         CONDO                    ALTA 4 Condominium
 CA-1         EPA                      Alta 8.1 Environmental Protection Lien
 CA-1         MH                       ALTA 7 Manufactured Housing
 CA-1         NEGATIVE                 ALTA 6.2 Negative Amortization
 CA-1         PUD                      ALTA 5 Planned Unit Development

Wholesale Broker guide 1/11/2011 v.8                                                  Page 126
 CA-1         REM                      ALTA 9 Restrictions, Encroachments, Minerals
 CA-2         ARM                      Alta 6 Adjustable (Variable) Rate
 CA-2         BALLOON                  FNMA Balloon Endorsement
 CA-2         CONDO                    Alta 4 Condominium
 CA-2         EPA                      Alta 8.1 Environmental Protecton Lien
 CA-2         MH                       Alta 7 Manufactured Housing
 CA-2         NEGATIVE                 Alta 6.2 Negative Amortization
 CA-2         PUD                      Alta 5 Planned Unit Development
 CA-2         REM                      Alta 9 Restrictions, Encroachments, Minerals
 CA-2         REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 CA-2         TRUST                    Trust Endorsement - Reverse Mortgage
 CO           ARM                      ALTA 6 Adjustable (Variable) Rate
 CO           BALLOON                  FNMA Balloon Endorsement
 CO           CONDO                    ALTA 4 Condominium
 CO           EPA                      ALTA 8.1 Environmental Protection Lien
 CO           MH                       ALTA 7 Manufactured Housing
 CO           NEGATIVE                 ALTA 6.2 Negative Amortization
 CO           PUD                      ALTA 5 Planned Unit Development
 CO           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 CT           ARM                      ALTA 6 Adjustable (Variable) Rate
 CT           BALLOON                  FNMA Balloon Endorsement
 CT           CONDO                    ALTA 4 Condominium
 CT           EPA                      ALTA 8.1 Environmental Protection Lien
 CT           MH                       ALTA 7 Manufactured Housing
 CT           NEGATIVE                 ALTA 6.2 Negative Amortization
 CT           PUD                      ALTA 5 Planned Unit Development
 CT           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 DC           ARM                      Alta 6 Adjustable (Variable) Rate
 DC           BALLOON                  Balloon
 DC           CONDO                    Alta 4 Condominium
 DC           EPA                      Alta 8.1 Environmental Protection Lien
 DC           MH                       Alta 7 Manufactured Housing
 DC           NEGATIVE                 Alta 6.2 Negative Amortization
 DC           PUD                      Alta 5 Planned Unit Development
 DC           REM                      Alta 9 Restrictions, Encroachments, Minerals
 DE           ARM                      ALTA 6 Adjustable (Variable) Rate
 DE           BALLOON                  FNMA Balloon Endorsement
 DE           CONDO                    ALTA 4 Condominium
 DE           EPA                      ALTA 8.1 Environmental Protection Lien
 DE           MH                       ALTA 7 Manufactured Housing
 DE           NEGATIVE                 ALTA 6.2 Negative Amortization
 DE           PUD                      ALTA 5 Planned Unit Development
 DE           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 DE           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 DE           TRUST                    Trust Endorsement - Reverse Mortgage
 FL           ARM                      ALTA 6 Adjustable (Variable) Rate
 FL           BALLOON                  FNMA Balloon Endorsement
 FL           CONDO                    ALTA 4 Condominium

Wholesale Broker guide 1/11/2011 v.8                                                  Page 127
 FL           EPA                      ALTA 8.1 Environmental Protection Lien
 FL           MH                       ALTA 7 Manufactured Housing
 FL           NEGATIVE                 ALTA 6.2 Negative Amortization
 FL           PUD                      ALTA 5 Planned Unit Development
 FL           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 FL           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 GA           ARM                      ALTA 6 Adjustable (Variable) Rate
 GA           BALLOON                  FNMA Balloon Endorsement
 GA           CONDO                    ALTA 4 Condominium
 GA           EPA                      ALTA 8.1 Environmental Protection Lien
 GA           MH                       ALTA 7 Manufactured Housing
 GA           NEGATIVE                 ALTA 6.2 Negative Amortization
 GA           PUD                      ALTA 5 Planned Unit Development
 GA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 HI           ARM                      ALTA 6 Adjustable (Variable) Rate
 HI           BALLOON                  FNMA Balloon Endorsement
 HI           CONDO                    ALTA 4 Condominium
 HI           EPA                      ALTA 8.1 Environmental Protection Lien
 HI           MH                       ALTA 7 Manufactured Housing
 HI           NEGATIVE                 ALTA 6.2 Negative Amortization
 HI           PUD                      ALTA 5 Planned Unit Development
 HI           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 IA           ARM                      ALTA 6 Adjustable (Variable) Rate
 IA           BALLOON                  FNMA Balloon Endorsement
 IA           CONDO                    ALTA 4 Condominium
 IA           EPA                      ALTA 8.1 Environmental Protection Lien
 IA           MH                       ALTA 7 Manufactured Housing
 IA           NEGATIVE                 ALTA 6.2 Negative Amortization
 IA           PUD                      ALTA 5 Planned Unit Development
 IA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 ID           ARM                      ALTA 6 Adjustable (Variable) Rate
 ID           BALLOON                  FNMA Balloon Endorsement
 ID           CONDO                    ALTA 4 Condominium
 ID           EPA                      ALTA 8.1 Environmental Protection Lien
 ID           MH                       ALTA 7 Manufactured Housing
 ID           NEGATIVE                 ALTA 6.2 Negative Amortization
 ID           PUD                      ALTA 5 Planned Unit Development
 ID           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 IL           ARM                      ALTA 6 Adjustable (Variable) Rate
 IL           CONDO                    ALTA 4 Condominium
 IL           EPA                      ALTA 8.1 Environmental Protection Lien
 IL           MH                       ALTA 7 Manufactured Housing
 IL           NEGATIVE                 ALTA 6.2 Negative Amortization
 IL           POLICYFE                 State of Illinois Title Policy Fee
 IL           PUD                      ALTA 5 Planned Unit Development
 IL           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 IN           ARM                      ALTA 6 Adjustable (Variable) Rate
 IN           CONDO                    ALTA 4 Condominium

Wholesale Broker guide 1/11/2011 v.8                                                  Page 128
 IN           EPA                      ALTA 8.1 Environmental Protection Lien
 IN           MH                       ALTA 7 Manufactured Housing
 IN           NEGATIVE                 ALTA 6.2 Negative Amortization
 IN           PUD                      ALTA 5 Planned Unit Development
 IN           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 IN           TIEFF                    TIEFF c/o Fidelity National Title Insurance Compan
 KS           ARM                      Alta 6 Adjustable (Variable) Rate
 KS           BALLOON                  Balloon
 KS           CONDO                    Alta 4 Condominium
 KS           EPA                      Alta 8.1 Environmental Protection Lien
 KS           MH                       Alta 7 Manufactured Housing
 KS           NEGATIVE                 Alta 6.2 Negative Amortization
 KS           PUD                      Alta 5 Planned Unit Development
 KS           REM                      Alta 9 Restrictions, Encroachments, Minerals
 KY           ARM                      ALTA 6 Adjustable (Variable) Rate
 KY           BALLOON                  FNMA Balloon Endorsement
 KY           CONDO                    ALTA 4 Condominium
 KY           EPA                      ALTA 8.1 Environmental Protection Lien
 KY           MH                       ALTA 7 Manufactured Housing
 KY           NEGATIVE                 ALTA 6.2 Negative Amortization
 KY           PUD                      ALTA 5 Planned Unit Development
 KY           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 LA           ARM                      ALTA 6 Adjustable (Variable) Rate
 LA           BALLOON                  FNMA Balloon Endorsement
 LA           CONDO                    ALTA 4 Condominium
 LA           CPL                      Closing Protection Letter
 LA           EPA                      ALTA 8.1 Environmental Protection Lien
 LA           MH                       ALTA 7 Manufactured Housing
 LA           NEGATIVE                 ALTA 6.2 Negative Amortization
 LA           PUD                      ALTA 5 Planned Unit Development
 LA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MA           ARM                      ALTA 6 Adjustable (Variable) Rate
 MA           BALLOON                  FNMA Balloon Endorsement
 MA           CONDO                    ALTA 4 Condominium
 MA           EPA                      ALTA 8.1 Environmental Protection Lien
 MA           MH                       ALTA 7 Manufactured Housing
 MA           NEGATIVE                 ALTA 6.2 Negative Amortization
 MA           PUD                      ALTA 5 Planned Unit Development
 MA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MA           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 MA           TRUST                    Trust Endorsement - Reverse Mortgage
 MD           ARM                      ALTA 6 Adjustable (Variable) Rate
 MD           BALLOON                  FNMA Balloon Endorsement
 MD           CONDO                    ALTA 4 Condominium
 MD           EPA                      ALTA 8.1 Environmental Protection Lien
 MD           MH                       ALTA 7 Manufactured Housing
 MD           NEGATIVE                 ALTA 6.2 Negative Amortization
 MD           PUD                      ALTA 5 Planned Unit Development

Wholesale Broker guide 1/11/2011 v.8                                                        Page 129
 MD           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 ME           ARM                      ALTA 6 Adjustable (Variable) Rate
 ME           BALLOON                  FNMA Balloon Endorsement
 ME           CONDO                    ALTA 4 Condominium
 ME           EPA                      ALTA 8.1 Environmental Protection Lien
 ME           MH                       ALTA 7 Manufactured Housing
 ME           NEGATIVE                 ALTA 6.2 Negative Amortization
 ME           PUD                      ALTA 5 Planned Unit Development
 ME           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MI           ARM                      ALTA 6 Adjustable (Variable) Rate
 MI           BALLOON                  FNMA Balloon Endorsement
 MI           CONDO                    ALTA 4 Condominium
 MI           EPA                      ALTA 8.1 Environmental Protection Lien
 MI           MH                       ALTA 7 Manufactured Housing
 MI           NEGATIVE                 ALTA 6.2 Negative Amortization
 MI           PUD                      ALTA 5 Planned Unit Development
 MI           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MI           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 MI           TRUST                    Trust Endorsement - Reverse Mortgage
 MN           ARM                      ALTA 6 Adjustable (Variable) Rate
 MN           BALLOON                  FNMA Balloon Endorsement
 MN           CONDO                    ALTA 4 Condominium
 MN           EPA                      ALTA 8.1 Environmental Protection Lien
 MN           MH                       ALTA 7 Manufactured Housing
 MN           NEGATIVE                 ALTA 6.2 Negative Amortization
 MN           PUD                      ALTA 5 Planned Unit Development
 MN           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MO           ARM                      ALTA 6 Adjustable (Variable) Rate
 MO           BALLOON                  FNMA Balloon Endorsement
 MO           CONDO                    ALTA 4 Condominium
 MO           CPL                      Closing Protection Letter
 MO           EPA                      ALTA 8.1 Environmental Protection Lien
 MO           MH                       ALTA 7 Manufactured Housing
 MO           NEGATIVE                 ALTA 6.2 Negative Amortization
 MO           PUD                      ALTA 5 Planned Unit Development
 MO           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MS           ARM                      ALTA 6 Adjustable (Variable) Rate
 MS           CONDO                    ALTA 4 Condominium
 MS           EPA                      ALTA 8.1 Environmental Protection Lien
 MS           MH                       ALTA 7 Manufactured Housing
 MS           NEGATIVE                 ALTA 6.2 Negative Amortization
 MS           PUD                      ALTA 5 Planned Unit Development
 MS           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 MT           ARM                      ALTA 6 Adjustable (Variable) Rate
 MT           BALLOON                  FNMA Balloon Endorsement
 MT           CONDO                    ALTA 4 Condominium
 MT           EPA                      ALTA 8.1 Environmental Protection Lien
 MT           MH                       ALTA 7 Manufactured Housing

Wholesale Broker guide 1/11/2011 v.8                                                  Page 130
 MT           NEGATIVE                 ALTA 6.2 Negative Amortization
 MT           PUD                      ALTA 5 Planned Unit Development
 MT           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NC           ARM                      ALTA 6 Adjustable (Variable) Rate
 NC           CONDO                    ALTA 4 Condominium
 NC           CPL>100K                 Closing Protection Letter - Loan 100k to 500k
 NC           CPL>500K                 Closing Protection Letter - Loan 500k and over
 NC           EPA                      ALTA 8.1 Environmental Protection Lien
 NC           MH                       ALTA 7 Manufactured Housing
 NC           NEGATIVE                 ALTA 6.2 Negative Amortization
 NC           PUD                      ALTA 5 Planned Unit Development
 NC           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 ND           ARM                      Alta 6 Adjustable (Variable) Rate
 ND           BALLOON                  Balloon
 ND           CONDO                    Alta 4 Condominium
 ND           EPA                      Alta 8.1 Environmental Protection Lien
 ND           MH                       Alta 7 Manufactured Housing
 ND           NEGATIVE                 Alta 6.2 Negative Amortization
 ND           PUD                      Alta 5 Planned Unit Development
 ND           REM                      Alta 9 Restrictions, Encroachments, Minerals
 ND           T CERT                   Title Certification Fee
 NE           ARM                      ALTA 6 Adjustable (Variable) Rate
 NE           BALLOON                  FNMA Balloon Endorsement
 NE           CONDO                    ALTA 4 Condominium
 NE           CPL                      Closing Protection Letter
 NE           EPA                      ALTA 8.1 Environmental Protection Lien
 NE           MH                       ALTA 7 Manufactured Housing
 NE           NEGATIVE                 ALTA 6.2 Negative Amortization
 NE           PUD                      ALTA 5 Planned Unit Development
 NE           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NH           ARM                      ALTA 6 Adjustable (Variable) Rate
 NH           BALLOON                  FNMA Balloon Endorsement
 NH           CONDO                    ALTA 4 Condominium
 NH           EPA                      ALTA 8.1 Environmental Protection Lien
 NH           MH                       ALTA 7 Manufactured Housing
 NH           NEGATIVE                 ALTA 6.2 Negative Amortization
 NH           PUD                      ALTA 5 Planned Unit Development
 NH           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NJ           ARM                      ALTA 6 Adjustable (Variable) Rate
 NJ           BALLOON                  FNMA Balloon Endorsement
 NJ           CONDO                    ALTA 4 Condominium
 NJ           CPL                      Closing Protection Letter
 NJ           EPA                      ALTA 8.1 Environmental Protection Lien
 NJ           MH                       ALTA 7 Manufactured Housing
 NJ           NEGATIVE                 ALTA 6.2 Negative Amortization
 NJ           PUD                      ALTA 5 Planned Unit Development
 NJ           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NJ           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage

Wholesale Broker guide 1/11/2011 v.8                                                    Page 131
 NJ           TRUST                    Trust Endorsement - Reverse Mortgage
 NM           ARM                      ALTA 6 Adjustable (Variable) Rate
 NM           BALLOON                  FNMA Balloon Endorsement
 NM           CONDO                    ALTA 4 Condominium
 NM           EPA                      ALTA 8.1 Environmental Protection Lien
 NM           MH                       ALTA 7 Manufactured Housing
 NM           NEGATIVE                 ALTA 6.2 Negative Amortization
 NM           PUD                      ALTA 5 Planned Unit Development
 NM           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NV           ARM                      ALTA 6 Adjustable (Variable) Rate
 NV           BALLOON                  FNMA Balloon Endorsement
 NV           CONDO                    ALTA 4 Condominium
 NV           EPA                      ALTA 8.1 Environmental Protection Lien
 NV           MH                       ALTA 7 Manufactured Housing
 NV           NEGATIVE                 ALTA 6.2 Negative Amortization
 NV           PUD                      ALTA 5 Planned Unit Development
 NV           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 NY           ARM                      ALTA 6 Adjustable (Variable) Rate
 NY           BALLOON                  FNMA Balloon Endorsement
 NY           CONDO                    ALTA 4 Condominium
 NY           EPA                      ALTA 8.1 Environmental Protection Lien
 NY           MH                       ALTA 7 Manufactured Housing
 NY           NEGATIVE                 ALTA 6.2 Negative Amortization
 NY           PUD                      ALTA 5 Planned Unit Development
 NY           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 OH           ARM                      ALTA 6 Adjustable (Variable) Rate
 OH           BALLOON                  FNMA Balloon Endorsement
 OH           CONDO                    ALTA 4 Condominium
 OH           CPL                      Closing Protection Letter
 OH           EPA                      ALTA 8.1 Environmental Protection Lien
 OH           MH                       ALTA 7 Manufactured Housing
 OH           NEGATIVE                 ALTA 6.2 Negative Amortization
 OH           PUD                      ALTA 5 Planned Unit Development
 OH           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 OK           ARM                      ALTA 6 Adjustable (Variable) Rate
 OK           ATTORNEY                 Abstract and Attorney Fees
 OK           BALLOON                  FNMA Balloon Endorsement
 OK           CONDO                    ALTA 4 Condominium
 OK           EPA                      ALTA 8.1 Environmental Protection Lien
 OK           MH                       ALTA 7 Manufactured Housing
 OK           NEGATIVE                 ALTA 6.2 Negative Amortization
 OK           PUD                      ALTA 5 Planned Unit Development
 OK           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 OR           ARM                      ALTA 6 Adjustable (Variable) Rate
 OR           CONDO                    ALTA 4 Condominium
 OR           EPA                      ALTA 8.1 Environmental Protection Lien
 OR           NEGATIVE                 ALTA 6.2 Negative Amortization


Wholesale Broker guide 1/11/2011 v.8                                                  Page 132
 OR           PUD                      ALTA 5 Planned Unit Development
 OR           REM                      ALTA 9 Restrictions, Encroachment, Minerals
 PA           ARM                      ALTA 6 Adjustable (Variable) Rate
 PA           BALLOON                  FNMA Balloon Endorsement
 PA           CONDO                    ALTA 4 Condominium
 PA           CPL                      Closing Protection Letter
 PA           EPA                      ALTA 8.1 Environmental Protection Lien
 PA           MH                       ALTA 7 Manufactured Housing
 PA           NEGATIVE                 ALTA 6.2 Negative Amortization
 PA           PUD                      ALTA 5 Planned Unit Development
 PA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 PA           REVERSE                  Alta 14.3 Future Advance - Reverse Mortgage
 PA           SHORT                    ALTA Short Form Fee
 PA           TRUST                    Trust Endorsement - Reverse Mortgage
 RI           ARM                      ALTA 6 Adjustable (Variable) Rate
 RI           BALLOON                  FNMA Balloon Endorsement
 RI           CONDO                    ALTA 4 Condominium
 RI           EPA                      ALTA 8.4 Environmental Protection Lien
 RI           MH                       ALTA 7 Manufactured Housing
 RI           NEGATIVE                 ALTA 6.2 Negative Amortization
 RI           PUD                      ALTA 5 Planned Unit Development
 RI           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 SC           ARM                      ALTA 6 Adjustable (Variable) Rate
 SC           CONDO                    ALTA 4 Condominium
 SC           EPA                      ALTA 8.1 Environmental Protection Lien
 SC           MH                       ALTA 7 Manufactured Housing
 SC           NEGATIVE                 ALTA 6.2 Negative Amortization
 SC           PUD                      ALTA 5 Planned Unit Development
 SC           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 SD           ARM                      Alta 6 Adjustable (Variable) Rate
 SD           BALLOON                  Balloon
 SD           CONDO                    Alta 4 Condominium
 SD           EPA                      ALTA 8.1 Environmental Protection Lien
 SD           MH                       Alta 7 Manufactured Housing
 SD           NEGATIVE                 Alta 6.2 Negative Amortization
 SD           PUD                      Alta 5 Planned Unit Development
 SD           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 TN           ARM                      Alta 6 Adjustable (Variable) Rate
 TN           BALLOON                  Balloon
 TN           CONDO                    Alta 4 Condominium
 TN           MH                       Alta 7 Manufactured Housing
 TN           NEGATIVE                 Alta 6.2 Negative Amortization
 TN           PUD                      Alta 5 Planned Unit Development
 TX           P-29                     P-29 Tax Deletion
 TX           T-17 PUD                 T-17 Planned Unit Development Endorsement
                                       T-19 Restriction, Encroachments, Mineral
 TX           T-19 REM                 Endorseme
 TX           T-20                     P-20 Tax Deletion

Wholesale Broker guide 1/11/2011 v.8                                                  Page 133
 TX           T-31                     T-31 Manufactured Housing
 TX           T-33                     T-33 Adjustable Rate
 TX           T-35                     T-35 Revolving Credit
 TX           T-36                     T-36 EPL Endorsement
 TX           T-39                     T-39 Balloon
 TX           T-42                     T-42 Equity Loan Mortgage
 TX           T-42.1                   T-42.1 Supplemental Coverage Equity Loan
 UT           ARM                      ALTA 6 Adjustable (Variable) Rate
 UT           BALLOON                  Balloon
 UT           CONDO                    Alta 4 Condominium
 UT           EPA                      Alta 8.1 Environmental Protection Lien
 UT           MH                       Alta 7 Manufactured Housing
 UT           NEGATIVE                 Alta 6.2 Negative Amortization
 UT           PUD                      Alta 5 Planned Unit Development
 UT           REM                      Alta 9 Restrictions, Encroachments, Minerals
 VA           ARM                      ALTA 6 Adjustable (Variable) Rate
 VA           BALLOON                  FNMA Balloon Endorsement
 VA           CONDO                    ALTA 4 Condominium
 VA           EPA                      ALTA 8.1 Environmental Protection Lien
 VA           MH                       ALTA 7 Manufactured Housing
 VA           NEGATIVE                 ALTA 6.2 Negative Amortization
 VA           PUD                      ALTA 5 Planned Unit Development
 VA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 VT           ARM                      ALTA 6 Adjustable (Variable) Rate
 VT           BALLOON                  FNMA Balloon Endorsement
 VT           CONDO                    ALTA 4 Condominium
 VT           EPA                      ALTA 8.1 Environmental Protection Lien
 VT           MH                       ALTA 7 Manufactured Housing
 VT           NEGATIVE                 ALTA 6.2 Negative Amortization
 VT           PUD                      ALTA 5 Planned Unit Development
 VT           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 WA           ARM                      ALTA 6 Adjustable (Variable) Rate
 WA           BALLOON                  FNMA Balloon Endorsement
 WA           CONDO                    ALTA 4 Condominium
 WA           EPA                      ALTA 8.1 Environmental Protection Lien
 WA           MH                       ALTA 7 Manufactured Housing
 WA           NEGATIVE                 ALTA 6.2 Negative Amortization
 WA           PUD                      ALTA 5 Planned Unit Development
 WA           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 WI           ARM                      ALTA 6 Adjustable (Variable) Rate
 WI           BALLOON                  FNMA Balloon Endorsement
 WI           CONDO                    ALTA 4 Condominium
 WI           EPA                      ALTA 8.1 Environmental Protection Lien
 WI           MH                       ALTA 7 Manufactured Housing
 WI           NEGATIVE                 ALTA 6.2 Negative Amortization
 WI           PUD                      ALTA 5 Planned Unit Development
 WI           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 WV           ARM                      ALTA 6 Adjustable (Variable) Rate

Wholesale Broker guide 1/11/2011 v.8                                                  Page 134
 WV           BALLOON                  FNMA Balloon Endorsement
 WV           CONDO                    ALTA 4 Condominium
 WV           EPA                      ALTA 8.1 Environmental Protection Lien
 WV           MH                       ALTA 7 Manufactured Housing
 WV           NEGATIVE                 ALTA 6.2 Negative Amortization
 WV           PUD                      ALTA 5 Planned Unit Development
 WV           REM                      ALTA 9 Restrictions, Encroachments, Minerals
 WY           ARM                      ALTA 6 Adjustable (Variable) Rate
 WY           BALLOON                  FNMA Balloon Endorsement
 WY           CONDO                    ALTA 4 Condominium
 WY           EPA                      ALTA 8.1 Environmental Protection Lien
 WY           MH                       ALTA 7 Manufactured Housing
 WY           NEGATIVE                 ALTA 6.2 Negative Amortizaton
 WY           PUD                      ALTA 5 Planned Unit Development
 WY           REM                      ALTA 9 Restrictions, Encroachments, Minerals




Wholesale Broker guide 1/11/2011 v.8                                                  Page 135

				
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