Company Information - Sierra Pacific Mortgage
100. INTRODUCTION
The Correspondent Lending Division of Sierra Pacific Mortgage (SPM) purchases mortgage loans closed in the name of the Correspondent using the Correspondent’s warehouse line(s). Correspondent is defined as the seller of a closed mortgage. All Sellers are considered non-delegated; all loans must be submitted to SPM for prior approval underwriting and must receive a clear to close disposition from SPM prior to Seller drawing closing docs.
101. AVAILABLE LOAN PRODUCTS
The products listed below are currently available to approved Sellers. Please visit Product Matrices under the Products and Rates tab on the Sierra Pacific website for a full description of each product.
• Conventional Conforming Fixed
• 5/1 and 7/1 Conforming ARMs
• Fannie High Balance Fixed
• Fannie High Balance 5/1 and 7/1 ARMs
• Freddie Mac Relief Refinance - Open Access Fixed
• Freddie Mac Relief Refinance - Open Access High Balance Fixed
• Non-Agency Jumbo Fixed
• Non-Agency Jumbo 5/1, 7/1, and 10/1 ARMS
• DU Refinance Plus Expanded
• Sierra Direct Conventional
• Standard FHA and FHA Hi-Balance
• VA Fixed
• USDA Rural Housing
102. SELLER GUIDE DISTRIBUTION
An electronic version of this Seller Guide may be obtained by visiting the SPM web site. To access the information, Sellers must be assigned a username and password.
103. UPDATES TO SELLER GUIDE
The Seller Guide may be updated from time to time. The written notice will be posted to the SPM website. Sellers should review the changes to the Seller Guide on the web, to ensure they have the most current information.
104. INTERNET ACCESS
The SPM web site provides Seller with easy access to automated underwriting, rate sheets, Seller’s Guide, current announcements, and many other valuable tools. Sellers must be registered to view the secured areas of the SPM web site.
105. CORPORATE ADDRESS AND PHONE NUMBER
The corporate mailing address for Sierra Pacific Mortgage is:
Sierra Pacific Mortgage
Correspondent Division
1180 Iron Point Road, Suite 200,
Folsom, CA 95630
Corporate Office Phone Number: 1 (800) 696-4471
106. REGIONAL FULFILLMENT CENTER
Loan files, suspense conditions and correspondence for delivered loans pending purchase should be sent to your assigned SPM Regional Fulfillment Center.
The Regional Fulfillment Center is responsible for handling all functions directly involved with the purchasing of loans from Sellers. These functions include:
• Underwriting prior approval
• Auditing and status of loan files delivered
• Loan purchase
• Post-purchase
107. LOAN SERVICING
Borrowers must have their SPM loan number available when contacting the Loan Servicing department. Sellers should remember to provide the borrower with the new SPM loan number when providing them with the Loan Servicing customer service telephone number. Customer Service is open Mon.-Fri. 8:00AM–5:00PM (PST), toll free 1 (888) 560-2280
Borrowers should send written correspondence to the address below:
Sierra Pacific Mortgage
Servicing Department
1180 Iron Point Road, Suite 200
Folsom, CA 95630
SPM may not be the end servicer of all purchased loans.
108. FOWARDING PAYMENTS
To insure prompt posting of all payments, Sellers should immediately forward any payments inadvertently received to the address below.
Sierra Pacific Mortgage
Servicing Department
1180 Iron Point Road, Suite 200
Folsom, CA 95630
109. BORROWER INQUIRIES
Sellers should refer borrowers’ written account status inquiries on purchased loans to:
Sierra Pacific Mortgage
Servicing Department
1180 Iron Point Road, Suite 200
Folsom, CA 95630
110. FINAL DOCUMENTATION
Final Documents (such as the recorded Deed of Trust / Mortgage and Final Title Policy, etc.) should be sent to:
Sierra Pacific Mortgage
Attention Post Closing
1180 Iron Point Road, Suite 200
Folsom, CA 95630
111. WAREHOUSE FACILITIES
It is the Correspondents responsibility to obtain approval from each warehouse facility to add SPM as an approved investor. If you have any questions, please contact your Account Executive.
200. INTRODUCTION
Sellers seeking to sell loans to Sierra Pacific Mortgage (SPM) Correspondent Lending Division must be an organization accustomed to making Conventional, FHA, VA and USDA/RD residential mortgages. Seller must have at least one warehouse line of credit and must be actively selling closed loans to at least one investor other than SPM.
201. DISCLAIMER
SPM reserves the right to amend Seller requirements set out in this section without providing prior notice to the Sellers.
In order to remain eligible, the Seller must be active with SPM in the preceding calendar year, maintain the initial eligibility standards or eligibility standards currently in effect, and comply with the continuing obligations as defined in this Seller Guide. In addition, SPM reserves the right to amend any or all continuing eligibility standards for a Seller based upon its current financial strength, volume and performance.
202. SELLER REQUIREMENTS
• Completed and approved correspondent application
• Executed Purchase and Sale Agreement (provide two with original signatures)
• Sellers must have a minimum net worth of $75,000. Net worth is determined in accordance with GAAP guidelines.
• Errors and Omissions insurance and a fidelity bond, with minimum coverage of $300,000. The carrier of such insurance must be rated B/III, A/II or better in the current Best’s Key Rating Guide. Sierra Pacific Mortgage Company, Inc. must be named as an additional loss payee.
• Audited Financial Statements
o In lieu of audited statements, the following are acceptable for financial institutions:
▪ Banks: Form #FFIEC034
▪ Savings and Loans: Form #FHLBB1313
▪ Credit Unions: Form #NCUA5300
• Unaudited financial statements may be allowed under the Preferred Correspondent Program.
• A minimum institutional Warehouse line of at least $1,000,000. Cash funding is only allowed for Bank and Credit Union clients.
• A minimum of three years Mortgage Banking experience strongly preferred
• Resumes of management, officers and key personnel.
• QC Policies and Procedures
• Corporate or Partnership Resolution
• Articles of Incorporation
• Satisfactory background check of principals, including letters of explanation for any MARI issues.
• Be properly licensed to originate and sell loans in the applicable state(s) and provide proof of licensure.
• IRS W-9 detailing the organization’s Tax ID Number
• Wire Instructions and copies of Bailee letters from all warehouse facilities
• Provide Servicing information
• Provide sample copies of RESPA / TIL and goodbye letters
• Provide copy of Correspondent’s privacy policies and procedures and evidence of compliance with FTC’s Red Flags Program
• Provide copy of Correspondent’s AIR policies and procedures
• Provide a brief description and/or attorney opinion letter for all pending legal issues naming Correspondent as a defendant and specifically addressing any material issues that may have an effect on the financial stability of Correspondent or that involve a potential loss of more than $25,000 to the Correspondent. Documentation should include information concerning who is the plaintiff, their base for taking the action, if the matter has been referred to legal counsel and Correspondent’s insurance carrier, coverage status with the insurance carrier, case status, etc.
• Copies of HUD, VA, FNMA AND FHLMC (as applicable) approval letters
• Evidence of compliance with BSA/AML program including CIP procedures
• Contact list with name, phone, fax and email for the following: Admin Web User, Commitment, Underwriting, Delivery, Post-Closing, Servicing, Purchase Advice and who is authorized to commit loans.
• Follow acceptable practices and prudent lending guidelines.
• Maintain satisfactory facilities in which to originate real estate mortgages.
• Must be an approved and trained MERS member
• Must be fully compliant with loan officer compensation policies and procedures.
Fiscal Review
At the discretion of SPM, the following documents will be needed for annual certification. They include but are not limited to the following:
• Fiscal year-end Financial Statements of Condition and Operations. If the Seller is a subsidiary company and there is no consolidating schedules provided in the Financial Statements of Condition and Operations, the fiscal year-end Financial Statements of Condition and Operations of the parent are also required.
• Statement of Stockholder’s Equity
• The names and resume of new officers, management and directors appointed since the last review.
• A summary and explanation of any significant changes in methods of operation, financial condition or relationship with regulatory agencies governing the operations of the Seller.
• A current Fidelity Bond and Errors and Omissions Insurance policy.
• The most recent Quality Control management report.
• The most recent review by any state agency, FNMA, FHLMC, GNMA and HUD.
• Warehouse aging reports for the previous three months
• Update/status on any pending legal issues previously disclosed in initial or renewal package
203. FIDELITY BOND AND E&O POLICY
Each approved Seller must have a Fidelity Bond and an Errors and Omissions Insurance policy in effect at all times. These policies must contain insurance coverage protecting the Seller against losses resulting from acts, errors, and omissions committed by the Seller’s personnel or other parties providing any type of service to the Seller. The carrier of such insurance coverage must be rate B/III, A/II or better in the current Best’s Key rating guide or rate A or better in Demotech rating guide.
The Fidelity Bond and Errors and Omissions Insurance policies held by a parent corporation may be used to provide insurance coverage to a Seller that is a subsidiary as long as that Seller is clearly indicated as being covered by the policy. The coverage must be adequate and equivalent to the insurance coverage that would otherwise be obtained on a separate basis by the subsidiary Seller.
Purchaser will also accept insurance coverage under the Mortgage Banker’s Blanket Bond Policy or the Savings and Loan Blanket Bond Policy for corporate Sellers. Individual insurance coverage is required if the Seller is owned as a sole proprietorship or is a partnership.
The Seller must furnish proof that the insurer has agreed to notify SPM if the required insurance coverage is canceled, reduced or amended for any reason. Claims against this policy, whether or not pertaining to loans sold by the Seller to SPM, must be reported to SPM. The Seller should indicate the total amount of the loss and circumstances surrounding the claim.
The Seller must notify SPM if it receives notice from its insurer of intent to cancel, not renew or otherwise modify the Seller’s coverage. This notification must be sent to SPM by registered mail at least 10-days before it becomes effective.
The Seller must report to SPM all cases of material theft, embezzlement or fraud and all claims made against the insurer within 10-days after the occurrence.
The Errors and Omissions Insurance coverage must, at a minimum, protect the Seller against negligence, errors and omissions with regard to the following:
1. Maintaining hazard and flood insurance that meets SPM requirements.
2. Maintaining conventional mortgage insurance.
3. Proper flood zone determination has been performed
4. Paying real estate taxes and any special assessments.
5. Complying with the reporting requirements of the mortgage insurance companies.
6. Any errors made by employees or officers of Seller
7. Fraud, misrepresentation, etc. committed by employees or officers of Seller.
This policy must be written on an “occurrence” basis. The minimum amount of coverage per occurrence must equal the amount required for the Fidelity Bond.
If there are any changes in the Fidelity Bond and Errors and Omissions insurance coverage, Sellers must provide to SPM an updated policy within 30-days of any such change.
204. WIRE INSTRUCTIONS
Each Seller will be set up to have mortgage loan purchase proceeds wired to the account listed on the Wire Set-up/Change Authorization Form submitted at the time of application and signed by one principal officer of the company. If a Seller wishes to change these instructions or add additional instructions, the Commitment Letter from the warehouse bank must be provided and should include wiring instructions. Please allow 48-72-hours for wire set up.
It is the seller’s responsibility to get an approval from your warehouse facilities for Sierra Pacific Mortgage to be an approved investor. A Bailee letter, including contact name and phone number, must accompany each loan submitted for purchase.
205. SELLER NUMBER
Once the completed application package is reviewed and approved, the Seller will be issued a notification letter and a Seller Number. This number should be referenced on all correspondence submitted to SPM.
206. PERIODIC REVIEWS
At SPM’S discretion we may conduct periodic reviews at times other than the annual re-certification review of the Seller’s performance.
The Seller agrees to allow SPM to conduct, from time to time, audits or inspections at one or more of the Seller’s offices during normal business hours. At that time, the Seller shall provide the assistance of a knowledgeable and responsible individual and will grant SPM access to all books, records and files pertaining to:
1. Residential real estate loans directed to SPM
2. The Seller’s compliance with the terms and provisions of the Loan Purchase and Sale Agreement, including this Seller’s Guide
The Seller also agrees, upon the request of SPM, to deliver the material described in the Maintenance of Records section of this Seller’s Guide. SPM may, from time to time conduct audits at SPM offices using information and documents provided by the Seller. During these audits the Seller should provide a person or persons to contact by telephone for additional information.
207. CHANGES IN APPROVED STATUS
Immediate notification of a change in the Seller’s approval status will be provided by SPM when it is determined that a Seller’s minimum certification or delivery performance criteria are not being met.
208. AVAILABILITY OF RECORDS
Each Seller is expected to promptly respond to any request for documents or records that SPM may require pertaining to the business dealings between SPM and the Seller. In the event a Seller does not respond in a timely manner to such a request, SPM may conclusively presume that such documents cannot be produced because they would confirm that the Seller either did not take certain actions required by this Seller’s Guide, the Loan Purchase and Sale Agreement, and any other agreement by and between SPM and Seller, or that the Seller took certain actions prohibited by any or all of these documents. In such case, SPM will take appropriate action based on the Seller’s inability to produce the necessary documentation, including Loan repurchase and/or termination of the Seller’s approval status.
If SPM is required to take legal action to obtain access to the contested documents or records, which it has a legitimate right to examine, the Seller will be liable for any legal fees, costs, and related expenses that are incurred in enforcing SPM’s right of access to the documents or records in question.
209. MAINTENANCE OF RECORDS
The Seller shall maintain adequate records of all loans submitted to SPM for underwriting approval for such periods of time as may be necessary to comply with the Equal Credit Opportunity Act and other applicable laws and regulations. The Seller shall maintain a file for each loan purchased by SPM. The Seller shall maintain each file for a period of three years from the date the loan is fully paid or, if the loan is accelerated, for at least six years from the date the loan is fully paid or state law whichever is the most restrictive. The file must contain:
1. Copies of all documents delivered in their original form to SPM.
2. Originals of all documents, copies of which were delivered to SPM.
3. All other loan and related documents not required to be sent to SPM.
210. QUALITY CONTROL
The Seller shall maintain an internal quality control program that ensures the accuracy of legal and origination documents, as well as the soundness of underwriting decisions. The program should be supported by a written plan outlining the objectives and scope of the review and applicable policies and procedures and shall include, at a minimum, post and pre-closing review procedures.
Seller’s Pre-Closing Review
A pre-closing review should, at a minimum, consist of the following procedures on all or a representative sample of loan production:
1. Review legal documentation for accuracy and completeness
2. Obtain review appraisals (when applicable)
3. Re-verify other origination documentation as deemed appropriate by the Seller
4. A documented telephone verification of employment is required to be obtained within three days prior to closing.
Sellers Post-closing Review
In the interest of sound quality control measures, SPM requires that the Seller audits at least a 10% randomly selected sample of recently closed loan inventory sold to SPM and reviews the product within 90 days of closing. The quality control plan should also allow for discretionary and targeted sampling where appropriate. SPM recommends that the Seller increase the scope or sample of loans audited when new employees are added.
Unless performed as an element of the pre-closing review, the post-closing audit should, at a minimum, consist of the following:
Complete underwriting of each loan, including an evaluation of the appraisal report by the quality control staff to evaluate the soundness of underwriting judgment and compliance with program criteria and to determine the existence of any irregularities. The presence of irregularities should lead to a more thorough investigation.
• Written re-verification of loan documentation, (i.e. employment and income, deposits, source of funds, etc.). In this process, a blanket authorization form is required.
• The Seller must obtain a new appraisal from a qualified source, independent of the original appraiser, on at least 10% of the audited sample. This appraisal may take the form of a new appraisal or field review. It should include, at a minimum, an exterior inspection of the mortgaged premises and comparables and a validation of the factual data on the original appraisal report.
• The Seller must obtain and review a new credit report (independent of the original reporting agency) on each loan. SPM recommends that the Seller order a new residential mortgage credit report or a source in-file credit report on all the sample loans selected for the audit. These credit reports must meet the requirements set forth in the credit report requirements section of this Seller Guide, including the requirement of a public records search.
• Review the remaining documentation, including the loan application and closing documents, for consistency, accuracy, validity, completeness, etc.
• Review the loans included in the audit sample to determine compliance to the various SPM representations and warranties set forth in this Seller Guide.
The Seller must also include in its quality control review all loans in which a 30-day delinquency occurred within the first four months of the loan. In addition, the Seller should include any loan in which foreclosure proceedings have been instituted within the first three years of the loan if a delinquency occurred during the first year with respect to that loan. In this case, the Seller should obtain a new credit report and a new appraisal.
SPM recommends that the Seller expand the scope of its quality control review whenever irregularities or discrepancies are discovered. This supplemental audit should include verifying the occupancy of the mortgaged premises, investigating the presence of undisclosed secondary financing and validating or determining possible self-employment income of the borrower.
The Seller must maintain accurate records (log books, etc.) of all loans audited, the work performed, results, and necessary follow-up and should make these records available to SPM upon request. The quality control staff should report general results as well as variances discovered during any phase of the audit to the Seller’s senior management on at least a quarterly basis. These reports should correct and prevent deficiencies in the Seller’s ongoing origination, underwriting, appraisal and closing functions. If a quality control audit discovers that a breach of any representations or warranty has occurred, the Seller must give SPM prompt written notification of such breach, outlining the details of the discovery and any supporting documents.
SPM may ask the Seller to increase its quality control sampling requirements or may take any action deemed necessary if the Seller experiences a number of variances which significantly impact the investment quality of the loans sold to SPM. The Seller agrees to conduct a loan audit on any loan upon the written request of SPM.
If an audit discovers an Even of Default, the Seller must promptly notify SPM in writing as specified in this Seller Guide.
The Seller shall complete a thorough and timely manner audit of any loan in which foreclosure proceedings have been instituted. During this investigation, SPM may manage the foreclosure process, making decisions regarding short payoffs, deed-in-lieu transactions, and REO sales prices and dispositions SPM will make these decisions without regard to this investigation and as though it, or its investor, will incur the loss of the loan.
However, if the investigation shows that an event of default has occurred, SPM may ask the Seller to repurchase the loan, or to reimburse SPM for its loss, if the property has been disposed of, depending on the stage of foreclosure process at the time of the determination.
211. REGULATORY COMPLIANCE
The Seller must be in good standing with all applicable regulatory authorities and not subject to any extraordinary supervision of its operations.
Seller agrees to inform SPM of any suspension or disciplinary action taken against it by FNMA, FHLMC, GNMA, HUD, VA or any state or federal agency.
The Seller must insure its ongoing compliance with all applicable governing laws, rules and regulations, including but not limited to the following:
1. Real Estate Settlement Procedures Act (RESPA)
2. Fair Credit Reporting Act including Risk Based Pricing Disclosure requirements
3. Fair Lending
4. Truth-In-Lending Act (TIL) including Loan Officer Compensation Requirements
5. Consumer Credit Protection Act
6. Equal Credit Opportunity Act (ECOA)
7. Home Mortgage Disclosure Act (HMDA)
8. Patriot Act
9. FACT Act
10. FTC Red Flag Rules and program requirements
11. AIR rules and requirements
Seller is responsible for providing the borrower with all required disclosures and re-disclosures as applicable.
Credit applicants may not be discriminated against on the basis of race, color, religion, national origin, sex, marital status, sexual orientation or age. In addition, the Seller may not discriminate because all or part of the applicant’s income is from a public assistance program
Seller must determine and certify that the loan is not a High Cost/predatory as defined by TILA/Section 32, TILA/HPML and state laws and/or regulations. Seller must also certify that loan does not exceed FNMA’s 5% fee threshold requirements. SPM will not purchase any mortgage loan that is defined as “high cost” or “predatory” or exceeds FNMA 5% rule.
212. EARLY PAYMENT DEFAULT
With respect to any Mortgage Loan that becomes sixty (60) days or more delinquent with respect to any of the first four (4) payments due SPM or its assigns, Seller shall reimburse SPM any premium pricing (the amount by which the Purchase Price exceeded par) paid by SPM to Seller for the Mortgage Loan.
213. EARLY PAYOFF
With respect to any Mortgage Loan that prepays in full within 180-days of the Purchase Date, the Seller shall reimburse SPM any premium pricing (the amount by which the Purchase Price exceeded par) paid by SPM to Seller for the Mortgage Loan.
214. MERGER OR CONSOLIDATION OF THE SELLER
To maintain eligibility and remain in good standing, the Correspondent is responsible to inform SPM of any material company changes that may affect the business partnership with SPM. Notification to SPM must be made in writing no later than seven calendar days after the legal finalization of any material change. Sierra Pacific Mortgage reserves the right to request that an approved Correspondent provide additional documentation and/or execute a new Loan Purchase and Sale Agreement when there are significant legal changes in the Correspondent business.
If there is a change in the Company name:
• With no change in assets (no merger or acquisition) – provide a new/updated Corporate Resolution and execute a new Loan Purchase and Sale Agreement.
• Due to a merger and/or acquisition – If the currently approved Correspondent is not the surviving entity, a new Loan Purchase and Sale Agreement, executed in the new business name, new audited financials, and Resolution for the Board of Directors.
215. CORRESPONDENT RESPONSIBILITY
The Correspondent is solely responsible to ensure that all documents, disclosures etc. used in the origination and closing of the mortgage loan meet applicable compliance and/or legal requirements for the jurisdiction in which the subject property is located, irrespective of the source of the documents.
300. PRICING
Rate sheets are published daily. Approved sellers may access rates and pricing through the web site, or may receive rates via e-mail, or an approved pricing engine website. Sierra Pacific Mortgage (SPM) reserves the right to change prices and/or update its rate sheet and pricing throughout the business day without prior notice to the Seller as market conditions warrant. Mid-day price changes will be posted to the SPM website and emailed to all web users as they occur.
Loan eligibility or approval is not determined by receipt of a Commitment Confirmation. Please refer to the guidelines and Product Matrices for details. All loans must be submitted to SPM for underwriting.
Final purchase price will be determined upon receipt of the closed loan package. The final purchase price may vary from the original lock confirmation price based on the final loan characteristics.
301. COMMITMENTS AND LOCK PERIODS
New Commitments are obtained under the Lock Loan tab of SPM website, between 8:00AM and 5:00PM (PST). All locks, relocks and extensions must be requested on the SPM website by 5:00PM (PST).
SPM offers 15, 30, and 45 and 60-day lock periods. If a lock expires on a weekend or holiday, the lock will expire on the next business day.
• 15-day Locks – are available at the point the SPM underwriter has issued a clear to close.
• 30-day pricing is calculated by reducing the 15 day price by 12.5 basis points.
• 45-day pricing is calculated by reducing the 30 day price by 20 basis points.
• 60-day pricing is calculated by reducing the 45 day price by 25 basis points.
• Suspended loans cannot be locked, relocked or extended until in approved status.
302. BEST EFFORTS COMMITMENTS
All Commitments are Best Efforts. The seller may lock-in an interest rate and price (and, if applicable, margin and life cap) for a particular borrower and property for a period of 15, 30, 45, OR 60-days. If the loan does not close and the Seller is not able to deliver it for purchase, a Pair-Off Fee will not be assessed. However, if the loan closes, the Commitment is converted to a mandatory delivery and is subject to a Pair-Off Fee.
303. DUPLICATE DELIVERY COMMITMENTS
Purchaser allows only one active Delivery Commitment per borrower/property combination. Duplicate Delivery Commitments will be priced at the worse of the prior Delivery Commitment or current market.
304. EXPIRATION DATES
Delivery Expiration Date
All mortgage loans must be closed and funded by Seller and delivered and in purchasable condition to SPM no later than the Delivery Expiration Date. “Purchasable” is defined as receipt of all required documents, complete and accurate as defined by the Seller Guide and/or Product Matrices.
Purchase Expiration Date
All mortgage loans must be purchased by the Purchase Expiration Date. The Purchase Expiration Date will be ten calendar days after the Delivery Expiration Date.
305. RATE LOCK EXTENSIONS
Extension of Delivery Expiration Date
• If a lock has not expired, an extension may be obtained for up to 16-days based upon:
o .125 pt for 4-days
o .25 pt for 8-days
o .375 pt for 16-days
• The above extension fees will be charged regardless of current pricing (an extension fee will be charged if current marked is better or worse than the lock price).
• A lock can be extended a cumulative total of 16-days. The maximum extension period may be reached with one 16-day extension or a combination of 4 and 8-day extensions.
• Locks expired greater than 60-days may be relocked at current market pricing.
Expired locks for which no loan file has been received will be automatically canceled.
Extension of Purchase Expiration Date
Loan that cannot be purchased by the Purchase Expiration Date will be automatically extended at a cost of 2.5 basis points per day until purchased. The Purchase Expiration Date may be extended for a maximum of 20-days.
306. RELOCKS/EXPIRED LOCKS
A Relock establishes new lock parameters after the original lock has expired.
Relocks are available if the loan is approved and the appraisal has been underwritten by SPM. Priced at current market or original lock price, whichever is worse, plus a .125 point relock fee.
Relocks are for 16-days. The relock period begins on the day of the relock request
The pricing comparison is the original base pricing less any extensions vs. current 15-day pricing. (Example: original lock had a price of 100.00 and had been extended 8-days, resulting in an extension price of 99.75. The extension price of 99.75 will then be compared to the current 15-day price).
After the price has been determined, a .125 pt relock fee will be applied. This fee will be charged even if the current market is better.
If a loan has been relocked, an extension within a relock period is not allowed.
Post relock period: If a lock has been extended for a cumulative 16-days and has not been closed and delivered to SPM by the Delivery Expiration Date, the loan will be priced to current market or original lock price, whichever is worse and assessed a .125 pt charge.
If the lock has been expired greater than 60-days, the loan may be relocked at current market pricing.
307. PAIR-OFF FEES
Calculation of a Pair-Off Fee:
• Amount paired-off (net delivery shortfall or excess delivery after tolerance) multiplied by the following sum: 0.125% PLUS any positive price difference (positive market movement) between the posted price (in percent terms)* on the date of pair-off and the price that would have been paid per the terms of the commitment. This product shall equal the Pair-Off Fee.
• The Market movement for Pair-Off/Delivery shortfall or excess delivery will be based on the rate closest to par at the time of commitment. This rate will be used to track market movement and will be the benchmark for the Pair-Off fee.
• Examples (assumes $100,000 commitment Pair-Off/shortfall):
o Original Commitment Price is 100.00. If current market price for same rate and program is 100.50, the Pair-Off Fee is $100,000 x [0.125% + 0.50% (positive market movement)] = .625% or $625.
o Original commitment price is 100.00. If current market price for same rate and program is 99.50, the Pair-Off Fee is $100,000 x 0.125% = $125. In this example, there is no positive market movement.
* Posted price (in percent terms) will be determined in the following manner:
• If the pair-off is assessed on or after the Delivery Expiration, the price to be used will be the 15-day delivery price posted by SPM (or the earliest delivery option available, whichever is shorter).
The minimum Pair-Off Fee is $100
Loan files delivered subsequent to being assessed a Pair-Off Fee must be relocked at current market prices.
Seller must ensure that SPM receives the Pair-Off Fees via wire transfer within five (5) business days of receipt of the Pair-off Fee Notification. SPM reserves the right to offset Pair-Off Fees or any other fees due SPM from any proceeds due Seller.
308. NON-DELIVERY AND FALL-OUT
Excessive cancellations, fallout or Pair-Offs will be grounds for review, restrictions and possible termination of Seller approval. SPM reserves the right to research Best Effort Commitments that are canceled and, if it is determined that the Mortgage Loan closed, the Seller will be assessed a Pair-Off Fee
309. ESCROW WAIVER
SPM will permit escrow accounts to be waived at a reduced price on loans that meet al requirements. Escrow waivers are permitted on conventional loans only, not Government or USDA loans. No Partial waivers are allowed for hazard or taxes only.
400. UNDERWRITING SUBMISSIONS
Unless otherwise stipulated in the program guidelines, all loan files must be approved through Sierra Pacific Mortgage’s (SPM) automated underwriting system (ExpressLoanTM). Please include all documentation required by the AUS Findings when submitting the file. All loans must be submitted to SPM for prior approval underwriting.
401. UNDERWRITING PACKAGE SUBMISSION
All loan documentation must be uploaded via electronic delivery system in the submission order as defined in the submission checklist. Documents must be arranged in the order listed on the Correspondent Underwriting Submission Form. Be sure to complete this form in its entirety including the program category and contact information.
402. CONTENTS OF SUBMISSION PACKAGES
Standard FNMA, FHLMC, GNMA (FHA/VA) and USDA/RD credit forms are required with all documents completed in full and signed where appropriate. Please be sure the submission package contains an appropriate level of information to enable the underwriter to make an informed decision. SPM requires full compliance with RESPA Reform, including the updated version of the Good Faith Estimate (GFE) and the Truth in Lending (TIL) on a new model form, in accordance with Regulation Z. Initial GFE and TIL must be in compliance with the Initial 1003 and delivered with the underwriting package for review.
1. LOAN APPLICATION REQUIREMENTS
The initial loan application (1003) is used to validate “the date of application” and other HMDA data. The Loan Officer must sign and date the original application. SPM requires that all loans meet applicable State, Federal and GSE requirements for the S.A.F.E. Act. The Seller must provide the Loan Originator ID, Loan Origination Company ID (NMLS) on the Initial and Final 1003.
403. APPRAISAL ORDERING
SPM offers the following options for ordering appraisals.
• Seller with $1 Million audited net worth financials can use their own National or Region AMC by signing an addendum to the Loan Purchase and Sale Agreement (LPSA). SPM also requires with each appraisal a Lenders AIR Cert, ECOA Form signed by the borrower(s) and the Borrower Appraisal Delivery Method Cert. Correspondents already approved and would like to use an outside AMC’s must sign the Addendum prior to submitting new loans into SPM.
• Seller with unaudited net worth below a Million can use either SPM website or go directly to the Approved SPM’s AMC’s. (See below approved AMC’s with SPM). A Lenders Air Cert is required if you go directly to the approved AMC’s and not through SPM website. ECOA and Appraisal Delivery Method Cert are always required with all Appraisals.
SPM approved AMC’s: Axis, ACT, GOT and StreetLinks
A copy of the appraisal report must be provided to the Borrower at least three days prior to closing. Should the Borrower elect to waive the 3-day requirement, the waiver must be signed at least 3-days prior to closing. The use of waiver should be avoided and may only be used in cases in which the scheduled closing date could not otherwise be met.
404. NOTIFICATION OF UNDERWRITING DECISION
The underwriting disposition is available on our website.
1. APPROVED
Seller will be provided an approval form which will specify the following:
• The interest rate and terms at which the loan was approved.
• Program Category
• Any underwriting or purchase conditions
Approved loans are subject to the Seller warranting the following as of the Seller’s respective mortgage loan purchase date:
• No material changes have occurred relating to credit documents submitted as part of the submission package including the property valuation listed on the appraisal.
• The Seller has updated credit documents when necessary.
If a material change has occurred in the submission information, the Seller must resubmit the credit package with the updated information. Failure to comply with this procedure may result in the Seller repurchasing the loan pursuant to the Loan Purchase and Sale Agreement (Remedies for Breach of Representations and Warranties). Approved loans must also comply with the Representations and Warranties, Section 800 of this Seller’s Guide as of the purchase date.
2. SUSPENDED
A loan will be suspended if the file has insufficient information to render an underwriting decision. The disposition is available on the web and be advised of the conditions that must be satisfied before resubmission for underwriting review.
3. DECLINED
If a loan is declined, a denial notice summarizing the reasons for denial will be posted to the loan. The disposition is available on the web site. It is the Seller’s responsibility to provide the applicants with any denial notices as required by state or federal regulations
4. CLEARING PRIOR TO DOC CONDITIONS
All conditions must be cleared by the SPM underwriter and a clear to close issued prior to closing documents being ordered. The approval form should serve as the resubmission cover sheet. All conditions should be numbered with the corresponding condition number on the approval form. Conditions must be uploaded to the efolder. Conditions received after 11:00AM by the SPM Regional Fulfillment Center assigned to Seller will be considered the next day’s work.
5. HMDA
SPM is compliant with HMDA requirements. The Correspondent is responsible for their responsibilities for HMDA reporting.
6. SUSPENDED OR DENIED LOANS
All conditions must be submitted at one time. The suspense or denial form should serve as the cover sheet. All conditions should be numbered with the corresponding condition number on the notification sheet. Conditions must be uploaded to the efolder. Conditions received after 11:00AM by the SPM Regional Fulfillment Center will be considered the next day’s work.
500. CLOSING DOCUMENTS
1. DOCUMENT PREPARATION
Upon request, Sierra Pacific Mortgage (SPM) will prepare your closing documents. SPM will also accept closing documents prepared by the following providers:
• DocMagic
• Gregg & Valby
• Black / Mann & Graham
• Navigator Lending Solutions
• Roberston / Anschutz
• IDS
• Pierson & Patterson
• Titans Lenders Corp.
• Equitable Mortgage Solutions
2. ORDERING CLOSING DOCUMENTS FROM SIERRA PACIFIC MORTGAGE
Please contact your SPM Customer Service Representative to order closing documents
3. AVAILABILITY OF CLOSING DOCUMENTS
All loans must be clear to close with no prior to doc conditions outstanding before closing documents can be ordered.
501. ACCEPTABLE CLOSING AGENTS
SPM maintains a list of approved closing agents. Please see Active Closing Agents in the Document Library on the SPM website for the current list of acceptable closing agents. Instructions for requesting that a closing agent be added to the list can also be found in the Document Library (allow 72-hours for processing). Contact your SPM Account Executive should you have any questions.
502. NOTARY REQUIREMENTS
Mortgage Loans closed by a notary associated with the correspondent (Seller) are not eligible for purchase. Unacceptable associations include, but might not be limited, to the following:
1. Any employee of the correspondent (Seller)
2. Any family member of any principal owner of the correspondent
3. Anyone that is to receive funds, other than the notary fee, upon closing of the loan
503. CLOSING PROTECTION LETTERS
Loan Specific Closing Protection Letters are required on all loans, except as noted below. The CPL must provide the following information:
1. Borrower
2. Loan Number
3. Property Address
4. Closing Agent (closing agent name and address on the CPL must be the Settlement Agency on the HUD-1 in escrow states)
5. The Underwriting Title Insurer issuing the CPL must be the same title underwriter on the title commitment as well as on the Final Title Policy
6. Title commitment number or file number
7. The CPL must be dated between the date of the title commitment and the date of the loan closing
8. Seller (correspondent) must be listed as lender
The following states do not issue Closing Protection Letters. The documentation required in lieu of a CPL is listed below.
1. New York – E&O coverage and Fidelity Bond Insurance
2. Washington – E&O coverage and Fidelity Bond Insurance if closing with attorney or escrow agent. If closing with a title company, CPL is required.
504. AFFIDAVIT OF IDENTITY/NAME AFFIDAVIT/ALSO KNOWN AS (AKA)
Caution should be taken in regard to borrower’s signature(s).Many signatures appear as incomplete names or, in some cases, totally illegible. If the borrower’s signature appears incomplete or is not legible, it will be the responsibility of the Seller to have the borrower sign a name affidavit, or other instrument which reflects all name and signature variances throughout the loan file.
1. Original form required as part of the mortgage loan file
2. Form must show all variations of the borrower’s name shown in the loan file.
3. Confirm properly executed by borrower
4. Notary section correct including: state, county, date, borrower name, notary’s signature, notary expiration date, notary seal.
505. POWER OF ATTORNEY
If the mortgage loan documents were executed pursuant to a power of attorney (POA), the title insurance company issuing the title policy must insure its use. POA must be specific to the loan transaction and the initial or final application must be signed by the borrower; a POA cannot be used for both applications.
The original specific power of attorney or a copy of such power of attorney certifying that such copy represents a true and correct reproduction of the original must have been signed by the borrower. It is the Seller’s responsibility to assure compliance with all delivery and title insurance requirements.
Review of Power of Attorney:
1. Must be specific to this transaction.
2. POA must be dated/appointed on or before the execution of any document executed using the POA.
3. The security instrument, note and all other closing documents musts be signed exactly as appointed on POA.
4. Notary section correct including: state, county, date, borrower name, notary’s signature, notary expiration date, notary seal.
Sample of how the documents should be signed:
John G Smith by June A Smith his attorney in fact
506. CONVEYANCE DEED
The following conveyance deeds are required:
1. Copy of the Warranty Deed or Grant Deed is required on all purchase transactions
2. Copy of Quit Claim required if refinance when the vesting on the title does not match the vesting on security instrument.
3. The legal description on the conveyance deed must match the legal description on the security instrument.
507. ESCROW/CLOSING INSTRUCTIONS
All files must contain a certified copy of the original signed by all borrowers and sellers.
508. PER DIEM INTEREST
Per Diem interest is calculated based upon a 365-day year.
509. INTEREST CREDITS
Up to 7days of interest may be credited to the borrower on Conventional, FHA, VA and USDA/RD loan products.
510. FUNDING
Seller will be responsible for review of the HUD-1 and funding the loan through their warehouse line and/or own funds if Seller is a regulated bank or credit union.
600. IMPORTANT LOAN DELIVERY DEADLINES
Sierra Pacific Mortgage (SPM) must receive the closed loan package through our electronic submission portal and receive the original hard copies of the collateral file in purchasable condition by the Delivery Expiration Date. In the event the mortgage loan file cannot be delivered by the Delivery Expiration Date, see Section 300 (Pricing) of this Guide for lock extension options.
It is important that Seller deliver the closed loan package to SPM or extend the rate lock by the Delivery Expiration Date in order to avoid relock fees and worse case pricing. Please see Section 300 (Pricing) for details.
Loans must be purchased by the Purchase Expiration Date. The Purchase Expiration Date will be 10-calendar days following the Delivery Expiration Date. Loans not purchased by the Purchase Expiration Date will be automatically extended at a cost of 2.5 basis points daily (for a maximum of 20-days) until purchased. Please see Section 300 (Pricing) for details. Seller should deliver purchase suspense conditions at least 2 business days prior to the Purchase Expiration Date.
1. ORIGINAL LOAN DOCUMENTS
Unless otherwise provided for in this Seller’s Guide, Sellers must provide originals of collateral documents.
SPM reserves the right to require the original of any document upon request.
2. PURCHASE REVIEW
All loans delivered for purchase must be reviewed by the seller for accuracy and to ensure that all required documents are included in the collateral package and efolder. Additionally, all underwriting conditions, outstanding originals and copies must be included in the collateral package and mortgage loan file.
The collateral package and mortgage loan file will be reviewed to ensure that the correct documents were used, and that the information on the documents is accurate, complete, consistent, and executed correctly. Failure of SPM to review or to discover any deficiency or error in a mortgage loan file will not release Seller from its obligations to provide any required documentation or correct any errors, nor will it prevent or inhibit Sierra exercise of any of its remedies hereunder, including repurchase of the mortgage loan file.
Following completion of the loan review, the mortgage loan file shall be either:
1. Approved for purchase;
2. Placed in loan suspense (not approved for purchase pending receipt of additional or corrective documentation); or
3. Denied for purchase.
3. PURCHASE ADVICE
Loan specific Purchase Advice letters are available on the Sierra website. If the Seller believes there is an error in the Purchase Advice, Seller must notify Sierra Pacific Mortgage no later than 9:00AM (PST) on the second business day after the loan is purchased.
4. PURCHASE SUSPENSE
If a mortgage loan file substantially conforms to SPM requirements, but does not meet all of underwriting, closing, or delivery requirements, the mortgage loan file may be placed in purchase suspense status. SPM shall notify Seller of such suspense action via the SPM website. Seller must take whatever action may be necessary to correct any deficiency and submit the additional or corrected documents to SPM for final approval. Purchase Suspense Conditions should be submitted at least 2-business days prior to the Purchase Expiration Date.
5. PURCHASE DENIAL
If a mortgage loan file is denied for purchase, the Seller shall be notified via the SPM website. The specific reasons for denial will be identified on the purchase review denial notice. SPM shall return the denied mortgage collateral package to Seller or to the warehouse lender holding a security interest in the note, as applicable.
601. LOAN PURCHASE
1. DETERMINATION OF PRINCIPAL BALANCE AND FIRST PAYMENT DUE TO SIERRA PACIFIC MORTGAGE
The principal balance of the loan on the purchase date will be calculated based on the effective date of the transfer of servicing and/or transfer of ownership as follows:
When 1st payment is due in the month immediately following the month in which the loan is purchased:
1. Loans purchased on the 1st through the 15th of the month - The payment due the month following purchase will be due SPM. Interest will be included in the purchase wire to Seller from the 1st of the month through but not including the purchase date. Interest will be based on a 365-day year.
EXAMPLE:
Purchase Date: 10-15
1st Payment Date: 11-1
1st Payment Due SPM: 11-1
Interest Added to Wire: 14 days
Principal Balance Purchased: Original Loan Amount (less curtailments if any)
2. Loans Purchased on the 16th through 31st – The payment due the month following purchase will be due seller. SPM will purchase the loan at the balance projected after the first payment is made to Seller. Sierra will deduct interest from the purchase wire from and including the date of purchase through the last day of the month. Interest will be based on a 365-day year.
EXAMPLE:
Purchase Date: 10-16
1st Payment Date: 11-1
1st Payment Due SPM: 12-1
Interest Deducted from Wire 16 days (16th through 31st)
Principal Balance Purchased: Projected Balance after 11-1 Payment
When 1st payment due is in the second month following the month of purchase: The 1st payment will be due SPM and the loan will be purchased at the original principal balance. However, interest will be due SPM from and including the purchase date through the last day of the month regardless of the purchase date.
EXAMPLE:
Purchase Date: 10-15
1st Payment Date: 12-1
1st Payment Due SPM: 12-1
Interest Deducted from Wire 17 days (15th through 31st)
Principal Balance Purchased: Original Loan Amount (less curtailments if any)
2. CALCULATION OF PURCHASE WIRE
1. Purchased Principal Balance
2. Plus/Minus premium or discount pricing pursuant to Lock Confirmation
3. Minus escrows calculated by SPM
4. Plus/Minus interest
5. Minus any fees or penalties due SPM
6. Minus SPM Fees
7. Minus USDA/RD fee, if applicable
The foregoing calculations will be reflected on the purchase advice.
NOTE: When closing a loan with an interest credit, please ensure that the file clearly demonstrates that the loan was funded before the seventh of the month and clear and concise instructions were provided to the closing agent to clearly label the amount credited to the borrower on the HUD-1 and that the HUD-1 reflects the interest credit
3. FEES
Administrative Fee
A $695 Administrative Fee will be deducted at the time of purchase and includes tax service and flood cert fees.
Document Preparation
A $150 Document fee, for all states except Texas, will be deducted at the time of purchase if SPM prepares the closing documents.
Texas Attorney Review
A $250 Document fee must collected at closing on all Texas loans for which SPM prepares the closing documents.
4. RIGHT TO COLLECT
SPM reserves the right to collect any and all monies due SPM including but not limited to those associated with pair offs, early payoffs, repurchases, late document deliveries, attorneys’ fees and any other fees or expenses identified in this Seller’s Guide. SPM reserves the right to collect monies in any lawful manner including, but not limited to offsetting from proceeds or other payment due to Seller.
5. ESCROW REQUIREMENTS
Escrow accounts are to be established at closing for all transactions unless otherwise provided for within this Seller Guide or prohibited by state regulations.
Escrow cushions are to comply with state guidelines.
SPM will permit escrow accounts to be waived on conventional loans (all occupancy types) when the LTV is 80.00% and below (90.00% and below in certain other states), unless prohibited by the product matrix or state law. A copy of the Escrow Waiver Letter identified with the SPM loan number and signed by the borrower(s) which contains at least;
A statement that the mortgagors acknowledge the responsibility to pay taxes and insurance on or before the due date and discloses that failure to pay taxes or insurance when due may result in the revocation of the escrow waiver.
6. AGGREGATE ANALYSIS
Aggregate accounting must be used in the calculation of the escrow/impound account. Escrow/impound accounts for the payment of taxes, mortgage insurance (MI, FHA, VA, or USDA), hazard insurance, flood insurance, must be established at closing when required. Adequate funds should be calculated and collected at closing to insure that a sufficient amount will be available to pay the next installment of taxes and insurance.
A copy of the Initial Escrow Account Disclosure Statement must be included in the closed mortgage loan file.
7. TAXES
All payment of real property taxes and special or supplemental assessments must be current prior to SPM purchasing the mortgage loan. Adequate escrow funds, when required, must be collected in compliance with all applicable laws to ensure the payment in full of real estate taxes and of all other taxes and assessments by the due date.
Any tax bill due before the first payment date must be paid at closing. Unpaid taxes that will become due within 30-days after purchase must be paid by Seller prior to SPM purchasing the loan. If SPM determines that insufficient funds for taxes or insurance were collected, the correct amount will be netted from the purchase proceeds. The Seller is responsible for any penalties assessed on payments that are due prior to or within 30-days of purchase. The month/year last paid date as written on the Tax Information Sheet will be used as the source for the last paid and next due date. The Tax Information Sheet) must be complete.
8. INSURANCE
Insurance must be current prior to SPM purchasing the mortgage loan. Adequate escrow funds, when required, must be collected in compliance with all applicable laws to ensure the payment in full by the due date.
Insurance payments due prior to the first payment must be paid at closing. Insurance payments due within 60-days of purchase must be paid by Seller prior to SPM purchasing the loan. If SPM determines that insufficient funds for insurance were collected, the correct amount will be netted from the purchase proceeds. The Seller is responsible for any late fees assessed on payments that are due prior to or within 90-days of purchase.
9. WIRING
The purchase proceeds will be sent via wire transfer. Payment will be made to Seller’s warehouse lender. The purchase advice will be posted to the SPM website on the purchase date.
The information provided in the Bailee Letter/wire instructions (in the case of a bank or credit union) must match the information provided in the master Bailee letter or Wire Set Up/Authorization Form provided by Seller at the time of initial set up of Seller’s warehouse bank information. Allow 72-hours to set up new warehouse accounts.
10. PAYMENTS
If Seller should receive any payment due to SPM, any such payments must be forwarded, via overnight courier to our Loan Servicing address in Section 107. Any check evidencing such payments must be properly endorsed to SPM. Seller must immediately notify SPM if Seller does not receive, when due, any monthly payment due to Seller prior to the effective date of the transfer of servicing and/or transfer of ownership. Seller must also immediately notify SPM if the mortgagor prepays the mortgage loan in full or in part. Seller is responsible for any per diem charges. See Section 213 for early payoff considerations.
11. MORTGAGE LOAN SEASONING
The maximum seasoning of a mortgage loan at the time of purchase must not be greater 30-days.
All loans must be fully disbursed at least 3-days prior to being purchased by SPM.
12. GOVERNMENT PAYMENTS
Prior to the loan purchase SPM requires evidence of the following for each government loan. SPM will accept the hardcopy electronic evidence provided by the FHA or VA official Web Site. USDA loan; SPM will net the RD Fee out of the wire at time of funding.
602. LOAN PACKAGING AND REVIEW
1. DELIVERY OF LOAN FILE FOR PURCHASE
All loans submitted for purchase must be uploaded to SPM’s electronic program (Blitz). The Closed Loan Submission form found in the Document Library on the SPM website must be completed and included with each loan submitted. All documents indicated on the Closed Loan Submission Form must be included. Please select “Closed Loan Package” on the Document Type drop down when uploading the package.
2. COLLATERAL PACKAGE
Seller’s warehouse lender must deliver the original collateral package to SPM (address below). The collateral package must have a label on the tab providing the following:
• Mortgagor’s Last Name, First Name
• Property Address
• Sierra Pacific Mortgage Loan Number
The document order within the collateral package must be as follows:
1. Original Note (and applicable addenda) and Original Allonge, (if applicable) endorsed to:
Sierra Pacific Mortgage Company, Inc.
A California Corporation
2. Mortgage/Deed of Trust (certified by title company as true and correct copy)
3. Original Signature Affidavit
4. Certified copy of note
All collateral files are to be sent to the following address:
Sierra Pacific Mortgage Company, Inc.
Attn: Correspondent Lending Collateral Dept.
5151 Beltline Road, Suite 510
Dallas, TX 75254
603. PRE-PURCHASE REVIEW
SPM reserves the right to require original of any documents upon request. Seller will be required to comply with all advance disclosure requirements based on federal, state and individual municipalities. Evidence of compliance with these laws will be required as part of the submission file. SPM will perform a pre-purchase review to ensure disclosure requirements were met and any loan not compliant will not be purchased.
Seller should consult with SPM’S Operational Policies and Procedures in conjunction with the following Pre-Purchase Review guidelines to completely evaluate and ascertain whether the loan meets SPM’S guidelines for purchase.
1. COMMITMENT CONFIRMATION
The Commitment Confirmation must be included as the top document.
2. CLOSED LOAN SUBMISSION FORM
Must be complete and include accurate loan information.
3. WIRE INSTRUCTIONS
A loan specific Bailee letter must be submitted with the collateral package. Each Bailee letter must include the following information:
1. Seller’s name
2. Seller’s loan number
3. Loan amount/principal balance
4. Wire instructions
5. Authorized signature
6. Contact information of warehouse lender
4. PAY HISTORY
A pay history for the loan being purchased is required if any of the following apply:
1. A payment became due 15-days prior to the purchase date
2. A principal reduction has been made.
3. Taxes have been disbursed prior to purchase
4. Insurance premium(s) have been disbursed prior to purchase.
Any loan that has experienced a 30-day delinquency is not eligible for purchase.
5. DISASTER AREA CERTIFICATION
When a Presidential Declaration is issued designating a specific geographic area as a major disaster area SPM will require a re-inspection certification. If the property is located within the designated disaster area and the original appraisal was done prior to the area being declared a disaster area SPM requires a re-inspection of the property and a Property Condition Certification Form.
6. NOTES
Notes may not contain white out or erasures. Strike overs are acceptable ONLY if any such changes have been initialed by all borrowers. The MIN# (Mortgage Identification Number) should appear on the Note. Note Endorsement: “Stamped” signatures are not acceptable; the Note endorsement must be a “live” signature. SPM will accept an Allonge to extend the endorsement space on the back of the Note. The Allonge must meet these requirements:
State on the allonge that it is attached to and made part of that certain Mortgage Note. Note Date, borrower(s) name, property address, loan number, loan amount must all appear exactly the same as the Note.
Original note must be endorsed as follows:
PAY TO THE ORDER OF
Sierra Pacific Mortgage Company, Inc.
WITHOUT RECOURSE
(Name of Seller)
(Signature of Officer)
(Officer’s Name and Title)
ARM Notes:
1. Change date is correct for product type.
2. Annual and lifetime rate caps are complete and correct for product type.
3. Floor (if applicable) is complete and accurate for product type.
4. Maximum lifetime interest rate is correct for product type.
5. Margin is correct for product type
6. Terms on note match terms on ARM loan program disclosure.
7. ASSIGNMENT OF DEED OF TRUST/MORTGAGE
There will be no assignments since all loans must be closed with MOM documents. All loans must be transferred to SPM within 48-hours of purchase.
8. TAX INFORMATION SHEET
Each file must contain a Tax Information Sheet which provides for specific servicing information on each mortgage loan, when an escrow account has been established at closing.
9. INITIAL ESCROW ANALYSIS
A fully completed Escrow Account Initial Disclosure Statement is required on all loans when an escrow account has been established at closing.
10. BORROWER’S PAYMENT BREAKDOWN LETTER
Itemizes borrower’s monthly payment by P&I, Taxes, Insurance, Mortgage Insurance, and any Government monthly premium.
11. INSURANCE REQUIREMENTS
Each mortgaged property must be covered by fire and hazard insurance with the extended coverage customary in the area in which the mortgaged property is located.
A mortgagor has the right to select his or her own hazard insurance carrier. Seller, however, must ensure that each policy complies with the requirements outlined in this Seller’s Guide. The insurance company must meet FNMA/FHLMC criteria and must be authorized (or licensed if required) to transact business in the state in which the mortgage property is located. SPM reserves the right to reject any hazard insurance policy issued by insurance carrier that is unacceptable to SPM. Insurance carriers must have a financial size category of III and at least a B general policyholder’s rating in Best’s Key Rating Guide or rated “A” or better by Demotech.
12. INSURANCE POLICIES
The policy(s) are to reflect the Seller’s name, immediately followed by “Its Successors and/or Assigns”. Sellers must include a copy of the Transfer of Servicing Letter for Insurance Company in the purchase file.
The letter should reflect the following change of servicer:
Hazard, Flood & Mortgage Insurance
Sierra Pacific Mortgage Company, Inc.,
Its Successors and/or Assigns
1180 Iron Point Road, Suite 200
Folsom, CA 95630
The Seller should send the letter(s) to the insurance company(s) upon the Seller’s receipt of the purchase advice.
13. HAZARD INSURANCE
1. Evidence of insurance in a form acceptable to SPM, (i.e., declarations page, Certificate of Insurance, Evidence of Insurance or binder). Evidence of premium payment may be provided by either one of the following:
a. Paid receipt for premium amount reflected on policy/binder; or
b. HUD-1 settlement statement indicates collection of premium amount reflected on policy/binder or
c. Payment reflected on Seller’s loan payment history.
2. Policy number is indicated (does not apply to binders).
3. If binder has expired or will expire in 60-days we must have the actual policy.
4. Loan information must be accurate:
a. Name(s) of borrower(s) agree with note.
b. Property address agrees with appraisal, the title commitment/ preliminary title report or title search.
c. Mailing address is same as property address except on second home or investment properties; in such cases it should agree with home address shown on FNMA 1003.
5. Amount of dwelling coverage is equal to or greater than the lesser of (subject to applicable state law restrictions):
a. The unpaid principal balance of note (or total unpaid balance of first lien and second lien when subject loan is in second position); or
b. Replacement value
NOTE: In no event will coverage be accepted in any amount less than the minimum amount necessary to fully compensate for any loss or damage on a replacement cost basis.
6. Blanket policies, (e.g., policies insuring dwelling and cars, boats, etc.), are not acceptable; however, riders for additional coverage for furs, jewels, etc., will be accepted.
7. Terms of coverage:
a. Effective date must be prior to or same as the date of closing.
b. Purchase: Policy must extend for minimum 12-months from date of closing
c. Refinance: Existing coverage will be acceptable, provided:
1. Sufficient impounds are collected to renew coverage at due date.
2. Existing coverage extends a minimum of 60-days beyond purchase date (if policy will expire in less than 60-days, evidence of renewal for one year will be required).
3. Evidence of change of mortgagee is provided, if applicable.
8. Policy is properly countersigned.
9. Provides for at least 30 days prior written notice of any cancellation, reduction in amount or material change in coverage to SPM.
10. The maximum deductible is the higher of $5,000.00 or 5% of the face amount of the policy.
11. If the policy excludes or limits the windstorm coverage, it is not acceptable. The maximum deductible for windstorm coverage is the higher of 2% of the face amount of the policy, $2,000 or the maximum allowed under state law.
12. Monthly paid hazard policies are not acceptable.
14. HAZARD / LIABILITY / PROPERTY INSURANCE – CONDOMINIUMS
Evidence of hazard insurance coverage for condominium projects must be supplied by Seller. Acceptable evidence shall be a certificate certifying that the “Master” or “Blanket” policy covers 100% of the current replacement cost of the condominium project, affording coverage for loss or damage by fire and other hazards to general and common elements.
15. REVIEW OF HAZARD / PROPERTY INSURANCE – CONDOMINIUIMS
1. HOA must maintain a master property insurance policy covering the entire project; including the unit. Errors and Omissions, HO-6 and boilers must be included. Coverage does not need to include land, foundations, excavations, or other items that are usually excluded from insurance coverage.
2. Acceptable evidence of insurance and must show the borrowers name, address and loan number along with the mortgage clause.
3. Name(s) of borrower(s) agree(s) with note and is/are shown as additional insured.
4. Property address (including unit number) agrees with loan documents
5. Homeowner’s Association (HOA) is names as insured.
6. Policy number is indicated.
7. If coverage of master policy will expire within 60 days after purchase, evidence of renewal for one year will be required.
8. Mortgage clause reads “(Seller Name), its Successors and Assigns” and reflects Seller in correct position (primary beneficiary on first liens, secondary beneficiary on second liens).
9. Hazard Insurance
a. An insurance policy that includes either of the following endorsements will assure full insurable value replacement cost coverage.
i. Guaranteed replacement cost endorsement; or
ii. Replacement cost endorsement
b. Policy must allow for giving at least 30-days’ notice prior to cancellation or modification to both the HOA and lender.
10. Liability Insurance
a. General liability insurance policy for the entire project – including all common areas and elements, public ways, and any other areas that are under its supervision is required
b. If project contains any commercial areas, insurance should also cover the commercial spaces. In this case, the insurance must cover bodily injury and property damage that results from the operation, maintenance, or use of the project’s common areas and elements.
c. Minimum $1 Million coverage for bodily injury and property damage for any single occurrence.
d. A specific endorsement to preclude the insurer’s denial of a unit owner’s claim because of negligent acts of the HOA if the policy does not include a “severability of interest”.
e. Policy should provide for at least ten days written notice to the HOA and lender before the insurer can cancel or substantially modify it.
16. COPY OF LENDER LOSS PAYEE CHANGE NOTIFICATION FOR HAZARD INSURANCE
Required on all loans.
17. FLOOD INSURANCE POLICY / BINDER OR APPLICATION
Flood insurance must be placed on a property located in a flood zone, as determined by FEMA maps. The flood insurance must be escrowed if an escrow account has been established for any other item. The coverage amount must cover the loan amount or be for the maximum amount according to flood insurance regulations whichever is less.
Additional coverage needed if the property has an additional structure located in the flood zone. FEMA requires flood insurance on any structure located in the flood zone that is on a permanent foundation and has at least 2 rigid walls. The structure would need a minimum replacement cost value greater than $1000 to require insurance. The value that the appraiser establishes is market value. Each structure of value greater than $1000 requires a separate Flood Insurance policy. (The Flood Dwelling policy covers only the main residence and a detached garage).
18. REVIEW OF FLOOD INSURANCE POLICY
1. Effective date of coverage must be prior to or same as the date of closing.
2. All borrower(s) names must appear on the insurance policy.
3. The premium due cannot be paid at closing. The borrower must provide a paid in full receipt for the flood policy prior to closing.
4. Property address must agree with appraisal, title commitment/ preliminary title report or title search.
5. Coverage must be equal to the loan amount or maximum allowed by FEMA (exceptions defined by state specific requirements.
6. Mortgage clause must read “(Seller’s name), its Successors and/or Assigns” and reflects Seller in correct position (primary beneficiary on first liens, secondary beneficiary on second liens).
7. Policy must be properly countersigned.
NOTE: If the property is located in a community that has been identified as flood prone/flood zone but is not participating in the National Flood Insurance Program, and the loan applicant is able to obtain flood insurance from a private insurance company, the loan will be eligible for purchase with proof of flood insurance. If the loan applicant cannot obtain flood insurance, the loan will not be eligible for purchase. The flood insurance from a private insurance company must be similar to what NFIP provides. If SPM is not selling the loan to the agencies, our investors will not take the flood policy as part of the hazard policy. It must be a separate policy.
19. REVIEW OF FLOOD INSURANCE FOR CONDOMINIUM
1. Flood Certificate is required on all loans to determine if a property is located in a Flood Zone.
2. If property is located in a special flood hazard area designated as either A or V, insurance is required.
3. A flood determination certificate (life of loan policy) must be obtained on all loans.
4. Homeowner’s Association must maintain flood insurance for each building.
5. Deductible is the lesser of 1% of the policy’s face amount or $5,000 unless prohibited by state law. Funds for deductible must be included in the HOA reserves account.
6. Provide copy of Lender Loss Payee change notification.
20. RENT LOSS INSURANCE
Rent loss insurance protects the landlord against loss of rent or rental value due to fire or other casualty that renders the subject property unavailable for use and as a result of which the tenant is excused from paying rent. A minimum of six months’ rent loss insurance is required for 1-4 unit non-owner occupied properties
21. OTHER HAZARDS
If a Seller has knowledge that the mortgaged property is or may be exposed to hazards (such as toxic or hazardous waste) not covered by fire and extended coverage insurance or other available insurance, Seller shall advise SPM of such hazard. In such event, reserves the right to refuse to purchase the related mortgage loan. Seller must comply with any and all agency requirements regarding any such hazards.
22. MINE SUBSIDENCE
If mine subsidence insurance is required, as evidenced by (i) title commitment, (ii) purchase contract or (iii) appraisal, such insurance must equal eight percent (80%) of the value of structure comprising a part of the mortgaged property or the maximum insurance available from the Department of Environmental Resources. Purchaser will accept the following items (as applicable) as evidence of insurance:
1. A hazard insurance policy binder that includes mine subsidence insurance.
2. If the mortgage loan is a refinance loan, the original or photocopy of an existing mine subsidence insurance policy from the Department of Environmental Resources and an Assignment of Interest Endorsement form.
3. If the mortgaged property is located in the Anthracite (hard coal) Region, a signed Request for Mine Subsidence Insurance Information form and an Assignment of Interest Endorsement form.
4. If the mortgage property is located in the Bituminous (soft coal) Region a signed Request for Mine Subsidence Insurance form, an Assignment of Interest Endorsement form and a town map which has been marked with the “X” to show the location of the property
Earthquake and Mudslide Insurance
Any applicable earthquake and mudslide insurance is required when applicable.
23. PRIVATE MORTGAGE INSURANCE
SPM will order mortgage insurance on behalf of Seller upon final loan approval. Seller should indicate on the Correspondent Underwriting Submission Form the mortgage insurance plan and the mortgage insurance company to be used.
The following mortgage insurance companies are available:
• Radian Guaranty, Inc.
• Genworth Mortgage Insurance Corporation
• Mortgage Guaranty Insurance Co. (MGIC)
• Essent Guaranty Inc.
• United Guaranty Residential Insurance Corporation (UGI)
Unless otherwise stipulated, private mortgage insurance pricing must be obtained when the LTV exceeds 80%.
Standard MI Coverage is as follows:
30-YEAR FIXED-RATE MORTGAGE
LTV Coverage
>80-85 12%
>85-90 25%
>90-95 30%
15-YEAR FICED-RATE MORTGAGE
LTV Coverage
>80-85 6%
>85-90 12%
>90-95 25%
24. PRIVATE MORTGAGE INSURANCE OPTIONS
Borrower paid Monthly (BPMI) or Lender Paid (LPMI)
1. LPMI may not be available for all loan products or property types as indicated on Rate Sheets.
Important Note: LPMI, the rate/fee adjustment will be managed through the lock process and does not require additional discount points to be charged to the customer.
25. NOTICE OF RIGHT TO CANCEL
1. Must be signed by each person who has an ownership interest in the property.
2. Notice of Right to Cancel includes all of the following information, and is correct and complete:
3. Notice of Seller’s retention or acquisition of a security interest in the borrower’s principal dwelling;
a. Notice of borrower’s right to cancel the transaction;
b. Advice/direction on how to exercise the right to cancel, along with a form for this purpose, which designates the address of the creditor’s place of business’
c. The effects of cancellation; and
d. The date the cancellation period ends.
4. The end date of the cancellation period shown on the Notice of Right to Cancel must allow the borrower three business days to cancel. For purposes of Right to Cancel, Saturday is included as a business day.
5. If confirmation section appears on notice, all original signors of notice must execute the confirmation.
6. Loan funds may not be disbursed prior to the end of the period. For example, funds were not disbursed prior to midnight of the third business day following the later of:
a. Date of consummation; or
b. Date of receipt of final Truth in Lending disclosure; or
c. Date or receipt of Notice of Right to Cancel.
26. FINAL TRUTH IN LENDING
Seller’s prepare their own TIL’s must be in full compliance. With delivery for underwriting (Initial TIL) and sale of the loan to SPM, the Seller warrants the TIL meets all applicable requirements.
1. Verify APR
2. Verify total for “Amount Financed”
3. Verify accuracy of payment schedule against product type (i.e., ARM, interest only); loans with private mortgage insurance should include MI in payment schedule.
4. Correct disclosure of variable rate featuring including, if applicable, variable rate information must be provided.
5. Prepayment features must be disclosed, if applicable.
6. Correct disclosure of assumability on product type must be provided.
7. Disclosure has been signed and dated by all parties who signed the security instrument.
8. Seller must attest that all TILA/MDIA waiting period for the collection of fees as well as waiting period associated with any redisclosures were complied with. Please note that for re-disclosure purposes, SPM uses a $100 finance charge threshold for all purchase and refinance transactions.
Important Note: When a material error on the TIL occurs as a result of an understated APR or Finance Charge, SPM requires full restitution to the consumer. For Non-Rescindable loans, upon receipt of a TIL discrepancy suspense, the Seller must complete all of the following:
1. Correct Truth In Lending Disclosure
2. Send a letter and the corrected TIL to the consumer stating the reason for the corrected TIL Disclosure. (Must be on company letterhead and signed by the Seller).
3. Proof of mailing and copy of restitution
For a Rescindable Loan – All of the above and provide the consumer with a new recession period.
Purchase of a loan by SPM does not waive the Correspondent’s sole responsibility. If a loan is purchased by SPM and later determined to be out of compliance, the loan is subject to immediate repurchase by the Correspondent.
27. RESPA
SPM requires full compliance with RESPA Reform, including the updated version of the Good Faith Estimate (GFE). The Seller must issue a re-disclosure GFE to the borrower within the required time frame of three business days of receiving the changed circumstance information. SPM requires a fully completed Change of Circumstances (COC) form for each re-issued GFE. Detailed description of the reason for each changed circumstance. Example; float to lock, relocked, extended or changes to the loan amount or estimated value of the property.
Timing for Final GFE. SPM requires that the final GFE be dated a minimum of one day prior to the Note Date. That GFE will be compared against the Final HUD-1 (page 3 – comparison page) to ensure compliance with RESPA fee tolerance. (Any later dated GFE’s will be disregarded for compliance purposes.) SPM will audit the No Tolerance and 10% tolerance section against the HUD. In the 10% tolerance section, SPM will audit for “padding” on the comparison chart. Only those fees that are actually charged on the HUD may appear on the GFE column of the comparison section of the HUD (page 3).
Cost to Cures: Sellers are reminded that permissible cures to RESPA/TIL must be made no later than 30-calendar days from the NOTE DATE. Cures must follow RESPA guidelines and documentation of the cure must be provided to SPM. Copy of the explanation (on sellers letterhead and signed), amended HUD, copy of the check and proof of mailing. Cures that are completed more than 30-days after the NOTE DATE are not acceptable and will result in non-purchase of the loan.
Note: If non-corrected errors are discovered after the purchase by SPM, the loan must be repurchased by the Seller.
28. APPROVED CLOSING AGENTS AND CLOSING PROTECTION LETTERS
The closing agent and the title insurance agency must be approved by SPM prior to the purchase of the loan. Please see the Document Library on the SPM website to view the list of approved closing agents. The Document Library also provides instructions for requesting the approval of closing agents not currently on the list.
An insured closing protection letter is required for every transaction. It must specifically name as covered under the letter, the complete name and address of the closing agent, the borrower(s) name, the property address and be assignable as to coverage. All letters must be validated with evidence of such in the loan file.
29. OFAC, HUD LDP, AND GOVERNMENT EPL LIST
Seller must provide evidence that all of the parties involved in the transactions have been checked against and do not appear on the three lists identified above. Parties include but are not limited to the following:
1. Borrower
2. Seller
3. Closing Agent/Title Insurer
4. Notary
5. Real Estate Agent(s)
6. Loan Officer
30. APPRAISAL - AIR COMPLIANCE
Every file will require evidence that the consumer received a copy of the appraisal report a minimum of 3 business days prior to consummation. All appraisals must be ordered and completed in full compliance with the Fannie Mae/Freddie Mac Appraiser Independent Requirements (AIR) and each FHA loan must be ordered and complete in full compliance with HUD Appraisal Independence requirements. All loans must include the ECOA Disclosure fully executed by the borrower(s) and Borrowers Appraisal Delivery Method Cert. A Lenders AIR Cert. is required if the Seller is not using the SPM portal to order the Appraisal.
For standard conventional products, if the appraisal report is more than 120-days old (from Note date) a new appraisal is required. A recertification of value is not acceptable.
31. THIRD-PARTY INVOICES
File must contain copies of all third-party invoices for appraisal and credit report Charges.
32. CIP RULES
The US Patriot Act requires that the borrower provide evidence as to their identity. Seller must provide evidence of compliance with US Patriot Act.
Laws by requiring borrower to produce for verification one form of identification containing their name, address, social security number and date of birth. This identification may be in the form of a driver’s license, passport, state issued identification car, military identification card, green card, Medicare or Medicaid card, etc. A copy of the identification must be in the loan file and the information on the card must match the information on the loan application (1003). If the information on the loan application and the identification do not match, Sierra may refuse to purchase the loan.
33. TITLE POLICY – COMMITMENT – BINDER – PRELIM
Review of Title Insurance
1. Closing lender named as proposed insured, if applicable.
2. Vesting requirements:
a. Purchase: immediately prior to borrower’s acquisition of property, title vested in seller as named in sales contract and HUD-1 settlement statement
b. Refinance: title vested in borrower’s name.
c. Title may not be held by corporations, business entities or trusts. All parties to be vested in title have executed security instrument, subject to state law.
3. If title has been conveyed within most recent 12 months, further review by underwriter and/or additional documentation may be required to ensure acceptability of transaction.
4. Title held is fee simple; if leasehold, must have been specifically approved by SPM prior to closing.
5. Legal description will be used as the basis for all references to legal descriptions on all legal documents (security instrument, assignment of mortgage, etc.).
6. Generally speaking only those title exceptions acceptable to FNMA will be permissible.
a. Taxes must be paid current.
b. Survey exceptions must be deleted, or appropriate affirmative coverage obtained.
c. All existing liens and judgments have been paid / released.
d. Surface entry rights must be waived or obtain appropriate affirmative coverage endorsement.
e. All references to taxes as exceptions to the coverage of the Title Policy must state “Not yet due and payable” or “Paid”.
7. Additional title endorsements may be required either as a condition to funding or as follow up documentation. (e.g., ARM, PUD, CONDO, Environmental Lien, etc.).
8. Title binder/commitment is properly countersigned by an authorized agent.
9. Amount of title insurance is equal to the face amount of the note.
10. Preliminary report/title commitment should be dated within 6-months of loan closing
34. TITLE POLICY DOCUMENTS
Seller must obtain an ALTA 1992 Mortgage Title Policy Form or the equivalent if an ALTA policy is not available in a specific geographic location covering the Mortgage Loan. The Title Policy must have been issued by a title insurer qualified to do business in the jurisdiction in which the subject property is located, insuring Seller, together with its Successors and Assigns, as to the appropriate priority lien position of the mortgage loan in the original principal amount of the note.
We will also accept the following ALTA Short Form of Title: The Short Form Residential Loan Policy and the Residential Loan Certificate to a Master Policy, subject to the following:
1. Acceptable for residential one to two family dwellings.
2. When the Residential Loan Certificate is used, copies of the Seller’s Master Policy with any and all addenda or endorsements will be required.
3. When the short form Residential Loan policy is used, copy of warranty deed will also be required.
4. The forms will only be acceptable from Fannie Mae approved title insurers.
5. Require evidence of current vesting in subject property.
6. The two short forms of title policies must have the applicable ALTA endorsements.
In addition, and unless prohibited by applicable state title industry regulations, all title policies must include the ALTA Form 100 (or its equivalent) with respect to affirmative coverage over violation of building and use restrictions, covenants and conditions, encroachments, etc., or other specific affirmative language insuring that there has been no violation of any such matters, which violation would result in a forfeiture or reversion of title. Additional endorsements may be necessary, to provide Sierra with full title insurance protection.
35. SURVEY / PLAT MAP REQUIREMENTS
All survey exceptions must be deleted from the final title policy. If the title company requires a new survey in order to delete the exception, Seller is required to obtain a new survey acceptable to the title company. The plat map/survey must be provided in all policies
| |Endorsements | |
|Number |Name |When Required |
|8.1 / 110.9 |Environmental Protection |All loans |
|4 / 115.1 |Condominium |For all loans secured by a Condo unit |
|5 / 115.1 |PUD Endorsement |For all loans secured by a PUD unit |
|6.0 or 6.1 / 111.5 |Variable Rate Mortgage |For all ARM loans |
|100 |Comprehensive Endorsement or its equivalent |All loans |
|116 |Location Endorsement |All loans |
|107.5 |Leasehold endorsement |For all leasehold properties |
36. NOTICE OF SPECIAL FLOOD HAZARD (NSFH)
SPM required an executed Special Flood Hazard Notice to be provided to the Borrower within a “reasonable time” prior to closing. The borrower(s) can sign the notice at a minimum of one day prior to the Note Date.
37. HUD.1
The Correspondent is responsible for ensuring that the HUD-1 Settlement for all loans sold SPM complies with all existing and subsequently RESPA requirements and guidelines. SPM requires a FINAL completed HUD-1 that contains both buyer (borrower) and seller information. If applicable, we will accept the seller information on a separate HUD-1 form.
The Final HUD-1 closing statement must show the correct Disbursement Date on Page 1 for all refinance transactions. The funds may NOT be disbursed prior to the expiration of the rescission period.
POC Items – SPM requires documentation (evidence) of payment for all items listed Paid Outside of Closing (POC) on the HUD-1. A receipt from the vendor or copy of the cancelled check evidencing payment to the vendor.
SPM requires that any disbursement equal to or greater than $5,000 on the Seller’s side of the HUD-1 that does not correlate with a lien shown on the preliminary title report must be documented as a valid disbursement to the Seller (for value gained).
38. FINANCIAL REFORM
By delivery of a loan file to SPM, the Seller warrants that the loan is in full compliance with all applicable Consumer Financial Protection Board (CFPB) regulations and guidelines (including those included in RESPA ECOA or any other subsequent regulations). Seller further acknowledges that there is no “cure” for violations of the CFPB (and any Dodd/Frank requirements therein). SPM reserves the right to refuse purchase of any loan discovered to be out of compliance. Additionally, any loan discovered to be out of compliance in a later Quality Control Review is subject to repurchase by the Seller.
39. NMLS
SPM requires the NMLS Name and NMLS Number of the individual Loan Officer and the Seller appear on the Initial 1003, Final 1003, Note and Security Instruments (Mortgage/Deed of Trust). The NMLS Name and Number must match exactly on these documents compared to the NMLS database.
40. 4506-T
SPM requires a 4506-T to be completed and signed/dated at closing by each borrower whose income has been used to qualify on the loan. The 4506-T must match the initial with the “Years or period request - #9 and the 2-years transcripts.
604. POST PURCHASE PROCEDURES
1. SERVICING TRANSFER
Immediately following the purchase of a mortgage loan, it is the Seller’s responsibility to:
1. Transfer ownership and servicing rights to SPM within 48-hours of purchase. SPM MERS # is 1000703.
2. Seller must deliver a Transfer of Servicing Letter to Insurance Company to insurance company providing coverage for hazard, flood or private mortgage insurance (if applicable) requesting that the name of the insured by amended to read “Sierra Pacific Mortgage Company, Inc., its successors and/or assigns”.
3. Seller must take any and all action SPM determines is necessary to (1) transfer to SPM all interest of Seller in, and to make SPM the mortgagee of each insurance policy; and (2) transfer all interest of Seller in and make SPM the loss payee of each title policy and any other insurance policy constituting a portion of the applicable mortgage loan file including any mortgage insurance company.
4. Seller must notify mortgagor(s) of the sale of the mortgage loan to SPM. Such notice must comply with and Seller must take any additional steps required by and applicable local, state or federal law. Such notice must specify at a minimum the effective date of the transfer of servicing, the address and telephone numbers of both SPM and Seller’s servicing department and a statement that the transfer will not alter any terms or conditions relating to the servicing of the mortgage loan.
Seller must utilize SPM servicing address and telephone number listed in section 107 for the purpose of generating the transfer of servicing notice. SPM assumes no responsibility for sufficiency or accuracy of any Notice of Servicing Transfer produced by Seller. The notice must be provided a minimum of 15-days prior to the effective date of the payment change.
2. 1098 REPORTING
SPM will prepare and submit the 1098 relative to interest from scheduled payments posted to the loan by SPM. Seller is responsible for preparing and submitting 1098 statements relative to interest collected at closing and interest from scheduled payments posted by Seller. Please contact the IRS or a tax expert should you have any questions regarding preparing the 1098.
3. ESCROW ANALYSIS
When an escrow account has been established, Purchaser’s Servicing Department may at their discretion analyze the escrow account.
Any discrepancies in the impound balance deducted from the purchase wire should be reported within two business days of purchase. If a written request and supporting documentation is not received within that time frame, the balance transferred will be considered acceptable and any overage will become available for disbursement to the borrower.
4. OUTSTANDING DOCUMENTS
Mortgage loans may be subject to repurchase by Seller, at the repurchase price, if the Seller fails to deliver all follow up documentation and information within the appropriate time periods.
5. FINAL DOCUMENTATION
The following documents are required within 90-days of purchase on all loans.
1. Original recorded security instrument with all riders.
2. Original recorded security agreements.
3. Final title policy and endorsements
4. Certified copy of recorded power of attorney, if applicable.
Please include the SPM loan number when forwarding any follow up documentation.
In the event a document is returned to you for correction, the document must be corrected and returned to SPM within 10-business days. Non-compliance may result in repurchase and/or penalty.
605. COMMON ERRORS
For your convenience, we have provided a list of common errors. Please refer to the following list as necessary.
1. SECURITY INSTRUMENT
1. Incorrect due and payable date
2. Incorrect document date
3. Incorrect lot # on legal description
4. Legal description not attached.
5. Notary section not signed
6. Borrower(s) signed prior to the document date
7. Borrower(s) undersigned
8. Riders not attached
9. Wrong riders attached
10. Incorrect property address
11. Incorrect vesting
12. Not closed on MERS docs
13. Crossed out sections on the riders are not initialed by all borrowers.
2. NOTES
1. Not endorsed or incomplete endorsement
2. Original note stamped certified
3. Incorrect interest rate
4. Incorrect document date
5. Incorrect first payment date
6. Incorrect P & I
7. Incorrect interest rate change date
8. Incorrect margin and life cap
9. Incorrect property address
10. Borrower(s) signed prior to the document date
11. Borrower(s) undersigned
12. Incorrect verbiage on prepayment penalty addendum
13. Crossed out sections on the note are not initialed by all borrowers
3. COMMON REASONS FOR PURCHASE FILE SUSPENSION
1. HUD-1/alternative document missing
2. Closing Protections Letter not provided.
3. Purchase transaction: verification of purchase price
4. Refinance: verification of cash back and proof of payoffs
5. Underwriting conditions not met
6. Complete payment history required – if applicable
7. Taxes due within 30 days of the purchase date must be paid by the Seller
8. Program violation
9. Copy of appraisers license missing from file
10. No original photos
11. Assignment either not received or improperly assigned
12. Notice of right to cancel improperly executed or missing
13. Terms of ARM loan program disclosure do not match the terms described on the note
14. Program disclosure not provided
15. Amount of dwelling coverage on hazard or flood too low.
16. Copy of recorded power of attorney missing
17. MDIA waiting periods were not compliant with TILA rules
18. GFE was not delivered within 3 business days of receipt of the loan application
700. GOVERNMENT LOANS
Each Government Loan confirms with all applicable FHA or VA underwriting, lending, selling and servicing requirements to all GNMA requirements for the inclusion of the Loan in a GNMA MBS pool.
Sierra Pacific Mortgage (SPM) requires that a copy of all documents requires for insuring package be included in the appropriate sections of the Delivery File. Seller is responsible for payment of the UFMIP or VA Funding Fee at time of closing. Prior to the loan purchase Sierra Pacific Mortgage requires evidence of the following for each government loan. SPM will accept the hardcopy electronic evidence provided by the FHA or VA official Web Sites.
Important Reminder: Ensure that the monthly MIP payment on the First Payment Letter to the borrower matches the information on the 92900 LT.
701. FHA LOANS
FHA Principal and Authorized Agent Agreement
Sellers that have an Unconditional Direct Endorsement (DE) approval or Supervised Approval (See below for details on Supervised) by FHA, may engage with SPM as an Authorized Agent. The Seller is the “Principal” (originator) while SPM acts as the “Agent” or the underwriting entity. SPM requires the Seller to close the loan in their own name. The Seller is responsible for obtaining the FHA Case Number, All RESPA Disclosures, ordering the appraisal and the UFMIP payment. Sierra Pacific Mortgage as the underwriter is responsible for insuring the loan.
To participate in the Authorized Agent program, the Seller and SPM must execute the FHA Principal Authorized Agent Agreement. SPM must have the fully executed Agreement from the seller prior to the submission of loans under the Authorized Agent process. Seller will also provide to SPM the letter from HUD stating they have their “Unconditional Direct Endorsement” approval.
Supervised Mortgagee
This designation is limited to financial institutions that are members of the Federal Reserve System and financial institutions whose accounts are insured by the Federal Deposit Insurance or the National Credit Union Administration. Supervised Loan Correspondent – A mortgagee that qualifies for approval as a supervised mortgagee may be approved as a supervised loan correspondent and must have one or more sponsors who underwrite the mortgages. Sponsors must be DE mortgagees.
FHA requires a copy of the borrower’s photo(s) ID in each insuring package; SPM requires a copy of that document in each FHA file.
702. VA LOANS
SPM accepts Fixed Rate VA loans guaranteed by the Veteran’s Administration. All loans must meet SPM guidelines and those published in the VA Lenders Handbook. SPM must underwrite and also be responsible for insuring the loan. The Seller is responsible for the VA Funding Fee payment.
Military Power of Attorney “General”
For VA purchase transactions only – an exception may be submitted for use of General Military Power of Attorney. Per the Lender’s Handbook, the Veteran MUST LIVE SIGN and DATE the Initial 1003, VA Addendums 26-1802a, and complete purchase contract (all pages including counter offers as applicable), as well as an “Alive and Well Statement” is required on the day of funding/disbursement.
703. RURAL DEVELOPMENT LOANS
SPM Rural Development product is a U.S. Department of Agriculture (USDA) Guaranteed Rural Housing (GRH) fixed-rate mortgage. The loans are directly insured/guaranteed by the government. It is offered to low- to-moderate income borrower (as defined by USDA) with property located in a USDA-designated rural area and is guaranteed by the USDA.
Benefits to qualified borrower include, but are limited to the following:
• Provides 100% LTV financing for existing homes and new construction based on appraised value.
• Available to low and moderate-income rural borrowers who are unable to meet the “upfront” cash-to-close requirements for conventional loans.
• No “first-time-homebuyer” requirements.
The eligibility of the property and borrower’s adjusted income for the product may be confirmed by using the USDA web site: .
Note: If the link does not work, key in the address.
Rural Development loans must be approved by SPM Underwriter and USDA. A USDA Conditional Commitment of Loan Approval (Form 1980-18) must be included in each file. Both approvals (SPM Underwriter and USDA) must be satisfied/clear prior to close/disbursement of the loan. The closing “Note Date” cannot be prior to the USDA approval date (Form 1980-18)
a. Seller Guide: Each Mortgage Loan complies, without limitation, with the terms, conditions and requirements of the Seller Guide.
b. True, Complete and Accurate Information and Documentation: All information or documentation provided to Purchaser, including information or documentation prepared or provided by any third party, including the Borrower, with respect to a Mortgage Loan is true, complete and accurate.
c. Property Valuation: Each Mortgage File contains a written appraisal prepared by an appraiser licensed or certified by the applicable governmental body in which the mortgaged property is located and in accordance with the requirements of Title XI of FIRREA. The appraisal was written, in form and substance, to (i) customary Fannie Mae or Freddie Mac standards for mortgage loans of the same type as such Mortgage Loans and (ii) USPAP standards, and satisfies applicable legal and regulatory requirements. The appraisal was made and signed prior to the final approval of the Mortgage Loan application. No appraisal or other property valuation referred to or used was more than 3-months old at the time of the Mortgage Loan closing. The person performing any property valuation (including an appraiser) received no benefit from, and such person's compensation or flow of business from the originator was not affected by, the approval or disapproval of the Mortgage Loan. The selection of the person performing the property valuation was made independently of the broker (where applicable) and the originator's loan sales and loan production personnel. The selection of the appraiser met the criteria of Fannie Mae and Freddie Mac for selecting an independent appraiser.
d. Fraud: No fraud, error, omission, misrepresentation, negligence or similar occurrence with respect to the Mortgage Loan has taken place on the part of the Mortgagor, the Seller or any other Person, including, without limitation, any appraiser, title company, closing or settlement agent, realtor, builder or developer or any other party involved in the origination or sale of the Mortgage Loan or the sale of the Mortgaged Property, that would impair in any way the rights of the Purchaser in the Mortgage Loan or Mortgaged Property or that violated applicable law.
e. Escrow Payments: With respect to escrow deposits and mortgage escrow accounts, all such payments are in the possession of Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made. All escrow payments have been collected in full compliance with state and federal law. An escrow of funds is not prohibited by applicable law and has been established in an amount sufficient to pay for every item subject to an escrow requirement which remains unpaid and which has been assessed but is not yet due and payable.
f. Mortgage Insurance: Except as indicated for pledged asset loans, if a Mortgage Loan has an LTV greater than 80%, the Mortgage Loan has mortgage insurance in accordance with the terms of the Fannie Mae Guide or the Freddie Mac Guide and is insured as to payment defaults by a Private Mortgage Insurance Policy issued by a Qualified Insurer. All provisions of such Private Mortgage Insurance Policy have been and are being complied with, such policy is in full force and effect and all premiums due thereunder have been paid. No action, inaction or event has occurred and no state of facts exists that has, or will result in the exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to a Private Mortgage Insurance Policy obligates the Mortgagor thereunder to maintain the Private Mortgage Insurance Policy and to pay all premiums and charges in connection therewith. To the extent a Mortgage Loan is insured under an LPMI policy, the Mortgage Interest Rate for the Mortgage Loan as set forth on the related Mortgage Loan Schedule is net of any such premium.
g. Regulatory Compliance: Any and all requirements of any federal, state or local law including, without limitation, usury, truth-in-lending, real estate settlement procedures, consumer credit protection, equal credit opportunity, fair housing, or disclosure laws applicable to the Mortgage Loan have been complied with in all material respects. No Mortgage Loan is a “high cost” or “covered” loan, as defined by any applicable federal, state or local predatory or abusive lending law, and no Mortgage Loan has a percentage listed under the Indicative Loss Severity Column (the column that appears in the Standard & Poor's Anti-Predatory Lending Law Update Table, included in the then-current Standard & Poor's LEVELS® Glossary of Terms on Appendix E). Any breach of this representation shall be deemed to materially and adversely affect the value of the Mortgage Loan and shall require a repurchase of the affected Mortgage Loan. No Mortgage Loan originated on or after March 7, 2003 is a “high cost home loan” as defined under the Georgia Fair Lending Act. No borrower was encouraged or required to select a loan product offered by an originator that was a higher cost product designed for less-creditworthy borrowers, unless at the time of the Mortgage Loan's origination, such borrower did not qualify, taking into account credit history and debt-to-income ratios, for a lower cost credit product then offered by such originator or any affiliate of such originator. There does not exist on the related Mortgaged Property any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act of 1976, or other federal, state or local environmental legislation including, without limitation, asbestos. There is no pending action or proceeding directly involving the Mortgaged Property in which compliance with any environmental law, rule or regulation is an issue; there is no violation of any environmental law, rule or regulation with respect to the Mortgaged Property; and nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to use and enjoyment of such Mortgaged Property. The Seller has complied with all applicable anti-money laundering laws and regulations, including without limitation the USA Patriot Act of 2001 (collectively, the “Anti-Money Laundering Laws”); the Seller has established an anti-money laundering compliance program as required by the Anti-Money Laundering Laws, has conducted the requisite due diligence in connection with the origination of each Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with respect to the legitimacy of the applicable Mortgagor and the origin of the assets used by said Mortgagor to purchase the property in question, and maintains, and will maintain, sufficient information to identify the applicable Mortgagor for purposes of the Anti-Money Laundering Laws. The servicing of each Mortgage Loan prior to the related Purchase Date complied in all material respects with the Customary Servicing Procedures and all then-applicable federal, state and local laws.
h. Borrower: As of the related Purchase Date, the Mortgagor is not in bankruptcy and is not insolvent and the Seller has no knowledge of any circumstances or condition with respect to the Mortgage, the Mortgaged Property, the Mortgagor or the Mortgagor's credit standing that could reasonably be expected to cause investors to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become Delinquent or materially adversely affect the value or marketability of the Mortgage Loan. Either the Mortgagor is a natural person who is legally permitted to reside in the United States or the Mortgagor is an inter-vivos trust acceptable to Fannie Mae. No borrower had a prior bankruptcy in the last ten years. No borrower previously owned a property in the last ten years that was the subject of a foreclosure during the time the borrower was the owner of record.
i. Source of Loan Payments: No loan payment has been escrowed as part of the loan proceeds on behalf of the borrower. No payments due and payable under the terms of the Mortgage Note and Mortgage or deed of trust, except for seller or builder concessions, have been paid by any person who was involved in, or benefited from, the sale or purchase of the Mortgaged Property or the origination, refinancing, sale, purchase or servicing of the Mortgage Loan other than the borrower.
j. No Prior Liens: The Seller is the sole owner and holder of the Mortgage Loan and the indebtedness evidenced by the Mortgage Note, and upon recordation the Purchaser or its designee will be the owner of record of the Mortgage and the indebtedness evidenced by the Mortgage Note, Each sale of the Mortgage Loan from any prior owner or the Seller was in exchange for fair equivalent value, and the prior owner or the Seller, as applicable, was solvent both prior to and after the transfer and had sufficient capital to pay and was able to pay its debts as they would generally mature. Immediately prior to the transfer and assignment to the Purchaser on the related Purchase Date, the Mortgage Loan, including the Mortgage Note and the Mortgage, was not subject to an assignment or pledge, and the Seller had good and marketable title to and was the sole owner thereof and had full right to transfer and sell the Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien, pledge, charge, claim or security interest. The Seller has the full right and authority subject to no interest or participation of, or agreement with, any other party, to sell and assign the Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any encumbrance, equity, participation interest, lien, pledge, charge, claim or security interest. The Seller intends to relinquish all rights to possess, control and monitor the Mortgage Loan.
k. Enforceability and Priority of Lien: The related Mortgage is a valid, subsisting, enforceable and perfected first lien on the Mortgaged Property (subject, as to enforceability, to bankruptcy and other creditor’s rights laws). The Mortgage and the Mortgage Note do not contain any evidence of any security interest or other interest or right thereto. Such lien is free and clear of all adverse claims, liens and encumbrances having priority over the first lien of the Mortgage subject only to (1) the lien of non-delinquent current real property taxes and assessments not yet due and payable, (2) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording which are acceptable to mortgage lending institutions generally and either (A) which are referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan, or (B) which do not adversely affect the Appraised Value of the Mortgaged Property as set forth in such appraisal and (3) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property. Any security agreement, chattel mortgage or equivalent document related to and delivered in connection with the Mortgage Loan establishes and creates a valid, subsisting, enforceable and perfected first lien and first priority security interest on the property described therein (subject, as to enforceability, to bankruptcy and other creditors rights laws), and the Seller has the full right to sell and assign the same to the Purchaser; There are no mechanics' or similar liens or claims which have been filed for work, labor or material (and no rights are outstanding that under law could give rise to such liens) affecting the related Mortgaged Property which are or may be liens prior to or equal to the lien of the related Mortgage. The related original Mortgage has been recorded or is in the process of being recorded.
l. No Modifications: The terms of the Mortgage Note and the Mortgage have not been impaired, waived, altered or modified in any material respect.
m. Taxes Paid: All taxes, governmental assessments, insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents which previously became due and owing have been paid by the borrower, or escrow funds from the borrower have been established in an amount sufficient to pay for every such escrowed item which remains unpaid and which has been assessed but is not yet due and payable.
n. No Damage/Condemnation: Each Mortgaged Property is undamaged by waste, vandalism, fire, hurricane, earthquake or earth movement, windstorm, flood, tornado or other casualty adversely affecting the value of a Mortgaged Property or the use for which the premises were intended, and each Mortgaged Property is in substantially the same condition it was at the time the most recent Appraised Value was obtained. There is no proceeding pending or threatened for the total or partial condemnation of any Mortgaged Property.
o. Fee Simple Estate / No Encroachments / Compliance with Zoning: The Mortgage creates a first lien or a first priority ownership interest in an estate in fee simple in real property securing the related Mortgage Note. All improvements subject to the Mortgage which were considered in determining the Appraised Value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property (and wholly within the project with respect to a condominium unit), no improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the title insurance policy referred to in clause (v) below and all improvements on the property comply with all applicable building, zoning and subdivision laws, regulations and ordinances.
p. Legally Occupied: As of the related Purchase Date, the Mortgaged Property is lawfully occupied under applicable law, and all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of the Mortgaged Property and, with respect to the use and occupancy of the same, including but not limited to certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities.
q. Mortgage Loan Legal and Binding: The Mortgage Note, the Mortgage and other agreements executed in connection therewith are original and genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in all respects in accordance with its terms subject to bankruptcy, insolvency, moratorium, reorganization and other laws of general application affecting the rights of creditors and by general equitable principles. The Seller has taken all action necessary to transfer such rights of enforceability to the Purchaser. All parties to the Mortgage Note, the Mortgage and other agreements executed in connection therewith, had the legal capacity to enter into the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage. The Mortgage Note and the Mortgage have been duly and properly executed by such parties.
r. Proceeds Fully Disbursed / Recording Fees Paid: The proceeds of the Mortgage Loan have been fully disbursed and there is no requirement for future advances thereunder, and any and all requirements as to completion of any on-site or off-site improvements and as to disbursements of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making or closing the Mortgage Loan and the recording of the Mortgage were paid or are in the process of being paid, and the Mortgagor is not entitled to any refund of any amounts paid or due under the Mortgage Note or Mortgage.
s. Existence of Title Insurance: Each Mortgage Loan (except (1) any Mortgage Loan secured by a Mortgaged Property located in any jurisdiction as to which an opinion of counsel of the type customarily rendered in such jurisdiction in lieu of title insurance is instead received and (2) any Mortgage Loan secured by Cooperative Shares) is covered by an ALTA lender's title insurance policy or other form of policy or insurance generally acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring [(subject to the exceptions contained in (m)(1), (2) and (3) above) the Seller, its successors and assigns, as to the first priority lien of the Mortgage in the original principal amount of the Mortgage Loan. Additionally, such policy affirmatively insures ingress and egress to and from the Mortgaged Property. Where required by applicable state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. The Seller, its successors and assigns, are the sole insured’s of such lender's title insurance policy; such title insurance policy has been duly and validly endorsed to the Purchaser or the assignment to the Purchaser of the Seller's interest therein does not require the consent of or notification to the insurer; and such lender's title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement and the related PPTL. No claims have been made under such lender's title insurance policy, and no prior holder of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender's title insurance policy. No originator, seller, prior owner of the Mortgage Loan or other Person has provided or received any unlawful fee, commission, kickback, or other compensation or value of any kind in connection with the title insurance policy.
t. Hazard Insurance: There is in force a valid hazard insurance policy and when applicable, a valid flood insurance policy. All policies must meet the requirements set forth in the Seller Guide. All buildings or other customarily insured improvements upon the Mortgaged Property are insured by an insurer acceptable under the Fannie Mae Guides, against loss by fire, hazards of extended coverage and such other hazards as are provided for in the Fannie Mae Guides or by the Freddie Mac Guides, in an amount representing coverage not less than the lesser of (i) the maximum insurable value of the improvements securing such Mortgage Loans and (ii) the greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an amount such that the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the Mortgaged Property is a condominium unit, it is included under the coverage afforded by a blanket policy for the project. If required by the FDPA, the Mortgage Loan is covered by a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration and conforming to Fannie Mae and Freddie Mac requirements, in an amount not less than the amount required by the FDPA. Such policy was issued by an insurer acceptable under the Fannie Mae Guides or the Freddie Mac Guides. The Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and expense, and upon the Mortgagor's failure to do so, authorizes the holder of the Mortgage to maintain such insurance at the Mortgagor's cost and expense and to seek reimbursement therefor from the Mortgagor. All such standard hazard and flood policies are in full force and effect and on the date of origination contained a standard mortgagee clause naming the Seller and its successors in interest and assigns as loss payee; such clause is still in effect and all premiums due on any such policies have been paid in full. No originator, seller, prior owner of the Mortgage Loan, borrower or any other Person, has engaged in any act or omission that would impair the coverage of any such insurance policy, the benefits of the endorsement provided for therein, or the validity and binding effect of either, including, without limitation, the provision or receipt of any unlawful fee, commission, kickback, or other compensation or value of any kind. No action, inaction, or event has occurred and no state of facts exists or has existed that has resulted or will result in the exclusion from, denial of, or defense to coverage under any such insurance policies, regardless of the cause of such failure of coverage.
u. No Default: There is no default, breach, violation or event of acceleration existing under the Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event permitting acceleration; and neither the Seller nor any prior mortgagee has waived any default, breach, violation or event permitting acceleration. No foreclosure action is currently threatened or has been commenced with respect to any Mortgaged Property.
v. No Rescission: The Mortgage Note and the Mortgage are not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render the Mortgage Note or Mortgage unenforceable, in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto. The Mortgagor was not a debtor at the time of origination of the Mortgage Loan and is not currently a debtor in any state or federal bankruptcy or insolvency proceeding.
w. Enforceable Right of Foreclosure: The Mortgage relating to a Mortgaged Property contains customary and enforceable provisions such as to render the rights and remedies of the holder thereof adequate for the realization against such Mortgaged Property of the benefits of the security provided thereby. There is no homestead or other exemption available to the Mortgagor which would interfere with the right to sell the Mortgaged Property at a trustee's sale or the right to foreclose on the Mortgage.
x. Mortgaged Property is 1-4 Family: The Mortgaged Property consists of a single parcel of real property with a detached single family residence erected thereon, or a townhouse, or a two-to four-family dwelling, or an individual condominium unit in a condominium project, or an individual unit in a planned unit development or a de minimis planned unit development, provided, however, that no residence or dwelling is a mobile home. As of the date of origination, no portion of the Mortgaged Property was used for commercial purposes, and since the date of origination no portion of the Mortgaged Property has been used for commercial purposes.
y. Original Mortgage Notes: The Seller has delivered to the Purchaser the original Mortgage Note with respect to each Mortgage Loan.
z. Doing Business: All parties which have had any interest in the Mortgage, whether as Mortgagee, assignee, pledgee or otherwise, are (or, during the period in which they held and disposed of such interest, were) (A) in compliance with any and all applicable licensing requirements of the laws of the state wherein the Mortgaged Property is located and (B) (1) organized under the laws of such state, (2) qualified to do business in such state, (3) a federal savings and loan association, a national bank, a Federal Home Loan Bank or a savings bank having principal offices in such state or (4) not doing business in such state.
aa. Loans Current / Prior Delinquencies: All payments due on a Mortgage Loan have been made, no Mortgage Loan is Delinquent and no Mortgage Loan has been Delinquent during the preceding twelve-month period; no payment made on such Mortgage Loan has been dishonored; there are no material defaults under the terms of such Mortgage Loan; and neither the Seller nor any other party has advanced funds or induced, solicited or knowingly received any advance of funds from a party other than the owner of the Mortgaged Property subject to the Mortgage, directly or indirectly, for the payment of any amount required by the Mortgage Loan.
ab. Acceleration of Payments: The Mortgage contains the usual and enforceable provisions of the originator at the time of origination for the acceleration of the payment of the unpaid principal amount of the Mortgage Loan if the related Mortgaged Property is sold without the prior consent of the Mortgagee thereunder.
ac. Leasehold Interest Representation and Warranty: To the extent the Mortgage Loan is secured by a leasehold interest, it complies with the requirements set forth in the Seller Guide with respect to such loans.
ad. Sole Collateral: the Mortgage Note is not and has not been secured by any collateral other than the lien of the corresponding Mortgage and the security interest of any applicable security agreement or chattel mortgage referred to in clause (m) above, and such collateral does not serve as security for any other obligation.
ae. Full Disclosure: The Mortgagor has received all disclosure materials required by applicable law with respect to the making of fixed rate or adjustable rate mortgage loans, as applicable.
af. No Graduated Payments: The Mortgage Loan does not contain “graduated payment” features, does not have a shared appreciation or other contingent interest feature and does not contain any buydown provisions.
ag. No Negative Amortization Loans: The Mortgage Loans have an original term to maturity of not more than 30 years, with interest payable in arrears on the first day of each month. Each Mortgage Note requires a monthly payment which is sufficient to fully amortize the original principal balance over the original term thereof (except in the case of interest only loans) and to pay interest at the related Mortgage Interest Rate. No Mortgage Loan contains terms or provisions which would result in negative amortization.
ah. Payment Terms: Payments on the Mortgage Loan commenced no more than sixty (60) days after the funds were disbursed in connection with the Mortgage Loan. The Mortgage Note is payable on the first day of each month in equal monthly installments of principal and interest (if not an interest only loan), with interest calculated and payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated maturity date, over an original term of not more than thirty years from commencement of amortization.
ai. Condominiums: If the Mortgaged Property is a condominium unit or a planned unit development, or stock in a cooperative housing corporation, such condominium, cooperative or planned unit development project meets the eligibility requirements of Fannie Mae and Freddie Mac.
aj. Service members’ Civil Relief Act: The Mortgagor has not notified the Seller that it is requesting relief under the Service members' Civil Relief Act, and the Seller has no knowledge of any relief requested or allowed to the Mortgagor under the Service members' Civil Relief Act.
ak. Construction: As of the related Purchase Date, no Mortgage Loan was in construction or rehabilitation status and no trade-in or exchange of a Mortgaged Property has been facilitated.
al. Qualified Lender: The Mortgage Loan was originated by a Mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar institution supervised and examined by a federal or state authority.
am. No Ground Leases: No Mortgaged Property is subject to a ground lease.
an. No Additional Fees: With respect to any broker fees collected and paid on any of the Mortgage Loans, all such fees have been properly assessed to the Mortgagor and no claims will arise as to such fees that are double charged and for which the Mortgagor would be entitled to reimbursement.
ao. Home Ownership and Equity Protection Act 1994: None of the Mortgage Loans are subject to the Home Ownership and Equity Protection Act of 1994 or any comparable state law.
ap. No Single Credit Insurance: None of the proceeds of the Mortgage Loan were used to finance single premium credit insurance policies.
aq. No Balloon Loans: No Mortgage Loan is a Balloon Mortgage Loan.
ar. MERS Mortgage Loans: A MIN has been assigned by MERS. The Seller has not received any notice of liens or legal actions with respect to such Mortgage Loan and no such notices have been electronically posted by MERS.
as. Credit Reporting: With respect to each Mortgage Loan, the Seller has fully and accurately furnished complete information on the related borrower credit files to Equifax, Experian and Trans Union Credit Information in accordance with the Fair Credit Reporting Act and its implementing regulations.
at. Servicing: The Mortgage Loans have been serviced in accordance with all Applicable Requirements.
au. Loan Type: No Mortgage Loan is a “pay option ARM,” “pick-a-payment” or similar type of mortgage loan or a home equity revolving line of credit.
av. Flood Certifications: Unless otherwise agreed upon by the Seller and the Purchaser, each Mortgage Loan is covered by a life of loan, transferable flood certification contract assignable to the Purchaser.
SUBSECTION 1.02 SELLER REPRESENTATIONS AND COVENANT:
a. It is duly organized, validly existing, and in good standing under the laws of its domestic jurisdiction and has all licenses necessary to carry on its business as now being conducted and is licensed, qualified and in good standing in the states where each Mortgaged Property is located if the laws of such state require licensing or qualification in order to conduct business of the type conducted by it. It has corporate power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by it and the consummation of the transactions contemplated hereby have been duly and validly authorized. This Agreement, assuming due authorization, execution and delivery by the Purchaser, evidences the legal, valid, binding and enforceable obligation of it, subject to applicable law except as enforceability may be limited by (i) bankruptcy, insolvency, liquidation, receivership, moratorium, reorganization or other similar laws affecting the enforcement of the rights of creditors and (ii) general principles of equity, whether enforcement is sought in a proceeding in equity or at law. All requisite corporate action has been taken by it to make this Agreement valid and binding upon it in accordance with the terms of this Agreement.
b. No consent, approval, authorization or order is required for the transactions contemplated by this Agreement from any court, governmental agency or body, or federal or state regulatory authority having jurisdiction over it or, if required, such consent, approval, authorization or order has been or will, prior to the related Purchase Date, be obtained.
c. The consummation of the transactions contemplated by this Agreement are in its ordinary course of business and will not result in the breach of any term or provision of its articles of association or by-laws or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any agreement, indenture or loan or credit agreement or other instrument to which it or its property is subject, or result in the violation of any law, rule, regulation, order, judgment or decree to which it or its property is subject.
d. There is no action, suit, proceeding or investigation pending or, to its best knowledge, threatened against it which, either individually or in the aggregate, would result in any material adverse change in its business, operations, financial condition, properties or assets, or in any material impairment of its right or ability to carry on its business substantially as now conducted or which would draw into question the validity of this Agreement or the Mortgage Loans or of any action taken or to be taken in connection with its obligations contemplated herein, or which would materially impair its ability to perform under the terms of this Agreement.
e. To the best of the Seller’s knowledge, the Seller is not in material default under any agreement, contract, instrument or indenture to which the Seller is a party or by which it (or any of its assets) is bound, which default would have a material adverse effect on the ability of the Seller to perform under this Agreement, nor, to the best of the Seller’s knowledge, has any event occurred which, with the giving of notice, the lapse of time or both, would constitute a default under any such agreement, contract, instrument or indenture and have a material adverse effect on the ability of the Seller to perform its obligations under this Agreement.
f. It does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant contained in this Agreement.
g. It is solvent and the sale of the Mortgage Loans will not cause it to become insolvent. The sale of the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud any of its creditors.
h. It has not dealt with any broker, investment banker, agent or other person that may be entitled to any commission or compensation in connection with the sale of the Mortgage Loans.
i. To the best of the Seller’s knowledge, neither this Agreement nor any statement, report or other agreement, document or instrument furnished or to be furnished pursuant to this Agreement contains any materially untrue statement of fact or omits to state a fact necessary to make the statements contained therein not misleading.
1. Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to this Agreement which provides for the adjustment of the Mortgage Interest Rate payable in respect thereto.
2. Agreement: This Loan Purchase and Sale Agreement including the Seller Guide, all exhibits, schedules, amendments and supplements hereto.
3. ALTA: The American Land Title Association or any successor thereto.
4. Anti-Money Laundering Laws: As defined in Section 5.01(e).
5. Applicable Requirements: With respect to the Mortgage Loans, as applicable and as of the time of reference, (i) the terms of the applicable Mortgage and Mortgage Note; (ii) Customary Servicing Procedures; (iii) all federal, state and local laws, statutes, rules, regulations and ordinances applicable to the servicing of the Mortgage Loans including, without limitation, the applicable requirements and guidelines of any insurer or any other governmental agency, board, commission, instrumentality or other governmental or quasi-governmental body or office; (iv) all other judicial and administrative judgments, orders, stipulations, awards, writs and injunctions applicable to the servicing of the Mortgage Loans; (v) all contractual obligations relating to the servicing of the Mortgage Loans including, without limitation, those contractual obligations contained in any applicable servicing agreement or in any agreement relating to the Mortgage Loans with any insurer or in the Mortgage File, and (vi) the obligations of the Seller set forth herein and in the Seller Guide.
6. Appraised Value: With respect to any Mortgaged Property, the lesser of (i) the value thereof as determined by a Qualified Appraiser at the time of origination of the Mortgage Loan, and (ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan; provided, however, that in the case of a Refinanced Mortgage Loan, such value of the Mortgaged Property is based solely upon the value determined by an appraisal or appraisals made for the originator of such Refinanced Mortgage Loan at the time of origination of such Refinanced Mortgage Loan by a Qualified Appraiser.
7. Appraiser Independence Requirements: The Appraiser Independence Requirements effective as of October 15, 2010, as amended and in effect from time to time.
8. Arbitration: Arbitration in accordance with the then governing Commercial Arbitration Rules of the American Arbitration Association (“AAA”) and administered by the AAA, which shall be conducted in Sacramento, California or other place mutually acceptable to the parties to the arbitration.
9. Arbitrator: A person who is not affiliated with the Seller or the Purchaser, who is a member of the American Arbitration Association.
10. Balloon Mortgage Loan: A Mortgage Loan that provided on the date of origination for monthly payments up to but not including the maturity date based on an amortization extending beyond its maturity date.
11. Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a legal holiday in the State of the State of California, or (iii) a day on which banks in State of California are authorized or obligated by law or executive order to be closed.
12. Commitment Confirmation: Issued upon interest rate lock request by Seller. Evidences the Purchase Price, Delivery Expiration Date and loan terms selected by Seller for a particular Mortgage Loan offered for sale by Seller to Purchaser under the terms of the Agreement. Notification provided to Seller by Purchaser evidencing Purchaser’s commitment to purchase the Mortgage Loan(s) specified in the notice, subject to the Mortgage Loans(s) compliance with the Agreement and any conditions set forth in the Commitment Confirmation.
13. Delivery Expiration Date: The date by which closed and fully disbursed Mortgage File must be delivered to SPM by Seller.
14. Consumer Information: Any personally identifiable information in any form (written electronic or otherwise) relating to a Mortgagor, including, but not limited to: a Mortgagor’s name, address, telephone number, Mortgage Loan number, Mortgage Loan payment history, delinquency status, insurance carrier or payment information, tax amount or payment information; the fact that the Mortgagor has a relationship with the Seller or the originator of the related Mortgage Loan; and any other non-public personally identifiable information.
15. Customary Servicing Procedures: With respect to any Mortgage Loan, those mortgage servicing practices (including collection procedures) of prudent mortgage banking institutions which service mortgage loans of the same type as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, and which are in accordance with Fannie Mae servicing practices and procedures for MBS pool mortgages, as defined in the Fannie Mae Guides including future updates, or as such mortgage servicing practices may change from time to time.
16. Delinquent: Any Mortgage Loan with respect to which the Monthly Payment due on a Due Date is not made by the close of business on the Business Day preceding the next scheduled Due Date for such Mortgage Loan.
17. Due Date: The day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
18. Early Payment Default: A Mortgage Loan becomes sixty (60) days or more delinquent with respect to any of the first four (4) payments due SPM or its assigns.
19. Early Payoff: A Mortgage Loan that prepays in full within 180 days of the Purchase Date.
20. Escrow Account: The account established by Seller for each Mortgage Loan for the deposit of Escrow Payments.
21. Escrow Payments: The amounts constituting ground rents, taxes, assessments, Primary Mortgage Insurance Policy premiums, fire and hazard insurance premiums, flood insurance premiums, condominium charges and other payments as may be required to be escrowed by the Mortgagor with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
22. Event of Default: Any one of the conditions or circumstances enumerated in Subsection 8.01.
23. Fannie Mae: The entity formerly known as the Federal National Mortgage Association or any successor thereto.
24. Fannie Mae Guides: The Fannie Mae Sellers’ Guide and the Fannie Mae Servicers’ Guide and all amendments or additions thereto in effect on and after the related Purchase Date.
25. FDPA: The Flood Disaster Protection Act of 1973, as amended.
26. Fidelity Bond: The fidelity bond required to be obtained by Seller pursuant to the Seller Guide.
27. Final Documents: The original recorded security instrument (Mortgage), the original final title policy, and any other original documents required to be recorded in association with a Mortgage Loan
28. FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended and in effect from time to time.
29. Freddie Mac: The entity formerly known as the Federal Home Loan Mortgage Corporation or any successor thereto.
30. Freddie Mac Guide: The Freddie Mac Single Family Seller/Servicer Guide and all amendments or additions thereto in effect on and after the related Purchase Date.
31. Independent: When used with respect to any other Person, a Person who (a) is in fact independent of another specified Person and any affiliate of such other Person, (b) does not have any material direct financial interest in such other Person or any affiliate of such other Person, and (c) is not connected with such other Person or any affiliate of such other Person as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions.
32. Initial Rate Cap: With respect to each Adjustable Rate Mortgage Loan and the initial Adjustment Date therefor, a number of percentage points per annum that is set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Interest Rate for such Adjustable Rate Mortgage Loan may increase or decrease from the Mortgage Interest Rate in effect immediately prior to such Adjustment Date.
33. Insurance Proceeds: With respect to each Mortgage Loan, proceeds of insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
34. Lifetime Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum Mortgage Interest Rate which shall be as permitted in accordance with the provisions of the related Mortgage Note.
35. Loan-to-Value Ratio: With respect to any Mortgage Loan as of any date of determination, the ratio, expressed as a percentage, of the outstanding principal balance of the Mortgage Loan on such date, to the Appraised Value of the related Mortgaged Property.
36. LPMI: Lender paid mortgage insurance.
37. LTV: Loan-to-Value Ratio.
38. MERS: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
39. MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS System.
40. MERS System: The system of recording transfers of mortgages electronically maintained by MERS.
41. MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
42. Minimum Interest Rate: With respect to each Adjustable Rate Mortgage Loan, a rate that is set forth in the Mortgage Note and is the minimum interest rate to which the Mortgage Interest Rate on such Mortgage Loan may be decreased.: The scheduled monthly payment on a Mortgage Loan due on any Due Date allocable to principal and/or interest on such Mortgage Loan pursuant to the terms of the related Mortgage Note.
43. Mortgage: The mortgage, deed of trust or other instrument securing a Mortgage Note which creates a first lien on an unsubordinated estate in fee simple in real property securing the Mortgage Note; 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, deed of trust or other instrument securing the Mortgage Note may secure and create a lien upon a leasehold estate of the Mortgagor.
44. Mortgage File: With respect to each Mortgage Loan, all documents involved in the origination, underwriting (including documented compensating factors pertaining to exceptions) closing and servicing of the Mortgage Loan, including but not limited to the documents specified in the Seller Guide), and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
45. Mortgage Interest Rate: With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, including, but not limited to, the limitations on such interest rate imposed by the Initial Rate Cap, the Periodic Rate Cap, the Minimum Interest Rate and the Lifetime Rate Cap, if any.
46. Mortgage Loan: An individual Mortgage Loan that is the subject of this Agreement, each Mortgage Loan originally sold and subject to this Agreement, which Mortgage Loan includes without limitation the Mortgage File, the Servicing File, the Monthly Payments, Principal Prepayments, Insurance Proceeds, any escrow accounts related to the Mortgage Loan, the Servicing Rights and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan, excluding repurchased mortgage loans.
47. Mortgage Note: The note or other evidence of the indebtedness of a Mortgagor secured by a Mortgage or, in the case of a Cooperative Loan, secured by the Cooperative Shares and the Cooperative Lease.
48. Mortgaged Property: The Mortgagor’s real property securing repayment of a related Mortgage Note, consisting of a fee simple interest in a single parcel of real property improved by a Residential Dwelling.
49. Mortgagee: The mortgagee or beneficiary named in the Mortgage and the successors and assigns of such mortgagee or beneficiary.
50. Mortgagor: The obligor on a Mortgage Note, who is an owner of the Mortgaged Property and the grantor or mortgagor named in the Mortgage and such grantor’s or mortgagor’s successors in title to the Mortgaged Property.
51. Periodic Rate Cap: As to each Adjustable Rate Mortgage Loan, the maximum increase or decrease in the Mortgage Interest Rate, on any Adjustment Date as provided in the related Mortgage Note, if applicable.
52. Person: An individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any agency or political subdivision thereof.
53. Private Mortgage Insurance Policy: A policy of primary mortgage guaranty insurance.
54. Principal Prepayment: Any full or partial payment or other recovery of principal on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment.
55. Purchase Advice: Notification provided by SPM to Seller on the Purchase Date of each Mortgage Loan itemizing the purchase proceeds wired by SPM to Seller’s warehouse bank (or Seller if Seller is a bank or credit union).
56. Purchase Date: The date Purchaser purchases a given Mortgage Loan from Seller.
57. Purchase Price: The price paid on the related Purchase Date by the Purchaser to the Seller pursuant to this Agreement in exchange for a Mortgage Loan.
58. Purchased Principal Balance: With respect to a Mortgage Loan, the unpaid principal balance calculated and purchased by SPM. The Purchased Principal Balance may be net of a Monthly Payment due Seller but not received as of the Purchase Date.
59. Qualified Appraiser: With respect to each Mortgage Loan, an appraiser, duly appointed by the originator, who had no interest, direct or indirect in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Fannie Mae or Freddie Mac (including but not limited to the Appraiser Independence Requirements) and Title XI of FIRREA and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.
60. Qualified Insurer: An insurance company duly qualified as such under the laws of the states in which the Mortgaged Properties are located, duly authorized and licensed in such states to transact the applicable insurance business and to write the insurance provided by the insurance policy issued by it, approved as an insurer by Fannie Mae and Freddie Mac.
61. Refinanced Mortgage Loan: A Mortgage Loan which was made to a Mortgagor who owned the Mortgaged Property prior to the origination of such Mortgage Loan and the proceeds of which were used in whole or part to satisfy an existing mortgage.
62. REO Property: A Mortgaged Property acquired by or on behalf of the Purchaser through foreclosure or deed in lieu of foreclosure.
63. Repurchase Price: With respect to any Mortgage Loan, a price equal to (i) the unpaid principal balance of the Mortgage Loan, multiplied by the greater of par or the Purchase Price paid by Purchaser, plus (ii) interest on such unpaid principal balance at the related Mortgage Interest Rate from the last date through which interest was last paid and distributed to the Purchaser to the last day of the month in which such repurchase occurs, plus, (iii) reasonable and customary third party expenses incurred in connection with the transfer of the Mortgage Loan being repurchased, plus (iv) any unreimbursed advances, minus (v) any amounts received in respect of such repurchased Mortgage Loan and being held in the Escrow Account for future distribution in connection with such Mortgage Loan.
64. Residential Dwelling: Any one of the following: (i) a detached one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium project or (iv) a one-family dwelling in a planned unit development, none of which is a cooperative, mobile or manufactured home.
65. Seller Guide: Seller's Correspondent Seller Guide, inclusive of Seller's policies and procedures, product matrices and any exhibits, addenda or attachments thereto.
66. Servicing Rights: With respect to each Mortgage Loan, any and all of the following: (a) all rights to service the Mortgage Loan; (b) all rights to receive the Servicing Fees, additional servicing compensation (including, without limitation, any late fees, assumption fees, penalties or similar payments with respect to the Mortgage Loan, and income on escrow accounts or other receipts on or with respect to the Mortgage Loan), reimbursements or indemnification for servicing the Mortgage Loan, and any payments received in respect of the foregoing and proceeds thereof; (c) the right to collect, hold and disburse escrow payments or other similar payments with respect to the Mortgage Loans and any amounts actually collected with respect thereto and to receive interest income on such amounts to the extent permitted by applicable law; (d) all accounts and other rights to payment related to any of the property described in this paragraph; (e) possession and use of any and all Mortgage Loan Documents and Mortgage Files pertaining to the Mortgage Loans or pertaining to the past, present or prospective servicing of the Mortgage Loans; (f) all rights and benefits relating to the direct solicitation of the related Mortgagors for refinance or modification of the Mortgage Loans and attendant right, title and interest in and to the list of such Mortgagors and data relating to their respective Mortgage Loans; (g) all rights, powers and privileges incident to any of the foregoing; and (h) all agreements or documents creating, defining or evidencing any of the foregoing rights to the extent they relate to such rights.
67. Servicing Transfer Date: The date Seller will stop accepting payments and Purchaser will begin accepting payments.
68. Underwriting Guidelines: As to each Mortgage Loan, the written underwriting guidelines in effect as of the origination date of such Mortgage Loans as set forth in the Seller Guide, as may be revised and modified, from time to time, by Purchaser.
69. USPAP: The Uniform Standards of Professional Appraisal Practice, as amended and in effect from time to time.
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