x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 45-2156869 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
350 Highland Drive Lewisville, TX | 75067 | |
(Address of principal executive offices) | (Zip Code) | |
Title of Each Class | Name of each exchange on which registered | |
Common Stock, $.01 par value per share | New York Stock Exchange | |
Large Accelerated Filer o | Accelerated Filer o | |
Non-Accelerated Filer x (Do not check if a smaller reporting company.) | Smaller reporting company o |
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• | the delay in our foreclosure proceedings due to inquiries by certain state Attorneys General, court administrators, and state and federal government agencies; |
• | the impact of the ongoing implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), including rules issued by the Consumer Financial Protection Bureau (CFPB) relating to mortgage servicing and originations and the continuing examination of our business begun by the CFPB, on our business activities and practices, costs of operations and overall results of operations; |
• | the impact on our servicing practices of enforcement consent orders against, and agreements entered into by certain federal and state agencies with, the largest mortgage servicers and ongoing inquiries regarding other non-bank mortgage servicers; |
• | the continued uncertainty of the residential mortgage market, increase in monthly payments on adjustable rate mortgage loans, adverse economic conditions, decrease in property values and increase in delinquencies and defaults; |
• | the deterioration of the market for reverse mortgages and increase in foreclosure rates for reverse mortgages; |
• | our ability to compete successfully in the mortgage loan servicing and mortgage loan originations industries; |
• | our ability to maintain or grow the size of our servicing portfolio and realize our significant investments in personnel and our technology platform by successfully identifying attractive acquisition opportunities, including mortgage servicing rights (MSRs), subservicing contracts, servicing platforms and originations platforms; |
• | our ability to scale-up appropriately and integrate our acquisitions to realize the anticipated benefits of any such potential future acquisitions, including potentially significant acquisitions; |
• | our substantial indebtedness may limit our financial and operating activities and our ability to incur additional debt to fund future needs; |
• | changes to federal, state and local laws and regulations concerning loan servicing, loan origination, loan modification or the licensing of entities that engage in these activities; |
• | changes in state and federal laws that are adverse to mortgage servicers which increase costs and operational complexity and impose significant penalties for violation; |
• | our ability to meet certain criteria or characteristics under the indentures governing our securitized pools of loans; |
• | our ability to follow the specific guidelines of government-sponsored enterprises (GSEs) or a significant change in such guidelines; |
• | changes to Home Affordable Modification Program (HAMP), Home Affordable Refinance Program, Making Home Affordable Plan or other similar government programs; |
• | changes in our business relationships with the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Government National Mortgage Association (“Ginnie Mae”) and others that facilitate the issuance of mortgage-backed securities (MBS); |
• | changes to the nature of the guarantees of Fannie Mae and Freddie Mac and the market implications of such changes; |
• | our ability to maintain our technology systems and our ability to adapt such systems for future operating environments; |
• | Revenue. An increase in delinquencies will result in lower revenue for loans we service for GSEs because we only collect servicing fees from GSEs for performing loans. Additionally, while increased delinquencies generate higher ancillary fees, including late fees, these fees are not likely to be recoverable in the event that the related loan is liquidated. In addition, an increase in delinquencies lowers the interest income we receive on cash held in collection and other accounts. |
• | Expenses. An increase in delinquencies will result in a higher cost to service due to the increased time and effort required to collect payments from delinquent borrowers. It may also result in an increase in interest expense as a result of an increase in our advancing obligations. |
• | Liquidity. An increase in delinquencies could also negatively impact our liquidity because of an increase in borrowing under our advance facilities. |
• | Valuation of MSRs. We base the price we pay for MSRs on, among other things, our projections of the cash flows from the related pool of mortgage loans. Our expectation of delinquencies is a significant assumption underlying those cash flow projections. If delinquencies were significantly greater than expected, the estimated fair value of our MSRs could be diminished. If the estimated fair value of MSRs is reduced, we could suffer a loss, which has a negative impact on our financial results. |
• | the rates of prepayment and repayment within the underlying pools of mortgage loans; |
• | projected rates of delinquencies, defaults and liquidations; |
• | future interest rates; |
• | our cost to service the loans; |
• | ancillary fee income; and |
• | amounts of future servicing advances. |
• | uncoordinated market functions; |
• | unanticipated issues in integrating information, communications and other systems; |
• | unanticipated incompatibility of purchasing, logistics, marketing and administration methods; |
• | not retaining key employees; and |
• | the diversion of management’s attention from ongoing business concerns. |
• | require us to dedicate a substantial portion of cash flow from operations to the payment of principal and interest on indebtedness, including indebtedness we may incur in the future, thereby reducing the funds available for other purposes; |
• | make it more difficult for us to satisfy and comply with our obligations with respect to the unsecured senior notes; |
• | subject us to increased sensitivity to increases in prevailing interest rates; |
• | place us at a competitive disadvantage to competitors with relatively less debt in economic downturns, adverse industry conditions or catastrophic external events; or |
• | reduce our flexibility in planning for or responding to changing business, industry and economic conditions. |
• | limitations imposed on us under the indentures governing our unsecured senior notes and other financing agreements that contain restrictive covenants and borrowing conditions that may limit our ability to raise additional debt; |
• | the decrease in liquidity in the credit markets; |
• | prevailing interest rates; |
• | the strength of the lenders from which we borrow; |
• | limitations on borrowings on advance facilities imposed by the amount of eligible collateral pledged, which may be less than the borrowing capacity of the advance facility; and |
• | accounting changes that may impact calculations of covenants in our debt agreements. |
• | our representations and warranties concerning loan quality and loan circumstances are inaccurate, including representations concerning the licensing of a mortgage broker; |
• | we fail to secure adequate mortgage insurance within a certain period after closing; |
• | a mortgage insurance provider denies coverage; or |
• | we fail to comply, at the individual loan level or otherwise, with regulatory requirements in the current dynamic regulatory environment. |
• | our staffing levels and other servicing practices; |
• | the servicing and ancillary fees that we may charge; |
• | our modification standards and procedures; and |
• | the amount of non-reimbursable advances. |
• | an increase in prevailing interest rates could generate an increase in delinquency, default and foreclosure rates resulting in an increase in both operating expenses and interest expense and could cause a reduction in the value of our assets; |
• | an increase in prevailing interest rates could adversely affect our loan originations volume because refinancing an existing loan would be less attractive for homeowners and qualifying for a loan may be more difficult for consumers; |
• | an increase in prevailing interest rates would increase the cost of servicing our outstanding debt, including our ability to finance servicing advances and loan originations; |
• | a decrease in prevailing interest rates may require us to record a decrease in the value of our MSRs; and |
• | a decrease in prevailing interest rates could reduce our earnings from our custodial deposit accounts. |
• | a classified board of directors with staggered three-year terms; |
• | removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of stockholders entitled to vote (provided, however, that for so long as FIF and certain other affiliates of Fortress and permitted transferees (collectively, the Fortress Stockholders) beneficially own at least 40% of our issued and outstanding common stock, directors may be removed with or without cause with the affirmative vote of a majority of the voting interest of stockholders entitled to vote); |
• | provisions in our amended and restated certificate of incorporation and amended and restated bylaws prevent stockholders from calling special meetings of our stockholders (provided, however, that for so long as the Fortress Stockholders beneficially own at least 25% of our issued and outstanding common stock, any stockholders that collectively beneficially own at least 25% of our issued and outstanding common stock may call special meetings of our stockholders); |
• | advance notice requirements by stockholders with respect to director nominations and actions to be taken at annual meetings; |
• | certain rights to the Fortress Stockholders with respect to the designation of directors for nomination and election to our board of directors, including the ability to appoint a majority of the members of our board of directors for so long as the Fortress Stockholders continue to beneficially own at least 40% of our issued and outstanding common stock; |
• | no provision in our amended and restated certificate of incorporation or amended and restated bylaws for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election; |
• | our amended and restated certificate of incorporation and our amended and restated bylaws only permit action by our stockholders outside a meeting by unanimous written consent, provided, however, that for so long as the Fortress Stockholders beneficially own at least 25% of our issued and outstanding common stock, our stockholders may act without a meeting by written consent of a majority of our stockholders; and |
• | under our amended and restated certificate of incorporation, our board of directors has authority to cause the issuance of preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders. Nothing in our amended and restated certificate of incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock. |
Location | Owned / Leased | Square Footage | |
Principal executive office: | |||
Lewisville, Texas – Corporate Headquarters | Leased | 160,910 | |
Business operations and support offices: | |||
Lewisville, Texas | Leased | 244,886 | |
Irving, Texas | Leased | 187,429 | |
Scottsbluff, Nebraska | Owned | 177,225 | |
Littleton, Colorado | Leased | 161,218 | |
Houston, Texas | Leased | 53,258 | |
Indianapolis, Indiana | Leased | 44,160 |
Prices | ||||||||
Quarter ended | High | Low | ||||||
March 31, 2012 (from March 8, 2012) | $ | 14.94 | $ | 13.02 | ||||
June 30, 2012 | $ | 21.64 | $ | 13.00 | ||||
September 30, 2012 | $ | 34.90 | $ | 20.90 | ||||
December 31, 2012 | $ | 37.20 | $ | 23.53 |
Year ended December 31, | 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||
Consolidated Balance Sheets Data: | (in thousands, except earnings per share amounts) | ||||||||||||||||||
Cash and cash equivalents | $ | 152,649 | $ | 62,445 | $ | 21,223 | $ | 41,645 | $ | 9,357 | |||||||||
Accounts receivable | 3,043,606 | 562,300 | 441,275 | 513,939 | 355,975 | ||||||||||||||
Mortgage loans held for sale | 1,480,537 | 458,626 | 369,617 | 203,131 | 560,354 | ||||||||||||||
Mortgage servicing rights (at fair value) | 635,860 | 251,050 | 145,062 | 114,605 | 110,808 | ||||||||||||||
Total assets | 7,126,143 | 1,787,931 | 1,947,181 | 1,280,185 | 1,122,001 | ||||||||||||||
Notes payable | 3,601,586 | 873,179 | 709,758 | 771,857 | 810,041 | ||||||||||||||
Unsecured senior notes | 1,062,635 | 280,199 | 244,061 | — | — | ||||||||||||||
Nonrecourse debt-legacy assets | 100,620 | 112,490 | 138,662 | 177,675 | — | ||||||||||||||
Excess spread financing (at fair value) | 288,089 | 44,595 | — | — | — | ||||||||||||||
ABS nonrecourse debt (at fair value) | — | — | 496,692 | — | — | ||||||||||||||
Total liabilities | 6,368,461 | 1,506,622 | 1,690,809 | 1,016,362 | 866,079 | ||||||||||||||
Total equity | 757,682 | 281,309 | 256,372 | 263,823 | 255,922 | ||||||||||||||
Consolidated Statements of Operations Data: | |||||||||||||||||||
Total revenues | $ | 984,315 | $ | 377,841 | $ | 261,428 | $ | 78,869 | $ | (12,656 | ) | ||||||||
Total expenses and impairments | 582,045 | 306,183 | 220,976 | 142,367 | 147,777 | ||||||||||||||
Total other (expense) income | (125,687 | ) | (50,771 | ) | (50,366 | ) | (17,379 | ) | 2,823 | ||||||||||
Income (loss) before taxes | 276,583 | 20,887 | (9,914 | ) | (80,877 | ) | (157,610 | ) | |||||||||||
Total income tax expense | 71,296 | — | — | — | — | ||||||||||||||
Net income (loss) | 205,287 | 20,887 | (9,914 | ) | (80,877 | ) | (157,610 | ) | |||||||||||
Reclassification of loss of investment in debt securities due to other than temporary impairments | — | — | — | — | 3,903 | ||||||||||||||
Change in value of designated cash flow hedges | — | (1,071 | ) | 1,071 | — | — | |||||||||||||
Comprehensive income (loss) | $ | 205,287 | $ | 19,816 | $ | (8,843 | ) | $ | (80,877 | ) | $ | (153,707 | ) | ||||||
Earnings (loss) per share data: | |||||||||||||||||||
Basic earnings (loss) per share | $ | 2.41 | $ | 0.30 | $ | (0.14 | ) | $ | (1.16 | ) | $ | (2.25 | ) | ||||||
Dilutive earnings (loss) per share | $ | 2.40 | $ | 0.30 | $ | (0.14 | ) | $ | (1.16 | ) | $ | (2.25 | ) | ||||||
Other Financial Data: | |||||||||||||||||||
Net cash provided by / (used in): | |||||||||||||||||||
Operating activities | $ | (1,958,116 | ) | $ | (28,903 | ) | $ | (101,653 | ) | $ | (83,641 | ) | $ | 40,212 | |||||
Investing activities | (2,157,292 | ) | (81,879 | ) | 101,197 | 29,983 | (34,643 | ) | |||||||||||
Financing activities | 4,205,612 | 152,004 | (19,966 | ) | 85,946 | (37,463 | ) | ||||||||||||
Adjusted EBITDA(1) (non-GAAP measure) | 456,439 | 135,968 | 65,306 | 46,422 | 21,634 | ||||||||||||||
Operating Segments: | |||||||||||||||||||
Interest expense from unsecured notes | 63,879 | 30,464 | 24,628 | — | — | ||||||||||||||
Change in fair value of mortgage servicing rights | 68,242 | 39,000 | 6,043 | 27,915 | 11,701 | ||||||||||||||
Depreciation and amortization | 8,880 | 3,395 | 1,873 | 1,542 | 1,172 | ||||||||||||||
Share-based compensation | 14,045 | 14,764 | 8,999 | 579 | 1,633 |
(1) | Adjusted EBITDA is a key performance measure used by management in evaluating the performance of our segments. Adjusted EBITDA represents our Operating Segments' income, and excludes income and expenses that relate to the financing of the unsecured senior notes, depreciable (or amortizable) asset base of the business, income taxes, exit costs from our 2007 restructuring and certain non-cash items. Adjusted EBITDA also excludes results from our legacy |
• | Financing arrangements for our Operating Segments are secured by assets that are allocated to these segments. Interest expense that relates to the financing of our unsecured senior notes is not considered in evaluating our operating performance because this obligation is serviced by the excess earnings from our Operating Segments after the debt obligations that are secured by their assets. |
• | To monitor operating costs of each Operating Segment excluding the impact from depreciation, amortization and fair value change of the asset base, exit costs from our restructuring and non-cash operating expense, such as share-based compensation. Operating costs are analyzed to manage costs per our operating plan and to assess staffing levels, implementation of technology based solutions, rent and other general and administrative costs. |
• | Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments; |
• | Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; |
• | Adjusted EBITDA does not reflect the cash requirements necessary to service principal payments related to the financing of the business; |
• | Adjusted EBITDA does not reflect the interest expense or the cash requirements necessary to service interest or principal payments on our corporate debt; |
• | although depreciation and amortization and changes in fair value of MSRs are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and |
• | other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. |
For the year ended December 31, | |||||||||||
Net Income/(Loss) from Operating Segments to Adjusted EBITDA Reconciliation (dollars in thousands): | 2012 | 2011 | 2010 | ||||||||
Net income/(loss) | $ | 205,287 | $ | 20,887 | $ | (9,914 | ) | ||||
Plus: | |||||||||||
Net loss from Legacy Portfolio and Other | 20,483 | 24,892 | 24,806 | ||||||||
Income Tax Expense | 71,296 | — | — | ||||||||
Income from Operating Segments | 297,066 | 45,779 | 14,892 | ||||||||
Adjust for: | |||||||||||
Interest expense from unsecured senior notes | 63,879 | 30,464 | 24,628 | ||||||||
Depreciation and amortization | 8,880 | 3,395 | 1,873 | ||||||||
Change in fair value of mortgage servicing rights | 68,242 | 39,000 | 6,043 | ||||||||
Amortization of mortgage servicing rights/obligations - at amortized cost | (5,120 | ) | — | — | |||||||
Exit costs (2) | — | 1,836 | — | ||||||||
Share-based compensation | 14,045 | 14,764 | 8,999 | ||||||||
Fair value changes on excess spread financing | 10,684 | 3,060 | — | ||||||||
Fair value changes on interest rate swap (1) | (1,237 | ) | (298 | ) | 9,801 | ||||||
Ineffective portion of cash flow hedge | — | (2,032 | ) | (930 | ) | ||||||
Adjusted EBITDA | $ | 456,439 | $ | 135,968 | $ | 65,306 |
(1) | Relates to an interest rate swap agreement which was treated as an economic hedge under ASC 815. |
(2) | Exit costs for the year ended December 31, 2011, are primarily due to reserves on future lease payments related to a restructuring program initiated in November 2011, which included closing several offices and the termination of a portion of our workforce. |
(i) | Mortgage Loans Held for Sale – We have elected to measure newly originated conventional residential mortgage loans held for sale at fair value. We estimate fair value by evaluating a variety of market indicators including recent trades and outstanding commitments to purchase loans, calculated on an aggregate basis. |
(ii) | Mortgage Loans Held for Investment, Subject to ABS Nonrecourse Debt – We determine the fair value on loans held for investment, subject to ABS nonrecourse debt using internally developed valuation models. These valuation models estimate the exit price we expect to receive in the loan’s principal market. Although we utilize and give priority to observable market inputs, such as interest rates and market spreads within these models, we typically are required to utilize internal inputs, such as prepayment speeds, credit losses and discount rates. These internal inputs require the use of our judgment and can have a significant impact on the determination of the loan’s fair value. In December 2011, we sold our remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, we derecognized the securitized mortgage loans held for investment, subject to ABS nonrecourse debt. |
(iii) | MSRs at Fair Value – We recognize MSRs related to all existing forward residential mortgage loans transferred to a third party in a transfer that meets the requirements for sale accounting. Additionally, we may acquire the rights to service forward residential mortgage loans through the purchase of these rights from third parties. We apply fair value accounting to this class of MSRs, with all changes in fair value recorded as a charge or credit to servicing fee income in the consolidated statement of operations. We estimate the fair value of these MSRs using a process that combines the use of a discounted cash flow model and analysis of current market data to arrive at an estimate of fair value. The cash flow assumptions and prepayment assumptions used in the model are based on various factors, with the key assumptions being mortgage prepayment speeds, discount rates and credit losses. |
(iv) | Derivative Financial Instruments – We utilize certain derivative instruments in the ordinary course of our business to manage our exposure to changes in interest rates. These derivative instruments include forward sales of MBS, forward loan sale commitments and interest rate swaps and caps. We also issue interest rate lock commitments (IRLCs) to borrowers in connection with single family mortgage loan originations we intend to sell. We recognize all derivative instruments on our consolidated statement of financial position at fair value. The estimated fair values of forward sales of MBS and interest rate swaps and caps are based on the exchange price or dealer market price and are recorded as other assets or derivative financial instruments liabilities in the consolidated balance sheet. The initial and subsequent changes in value on forward sales of MBS are a component of gain on mortgage loans held for sale in the consolidated statement of operations and comprehensive income. The estimated fair values of IRLCs, loan purchase commitments (LPCs), and forward sale commitments are based on the fair value of related mortgage loans which is based on observable market date. Fair value amounts of IRLCs are adjusted for expected execution of outstanding loan commitments. IRLCs and LPC's are recorded in other assets and forward sale commitments are recorded as a component of mortgage loans held for sale in the consolidated balance sheet. The initial and subsequent changes in value of IRLCs, LPCs, and forward sale commitments are a component of gain on mortgage loans held for sale in the consolidated statement of operations and comprehensive income. |
(v) | ABS Nonrecourse Debt – Effective January 1, 2010, accounting guidance related to VIEs eliminated the concept of a qualifying special purpose entity (QSPE), and all existing special purpose entities (SPEs) are subject to the new consolidation guidance. Upon adoption of this new accounting guidance, we identified certain securitization trusts where we, through our affiliates, continued to hold beneficial interests in these trusts. These retained beneficial interests obligate us to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant. In addition, as master servicer on the related mortgage loans, we retain the power to direct the activities of the VIE that most significantly impact the economic performance of the VIE. When it is determined that we have both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE, the assets and liabilities of these VIEs are included in our consolidated financial statements. Upon consolidation of these VIEs, we |
(vi) | Excess Spread Financing – In conjunction with the acquisition of certain of our MSRs, we enter into a sale and assignment agreements, which we treat as a financing with an affiliated entity of Fortress Investment Group, whereby we sell the right to receive a portion of the excess cash flow generated from a certain underlying MSR portfolio after receipt of a fixed basic servicing fee per loan. We retain all ancillary income associated with servicing the portfolio and the remaining portion of the excess cash flow after receipt of the fixed basic servicing fee. We measure this financing arrangement at fair value to more accurately represent the future economic performance of the acquired MSRs and related excess servicing financing. We estimate the fair value of this financing using a process that combines the use of a discounted cash flow model and analysis of current market data based on the value of the underlying MSRs. |
For the year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Revenues: | ||||||||||||
Servicing fee income | $ | 462,495 | $ | 233,411 | $ | 167,126 | ||||||
Other fee income | 34,656 | 35,294 | 16,958 | |||||||||
Total fee income | 497,151 | 268,705 | 184,084 | |||||||||
Gain on mortgage loans held for sale | 487,164 | 109,136 | 77,344 | |||||||||
Total revenues | 984,315 | 377,841 | 261,428 | |||||||||
Expenses and impairments: | ||||||||||||
Salaries, wages and benefits | 358,455 | 202,290 | 149,115 | |||||||||
General and administrative | 201,587 | 82,183 | 58,913 | |||||||||
Provision for loan losses | 2,353 | 3,537 | 3,298 | |||||||||
Loss on foreclosed real estate and other | 2,864 | 6,833 | 205 | |||||||||
Occupancy | 16,786 | 11,340 | 9,445 | |||||||||
Total expenses and impairments | 582,045 | 306,183 | 220,976 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 71,586 | 66,802 | 98,895 | |||||||||
Interest expense | (197,308 | ) | (105,375 | ) | (116,163 | ) | ||||||
Contract termination fees | 15,600 | — | — | |||||||||
Loss on equity method investments | (14,571 | ) | (107 | ) | — | |||||||
Gain/(loss) on interest rate swaps and caps | (994 | ) | 298 | (9,801 | ) | |||||||
Fair value changes in ABS securitizations | — | (12,389 | ) | (23,297 | ) | |||||||
Total other (expense) | (125,687 | ) | (50,771 | ) | (50,366 | ) | ||||||
Income (loss) before taxes | 276,583 | 20,887 | (9,914 | ) | ||||||||
Income tax expense | 71,296 | — | — | |||||||||
Net income / (loss) | 205,287 | 20,887 | (9,914 | ) | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Change in value of designated cash flow hedges | — | (1,071 | ) | 1,071 | ||||||||
Comprehensive income (loss) | $ | 205,287 | $ | 19,816 | $ | (8,843 | ) | |||||
Earnings (loss) per share: | ||||||||||||
Basic earnings (loss) per share | $ | 2.41 | $ | 0.30 | $ | (0.14 | ) | |||||
Diluted earnings (loss) per share | $ | 2.40 | $ | 0.30 | $ | (0.14 | ) |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Revenues: | |||||||||||
Servicing fee income | $ | 462,001 | $ | 238,394 | $ | 175,569 | |||||
Other fee income | 35,133 | 17,189 | 7,273 | ||||||||
Total fee income | 497,134 | 255,583 | 182,842 | ||||||||
Gain on mortgage loans held for sale | — | — | — | ||||||||
Total revenues | 497,134 | 255,583 | 182,842 | ||||||||
Expenses and impairments: | |||||||||||
Salaries, wages and benefits | 195,446 | 123,655 | 78,269 | ||||||||
General and administrative | 130,727 | 48,611 | 24,664 | ||||||||
Occupancy | 11,521 | 5,664 | 4,350 | ||||||||
Loss on foreclosed real estate and other | 463 | — | — | ||||||||
Total expenses and impairments | 338,157 | 177,930 | 107,283 | ||||||||
Other income (expense): | |||||||||||
Interest income | 30,936 | 2,263 | 263 | ||||||||
Interest expense | (156,817 | ) | (58,024 | ) | (51,791 | ) | |||||
Contract termination fee | 15,600 | — | — | ||||||||
Loss on equity method investments | (14,571 | ) | (107 | ) | — | ||||||
Gain (loss) on interest rate swaps and caps | 1,237 | 298 | (9,801 | ) | |||||||
Total other (expense) | (123,615 | ) | (55,570 | ) | (61,329 | ) | |||||
Income before taxes | $ | 35,362 | $ | 22,083 | $ | 14,230 |
December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Servicing Portfolio ($ in millions) | |||||||||||
Unpaid principal balance: | |||||||||||
Special Servicing | $ | 10,775 | $ | 10,165 | $ | 4,893 | |||||
Government-sponsored enterprises | 109,867 | 69,772 | 52,194 | ||||||||
Non-Agency Securitizations | 53,294 | 18,868 | 7,089 | ||||||||
Total boarded forward servicing portfolio | 173,936 | 98,805 | 64,176 | ||||||||
Acquired Servicing Rights owned - serviced by others | 4,946 | — | — | ||||||||
Acquired Servicing Rights owned - serviced by predecessor | 550 | — | — | ||||||||
Total forward servicing portfolio | 179,432 | 98,805 | 64,176 | ||||||||
Reverse mortgage servicing | 28,382 | — | — | ||||||||
Reverse mortgage servicing under contract | — | 7,781 | — | ||||||||
Total servicing portfolio unpaid principal balance | $ | 207,814 | $ | 106,586 | $ | 64,176 |
Year ended December 31, | |||||||||||||
2012 | 2011 | 2010 | |||||||||||
($ in millions, except for average loan amount) | |||||||||||||
Loan count-servicing | 979,414 | 596,011 | 389,172 | ||||||||||
Ending unpaid principal balance | $ | 173,936 | $ | 98,805 | $ | 64,176 | |||||||
Average unpaid principal balance | $ | 136,371 | $ | 81,491 | $ | 38,653 | |||||||
Average loan amount | $ | 177,592 | $ | 165,778 | $ | 164,904 | |||||||
Average coupon | 5.34 | % | 5.43 | % | 5.74 | % | |||||||
Average FICO | 671 | 627 | 631 | ||||||||||
60+ delinquent (% of loans) (1) | 14.1 | % | 14.7 | % | 17.0 | % | |||||||
Total prepayment speed (12 month constant pre-payment rate) | 15.7 | % | 13.4 | % | 13.3 | % |
(1) | Loan delinquency is based on the current contractual due date of the loan. In the case of a completed loan modification, delinquency is based on the modified due date of the loan. |
December 31, | |||
($ in millions, except for average loan amount) | 2012 | ||
Loan count | 170,463 | ||
Ending unpaid principal balance | $ | 28,382 | |
Average loan amount | $ | 166,498 | |
Average borrower age | 76 |
Year ended December 31, | |||||||
2012 | 2011 | ||||||
Servicing fee income | $ | 376,497 | $ | 207,102 | |||
Loss mitigation and performance-based incentive fees | 28,821 | 15,671 | |||||
Modification fees | 48,511 | 32,552 | |||||
Reverse mortgage service fees | 40,450 | — | |||||
Late fees and other ancillary charges | 31,930 | 23,728 | |||||
Other servicing fee related revenues | 9,598 | 1,401 | |||||
Total servicing fee income before MSR fair value adjustments | 535,807 | 280,454 | |||||
Fair value adjustments on excess spread financing | (10,684 | ) | (3,060 | ) | |||
Reverse mortgage servicing amortization/accretion | 5,120 | — | |||||
Fair value adjustments on MSR | (68,242 | ) | (39,000 | ) | |||
Total servicing fee income | $ | 462,001 | $ | 238,394 |
Year ended December 31, | |||||||
2012 | 2011 | ||||||
Servicing Fee Income | (in thousands) | ||||||
Primary servicing | $ | 350,829 | $ | 164,096 | |||
Subservicing | 144,528 | 116,358 | |||||
Reverse servicing | 40,450 | — | |||||
Total servicing fee income before MSR fair value adjustments | $ | 535,807 | $ | 280,454 | |||
December 31, | |||||||
2012 | 2011 | ||||||
Unpaid Principal Balance | (in millions) | ||||||
Primary servicing | $ | 134,511 | $ | 45,817 | |||
Subservicing | 44,921 | 52,988 | |||||
Reverse servicing | 28,382 | — | |||||
Total unpaid principal balance | $ | 207,814 | $ | 98,805 |
• | Increase of $169.4 million due to higher average UPB of $136.4 billion in 2012 compared to $81.5 billion in 2011. The increase in our servicing portfolio was primarily driven by an increase in average UPB for loans serviced for GSEs and other subservicing contracts for third party investors to $89.8 billion in the year ended December 31, 2012 from $61.0 billion in the comparable 2011 period. In addition, we also experienced an increase in average UPB for our private asset-backed securitizations portfolio, which increased to $36.1 billion in the year ended December 31, 2012 compared to $13.0 billion in the comparable 2011 period. |
• | Increase of $40.5 million from fees earned from our reverse mortgage portfolio for which we began servicing in January 2012. |
• | Increase of $15.9 million due to higher modification fees earned from HAMP and non-HAMP modifications. |
• | Increase of $13.1 million due to higher loss mitigation and performance-based incentive fees earned from a GSE. |
• | Increase of $8.2 million from increased collections from late fees and other ancillary charges. |
• | Increase of $8.2 million in other servicing fee income due to our June 2012 Aurora servicing portfolio acquisition. In conjunction with this acquisition, we acquired a master servicing portfolio of over $4.9 billion. Revenues related to the master servicing portfolio are included in other servicing fee income. |
• | Decrease of $29.2 million from change in fair value on MSRs which was recognized in servicing fee income. The fair value of our MSRs is based upon the present value of the expected future cash flows related to servicing these loans. The revenue components of the cash flows are servicing fees, interest earned on custodial accounts, and other ancillary income. The expense components include operating costs related to servicing the loans (including delinquency and foreclosure costs) and interest expenses on servicing advances. The expected future cash flows are primarily impacted by prepayment estimates, delinquencies, and market discount rates. Generally, the value of MSRs increases when interest rates increase and decreases when interest rates decline due to the effect those changes in interest rates have on prepayment estimates. Other factors affecting the MSR value includes the estimated effects of loan modifications on expected cash flows. Such modifications tend to positively impact cash flows by extending the expected life of the affected MSR and potentially producing additional revenue opportunities depending on the type of modification. In valuing the MSRs, we believe our assumptions are consistent with the assumptions other major market participants use. These assumptions include a level of future modification activity that we believe major market participants would use in their valuation of MSRs. Internally, we have modification goals that exceed the assumptions utilized in our valuation model. Nevertheless, were we to apply an assumption of a level of future modifications consistent with our internal goals to our MSR valuation, we do not believe the resulting increase in value would be material. Additionally, several state Attorneys General have requested that certain mortgage servicers, including us, suspend foreclosure proceedings pending internal review to ensure compliance with applicable law, and we received requests from four such state Attorneys General. Although we have resumed those previously delayed proceedings, changes in the foreclosure process that may be required by government or regulatory bodies could increase the cost of servicing and diminish the value of our MSRs. We utilize assumptions of servicing costs that include delinquency and foreclosure costs that we believe major market participants would use to value their MSRs. We periodically compare our internal MSR valuation to third party valuation of our MSRs to help substantiate our market assumptions. We have considered the costs related to the delayed proceedings in our assumptions and we do not believe that any resulting decrease in the MSR was material given the expected short-term nature of the issue. |
• | Increase of $5.1 million from the net impact of accretion/amortization on our mortgage servicing rights related to acquisitions of reverse mortgage portfolios during 2012 with no comparable accretion/amortization recorded during the twelve months ended December 31, 2011. |
• | Decrease of $7.6 million from the change in fair value of our excess spread financing arrangements. In conjunction with various MSR acquisitions, we have entered into sale and assignment agreements, which we treated as financings. Within these agreements, we sell the right to receive a portion of the excess cash flow generated from certain underlying MSR portfolios after receipt of a fixed basic servicing fee per loan. We measure these financing arrangements at fair value. |
Year ended December 31, | |||||||
Other Fee Income | 2012 | 2011 | |||||
Primary servicing | $ | 3,670 | $ | 5,520 | |||
Subservicing | 185 | 3,038 | |||||
Adjacent businesses | 31,278 | 8,631 | |||||
Total other fee income | $ | 35,133 | $ | 17,189 |
Year ended December 31, | |||||||
Expenses and impairments | 2012 | 2011 | |||||
Primary servicing | $ | 154,732 | $ | 70,549 | |||
Subservicing | 118,901 | 82,938 | |||||
Reverse servicing | 30,525 | — | |||||
Adjacent businesses | 18,429 | 9,100 | |||||
Other servicing segment expenses | 15,570 | 15,343 | |||||
Total expenses and impairments | $ | 338,157 | $ | 177,930 |
• | Interest expense was $156.8 million for the year ended December 31, 2012 compared to $58.0 million for the year ended December 31, 2011, an increase of $98.8 million, or 170.3%, primarily due to higher average outstanding debt (excluding unsecured senior notes) of $1,334.5 million in the year ended December 31, 2012 compared to $642.9 million in the comparable 2011 period. Interest expense from the unsecured senior notes was $57.7 million and $30.3 million, respectively, for the years ended December 31, 2012 and 2011. In 2011, interest expense also includes gains for the ineffective portion of cash flow hedge of $2.0 million. |
• | Interest income was $30.9 million for the year ended December 31, 2012 compared to $2.3 million for the year ended December 31, 2011, an increase of $28.6 million, due in part to interest earned on our participating interests in reverse mortgages combined with accretion recognized related to discounts recorded on acquired servicer advances. During 2012, in conjunction with an MSR acquisition, we allocated a discount to the related servicer advances. This discount is realized as the underlying servicer advances are collected. We recognized $11.3 million of the discount in 2012 related to collections on the servicer advances. |
• | We recorded $15.6 million of contract termination fees for the year ended December 31, 2012. During 2012, we pursued a potential acquisition of the mortgage servicing rights and other assets of a financial services company in bankruptcy and received the right to receive a breakup fee in the event that we did not win the bankruptcy auction for these assets. We were not the highest bidder in the auction and subsequently received the breakup fee which was recorded in contract termination fees, net of the portion payable to Nationstar's co-investment partner in the potential acquisition. We did not recognize any contract termination fees in 2011 or 2010. |
• | We recognized a loss on equity investment of $14.6 million during 2012 compared to $0.1 million in 2011. The large increase in the loss relates to the decision to wind down the operation of the underlying entity. (see Note 27- Related Party Disclosure). |
Year ended December 31, | 2011 | 2010 | |||||
Servicing fee income | $ | 207,102 | $ | 118,443 | |||
Loss mitigation and performance-based incentive fees | 15,671 | 16,621 | |||||
Modification fees | 32,552 | 21,792 | |||||
Late fees and other ancillary charges | 23,728 | 22,828 | |||||
Other servicing fee related revenues | 1,401 | 1,928 | |||||
Total servicing fee income before MSR fair value adjustments | 280,454 | 181,612 | |||||
Fair value adjustments on excess spread financing | (3,060 | ) | — | ||||
Fair value adjustments on MSR | (39,000 | ) | (6,043 | ) | |||
Total servicing fee income | $ | 238,394 | $ | 175,569 |
Servicing Fee Income | |||||||
Year ended December 31, | 2011 | 2010 | |||||
Primary servicing | $ | 164,096 | $ | 161,312 | |||
Subservicing | 116,358 | 20,300 | |||||
Total servicing fee income before MSR fair value adjustments | $ | 280,454 | $ | 181,612 |
UPB (in millions) | |||||||
December 31, | 2011 | 2010 | |||||
Primary servicing | $ | 45,817 | $ | 34,404 | |||
Subservicing | 52,988 | 29,772 | |||||
Total unpaid principal balance | $ | 98,805 | $ | 64,176 |
(a) | Increase of $88.7 million due to higher average UPB of $81.5 billion in the 2011 period compared to $38.7 billion in the comparable 2010 period. The increase in our servicing portfolio was primarily driven by an increase in average UPB for loans serviced for GSEs and other subservicing contracts for third party investors of $61.0 billion in the 2011 period compared to $28.0 billion in the comparable 2010 period. In addition, we also experienced an increase in average UPB for our private asset-backed securitizations portfolio, which increased to $13.0 billion in the year ended December 31, 2011 compared to $7.4 billion in the comparable 2010 period. |
(b) | Increase of $10.8 million due to higher modification fees earned from HAMP and non-HAMP modifications. |
(c) | Decrease of $0.9 million due to decreased loss mitigation and performance-based incentive fees earned from a GSE. |
(d) | Decrease of $33.0 million from change in fair value on MSRs which was recognized in servicing fee income. The fair value of our MSRs is based upon the present value of the expected future cash flows related to servicing these loans. The revenue components of the cash flows are servicing fees, interest earned on custodial accounts, and other ancillary income. The expense components include operating costs related to servicing the loans (including delinquency and foreclosure costs) and interest expenses on servicing advances. The expected future cash flows are primarily impacted by prepayment estimates, delinquencies, and market discount rates. Generally, the value of MSRs increases when interest rates increase and decreases when interest rates decline due to the effect those changes in interest rates have on prepayment estimates. Other factors affecting the MSR value includes the estimated effects of loan modifications on expected cash flows. Such modifications tend to positively impact cash flows by extending the expected life of the |
Other Fee Income | |||||||
Year ended December 31, | 2011 | 2010 | |||||
Primary servicing | $ | 5,520 | $ | 6,865 | |||
Subservicing | 3,038 | 408 | |||||
Adjacent businesses | 8,631 | — | |||||
Total other fee income | $ | 17,189 | $ | 7,273 |
Expenses and impairments | |||||||
Year ended December 31, | 2011 | 2010 | |||||
Primary servicing | $ | 70,549 | $ | 82,772 | |||
Subservicing | 82,938 | 18,276 | |||||
Adjacent businesses | 9,100 | — | |||||
Other Servicing Segment expenses | 15,343 | 6,235 | |||||
Total expenses and impairments | $ | 177,930 | $ | 107,283 |
• | Interest income was $2.3 million for the year ended December 31, 2011 compared to $0.3 million for the year ended December 31, 2010, an increase of $2.0 million, due to higher average outstanding custodial cash deposit balances on custodial cash accounts as a result of the growth in our servicing portfolio. |
• | Interest expense was $58.0 million for the year ended December 31, 2011 compared to $51.8 million for the year ended December 31, 2010, an increase of $6.2 million, or 12.0%, primarily due to higher average outstanding debt of $642.9 million in the year ended December 31, 2011 compared to $638.6 million in the comparable 2010 period. The impact of the higher debt balances is partially offset by lower interest rates due to declines in the base LIBOR and decreases in the overall index margin on outstanding servicer advance facilities. Interest expense from the senior notes was $30.3 million and $22.1 million, respectively, for the years ended December 31, 2011 and 2010. Interest expense also includes gains for the ineffective portion of cash flow hedge of $2.0 million and $0.9 million, respectively, for the years ended December 31, 2011 and 2010. |
• | Loss on interest rate swaps and caps was $9.8 million for the year ended December 31, 2010 compared to a $0.3 million gain for the year ended December 31, 2011. Effective October 1, 2010, we designated an existing interest rate swap as a cash flow hedge against outstanding floating rate financing associated with one of our outstanding servicer advance facilities. This interest rate swap is recorded at fair value, with any changes in fair value related to the effective portion of the hedge being recorded as an adjustment to other comprehensive income. Prior to this designation, any changes in fair value were recorded as a loss on interest rate swaps and caps on our statement of operations. In conjunction with our October 2011 amendment to our 2010-ABS Advance Financing Facility, we paid off our 2009-ABS Advance Financing Facility and transferred the related collateral to the 2010-ABS Advance Financing Facility. Concurrently with the repayment of the 2009-ABS Advance Financing Facility, we de-designated the underlying interest rate swap on our 2009-ABS Advance Financing Facility. Our outstanding 2010-ABS interest rate swap served as an economic hedge during the period it was outstanding for the year ended December 31, 2011. |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Revenues: | |||||||||||
Servicing fee income | $ | — | $ | — | $ | — | |||||
Other fee income (expense) | (291 | ) | 14,109 | 7,042 | |||||||
Total fee income (expense) | (291 | ) | 14,109 | 7,042 | |||||||
Gain on mortgage loans held for sale | 487,142 | 109,431 | 77,498 | ||||||||
Total revenues | 486,851 | 123,540 | 84,540 | ||||||||
Expenses and impairments: | |||||||||||
Salaries, wages and benefits | 152,254 | 71,697 | 57,852 | ||||||||
General and administrative | 62,607 | 26,344 | 26,761 | ||||||||
Occupancy | 4,882 | 3,566 | 2,307 | ||||||||
Total expenses and impairments | 219,743 | 101,607 | 86,920 | ||||||||
Other income (expense): | |||||||||||
Interest income | 20,426 | 12,718 | 11,848 | ||||||||
Interest expense | (25,830 | ) | (10,955 | ) | (8,806 | ) | |||||
Total other income (expense) | (5,404 | ) | 1,763 | 3,042 | |||||||
Income before taxes | $ | 261,704 | $ | 23,696 | $ | 662 |
Year ended December 31, | |||||||||||
Originations Volume (in millions): | 2012 | 2011 | 2010 | ||||||||
Retail | $ | 4,361 | $ | 2,200 | $ | 1,608 | |||||
Wholesale | 2,966 | 1,212 | 1,184 | ||||||||
Correspondent | 569 | — | — | ||||||||
Total Originations | $ | 7,896 | $ | 3,412 | $ | 2,792 |
• | Other fee income (expense) was $(0.3) million for the year ended December 31, 2012 compared to $14.1 million for the year ended December 31, 2011, a decrease of $14.4 million, or (102.1)%, primarily due to lower points and fees collected as a result of product mix changes in originations from 2011 to 2012, combined with an increase in fees paid to third party mortgage brokers. |
Year ended December 31, | 2012 | 2011 | |||||
Gain on sale | $ | 288,766 | $ | 68,567 | |||
Provision for repurchases | (13,121 | ) | (5,534 | ) | |||
Capitalized servicing rights | 58,607 | 36,474 | |||||
Fair value mark-to-market adjustments | 18,368 | 11,159 | |||||
Mark-to-market on derivatives/hedges | 134,522 | (1,235 | ) | ||||
Total gain on mortgage loans held for sale | $ | 487,142 | $ | 109,431 |
• | Increase of $220.2 million from larger volume of originations, which increased from $3.4 billion in 2011 to $7.9 billion in 2012, and higher margins earned on the sale of residential mortgage loans during the period. |
• | Increase of $135.7 million from change in unrealized gains/losses on derivative financial instruments. These include IRLCs, LPCs, and forward sales of MBS. |
• | Increase of $22.1 million from capitalized MSRs due to the larger volume of originations and subsequent retention of MSRs. |
• | Increase of $7.2 million resulting from the change in fair value on newly-originated loans. |
• | Decrease of $7.6 million from a larger provision for repurchases as a result of the increase in our loan sale volume. |
• | Increase of $80.6 million in salaries, wages and benefits expense from increase in average headcount of 988 in 2011 to 1,157 in 2012 and increases in performance-based compensation due to the large increase in originations volume. |
• | Increase of $37.6 million in general and administrative and occupancy expense primarily due to an increase in our overhead expenses from the higher originations volume in the 2012 period. |
• | Interest income was $20.4 million for the year ended December 31, 2012 compared to $12.7 million for the year ended December 31, 2011, an increase of $7.7 million, or 60.6%, representing interest earned from originated loans prior to sale or securitization. The increase is primarily due to the increase in the volume of originations. Loans are typically sold within 30 days of origination. |
• | Interest expense was $25.8 million for the year ended December 31, 2012 compared to $11.0 million for the year ended December 31, 2011, an increase of $14.8 million, or 134.5%, primarily due to an increase in originations volume in 2012 and associated financing required to originate these loans, including interest expense attributable to the originations segment on our unsecured senior notes, combined with $6.2 million of interest expense on senior unsecured notes. During 2012, we allocated a portion of our interest expense from these unsecured notes to our Originations segment to match the benefit this segment will receive from future portfolio acquisitions due to the ability to recapture portfolio runoff. |
• | Other fee income was $14.1 million for the year ended December 31, 2011 compared to $7.0 million for the year ended |
Year ended December 31, | 2011 | 2010 | |||||
Gain on sale | $ | 68,567 | $ | 51,839 | |||
Provision for repurchases | (5,534 | ) | (4,649 | ) | |||
Capitalized servicing rights | 36,474 | 26,253 | |||||
Fair value mark-to-market adjustments | 11,159 | 2,301 | |||||
Mark-to-market on derivatives/hedges | (1,235 | ) | 1,754 | ||||
Total gain on mortgage loans held for sale | $ | 109,431 | $ | 77,498 |
• | Increase of $16.8 million from larger volume of originations, which increased from $2.8 billion in 2010 to $3.4 billion in 2011, and higher margins earned on the sale of residential mortgage loans during the period. |
• | Increase of $10.2 million from capitalized MSRs due to the larger volume of originations and subsequent retention of MSRs. |
• | Increase of $8.9 million resulting from the change in fair value on newly-originated loans. |
• | Decrease of $3.0 million from change in unrealized gains/losses on derivative financial instruments. These include IRLCs and forward sales of MBS. |
• | Decrease of $0.9 million from an increase in our provision for repurchases as a result of the increase in our loan sale volume. |
• | Increase of $13.8 million in salaries, wages and benefits expense from increase in average headcount of 688 in 2010 to |
• | Increase of $0.8 million in general and administrative and occupancy expense primarily due to an increase in our |
• | Interest income was $12.7 million for the year ended December 31, 2011 compared to $11.8 million for the year ended |
• | Interest expense was $11.0 million for the year ended December 31, 2011 compared to $8.8 million for the year ended |
Year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Revenues: | |||||||||||
Servicing fee income | $ | 2,287 | $ | 1,972 | $ | 820 | |||||
Other fee income | (186 | ) | 3,996 | 2,643 | |||||||
Total fee income | 2,101 | 5,968 | 3,463 | ||||||||
Gain on mortgage loans held for sale | — | — | — | ||||||||
Total revenues | 2,101 | 5,968 | 3,463 | ||||||||
Expenses and impairments: | |||||||||||
Salaries, wages and benefits | 10,757 | 7,233 | 13,148 | ||||||||
General and administrative | 8,251 | 7,228 | 7,488 | ||||||||
Provision for loan losses | 1,890 | 3,537 | 3,298 | ||||||||
Loss on sale of foreclosed real estate and other | 2,864 | 6,833 | 205 | ||||||||
Occupancy | 383 | 2,110 | 2,788 | ||||||||
Total expenses and impairments | 24,145 | 26,941 | 26,927 | ||||||||
Other income (expense): | |||||||||||
Interest income | 18,431 | 44,866 | 77,521 | ||||||||
Interest expense | (14,639 | ) | (36,396 | ) | (55,566 | ) | |||||
Loss on interest rate swaps and caps | (2,231 | ) | — | — | |||||||
Fair value of changes in ABS securitizations | — | (12,389 | ) | (23,297 | ) | ||||||
Total other income (expense) | 1,561 | (3,919 | ) | (1,342 | ) | ||||||
Loss before taxes | $ | (20,483 | ) | $ | (24,892 | ) | $ | (24,806 | ) |
Year ended December 31, | |||||||||||||
2012 | 2011 | 2010 | (1) | ||||||||||
Performing – UPB | $ | 260,219 | $ | 279,730 | $ | 1,037,201 | |||||||
Nonperforming (90+ Delinquency) - UPB | 93,935 | 90,641 | 337,779 | ||||||||||
REO - Estimated Fair Value | 10,467 | 3,668 | 27,337 | ||||||||||
Total Legacy Portfolio and Other – UPB | $ | 364,621 | $ | 374,039 | $ | 1,402,317 |
(1) | Amounts include one previously off-balance sheet securitization which was consolidated upon adoption of ASC 810, Consolidation, related to consolidation of certain VIEs. |
December 31, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 152,649 | $ | 62,445 | |||
Restricted cash | 393,190 | 71,499 | |||||
Accounts receivable | 3,043,606 | 562,300 | |||||
Mortgage loans held for sale | 1,480,537 | 458,626 | |||||
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets, net of allowance for loan losses of $4,390 and $5,824 | 238,907 | 243,480 | |||||
Reverse mortgage interests | 750,273 | — | |||||
Receivables from affiliates | 12,604 | 4,609 | |||||
Mortgage servicing rights – fair value | 635,860 | 251,050 | |||||
Mortgage servicing rights – amortized cost | 10,973 | — | |||||
Property and equipment, net of accumulated depreciation of $48,806 and $39,201, respectively | 75,026 | 24,073 | |||||
Real estate owned (REO), net | 10,467 | 3,668 | |||||
Other assets | 322,051 | 106,181 | |||||
Total assets | $ | 7,126,143 | $ | 1,787,931 | |||
Liabilities and equity | |||||||
Notes payable | $ | 3,601,586 | $ | 873,179 | |||
Unsecured senior notes | 1,062,635 | 280,199 | |||||
Payables and accrued liabilities | 631,431 | 183,789 | |||||
Derivative financial instruments | 20,026 | 12,370 | |||||
Mortgage servicing liabilities | 83,238 | — | |||||
Nonrecourse debt - Legacy Assets | 100,620 | 112,490 | |||||
Excess spread financing - fair value | 288,089 | 44,595 | |||||
Participating interest financing | 580,836 | — | |||||
Total liabilities | 6,368,461 | 1,506,622 | |||||
Members’ units related to Nationstar Mortgage LLC | — | 281,309 | |||||
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock at $0.01 par value - 1,000,000 shares authorized, 90,480 shares issued at December 31, 2012 | 905 | — | |||||
Additional paid-in-capital | 556,056 | — | |||||
Retained earnings | 205,287 | — | |||||
Common shares held by subsidiary | (4,566 | ) | — | ||||
Total equity | 757,682 | 281,309 | |||||
Total liabilities and equity | $ | 7,126,143 | $ | 1,787,931 |
Year ended December 31, | 2012 | 2011 | 2010 | ||||||||
Repurchase reserves, beginning of period | $ | 10,026 | $ | 7,321 | $ | 3,648 | |||||
Additions | 13,121 | 5,534 | 4,649 | ||||||||
Charge-offs | (4,636 | ) | (2,829 | ) | (976 | ) | |||||
Repurchase reserves, end of period | $ | 18,511 | $ | 10,026 | $ | 7,321 |
Year ended December 31, | 2012 | 2011 | 2010 | |||||||||||||||||
UPB | Count | UPB | Count | UPB | Count | |||||||||||||||
Beginning balance | $ | 12.9 | 61 | $ | 4.3 | 21 | $ | 1.3 | 8 | |||||||||||
Repurchases and indemnifications | (5.5 | ) | (26 | ) | (6.9 | ) | (37 | ) | (1.9 | ) | (8 | ) | ||||||||
Claims initiated | 24.3 | 132 | 32.4 | 154 | 10.8 | 53 | ||||||||||||||
Rescinded | (17.7 | ) | (88 | ) | (16.9 | ) | (77 | ) | (5.9 | ) | (32 | ) | ||||||||
Ending balance | $ | 14.0 | 79 | $ | 12.9 | 61 | $ | 4.3 | 21 |
Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | Total | ||||||||||||||||||||||||||||||||||||
$ | Count | $ | Count | $ | Count | $ | Count | $ | Count | $ | Count | ||||||||||||||||||||||||||||||
Loan Sales | $ | 6.9 | 31,261 | $ | 3.3 | 16,629 | $ | 2.6 | 13,090 | $ | 1.0 | 5,344 | $ | 0.5 | 3,412 | $ | 14.3 | 69,736 |
• | Operating cash decreased $4,491.9 million due to higher volume in our originations segment. We originated $7,904.1 million in residential mortgage loans during 2012, compared to $3,412.2 million during 2011. This decrease was partially offset by an increase of $3,794.3 million in our cash inflows from proceeds received from the sale of our residential mortgage loans and payments received on mortgage loans. We received $7,197.7 million in cash proceeds from loan sales and principal collections during 2012, compared to $3,403.4 million during 2011. |
• | Decrease of $1,075.4 million in cash outflows used by working capital which used $1,097.1 million during 2012 compared to $21.7 million during 2011. |
• | $718.6 million improvement in proceeds received from sale of originated loans, which provided $3,339.9 million and $2,621.3 million for the years ending December 31, 2011 and 2010, respectively, partially offset by a $620.6 million increase in cash used to originate loans. Mortgage loans originated and purchased, net of fees, used $3,412.2 million and $2,791.6 million in the years ending December 31, 2011 and 2010, respectively. |
• | $74.1 million decrease in cash outflows used for working capital, which used ($21.7) million cash for the year ended December 31, 2011 and provided $52.4 million during the same period in the prior year. |
Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | Total | |||||||||||||||
Unsecured Senior Notes | $ | — | $ | 285,000 | $ | — | $ | 775,000 | $ | 1,060,000 | |||||||||
Interest expense from Unsecured Senior Notes | 99,105 | 181,599 | 135,188 | 148,664 | 564,556 | ||||||||||||||
MBS Advance Financing Facility | 185,817 | — | — | — | 185,817 | ||||||||||||||
Securities Repurchase Facility (2011) | 11,774 | — | — | — | 11,774 | ||||||||||||||
2010-ABS Advance Financing Facility | — | 194,833 | — | — | 194,833 | ||||||||||||||
2011-Agency Advance Financing Facility | 476,091 | — | — | — | 476,091 | ||||||||||||||
MSR Note | 4,627 | — | — | — | 4,627 | ||||||||||||||
2012-AW agency advance financing facility | 100,000 | — | — | — | 100,000 | ||||||||||||||
2012-C ABS advance financing facility | 657,027 | — | — | — | 657,027 | ||||||||||||||
2012-R ABS advance financing facility | 374,739 | — | — | — | 374,739 | ||||||||||||||
2012-W ABS advance financing facility | 492,235 | — | — | — | 492,235 | ||||||||||||||
$375 million warehouse facility | — | 245,287 | — | — | 245,287 | ||||||||||||||
$150 million warehouse facility | 224,790 | — | — | — | 224,790 | ||||||||||||||
$250 million warehouse facility (2011) | 356,104 | — | — | — | 356,104 | ||||||||||||||
$100 million warehouse facility (2009) | 87,747 | — | — | — | 87,747 | ||||||||||||||
ASAP+ Short-Term Financing Facility | 124,572 | — | — | — | 124,572 | ||||||||||||||
Lease Obligations | 24,459 | 40,874 | 12,949 | 7,638 | 85,920 | ||||||||||||||
Total | $ | 3,219,087 | $ | 947,593 | $ | 148,137 | $ | 931,302 | $ | 5,246,119 |
• | an increase in interest rates would increase our costs of servicing our outstanding debt, including our ability to finance servicing advances; |
• | a decrease (increase) in interest rates would generally increase (decrease) prepayment rates and may require us to report a decrease (increase) in the value of our MSRs; |
• | a change in prevailing interest rates could impact our earnings from our custodial deposit accounts; and |
• | an increase in interest rates could generate an increase in delinquency, default and foreclosure rates resulting in an increase in both operating expenses and interest expense and could cause a reduction in the value of our assets. |
• | a substantial and sustained increase in prevailing interest rates could adversely affect our loan originations volume because refinancing an existing loan would be less attractive and qualifying for a loan may be more difficult; and |
• | an increase in interest rates would increase our costs of servicing our outstanding debt, including our ability to finance loan originations; |
Change in Fair Value | December 31, 2012 | ||||||
(in thousands) | Down 25 bps | Up 25 bps | |||||
Increase (decrease) in assets | |||||||
Mortgage loans held for sale | $ | 14,490 | $ | (17,010 | ) | ||
Mortgage servicing rights – fair value | (3,922 | ) | 4,638 | ||||
Other assets (derivatives) | |||||||
Interest Rate Lock Commitments | 20,042 | (27,241 | ) | ||||
Total change in assets | 30,610 | (39,613 | ) | ||||
Increase (decrease) in liabilities | |||||||
Derivative financial instruments | |||||||
Interest rate swaps and caps | (1,579 | ) | 1,572 | ||||
Forward MBS trades | 41,737 | (50,093 | ) | ||||
Excess spread financing (at fair value) | (720 | ) | 853 | ||||
Total change in liabilities | 39,438 | (47,668 | ) | ||||
Total, net change | $ | (8,828 | ) | $ | 8,055 |
December 31, 2012 | December 31, 2011 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 152,649 | $ | 62,445 | |||
Restricted cash | 393,190 | 71,499 | |||||
Accounts receivable | 3,043,606 | 562,300 | |||||
Mortgage loans held for sale | 1,480,537 | 458,626 | |||||
Mortgage loans held for investment, subject to nonrecourse debt - Legacy Assets, net of allowance for loan losses of $4,390 and $5,824, respectively | 238,907 | 243,480 | |||||
Reverse mortgage interests | 750,273 | — | |||||
Receivables from affiliates | 12,604 | 4,609 | |||||
Mortgage servicing rights – fair value | 635,860 | 251,050 | |||||
Mortgage servicing rights – amortized cost | 10,973 | — | |||||
Property and equipment, net of accumulated depreciation of $48,806 and $39,201, respectively | 75,026 | 24,073 | |||||
Real estate owned (REO), net | 10,467 | 3,668 | |||||
Other assets | 322,051 | 106,181 | |||||
Total assets | $ | 7,126,143 | $ | 1,787,931 | |||
Liabilities and equity | |||||||
Notes payable | $ | 3,601,586 | $ | 873,179 | |||
Unsecured senior notes | 1,062,635 | 280,199 | |||||
Payables and accrued liabilities | 631,431 | 183,789 | |||||
Derivative financial instruments | 20,026 | 12,370 | |||||
Mortgage servicing liabilities | 83,238 | — | |||||
Nonrecourse debt - Legacy Assets | 100,620 | 112,490 | |||||
Excess spread financing - fair value | 288,089 | 44,595 | |||||
Participating interest financing | 580,836 | — | |||||
Total liabilities | 6,368,461 | 1,506,622 | |||||
Commitments and contingencies – See Note 21 | — | — | |||||
Members’ units related to Nationstar Mortgage LLC | — | 281,309 | |||||
Preferred stock at $0.01 par value - 300,000 shares authorized, no shares issued and outstanding | — | — | |||||
Common stock at $0.01 par value - 1,000,000 shares authorized, 90,480 shares issued at December 31, 2012 | 905 | — | |||||
Additional paid-in-capital | 556,056 | — | |||||
Retained earnings | 205,287 | — | |||||
Common shares held by subsidiary | (4,566 | ) | — | ||||
Total equity | 757,682 | 281,309 | |||||
Total liabilities and equity | $ | 7,126,143 | $ | 1,787,931 |
For the year ended December 31, | ||||||||||||
2012 | 2011 | 2010 | ||||||||||
Revenues: | ||||||||||||
Servicing fee income | $ | 462,495 | $ | 233,411 | $ | 167,126 | ||||||
Other fee income | 34,656 | 35,294 | 16,958 | |||||||||
Total fee income | 497,151 | 268,705 | 184,084 | |||||||||
Gain on mortgage loans held for sale | 487,164 | 109,136 | 77,344 | |||||||||
Total revenues | 984,315 | 377,841 | 261,428 | |||||||||
Expenses and impairments: | ||||||||||||
Salaries, wages and benefits | 358,455 | 202,290 | 149,115 | |||||||||
General and administrative | 201,587 | 82,183 | 58,913 | |||||||||
Provision for loan losses | 2,353 | 3,537 | 3,298 | |||||||||
Loss on foreclosed real estate and other | 2,864 | 6,833 | 205 | |||||||||
Occupancy | 16,786 | 11,340 | 9,445 | |||||||||
Total expenses and impairments | 582,045 | 306,183 | 220,976 | |||||||||
Other income (expense): | ||||||||||||
Interest income | 71,586 | 66,802 | 98,895 | |||||||||
Interest expense | (197,308 | ) | (105,375 | ) | (116,163 | ) | ||||||
Contract termination fees | 15,600 | — | — | |||||||||
Loss on equity method investments | (14,571 | ) | (107 | ) | — | |||||||
Gain/(loss) on interest rate swaps and caps | (994 | ) | 298 | (9,801 | ) | |||||||
Fair value changes in ABS securitizations | — | (12,389 | ) | (23,297 | ) | |||||||
Total other (expense) | (125,687 | ) | (50,771 | ) | (50,366 | ) | ||||||
Income (loss) before taxes | 276,583 | 20,887 | (9,914 | ) | ||||||||
Income tax expense | 71,296 | — | — | |||||||||
Net income / (loss) | 205,287 | 20,887 | (9,914 | ) | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Change in value of designated cash flow hedges | — | (1,071 | ) | 1,071 | ||||||||
Comprehensive income (loss) | $ | 205,287 | $ | 19,816 | $ | (8,843 | ) | |||||
Earnings (loss) per share: | ||||||||||||
Basic earnings (loss) per share | $ | 2.41 | $ | 0.30 | $ | (0.14 | ) | |||||
Diluted earnings (loss) per share | $ | 2.40 | $ | 0.30 | $ | (0.14 | ) | |||||
Weighted average shares: | ||||||||||||
Basic | 85,328 | 70,000 | 70,000 | |||||||||
Dilutive effect of stock awards | 196 | — | — | |||||||||
Diluted | 85,524 | 70,000 | 70,000 | |||||||||
Dividends declared per share | $ | — | $ | — | $ | — |
Common Shares Outstanding | Members’ Units | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Common shares held by subsidiary | Total Stockholders’ Units and Equity | |||||||||||||||||||||||
Balance at December 31, 2009 | — | $ | 263,823 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 263,823 | |||||||||||||||
Cumulative effect of change in accounting principles as of January 1, 2010 related to adoption of new accounting guidance on consolidation of variable interest entities | — | (8,068 | ) | — | — | — | — | — | (8,068 | ) | ||||||||||||||||||||
Share based compensation | — | 12,856 | — | — | — | — | — | 12,856 | ||||||||||||||||||||||
Tax related share-based settlement of units by members | — | (3,396 | ) | — | — | — | — | — | (3,396 | ) | ||||||||||||||||||||
Net Loss | — | (9,914 | ) | — | — | — | — | — | (9,914 | ) | ||||||||||||||||||||
Change in value of cash flow hedge | — | — | — | — | 1,071 | — | — | 1,071 | ||||||||||||||||||||||
Balance at December 31, 2010 | — | 255,301 | — | — | 1,071 | — | — | 256,372 | ||||||||||||||||||||||
Share-based compensation | — | 14,815 | — | — | — | — | — | 14,815 | ||||||||||||||||||||||
Distributions to parent | — | (4,348 | ) | — | — | — | — | — | (4,348 | ) | ||||||||||||||||||||
Tax related share-based settlement of units by members | — | (5,346 | ) | — | — | — | — | — | (5,346 | ) | ||||||||||||||||||||
Net income | — | 20,887 | — | — | — | — | — | 20,887 | ||||||||||||||||||||||
Change in value of cash flow hedge | — | — | — | — | (1,071 | ) | — | — | (1,071 | ) | ||||||||||||||||||||
Balance at December 31, 2011 | — | 281,309 | — | — | — | — | — | 281,309 | ||||||||||||||||||||||
Contributions from parent – FIF HE | — | 12,764 | — | — | — | — | — | 12,764 | ||||||||||||||||||||||
LLC conversion of equity to common shares | 70,000 | (294,073 | ) | 700 | 293,373 | — | — | — | — | |||||||||||||||||||||
Common stock issuance | 19,167 | — | 192 | 246,508 | — | — | — | 246,700 | ||||||||||||||||||||||
Shares issued under incentive plan | 1,293 | — | 13 | (13 | ) | — | — | — | — | |||||||||||||||||||||
Share-based compensation | — | — | — | 13,342 | — | — | — | 13,342 | ||||||||||||||||||||||
Excess tax benefit from share-based compensation | — | — | — | 2,846 | — | — | — | 2,846 | ||||||||||||||||||||||
Withholding tax related to share based settlement of common stock by management | — | — | — | — | — | — | (4,566 | ) | (4,566 | ) | ||||||||||||||||||||
Net income | — | — | — | — | — | 205,287 | — | 205,287 | ||||||||||||||||||||||
Balance at December 31, 2012 | 90,460 | $ | — | $ | 905 | $ | 556,056 | $ | — | $ | 205,287 | $ | (4,566 | ) | $ | 757,682 |
For the year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Operating activities | |||||||||||
Net income / (loss) | $ | 205,287 | $ | 20,887 | $ | (9,914 | ) | ||||
Adjustments to reconcile net income / (loss) to net cash used in operating activities: | |||||||||||
Share-based compensation | 13,342 | 14,815 | 12,856 | ||||||||
Gain on mortgage loans held for sale | (487,164 | ) | (109,136 | ) | (77,344 | ) | |||||
Provision for loan losses | 2,353 | 3,537 | 3,298 | ||||||||
Loss on foreclosed real estate | 2,864 | 6,833 | 205 | ||||||||
Loss on equity method investments | 14,571 | 107 | — | ||||||||
(Gain) / loss on derivatives including ineffectiveness on interest rate swaps and caps | 994 | (2,331 | ) | 8,872 | |||||||
Fair value changes in ABS securitizations | — | 12,389 | 23,297 | ||||||||
Fair value changes in excess spread financing | 10,683 | 3,060 | — | ||||||||
Depreciation and amortization | 9,620 | 4,063 | 2,117 | ||||||||
Fair value changes in mortgage servicing rights | 68,242 | 39,000 | 6,043 | ||||||||
Amortization/accretion of mortgage servicing rights at amortized cost | (5,120 | ) | — | — | |||||||
Amortization of debt discount | 25,385 | 13,331 | 18,731 | ||||||||
Amortization (accretion) of premiums/discounts | (15,750 | ) | (5,042 | ) | (4,526 | ) | |||||
Mortgage loans originated and purchased, net of fees | (7,904,052 | ) | (3,412,185 | ) | (2,791,639 | ) | |||||
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees | 7,197,722 | 3,403,437 | 2,653,943 | ||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable, net | (752,507 | ) | (83,133 | ) | 41,148 | ||||||
Net tax effect of stock grants issued | (2,846 | ) | — | — | |||||||
Receivables from affiliates | 1,350 | 4,384 | 3,958 | ||||||||
Reverse funded advances | (608,085 | ) | — | — | |||||||
Other assets | (34,306 | ) | (44,576 | ) | (861 | ) | |||||
Payables and accrued liabilities | 299,301 | 101,657 | 8,163 | ||||||||
Net cash used in operating activities | (1,958,116 | ) | (28,903 | ) | (101,653 | ) |
For the year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Investing activities | |||||||||||
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt | — | 40,000 | 48,838 | ||||||||
Property and equipment additions, net of disposals | (25,356 | ) | (19,742 | ) | (3,936 | ) | |||||
Acquisition of equity method investee | — | (6,600 | ) | — | |||||||
Deposits on reverse mortgage servicing rights, net | (37,911 | ) | (26,893 | ) | — | ||||||
Deposits on / purchase of forward mortgage servicing rights, net of liabilities incurred | (2,070,375 | ) | (96,467 | ) | (17,812 | ) | |||||
Loan repurchases from Ginnie Mae | (24,329 | ) | — | — | |||||||
Proceeds from sales of REO | 679 | 27,823 | 74,107 | ||||||||
Net cash (used in) / provided by investing activities | (2,157,292 | ) | (81,879 | ) | 101,197 | ||||||
Financing activities | |||||||||||
Issuance of Senior Unsecured Notes, net | 770,699 | 35,166 | 243,013 | ||||||||
Transfers (to) / from restricted cash, net | (321,691 | ) | 16,812 | (33,731 | ) | ||||||
Issuance of common stock, net of IPO issuance costs | 246,700 | — | — | ||||||||
Issuance of participating interest financing | 582,897 | — | — | ||||||||
Issuance of excess spread financing | 272,617 | 40,492 | — | ||||||||
Increase in notes payable | 2,728,407 | 163,421 | (62,099 | ) | |||||||
Repayment of nonrecourse debt – Legacy assets | (13,785 | ) | (30,433 | ) | (45,364 | ) | |||||
Repayment of ABS nonrecourse debt | — | (58,091 | ) | (103,466 | ) | ||||||
Repayment of excess servicing spread financing | (39,865 | ) | (2,207 | ) | — | ||||||
Distributions to parent – FIF | — | (4,348 | ) | — | |||||||
Net tax benefit for stock grants issued | 2,846 | — | — | ||||||||
Debt financing costs | (23,213 | ) | (3,462 | ) | (14,923 | ) | |||||
Tax related share-based settlement of units by members | — | (5,346 | ) | (3,396 | ) | ||||||
Net cash provided by / (used in) financing activities | 4,205,612 | 152,004 | (19,966 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 90,204 | 41,222 | (20,422 | ) | |||||||
Cash and cash equivalents at beginning of period | 62,445 | 21,223 | 41,645 | ||||||||
Cash and cash equivalents at end of period | $ | 152,649 | $ | 62,445 | $ | 21,223 | |||||
Supplemental disclosures of non-cash activities | |||||||||||
Transfer of mortgage loans held for sale to REO at fair value | $ | — | $ | 90 | $ | 352 | |||||
Transfer of mortgage loans held for investment to REO at fair value | 4,295 | 6,291 | 18,928 | ||||||||
Transfer of mortgage loans held for investment, subject to ABS nonrecourse debt to REO at fair value | — | 17,528 | 37,127 | ||||||||
Change in value of cash flow hedge–accumulated other comprehensive income | — | (1,071 | ) | 1,071 | |||||||
Mortgage servicing rights resulting from sale or securitization of mortgage loans | 58,607 | 36,474 | 26,253 | ||||||||
Tax related share-based settlement of common stock | 4,566 | — | — | ||||||||
Liabilities incurred from purchase of forward mortgage servicing rights | 48,146 | 6,333 | — |
December 31, 2012 | December 31, 2011 | ||||||
Transfers Accounted for as Secured Borrowings | Transfers Accounted for as Secured Borrowings | ||||||
ASSETS | |||||||
Restricted cash | $ | 247,531 | $ | 22,316 | |||
Reverse mortgage interests | 542,037 | — | |||||
Accounts receivable | 2,656,277 | 279,414 | |||||
Mortgage loans held for investment, subject to nonrecourse debt | 224,207 | 237,496 | |||||
REO | 2,039 | 3,668 | |||||
Total Assets | $ | 3,672,091 | $ | 542,894 | |||
LIABILITIES | |||||||
Notes payable | $ | 2,294,925 | $ | 244,574 | |||
Payables and accrued liabilities | 3,415 | 977 | |||||
Derivative financial instruments | 6,118 | — | |||||
Nonrecourse debt–Legacy Assets | 100,620 | 112,490 | |||||
Participating interest financing | 580,836 | — | |||||
Total Liabilities | $ | 2,985,914 | $ | 358,041 |
December 31, 2012 | December 31, 2011 | ||||||
Total collateral balances | $ | 4,134,513 | $ | 4,579,142 | |||
Total certificate balances | 4,136,316 | 4,582,598 | |||||
Total mortgage servicing rights at fair value | 30,940 | 28,635 |
For the year ended, | December 31, 2012 | December 31, 2011 | December 31, 2010 | ||||||||||||||||||||
Principal Amount of Loans 60 Days or More Past Due | Credit Losses | Principal Amount of Loans 60 Days or More Past Due | Credit Losses | Principal Amount of Loans 60 Days or More Past Due | Credit Losses | ||||||||||||||||||
Total securitization trusts | $ | 1,180,133 | $ | 273,817 | $ | 1,066,130 | $ | 335,221 | $ | 830,953 | $ | 242,905 |
For the year ended, | December 31, 2012 | December 31, 2011 | December 31, 2010 | ||||||||||||||||||||
Servicing Fees Received | Loan Repurchases | Servicing Fees Received | Loan Repurchases | Servicing Fees Received | Loan Repurchases | ||||||||||||||||||
Total securitization trusts | $ | 28,049 | $ | — | $ | 28,569 | $ | — | $ | 29,129 | $ | — |
December 31, 2012 | December 31, 2011 | ||||||
Servicer advances, net of initial purchase discount | $ | 2,800,690 | $ | 511,725 | |||
Accrued servicing fees | 90,231 | 20,865 | |||||
Receivables from trusts | 39,029 | 4,664 | |||||
Reverse mortgage - other | 28,448 | — | |||||
Accrued interest | 3,801 | 1,512 | |||||
Other | 81,407 | 23,534 | |||||
Total accounts receivable | $ | 3,043,606 | $ | 562,300 |
December 31, | 2012 | 2011 | |||||
Mortgage loans held for sale – unpaid principal balance | $ | 1,426,182 | $ | 442,596 | |||
Mark-to-market adjustment | 54,355 | 16,030 | |||||
Total mortgage loans held for sale | $ | 1,480,537 | $ | 458,626 |
December 31, | 2012 | 2011 | 2010 | ||||||||
Mortgage loans held for sale – Non-performing | $ | — | $ | — | $ | 371 |
For the year ended December 31, | 2012 | 2011 | |||||
Mortgage loans held for sale – beginning balance | $ | 458,626 | $ | 369,617 | |||
Mortgage loans originated and purchased, net of fees | 7,904,052 | 3,412,185 | |||||
Cost of loans sold, net of fees | (6,917,892 | ) | (3,339,859 | ) | |||
Principal payments received on mortgage loans held for sale and other changes | 37,205 | 19,668 | |||||
Transfer of mortgage loans held for sale to held for investment due to bankruptcy and pending foreclosures | (1,454 | ) | (2,697 | ) | |||
Transfer of mortgage loans held for sale to REO | — | (288 | ) | ||||
Mortgage loans held for sale – ending balance | $ | 1,480,537 | $ | 458,626 |
December 31, | 2012 | 2011 | |||||
Mortgage loans held for investment, subject to nonrecourse debt- Legacy Assets, net – unpaid principal balance | $ | 354,154 | $ | 375,720 | |||
Transfer discount | |||||||
Accretable | (19,749 | ) | (22,392 | ) | |||
Non-accretable | (91,108 | ) | (104,024 | ) | |||
Allowance for loan losses | (4,390 | ) | (5,824 | ) | |||
Total mortgage loans held for investment, subject to nonrecourse debt-legacy assets, net | $ | 238,907 | $ | 243,480 |
Accretable Yield | Year ended December 31, 2012 | Year ended December 31, 2011 | |||||
Balance at the beginning of the period | $ | 22,392 | $ | 25,219 | |||
Additions | — | — | |||||
Accretion | (3,548 | ) | (4,131 | ) | |||
Reclassifications from nonaccretable discount | 905 | 1,304 | |||||
Disposals | — | — | |||||
Balance at the end of the period | $ | 19,749 | $ | 22,392 |
Year ended December 31, 2012 | |||||||||||
Performing | Non-Performing | Total | |||||||||
Balance at the beginning of the period | $ | 1,641 | $ | 4,183 | $ | 5,824 | |||||
Provision for loan losses | 1,365 | 525 | 1,890 | ||||||||
Recoveries on loans previously charged-off | — | — | — | ||||||||
Charge-offs | (2,235 | ) | (1,089 | ) | (3,324 | ) | |||||
Balance at the end of the period | $ | 771 | $ | 3,619 | $ | 4,390 | |||||
Ending UPB – Collectively evaluated for impairment | $ | 260,219 | $ | 93,935 | $ | 354,154 |
Year ended December 31, 2011 | |||||||||||
Performing | Non-Performing | Total | |||||||||
Balance at the beginning of the period | $ | 829 | $ | 2,469 | $ | 3,298 | |||||
Provision for loan losses | 1,346 | 2,191 | 3,537 | ||||||||
Recoveries on loans previously charged-off | — | — | — | ||||||||
Charge-offs | (534 | ) | (477 | ) | (1,011 | ) | |||||
Balance at the end of the period | $ | 1,641 | $ | 4,183 | $ | 5,824 | |||||
Ending UPB – Collectively evaluated for impairment | $ | 283,770 | $ | 91,950 | $ | 375,720 |
Year ended December 31, 2010 | |||||||||||
Performing | Non-Performing | Total | |||||||||
Balance at the beginning of the period | $ | — | $ | — | $ | — | |||||
Provision for loan losses | 829 | 2,469 | 3,298 | ||||||||
Recoveries on loans previously charged-off | — | — | — | ||||||||
Charge-offs | — | — | — | ||||||||
Balance at the end of the period | $ | 829 | $ | 2,469 | $ | 3,298 | |||||
Ending balance – Collectively evaluated for impairment | $ | 310,730 | $ | 101,148 | $ | 411,878 |
December 31, 2012 | December 31, 2011 | ||||||
(in thousands) | |||||||
Credit Quality by Delinquency Status | |||||||
Performing | $ | 260,219 | $ | 283,770 | |||
Non-Performing | 93,935 | 91,950 | |||||
Total | $ | 354,154 | $ | 375,720 | |||
Credit Quality by Loan-to-Value Ratio | |||||||
Less than 60 | $ | 39,436 | $ | 42,438 | |||
Less than 70 and more than 60 | 16,581 | 15,968 | |||||
Less than 80 and more than 70 | 20,890 | 25,190 | |||||
Less than 90 and more than 80 | 27,988 | 32,620 | |||||
Less than 100 and more than 90 | 32,570 | 33,708 | |||||
Greater than 100 | 216,689 | 225,796 | |||||
Total | $ | 354,154 | $ | 375,720 |
December 31, | 2012 | 2011 | |||||
UPB of advances previously securitized by Nationstar | $ | 542,037 | $ | — | |||
UPB of advances unsecuritized | 208,699 | — | |||||
Allowance for losses - reverse mortgage interests | (463 | ) | — | ||||
Total reverse mortgage interests | $ | 750,273 | $ | — |
Credit Sensitive MSRs | December 31, 2012 | December 31, 2011 | |||
Discount rate | 18.11 | % | 25.71 | % | |
Total prepayment speeds | 22.42 | % | 15.80 | % | |
Expected weighted-average life | 4.12 years | 5.15 years | |||
Credit losses | 24.68 | % | 35.42 | % | |
Interest Rate Sensitive MSRs | December 31, 2012 | December 31, 2011 | |||
Discount rate | 10.62 | % | 10.46 | % | |
Total prepayment speeds | 17.08 | % | 19.02 | % | |
Expected weighted-average life | 5.19 years | 5.04 years | |||
Credit losses | 11.09 | % | 9.73 | % |
Year ended December 31, 2012 | Year ended December 31, 2011 | ||||||
Fair value at the beginning of the period | $ | 251,050 | $ | 145,062 | |||
Additions: | |||||||
Servicing resulting from transfers of financial assets | 58,607 | 36,474 | |||||
Recognition of servicing assets from derecognition of variable interest entities | — | 5,714 | |||||
Purchases of servicing assets | 394,445 | 102,800 | |||||
Changes in fair value: | |||||||
Due to changes in valuation inputs or assumptions used in the valuation model | 5,500 | (14,207 | ) | ||||
Other changes in fair value | (73,742 | ) | (24,793 | ) | |||
Fair value at the end of the period | $ | 635,860 | $ | 251,050 | |||
Unpaid principal balance of forward loans serviced for others | |||||||
Credit sensitive loans | $ | 114,629,399 | $ | 32,408,623 | |||
Interest sensitive loans | 16,494,985 | 11,844,831 | |||||
Total owned loans | $ | 131,124,384 | $ | 44,253,454 |
Discount Rate | Total Prepayment Speeds | Credit Losses | ||||||||||||||||||
100 bps Adverse Change | 200 bps Adverse Change | 10% Adverse Change | 20% Adverse Change | 10% Adverse Change | 20% Adverse Change | |||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Mortgage servicing rights | $ | (17,060 | ) | $ | (34,419 | ) | $ | (66,037 | ) | $ | (124,995 | ) | $ | (77,072 | ) | $ | (157,433 | ) | ||
December 31, 2011 | ||||||||||||||||||||
Mortgage servicing rights | $ | (6,640 | ) | $ | (12,929 | ) | $ | (13,281 | ) | $ | (25,215 | ) | $ | (5,081 | ) | $ | (10,944 | ) |
Year Ended | |||||||
December 31, 2012 | |||||||
Assets | Liabilities | ||||||
Activity of MSRs at amortized cost | |||||||
Balance at the beginning of the period | $ | — | $ | — | |||
Additions: | |||||||
Purchase /Assumptions of servicing rights/obligations | 12,415 | 89,800 | |||||
Deductions: | |||||||
Amortization/Accretion | (1,442 | ) | (6,562 | ) | |||
Balance at end of the period | $ | 10,973 | $ | 83,238 |
For the years ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Servicing fees | $ | 348,915 | $ | 191,652 | $ | 103,690 | |||||
Ancillary fees | 123,318 | 82,099 | 70,130 | ||||||||
Total servicing and ancillary fees | $ | 472,233 | $ | 273,751 | $ | 173,820 |
December 31, 2012 | December 31, 2011 | Range of Estimated Useful Life | |||||||
Furniture, fixtures and equipment | $ | 47,620 | $ | 33,334 | 3 - 5 years | ||||
Capitalized software costs | 24,431 | 14,356 | 5 years | ||||||
Long-term capital leases - computer equipment | 24,917 | — | 5 years | ||||||
Building and leasehold improvements | 10,556 | 7,887 | Varies | ||||||
Software in development and other | 12,713 | 6,862 | |||||||
120,237 | 62,439 | ||||||||
Less: Accumulated depreciation and amortization | (48,806 | ) | (39,201 | ) | |||||
Plus: Land | 3,595 | 835 | |||||||
Total property and equipment, net | $ | 75,026 | $ | 24,073 |
Future Minimum Lease Payments | |||
2013 | $ | 7,585 | |
2014 | 7,503 | ||
2015 | 6,084 | ||
Thereafter | — | ||
Total future lease payments | 21,172 | ||
Less: Imputed interest | (1,917 | ) | |
Net capital lease liability | $ | 19,255 |
December 31, 2012 | December 31, 2011 | ||||||
Derivative financial instruments (see Note 11) | $ | 152,189 | $ | 11,302 | |||
Loans subject to repurchase right from Ginnie Mae | 72,156 | 35,735 | |||||
Deferred financing costs | 46,780 | 12,059 | |||||
Deferred tax asset (see Note 15) | 23,737 | — | |||||
Margin call deposits (see Note 11) | 10,920 | 4,518 | |||||
Equity method investment (see Note 27) | — | 6,493 | |||||
Prepaid expenses | 6,083 | 4,286 | |||||
Deposits pending on mortgage servicing rights acquisitions | 2,040 | 28,904 | |||||
Other | 8,146 | 2,884 | |||||
Total other assets | $ | 322,051 | $ | 106,181 |
December 31, 2012 | December 31, 2011 | ||||||
Reverse mortgage payables | $ | 103,068 | $ | — | |||
Mortgage insurance premiums and reserves | 77,967 | 19,308 | |||||
Servicing payables | 73,967 | 5,801 | |||||
Loans subject to repurchase from Ginnie Mae | 72,156 | 35,735 | |||||
Accrued bonus and payroll | 58,083 | 21,791 | |||||
Current taxes | 50,908 | 154 | |||||
Accrued interest | 31,938 | 10,225 | |||||
Lease payables | 29,553 | 2,856 | |||||
Legal and professional fees | 27,860 | 6,713 | |||||
Government-sponsored entities | 27,071 | 27,801 | |||||
Repurchase reserves | 18,511 | 10,026 | |||||
MSR purchases payable including advances | 14,243 | 8,204 | |||||
Payables to securitization trusts | 7,946 | 4,263 | |||||
Cancelled lease reserves | 7,188 | 9,160 | |||||
Other | 30,972 | 21,752 | |||||
Total payables and accrued liabilities | $ | 631,431 | $ | 183,789 |
Derivatives in ASC 815 Cash Flow Hedging Relationships | Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) | Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) | |||||||||||
For the year ended December 31, 2012 | ||||||||||||||||
Interest Rate Swap | $ | — | Interest Expense | $ | — | Interest Expense | $ | — | ||||||||
For the year ended December 31, 2011 | ||||||||||||||||
Interest Rate Swap | $ | (1,071 | ) | Interest Expense | $ | 165 | Interest Expense | $ | 2,032 | |||||||
For the year ended December 31, 2010 | ||||||||||||||||
Interest Rate Swap | $ | 1,071 | Interest Expense | $ | — | Interest Expense | $ | 930 |
Expiration Dates | Outstanding Notional | Fair Value | Recorded Gains / (Losses) | ||||||||||
For the year ended December 31, 2012 | |||||||||||||
MORTGAGE LOANS HELD FOR SALE | |||||||||||||
Loan sale commitments | 2013 | $ | 445 | $ | 21 | $ | (613 | ) | |||||
OTHER ASSETS | |||||||||||||
IRLCs | 2013 | 4,921,963 | 150,048 | 138,746 | |||||||||
Forward MBS trades | 2013 | 977,900 | 888 | 888 | |||||||||
LPCs | 2013 | 112,624 | 1,253 | 1,253 | |||||||||
LIABILITIES | |||||||||||||
Interest rate swaps and caps | 2013-2015 | 726,168 | 6,120 | 420 | |||||||||
Interest rate swaps on ABS debt (1) | 2013-2017 | 654,192 | 1,846 | (1,414 | ) | ||||||||
Forward MBS trades | 2013 | 3,964,721 | 11,974 | (6,144 | ) | ||||||||
LPCs | 2013 | 78,839 | 86 | (86 | ) | ||||||||
For the year ending December 31, 2011 | |||||||||||||
MORTGAGE LOANS HELD FOR SALE | |||||||||||||
Loan sale commitments | 2012 | $ | 28,047 | $ | 634 | $ | 592 | ||||||
OTHER ASSETS | |||||||||||||
IRLCs | 2012 | 736,377 | 11,302 | 6,598 | |||||||||
LIABILITIES | |||||||||||||
Interest rate swaps and caps | 2012-2015 | 193,500 | 6,540 | 1,261 | |||||||||
Forward MBS trades | 2012 | 691,725 | 5,830 | (9,792 | ) | ||||||||
Interest rate swap, subject to ABS nonrecourse debt (2) | — | — | — | (8,058 | ) |
(1) | In March 2012, Nationstar received interest rate swaps from FIF as a part of the Reorganization. |
(2) | In December 2011, Nationstar sold its remaining variable interest in a securitization trust that had been a consolidated VIE since January 1, 2010 and deconsolidated the VIE. Upon deconsolidation of this VIE, Nationstar derecognized the related ABS nonrecourse debt and therefore the underlying interest rate swap, subject to ABS nonrecourse debt. |
December 31, 2012 | December 31, 2011 | ||||||||||||||
Outstanding | Collateral Pledged | Outstanding | Collateral Pledged | ||||||||||||
Servicing Segment Notes Payable | |||||||||||||||
MBS advance financing facility | $ | 185,817 | $ | 206,622 | $ | 179,904 | $ | 182,096 | |||||||
Securities repurchase facility (2011) | 11,774 | 55,603 | 11,774 | 55,603 | |||||||||||
2010-ABS advance financing facility | 194,833 | 233,208 | 219,563 | 249,499 | |||||||||||
2011-1 Agency advance financing facility | 476,091 | 549,284 | 25,011 | 28,811 | |||||||||||
MSR note | 4,627 | 12,328 | 10,180 | 16,230 | |||||||||||
2012-AW agency advance financing facility | 100,000 | 135,343 | — | — | |||||||||||
2012-C ABS advance financing facility | 657,027 | 742,238 | — | — | |||||||||||
2012-R ABS advance financing facility | 374,739 | 428,758 | — | — | |||||||||||
2012-W ABS advance financing facility | 492,235 | 566,332 | — | — | |||||||||||
Reverse participations and max claim buyouts financing facility | 65,943 | 76,455 | — | — | |||||||||||
MBS advance financing facility (2012) | — | — | — | — | |||||||||||
Originations Segment Notes Payable | |||||||||||||||
$375 million warehouse facility | 245,287 | 285,281 | 46,810 | 51,040 | |||||||||||
$150 million warehouse facility | 224,790 | 241,867 | 251,722 | 265,083 | |||||||||||
$250 million warehouse facility (2011) | 356,104 | 371,836 | 7,310 | 7,672 | |||||||||||
$100 million warehouse facility (2009) | 87,747 | 91,403 | 16,047 | 16,715 | |||||||||||
ASAP+ facility | 124,572 | 124,596 | 104,858 | 104,006 | |||||||||||
Total notes payable | $ | 3,601,586 | $ | 4,121,154 | $ | 873,179 | $ | 976,755 |
December 31, 2012 | December 31, 2011 | ||||||
$285 million face value, 10.875% interest rate payable semi-annually, due April 2015 | $ | 281,676 | $ | 280,199 | |||
$375 million face value, 9.625% interest rate payable semi-annually, due May 2019 | 380,232 | — | |||||
$400 million face value, 7.875% interest rate payable semi-annually, due October 2020 | $ | 400,727 | $ | — | |||
Total | $ | 1,062,635 | $ | 280,199 |
Year | Amount | ||
2013 | $ | — | |
2014 | — | ||
2015 | 285,000 | ||
2016 | — | ||
2017 | — | ||
Thereafter | 775,000 | ||
Total | $ | 1,060,000 |
Discount Rate | Total Prepayment Speeds | Credit Losses | ||||||||||||||||||
100 bps Adverse Change | 200 bps Adverse Change | 10% Adverse Change | 20% Adverse Change | 10% Adverse Change | 20% Adverse Change | |||||||||||||||
December 31, 2012 | ||||||||||||||||||||
Excess spread financing | $ | 7,978 | $ | 16,404 | $ | 10,654 | $ | 22,240 | $ | 5,538 | $ | 11,075 |
December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Repurchase reserves, beginning of period | $ | 10,026 | $ | 7,321 | $ | 3,648 | |||||
Additions | 13,121 | 5,534 | 4,649 | ||||||||
Charge-offs | (4,636 | ) | (2,829 | ) | (976 | ) | |||||
Repurchase reserves, end of period | $ | 18,511 | $ | 10,026 | $ | 7,321 |
For the year ended December 31, | |||||||||||
2012 | 2011 | 2010 | |||||||||
Servicing | $ | 58,840 | $ | 18,396 | $ | 10,528 | |||||
Legal and professional fees | 52,673 | 17,607 | 14,741 | ||||||||
Outsourcing | 18,199 | 2,557 | 1,049 | ||||||||
Depreciation and amortization | 9,620 | 4,063 | 2,117 | ||||||||
Equipment | 8,222 | 4,605 | 3,862 | ||||||||
Travel | 8,014 | 3,388 | 2,152 | ||||||||
Postage | 7,582 | 5,978 | 4,220 | ||||||||
Dues and fees | 7,522 | 5,588 | 4,114 | ||||||||
Loan processing charges | 6,956 | 3,508 | 3,197 | ||||||||
Telecommunications and technology | 6,700 | 3,832 | 2,347 | ||||||||
Stationary and office supplies | 5,309 | 3,964 | 2,594 | ||||||||
Advertising | 5,300 | 4,723 | 4,559 | ||||||||
Other | 6,650 | 3,974 | 3,433 | ||||||||
Total general and administrative expenses | $ | 201,587 | $ | 82,183 | $ | 58,913 |
For the year ended December 31, 2012 | |||
Current | |||
Federal | $ | 82,120 | |
State | 10,126 | ||
92,246 | |||
Deferred | |||
Federal | (18,721 | ) | |
State | (2,229 | ) | |
(20,950 | ) | ||
Total | $ | 71,296 |
For the year ended December 31, 2012 | ||||||
(in dollars) | (in percentages) | |||||
Tax expense at federal statutory rate | $ | 96,804 | 35.0 | % | ||
Effect of: | ||||||
Initial recording of deferred tax asset/liability, net of valuation allowance | — | — | % | |||
State taxes, net of federal benefit | 6,129 | 2.2 | % | |||
Pre-reorganization earnings | (14,302 | ) | (5.2 | )% | ||
Release of valuation allowance | (17,767 | ) | (6.4 | )% | ||
Other, net | 432 | 0.2 | % | |||
Total income tax expense | $ | 71,296 | 25.8 | % |
December 31, 2012 | |||
Deferred Tax Assets | |||
Effect of: | |||
Loss carryforwards (federal, state & capital) | $ | 74,335 | |
MSR fair value adjustments | 61,837 | ||
Reverse mortgage premiums | 15,248 | ||
Loss reserves | 10,256 | ||
Rent expense | 4,206 | ||
Equity in earnings of unconsolidated group for tax | 3,662 | ||
Restricted share based compensation | 3,401 | ||
Impairment | 2,661 | ||
Other, net | 275 | ||
Total Deferred Tax Assets | 175,881 | ||
Deferred Tax Liabilities | |||
Originated MSR gain on sale | (67,975 | ) | |
Purchased MSR amortization | (26,136 | ) | |
Depreciation and amortization, net | (10,018 | ) | |
Co-investment fair value adjustments | (1,222 | ) | |
Prepaid assets | (1,161 | ) | |
Other, net | (65 | ) | |
Total Deferred Tax Liabilities | (106,577 | ) | |
Valuation Allowance | (45,567 | ) | |
Net Deferred Tax Asset | $ | 23,737 |
Year ended December 31, 2012 | ||||||||||
Net Income | Average Shares Outstanding | Earnings Per Share | ||||||||
(in thousands, except share amounts) | ||||||||||
Net income attributable to Nationstar Inc. — basic | $ | 205,287 | 85,328 | $ | 2.41 | |||||
Effect of dilutive stock awards | — | 196 | ||||||||
Net income attributable to Nationstar Inc. — diluted | $ | 205,287 | 85,524 | $ | 2.40 |
Year ended December 31, 2011 | ||||||||||
Net Income | Average Shares Outstanding | Earnings Per Share | ||||||||
(in thousands, except share amounts) | ||||||||||
Net income attributable to Nationstar Inc. — basic | $ | 20,887 | 70,000 | $ | 0.30 | |||||
Effect of dilutive stock awards | — | — | ||||||||
Net income attributable to Nationstar Inc. — diluted | $ | 20,887 | 70,000 | $ | 0.30 |
Year ended December 31, 2010 | ||||||||||
Net Loss | Average Shares Outstanding | Earnings Per Share | ||||||||
(in thousands, except share amounts) | ||||||||||
Net loss attributable to Nationstar Inc. — basic | $ | (9,914 | ) | 70,000 | $ | (0.14 | ) | |||
Effect of dilutive stock awards | — | — | ||||||||
Net loss attributable to Nationstar Inc. — diluted | $ | (9,914 | ) | 70,000 | $ | (0.14 | ) |
Excess Spread financing | Prepayment Speeds | Average Life (years) | Discount Rate |
Low | 9.4% | 3.0 years | 13.6% |
High | 22.4% | 4.5 years | 15.5% |
December 31, 2012 | |||||||||||||||
Recurring Fair Value Measurements | |||||||||||||||
Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
ASSETS | |||||||||||||||
Mortgage loans held for sale(1) | $ | 1,480,537 | $ | — | $ | 1,480,537 | $ | — | |||||||
Mortgage servicing rights – fair value(1) | 635,860 | — | — | 635,860 | |||||||||||
Other assets: | |||||||||||||||
IRLCs | 150,048 | — | 150,048 | — | |||||||||||
Forward MBS trades | 888 | — | 888 | — | |||||||||||
Loan Purchase Commitments (LPCs) | 1,253 | — | 1,253 | — | |||||||||||
Total assets | $ | 2,268,586 | $ | — | $ | 1,632,726 | $ | 635,860 | |||||||
LIABILITIES | |||||||||||||||
Derivative financial instruments | |||||||||||||||
Interest rate swaps and caps | $ | 6,120 | $ | — | $ | 6,120 | $ | — | |||||||
Interest rate swaps on ABS debt | 1,846 | — | 1,846 | — | |||||||||||
Forward MBS trades | 11,974 | — | 11,974 | — | |||||||||||
LPCs | 86 | — | 86 | — | |||||||||||
Excess spread financing (at fair value) | 288,089 | — | — | 288,089 | |||||||||||
Total liabilities | $ | 308,115 | $ | — | $ | 20,026 | $ | 288,089 | |||||||
December 31, 2011 | |||||||||||||||
Recurring Fair Value Measurements | |||||||||||||||
Total Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
ASSETS | |||||||||||||||
Mortgage loans held for sale(1) | $ | 458,626 | $ | — | $ | 458,626 | $ | — | |||||||
Mortgage servicing rights – fair value(1) | 251,050 | — | — | 251,050 | |||||||||||
Other assets: | |||||||||||||||
IRLCs | 11,302 | — | 11,302 | — | |||||||||||
Total assets | $ | 720,978 | $ | — | $ | 469,928 | $ | 251,050 | |||||||
LIABILITIES | |||||||||||||||
Derivative financial instruments | |||||||||||||||
Interest rate swaps and caps | $ | 6,540 | $ | — | $ | 6,540 | $ | — | |||||||
Forward MBS trades | 5,830 | — | 5,830 | — | |||||||||||
Excess spread financing (at fair value) | 44,595 | — | — | 44,595 | |||||||||||
Total liabilities | $ | 56,965 | $ | — | $ | 12,370 | $ | 44,595 |
(1) | Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate. |
ASSETS | LIABILITIES | |||||||
For the year ended December 31, 2012 | Mortgage servicing rights | Excess spread financing | ||||||
Beginning balance | $ | 251,050 | $ | 44,595 | ||||
Transfers into Level 3 | — | — | ||||||
Transfers out of Level 3 | — | — | ||||||
Total gains or losses | — | |||||||
Included in earnings | (68,242 | ) | 10,683 | |||||
Included in other comprehensive income | — | — | ||||||
Purchases, issuances, sales and settlements | ||||||||
Purchases | 394,445 | — | ||||||
Issuances | 58,607 | 272,676 | ||||||
Sales | — | — | ||||||
Settlements | — | (39,865 | ) | |||||
Ending balance | $ | 635,860 | $ | 288,089 |
ASSETS | LIABILITIES | |||||||
For the year ending December 31, 2011 | Mortgage servicing rights | Excess spread financing | ||||||
Beginning balance | $ | 145,062 | $ | — | ||||
Transfers into Level 3 | — | — | ||||||
Transfers out of Level 3 | — | — | ||||||
Total gains or losses | ||||||||
Included in earnings | (39,000 | ) | 3,060 | |||||
Included in other comprehensive income | — | — | ||||||
Purchases, issuances, sales and settlements | ||||||||
Purchases | 102,800 | — | ||||||
Issuances | 36,474 | 43,742 | ||||||
Sales | — | — | ||||||
Settlements | 5,714 | (2,207 | ) | |||||
Ending balance | $ | 251,050 | $ | 44,595 |
Nonrecurring Fair Value Measurements | Total Estimated Fair Value | Total Gain (Loss) Included in Earnings | |||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||
Year ended December 31, 2012 | |||||||||||||||||||
Assets | |||||||||||||||||||
REO(1) | $ | — | $ | — | $ | 10,467 | $ | 10,467 | $ | (2,864 | ) | ||||||||
Total assets | $ | — | $ | — | $ | 10,467 | $ | 10,467 | $ | (2,864 | ) | ||||||||
Year ended December 31, 2011 | |||||||||||||||||||
Assets | |||||||||||||||||||
REO(1) | $ | — | $ | — | $ | 3,668 | $ | 3,668 | $ | (6,833 | ) | ||||||||
Total assets | $ | — | $ | — | $ | 3,668 | $ | 3,668 | $ | (6,833 | ) |
(1) | Based on the nature and risks of these assets and liabilities, the Company has determined that presenting them as a single class is appropriate. |
December 31, 2012 | |||||||||||||||
Carrying Amount | Fair Value | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 152,649 | $ | 152,649 | $ | — | $ | — | |||||||
Restricted cash | 393,190 | 393,190 | — | — | |||||||||||
Mortgage loans held for sale | 1,480,537 | — | 1,480,537 | — | |||||||||||
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets | 238,907 | — | — | 220,755 | |||||||||||
Reverse mortgage interests | 750,273 | — | 805,650 | — | |||||||||||
Derivative instruments | 152,189 | — | 152,189 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Notes payable | 3,601,586 | — | — | 3,601,586 | |||||||||||
Unsecured senior notes | 1,062,635 | 1,151,997 | — | — | |||||||||||
Derivative financial instruments | 20,026 | — | 20,026 | — | |||||||||||
Nonrecourse debt - Legacy assets | 100,620 | — | — | 102,492 | |||||||||||
Excess spread financing | 288,089 | — | — | 288,089 | |||||||||||
Participating interest financing | 580,836 | — | 593,741 | — | |||||||||||
December 31, 2011 | |||||||||||||||
Carrying Amount | Fair Value | ||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||
Financial assets: | |||||||||||||||
Cash and cash equivalents | $ | 62,445 | $ | 62,445 | $ | — | $ | — | |||||||
Restricted cash | 71,499 | 71,499 | — | — | |||||||||||
Mortgage loans held for sale | 458,626 | — | 458,626 | — | |||||||||||
Mortgage loans held for investment, subject to nonrecourse debt – Legacy assets | 243,480 | — | — | 226,890 | |||||||||||
Derivative instruments | 11,302 | — | 11,302 | — | |||||||||||
Financial liabilities: | |||||||||||||||
Notes payable | 873,179 | — | — | 873,179 | |||||||||||
Unsecured senior notes | 280,199 | 282,150 | — | — | |||||||||||
Derivative financial instruments | 12,370 | — | 12,370 | — | |||||||||||
Nonrecourse debt - Legacy assets | 112,490 | — | — | 114,037 | |||||||||||
Excess spread financing | 44,595 | — | — | 44,595 |
Shares | Grant Date Fair Value | Remaining Contractual Term | |||
Restricted Stock outstanding at January 1, 2012 | — | $— | 0 | ||
Granted in March 2012 | 1,277 | $14.00 | 2.2 | ||
Grants issued subsequent to initial public offering | 69 | $29.95 | 2.3 | ||
Forfeited | (53) | ||||
Restricted Stock outstanding at December 31, 2012 | 1,293 | ||||
Restricted Stock unvested and expected to vest | 1,283 | ||||
Restricted Stock vested and payable at December 31, 2012 | — |
2013 | 2014 | 2015 | |||
Restricted Stock expected to vest | 431,560 | 425,560 | 426,836 |
Year | Amount | ||
2013 | $ | 16,874 | |
2014 | 15,028 | ||
2015 | 12,259 | ||
2016 | 8,474 | ||
2017 | 4,475 | ||
Thereafter | 7,638 | ||
Total | $ | 64,748 |
Liability Balance at January 1 | Restructuring Adjustments | Restructuring Settlements | Liability Balance at December 31 | ||||||||||||
Year-ended December 31, 2010 | |||||||||||||||
Restructuring charges: | |||||||||||||||
Lease terminations | $ | 9,465 | $ | 2,287 | $ | (2,569 | ) | $ | 9,183 | ||||||
Total | $ | 9,465 | $ | 2,287 | $ | (2,569 | ) | $ | 9,183 | ||||||
Year-ended December 31, 2011 | |||||||||||||||
Restructuring charges: | |||||||||||||||
Lease terminations | $ | 9,183 | $ | 1,084 | $ | (1,807 | ) | $ | 8,460 | ||||||
Total | $ | 9,183 | $ | 1,084 | $ | (1,807 | ) | $ | 8,460 | ||||||
Year-ended December 31, 2012 | |||||||||||||||
Restructuring charges: | |||||||||||||||
Lease terminations | $ | 8,460 | $ | 500 | $ | (1,774 | ) | $ | 7,186 | ||||||
Total | $ | 8,460 | $ | 500 | $ | (1,774 | ) | $ | 7,186 |
December 31, 2012 | December 31, 2011 | ||||||||||||
State | Unpaid Principal Balance | % of Total Outstanding | Unpaid Principal Balance | % of Total Outstanding | |||||||||
Texas | $ | 49,814 | 13.8 | % | $ | 52,620 | 13.7 | % | |||||
Florida | 47,751 | 13.2 | % | 54,199 | 14.2 | % | |||||||
California | 29,194 | 8.1 | % | 32,684 | 8.5 | % | |||||||
Pennsylvania | 18,670 | 5.2 | % | 18,471 | 4.8 | % | |||||||
All other states (1) | 215,356 | 59.7 | % | 224,906 | 58.8 | % | |||||||
$ | 360,785 | 100.0 | % | $ | 382,880 | 100.0 | % |
(1) | No other state contains more than 5.0% of the total outstanding. |
December 31, | |||||||
2012 | 2011 | ||||||
Amortizing Adjustable Rate Mortgages (ARMs): | |||||||
2/28 | $ | 56,849 | $ | 68,993 | |||
3/27 | 5,046 | 6,402 | |||||
All other ARMs | 3,459 | 14,343 | |||||
$ | 65,354 | $ | 89,738 |
Year ended December 31, 2012 | |||||||||||||||||||||||
Servicing | Originations | Operating Segments | Legacy Portfolio and Other | Eliminations | Consolidated | ||||||||||||||||||
REVENUES: | |||||||||||||||||||||||
Servicing fee income | $ | 462,001 | $ | — | $ | 462,001 | $ | 2,287 | $ | (1,793 | ) | $ | 462,495 | ||||||||||
Other fee income | 35,133 | (291 | ) | 34,842 | (186 | ) | — | 34,656 | |||||||||||||||
Total fee income | 497,134 | (291 | ) | 496,843 | 2,101 | (1,793 | ) | 497,151 | |||||||||||||||
Gain/(loss) on mortgage loans held for sale | — | 487,142 | 487,142 | — | 22 | 487,164 | |||||||||||||||||
Total revenues | 497,134 | 486,851 | 983,985 | 2,101 | (1,771 | ) | 984,315 | ||||||||||||||||
Total expenses and impairments | 338,157 | 219,743 | 557,900 | 24,145 | — | 582,045 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 30,936 | 20,426 | 51,362 | 18,431 | 1,793 | 71,586 | |||||||||||||||||
Interest expense | (156,817 | ) | (25,830 | ) | (182,647 | ) | (14,639 | ) | (22 | ) | (197,308 | ) | |||||||||||
Contract termination fees, net | 15,600 | — | 15,600 | — | — | 15,600 | |||||||||||||||||
Loss on equity method investment | (14,571 | ) | — | (14,571 | ) | — | — | (14,571 | ) | ||||||||||||||
Loss on interest rate swaps and caps | 1,237 | — | 1,237 | (2,231 | ) | — | (994 | ) | |||||||||||||||
Total other income (expense) | (123,615 | ) | (5,404 | ) | (129,019 | ) | 1,561 | 1,771 | (125,687 | ) | |||||||||||||
Income (loss) before taxes | $ | 35,362 | $ | 261,704 | $ | 297,066 | $ | (20,483 | ) | $ | — | $ | 276,583 | ||||||||||
Depreciation and amortization | $ | 6,126 | $ | 2,754 | $ | 8,880 | $ | 740 | $ | — | $ | 9,620 | |||||||||||
Total assets | 4,938,330 | 1,845,979 | 6,784,309 | 341,834 | — | 7,126,143 |
Year ended December 31, 2011 | |||||||||||||||||||||||
Servicing | Originations | Operating Segments | Legacy Portfolio and Other | Eliminations | Consolidated | ||||||||||||||||||
REVENUES: | |||||||||||||||||||||||
Servicing fee income | $ | 238,394 | $ | — | $ | 238,394 | $ | 1,972 | $ | (6,955 | ) | $ | 233,411 | ||||||||||
Other fee income | 17,189 | 14,109 | 31,298 | 3,996 | — | 35,294 | |||||||||||||||||
Total fee income | 255,583 | 14,109 | 269,692 | 5,968 | (6,955 | ) | 268,705 | ||||||||||||||||
Gain (loss) on mortgage loans held for sale | — | 109,431 | 109,431 | — | (295 | ) | 109,136 | ||||||||||||||||
Total revenues | 255,583 | 123,540 | 379,123 | 5,968 | (7,250 | ) | 377,841 | ||||||||||||||||
Total expenses and impairments | 177,930 | 101,607 | 279,537 | 26,941 | (295 | ) | 306,183 | ||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 2,263 | 12,718 | 14,981 | 44,866 | 6,955 | 66,802 | |||||||||||||||||
Interest expense | (58,024 | ) | (10,955 | ) | (68,979 | ) | (36,396 | ) | — | (105,375 | ) | ||||||||||||
Loss on equity method investment | (107 | ) | — | (107 | ) | — | — | (107 | ) | ||||||||||||||
Loss on interest rate swaps | 298 | — | 298 | — | — | 298 | |||||||||||||||||
Fair value changes - ABS securitizations | — | — | — | (12,389 | ) | — | (12,389 | ) | |||||||||||||||
Total other income (expense) | (55,570 | ) | 1,763 | (53,807 | ) | (3,919 | ) | 6,955 | (50,771 | ) | |||||||||||||
Income (loss) before taxes | $ | 22,083 | $ | 23,696 | $ | 45,779 | $ | (24,892 | ) | $ | — | $ | 20,887 | ||||||||||
Depreciation and amortization | $ | 2,089 | $ | 1,306 | $ | 3,395 | $ | 668 | $ | — | $ | 4,063 | |||||||||||
Total assets | 909,992 | 600,105 | 1,510,097 | 277,834 | — | 1,787,931 |
Year ended December 31, 2010 | |||||||||||||||||||||||
Servicing | Originations | Operating Segments | Legacy Portfolio and Other | Eliminations | Consolidated | ||||||||||||||||||
REVENUES: | |||||||||||||||||||||||
Servicing fee income | $ | 175,569 | $ | — | $ | 175,569 | $ | 820 | $ | (9,263 | ) | $ | 167,126 | ||||||||||
Other fee income | 7,273 | 7,042 | 14,315 | 2,643 | — | 16,958 | |||||||||||||||||
Total fee income | 182,842 | 7,042 | 189,884 | 3,463 | (9,263 | ) | 184,084 | ||||||||||||||||
Gain (loss) on mortgage loans held for sale | — | 77,498 | 77,498 | — | (154 | ) | 77,344 | ||||||||||||||||
Total revenues | 182,842 | 84,540 | 267,382 | 3,463 | (9,417 | ) | 261,428 | ||||||||||||||||
Total expenses and impairments | 107,283 | 86,920 | 194,203 | 26,927 | (154 | ) | 220,976 | ||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | 263 | 11,848 | 12,111 | 77,521 | 9,263 | 98,895 | |||||||||||||||||
Interest expense | (51,791 | ) | (8,806 | ) | (60,597 | ) | (55,566 | ) | — | (116,163 | ) | ||||||||||||
Loss on interest rate swaps | (9,801 | ) | — | (9,801 | ) | — | — | (9,801 | ) | ||||||||||||||
Fair value changes - ABS securitizations | — | — | — | (23,297 | ) | — | (23,297 | ) | |||||||||||||||
Total other income (expense) | (61,329 | ) | 3,042 | (58,287 | ) | (1,342 | ) | 9,263 | (50,366 | ) | |||||||||||||
Income (loss) before taxes | $ | 14,230 | $ | 662 | $ | 14,892 | $ | (24,806 | ) | $ | — | $ | (9,914 | ) | |||||||||
Depreciation and amortization | $ | 1,092 | $ | 781 | $ | 1,873 | $ | 244 | $ | — | $ | 2,117 | |||||||||||
Total assets | 689,923 | 402,627 | 1,092,550 | 854,631 | — | 1,947,181 |
NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING BALANCE SHEET DECEMBER 31, 2012 (IN THOUSANDS) | |||||||||||||||||||||||
Assets | Nationstar Inc. | Issuer | Guarantor (Subsidiaries) | Non-Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||||
Cash and cash equivalents | $ | — | $ | 152,248 | $ | 401 | $ | — | $ | — | $ | 152,649 | |||||||||||
Restricted cash | — | 145,657 | 3 | 247,530 | — | 393,190 | |||||||||||||||||
Accounts receivable, net | — | 3,040,666 | 1,826 | 1,114 | — | 3,043,606 | |||||||||||||||||
Mortgage loans held for sale | — | 1,480,537 | — | — | — | 1,480,537 | |||||||||||||||||
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net | — | 14,700 | — | 224,207 | — | 238,907 | |||||||||||||||||
Participating interest in reverse mortgages | — | 750,273 | — | — | — | 750,273 | |||||||||||||||||
Receivables from affiliates | — | — | 92,373 | 1,983,997 | (2,063,766 | ) | 12,604 | ||||||||||||||||
Mortgage servicing rights – fair value | — | 635,860 | — | — | — | 635,860 | |||||||||||||||||
Investment in subsidiaries | 728,908 | 149,188 | — | — | (878,096 | ) | — | ||||||||||||||||
Mortgage servicing rights – amortized cost | — | 10,973 | — | — | — | 10,973 | |||||||||||||||||
Property and equipment, net | — | 74,191 | 835 | — | — | 75,026 | |||||||||||||||||
REO, net | — | 8,428 | — | 2,039 | — | 10,467 | |||||||||||||||||
Other assets | 28,774 | 303,737 | 1,829 | 1,847 | (14,136 | ) | 322,051 | ||||||||||||||||
Total assets | $ | 757,682 | $ | 6,766,458 | $ | 97,267 | $ | 2,460,734 | $ | (2,955,998 | ) | $ | 7,126,143 | ||||||||||
Liabilities and stockholders’ equity | |||||||||||||||||||||||
Notes payable | $ | — | $ | 1,306,557 | $ | — | $ | 2,295,029 | $ | — | $ | 3,601,586 | |||||||||||
Unsecured senior notes | — | 1,062,635 | — | — | — | 1,062,635 | |||||||||||||||||
Payables and accrued liabilities | — | 640,369 | 1,815 | 3,383 | (14,136 | ) | 631,431 | ||||||||||||||||
Payables to affiliates | — | 2,063,766 | — | — | (2,063,766 | ) | — | ||||||||||||||||
Derivative financial instruments | — | 12,060 | — | 7,966 | — | 20,026 | |||||||||||||||||
Mortgage Servicing Liability | — | 83,238 | — | — | — | 83,238 | |||||||||||||||||
Nonrecourse debt–Legacy Assets | — | — | — | 100,620 | — | 100,620 | |||||||||||||||||
Excess spread financing - at fair value | — | 288,089 | — | — | — | 288,089 | |||||||||||||||||
Participating interest financing | — | 580,836 | — | — | — | 580,836 | |||||||||||||||||
Total liabilities | — | 6,037,550 | 1,815 | 2,406,998 | (2,077,902 | ) | 6,368,461 | ||||||||||||||||
Total stockholders’ equity | 757,682 | 728,908 | 95,452 | 53,736 | (878,096 | ) | 757,682 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 757,682 | $ | 6,766,458 | $ | 97,267 | $ | 2,460,734 | $ | (2,955,998 | ) | $ | 7,126,143 |
NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEAR ENDED DECEMBER 31, 2012 (IN THOUSANDS) | |||||||||||||||||||||||
Nationstar Inc. | Issuer | Guarantor (Subsidiaries) | Non-Guarantor (Subsidiaries) | Eliminations | Consolidated | ||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Servicing fee income | $ | — | $ | 462,980 | $ | 1,308 | $ | — | $ | (1,793 | ) | $ | 462,495 | ||||||||||
Other fee income (expense) | — | (395 | ) | 34,583 | 468 | — | 34,656 | ||||||||||||||||
Total fee income | — | 462,585 | 35,891 | 468 | (1,793 | ) | 497,151 | ||||||||||||||||
Gain on mortgage loans held for sale | — | 487,164 | — | — | — | 487,164 | |||||||||||||||||
Total Revenues | — | 949,749 | 35,891 | 468 | (1,793 | ) | 984,315 | ||||||||||||||||
Expenses and impairments: | |||||||||||||||||||||||
Salaries, wages and benefits | — | 349,012 | 9,443 | — | — | 358,455 | |||||||||||||||||
General and administrative | — | 198,948 | 2,625 | 14 | — | 201,587 | |||||||||||||||||
Provision for loan losses | — | 463 | — | 1,890 | — | 2,353 | |||||||||||||||||
Loss (gain) on foreclosed real estate and other | — | (1,497 | ) | — | 4,361 | — | 2,864 | ||||||||||||||||
Occupancy | — | 16,734 | 52 | — | — | 16,786 | |||||||||||||||||
Total expenses and impairments | — | 563,660 | 12,120 | 6,265 | — | 582,045 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest income | — | 51,307 | — | 18,486 | 1,793 | 71,586 | |||||||||||||||||
Interest expense | — | (137,638 | ) | — | (59,670 | ) | — | (197,308 | ) | ||||||||||||||
Contract termination fees, net | — | 15,600 | — | — | — | 15,600 | |||||||||||||||||
Loss on equity method investments | — | (14,571 | ) | — | — | — | (14,571 | ) | |||||||||||||||
Gain/(Loss) on interest rate swaps and caps | — | (1,415 | ) | — | 421 | — | (994 | ) | |||||||||||||||
Gain/(loss) from subsidiaries | 179,359 | (22,789 | ) | — | — | (156,570 | ) | — | |||||||||||||||
Total other income (expense) | 179,359 | (109,506 | ) | — | (40,763 | ) | (154,777 | ) | (125,687 | ) | |||||||||||||
Income before taxes | 179,359 | 276,583 | 23,771 | (46,560 | ) | (156,570 | ) | 276,583 | |||||||||||||||
Income tax expense/(benefit) | (25,928 | ) | 97,224 | — | — | — | 71,296 | ||||||||||||||||
Net income/(loss) | $ | 205,287 | $ | 179,359 | $ | 23,771 | $ | (46,560 | ) | $ | (156,570 | ) | $ | 205,287 |
NATIONSTAR MORTGAGE HOLDINGS INC. CONSOLIDATING STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2012 (IN THOUSANDS) | |||||||||||||||||||||||
Nationstar Inc. | Issuer | Guarantor (Subsidiaries) | Non-Guarantor (Subsidiaries) | Eliminations | Consolidated | ||||||||||||||||||
Operating activities: | |||||||||||||||||||||||
Net income/(loss) | $ | 205,287 | $ | 179,359 | $ | 23,771 | $ | (46,560 | ) | $ | (156,570 | ) | $ | 205,287 | |||||||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||||||||||||||
(Gain)/loss from subsidiaries | (179,359 | ) | 22,789 | — | — | 156,570 | — | ||||||||||||||||
Share-based compensation | — | 13,342 | — | — | — | 13,342 | |||||||||||||||||
Gain on mortgage loans held for sale | — | (487,164 | ) | — | — | — | (487,164 | ) | |||||||||||||||
Provision for loan losses | — | 463 | — | 1,890 | — | 2,353 | |||||||||||||||||
Loss (gain) on foreclosed real estate and other | — | (1,497 | ) | — | 4,361 | — | 2,864 | ||||||||||||||||
Loss on equity method investments | — | 14,571 | — | — | — | 14,571 | |||||||||||||||||
(Gain)/loss on ineffectiveness on interest rate swaps and cap | — | 1,415 | — | (421 | ) | — | 994 | ||||||||||||||||
Fair value changes in excess spread financing | — | 10,683 | — | — | — | 10,683 | |||||||||||||||||
Depreciation and amortization | — | 9,620 | — | — | — | 9,620 | |||||||||||||||||
Change in fair value of mortgage servicing rights | — | 68,242 | — | — | — | 68,242 | |||||||||||||||||
Accretion of mortgage servicing liability | — | (5,120 | ) | — | — | — | (5,120 | ) | |||||||||||||||
Amortization of debt discount | — | 25,385 | — | — | — | 25,385 | |||||||||||||||||
Amortization of premiums/(discounts) | — | (12,382 | ) | — | (3,368 | ) | — | (15,750 | ) | ||||||||||||||
Mortgage loans originated and purchased, net of fees | — | (7,904,052 | ) | — | — | — | (7,904,052 | ) | |||||||||||||||
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees | — | 7,185,335 | — | 12,387 | — | 7,197,722 | |||||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||||||
Accounts receivable | — | (1,030,084 | ) | (1,819 | ) | 279,396 | — | (752,507 | ) | ||||||||||||||
Receivables from/(payables to) affiliates | — | 2,084,031 | (21,837 | ) | (2,060,844 | ) | — | 1,350 | |||||||||||||||
Net tax effect of stock grants issued | — | (2,846 | ) | — | — | — | (2,846 | ) | |||||||||||||||
Reverse funded advances | — | (608,085 | ) | — | — | — | (608,085 | ) | |||||||||||||||
Other assets | (28,774 | ) | (17,895 | ) | (1,773 | ) | — | 14,136 | (34,306 | ) | |||||||||||||
Accounts payable and accrued liabilities | 2,846 | 308,636 | 1,815 | 140 | (14,136 | ) | 299,301 | ||||||||||||||||
Net cash provided by/(used in) operating activities | — | (145,254 | ) | 157 | (1,813,019 | ) | — | (1,958,116 | ) |
Nationstar Inc. | Issuer | Guarantor (Subsidiaries) | Non-Guarantor (Subsidiaries) | Eliminations | Consolidated | ||||||||||||||||||
Investing activities: | |||||||||||||||||||||||
Property and equipment additions, net of disposals | — | (25,356 | ) | — | — | — | (25,356 | ) | |||||||||||||||
Loan repurchases from Ginnie Mae | — | (24,329 | ) | — | — | — | (24,329 | ) | |||||||||||||||
Deposit on reverse mortgage servicing rights, net | — | (37,911 | ) | — | — | — | (37,911 | ) | |||||||||||||||
Deposit on / purchase of mortgage servicing rights, net of liabilities incurred | — | (2,070,375 | ) | — | — | — | (2,070,375 | ) | |||||||||||||||
Proceeds from sales of REO | — | (884 | ) | — | 1,563 | — | 679 | ||||||||||||||||
Net cash provided by/(used in) investing activities | — | (2,158,855 | ) | — | 1,563 | — | (2,157,292 | ) | |||||||||||||||
Financing activities: | |||||||||||||||||||||||
Issuance of Senior Unsecured Notes | — | 770,699 | — | — | — | 770,699 | |||||||||||||||||
Transfers to/from restricted cash | — | (96,477 | ) | — | (225,214 | ) | — | (321,691 | ) | ||||||||||||||
Issuance of common stock, net of IPO issuance costs | 246,700 | — | — | — | — | 246,700 | |||||||||||||||||
Issuance of participating interest financing | — | 582,897 | — | — | — | 582,897 | |||||||||||||||||
Issuance of excess spread financing | — | 272,617 | — | — | — | 272,617 | |||||||||||||||||
Increase (decrease) in notes payable, net | — | 677,952 | — | 2,050,455 | — | 2,728,407 | |||||||||||||||||
Repayment of nonrecourse debt–Legacy assets | — | — | — | (13,785 | ) | — | (13,785 | ) | |||||||||||||||
Repayment of excess servicing spread financing | — | (39,865 | ) | — | — | — | (39,865 | ) | |||||||||||||||
Net tax benefit for stock grants issued | — | 2,846 | — | — | — | 2,846 | |||||||||||||||||
Distribution to subsidiaries | (246,700 | ) | — | — | — | 246,700 | — | ||||||||||||||||
Contributions of parent | — | 246,700 | — | — | (246,700 | ) | — | ||||||||||||||||
Debt financing costs | — | (23,213 | ) | — | — | — | (23,213 | ) | |||||||||||||||
Net cash provided by/(used in) financing activities | — | 2,394,156 | — | 1,811,456 | — | 4,205,612 | |||||||||||||||||
Net increase/(decrease) in cash | — | 90,047 | 157 | — | — | 90,204 | |||||||||||||||||
Cash and cash equivalents at beginning of period | — | 62,201 | 244 | — | — | 62,445 | |||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 152,248 | $ | 401 | $ | — | $ | — | $ | 152,649 |
NATIONSTAR MORTGAGE LLC CONSOLIDATING BALANCE SHEET DECEMBER 31, 2011 (IN THOUSANDS) | |||||||||||||||||||
Issuer (Parent) | Guarantor (Subsidiaries) | Non-Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 62,201 | $ | 244 | $ | — | $ | — | $ | 62,445 | |||||||||
Restricted cash | 49,180 | 3 | 22,316 | — | 71,499 | ||||||||||||||
Accounts receivable, net | 281,782 | 7 | 280,511 | — | 562,300 | ||||||||||||||
Mortgage loans held for sale | 458,626 | — | — | — | 458,626 | ||||||||||||||
Mortgage loans held for investment, subject to nonrecourse debt–Legacy Asset, net | 5,984 | — | 237,496 | — | 243,480 | ||||||||||||||
Receivables from affiliates | 41,961 | 70,541 | — | (107,893 | ) | 4,609 | |||||||||||||
Mortgage servicing rights – fair value | 251,050 | — | — | — | 251,050 | ||||||||||||||
Investment in subsidiaries | 140,880 | — | — | (140,880 | ) | — | |||||||||||||
Property and equipment, net | 23,238 | 835 | — | — | 24,073 | ||||||||||||||
REO, net | — | — | 3,668 | — | 3,668 | ||||||||||||||
Other assets | 106,181 | — | — | — | 106,181 | ||||||||||||||
Total assets | $ | 1,421,083 | $ | 71,630 | $ | 543,991 | $ | (248,773 | ) | $ | 1,787,931 | ||||||||
Liabilities and members’ equity | |||||||||||||||||||
Notes payable | $ | 628,605 | $ | — | $ | 244,574 | $ | — | $ | 873,179 | |||||||||
Unsecured senior notes | 280,199 | — | — | — | 280,199 | ||||||||||||||
Payables and accrued liabilities | 180,545 | — | 3,244 | — | 183,789 | ||||||||||||||
Payables to affiliates | — | — | 107,893 | (107,893 | ) | — | |||||||||||||
Derivative financial instruments | 5,830 | — | 6,540 | — | 12,370 | ||||||||||||||
Derivative financial instruments, subject to ABS nonrecourse debt | — | — | — | — | — | ||||||||||||||
Nonrecourse debt–Legacy Assets | — | — | 112,490 | — | 112,490 | ||||||||||||||
Excess spread financing – fair value | 44,595 | — | — | — | 44,595 | ||||||||||||||
ABS nonrecourse – fair value | — | — | — | — | — | ||||||||||||||
Total liabilities | 1,139,774 | — | 474,741 | (107,893 | ) | 1,506,622 | |||||||||||||
Total members’ equity | 281,309 | 71,630 | 69,250 | (140,880 | ) | 281,309 | |||||||||||||
Total liabilities and members’ equity | $ | 1,421,083 | $ | 71,630 | $ | 543,991 | $ | (248,773 | ) | $ | 1,787,931 |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Revenues: | |||||||||||||||||||
Servicing fee income | $ | 234,135 | $ | — | $ | 6,231 | $ | (6,955 | ) | $ | 233,411 | ||||||||
Other fee income | 17,889 | 15,313 | 2,092 | — | 35,294 | ||||||||||||||
Total fee income | 252,024 | 15,313 | 8,323 | (6,955 | ) | 268,705 | |||||||||||||
Gain on mortgage loans held for sale | 109,136 | — | — | — | 109,136 | ||||||||||||||
Total Revenues | 361,160 | 15,313 | 8,323 | (6,955 | ) | 377,841 | |||||||||||||
Expenses and impairments: | |||||||||||||||||||
Salaries, wages and benefits | 198,703 | 3,587 | — | — | 202,290 | ||||||||||||||
General and administrative | 72,654 | 3,207 | 6,322 | — | 82,183 | ||||||||||||||
Provision for loan losses | 1,346 | — | 2,191 | — | 3,537 | ||||||||||||||
Loss on foreclosed real estate and other | 2,613 | — | 4,220 | — | 6,833 | ||||||||||||||
Occupancy | 11,163 | 177 | — | — | 11,340 | ||||||||||||||
Total expenses and impairments | 286,479 | 6,971 | 12,733 | — | 306,183 | ||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest income | 14,880 | — | 44,967 | 6,955 | 66,802 | ||||||||||||||
Interest expense | (58,452 | ) | — | (46,923 | ) | — | (105,375 | ) | |||||||||||
Loss on equity method investments | (107 | ) | — | — | — | (107 | ) | ||||||||||||
Gain/(Loss) on interest rate swaps and caps | — | — | 298 | — | 298 | ||||||||||||||
Fair value changes in ABS securitizations | 7,695 | — | (20,084 | ) | — | (12,389 | ) | ||||||||||||
Gain/(loss) from subsidiaries | (17,810 | ) | — | — | 17,810 | — | |||||||||||||
Total other income (expense) | (53,794 | ) | — | (21,742 | ) | 24,765 | (50,771 | ) | |||||||||||
Net income/(loss) | 20,887 | 8,342 | (26,152 | ) | 17,810 | 20,887 | |||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||
Change in value of cash flow hedges | (1,071 | ) | — | (1,071 | ) | 1,071 | (1,071 | ) | |||||||||||
Reclassification adjustments for gain (loss) included in earnings | — | — | — | — | — | ||||||||||||||
Comprehensive income / (loss) | $ | 19,816 | $ | 8,342 | $ | (27,223 | ) | $ | 18,881 | $ | 19,816 |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Operating activities: | |||||||||||||||||||
Net income/(loss) | $ | 20,887 | $ | 8,342 | $ | (26,152 | ) | $ | 17,810 | $ | 20,887 | ||||||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||||||||||
Loss from subsidiaries | 17,810 | — | — | (17,810 | ) | — | |||||||||||||
Share-based compensation | 14,815 | — | — | — | 14,815 | ||||||||||||||
(Gain)/loss on mortgage loans held for sale | (109,136 | ) | — | — | — | (109,136 | ) | ||||||||||||
Provision for loan losses | 1,346 | — | 2,191 | — | 3,537 | ||||||||||||||
Loss on foreclosed real estate and other | 2,613 | — | 4,220 | — | 6,833 | ||||||||||||||
Loss on equity method investments | 107 | — | — | — | 107 | ||||||||||||||
(Gain)/loss on ineffectiveness on interest rate swaps and cap | — | — | (2,331 | ) | — | (2,331 | ) | ||||||||||||
Fair value changes in ABS securitizations | (7,695 | ) | — | 20,084 | — | 12,389 | |||||||||||||
Fair value changes in excess spread financing | 3,060 | — | — | — | 3,060 | ||||||||||||||
Depreciation and amortization | 4,063 | — | — | — | 4,063 | ||||||||||||||
Change in fair value of mortgage servicing rights | 39,000 | — | — | — | 39,000 | ||||||||||||||
Amortization of debt discount | 9,070 | — | 4,261 | — | 13,331 | ||||||||||||||
Amortization of premiums/(discounts) | — | — | (5,042 | ) | — | (5,042 | ) | ||||||||||||
Mortgage loans originated and purchased, net of fees | (3,412,185 | ) | — | — | — | (3,412,185 | ) | ||||||||||||
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees | 3,376,778 | — | 26,659 | — | 3,403,437 | ||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Accounts receivable | 162,980 | (7 | ) | (246,106 | ) | — | (83,133 | ) | |||||||||||
Receivables from/(payables to) affiliates | (227,455 | ) | (8,407 | ) | 240,246 | — | 4,384 | ||||||||||||
Other assets | (44,576 | ) | — | — | — | (44,576 | ) | ||||||||||||
Accounts payable and accrued liabilities | 99,602 | — | 2,055 | — | 101,657 | ||||||||||||||
Net cash provided by/(used in) operating activities | (48,916 | ) | (72 | ) | 20,085 | — | (28,903 | ) |
Statement of Cash Flows continued | Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | ||||||||||||||
Investing activities: | |||||||||||||||||||
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt | — | — | 40,000 | — | 40,000 | ||||||||||||||
Property and equipment additions, net of disposals | (19,742 | ) | — | — | — | (19,742 | ) | ||||||||||||
Acquisition of equity method investment | (6,600 | ) | — | — | — | (6,600 | ) | ||||||||||||
Deposit on reverse mortgage servicing rights | (26,893 | ) | — | — | — | (26,893 | ) | ||||||||||||
Deposit on / purchase of mortgage servicing rights | (96,467 | ) | — | — | — | (96,467 | ) | ||||||||||||
Proceeds from sales of REO | 15,566 | — | 12,257 | — | 27,823 | ||||||||||||||
Net cash provided by/(used in) investing activities | (134,136 | ) | — | 52,257 | — | (81,879 | ) | ||||||||||||
Financing activities: | |||||||||||||||||||
Transfers to/from restricted cash | 8,399 | (3 | ) | 8,416 | — | 16,812 | |||||||||||||
Issuance of unsecured senior notes | 35,166 | — | — | — | 35,166 | ||||||||||||||
Issuance of excess spread financing | 40,492 | — | — | — | 40,492 | ||||||||||||||
Decrease in notes payable, net | 155,655 | — | 7,766 | — | 163,421 | ||||||||||||||
Repayment of nonrecourse debt–Legacy assets | — | — | (30,433 | ) | — | (30,433 | ) | ||||||||||||
Repayment of ABS nonrecourse debt | — | — | (58,091 | ) | — | (58,091 | ) | ||||||||||||
Repayment of excess servicing spread financing | (2,207 | ) | — | — | — | (2,207 | ) | ||||||||||||
Distribution to parent | (4,348 | ) | — | — | — | (4,348 | ) | ||||||||||||
Debt financing costs | (3,462 | ) | — | — | — | (3,462 | ) | ||||||||||||
Tax related share-based settlement of units by members | (5,346 | ) | — | — | — | (5,346 | ) | ||||||||||||
Net cash provided by/(used in) financing activities | 224,349 | (3 | ) | (72,342 | ) | — | 152,004 | ||||||||||||
Net increase/(decrease) in cash | 41,297 | (75 | ) | — | — | 41,222 | |||||||||||||
Cash and cash equivalents at beginning of period | 20,904 | 319 | — | — | 21,223 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 62,201 | $ | 244 | $ | — | $ | — | $ | 62,445 |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 20,904 | $ | 319 | $ | — | $ | — | $ | 21,223 | |||||||||
Restricted cash | 57,579 | — | 33,546 | — | 91,125 | ||||||||||||||
Accounts receivable, net | 437,300 | — | 3,975 | — | 441,275 | ||||||||||||||
Mortgage loans held for sale | 369,617 | — | — | — | 369,617 | ||||||||||||||
Mortgage loans held for investment, subject to nonrecourse debt, Legacy Assets, net | 5,016 | — | 261,304 | — | 266,320 | ||||||||||||||
Mortgage loans held for investment, subject to ABS nonrecourse debt (at fair value) | — | — | 538,440 | — | 538,440 | ||||||||||||||
Investment in debt securities–available-for-sale | 597 | — | — | (597 | ) | — | |||||||||||||
Investment in subsidiaries | 158,276 | — | — | (158,276 | ) | — | |||||||||||||
Receivables from affiliates | — | 62,171 | 132,353 | (185,531 | ) | 8,993 | |||||||||||||
Mortgage servicing rights | 145,062 | — | — | — | 145,062 | ||||||||||||||
Property and equipment, net | 7,559 | 835 | — | — | 8,394 | ||||||||||||||
REO, net | 323 | — | 27,014 | — | 27,337 | ||||||||||||||
Other assets | 29,395 | — | — | — | 29,395 | ||||||||||||||
Total Assets | $ | 1,231,628 | $ | 63,325 | $ | 996,632 | $ | (344,404 | ) | $ | 1,947,181 | ||||||||
Liabilities and members’ equity | |||||||||||||||||||
Notes payable | $ | 472,950 | $ | — | $ | 236,808 | $ | — | $ | 709,758 | |||||||||
Unsecured senior notes | 244,061 | — | — | — | 244,061 | ||||||||||||||
Payables and accrued liabilities | 73,785 | — | 1,269 | — | 75,054 | ||||||||||||||
Payables to affiliates | 185,531 | — | — | (185,531 | ) | — | |||||||||||||
Derivative financial instruments | — | — | 7,801 | — | 7,801 | ||||||||||||||
Derivative financial instruments, subject to ABS nonrecourse debt | — | — | 18,781 | — | 18,781 | ||||||||||||||
Nonrecourse debt–Legacy Assets | — | — | 138,662 | — | 138,662 | ||||||||||||||
ABS nonrecourse debt (at fair value) | — | — | 497,289 | (597 | ) | 496,692 | |||||||||||||
Total liabilities | 976,327 | — | 900,610 | (186,128 | ) | 1,690,809 | |||||||||||||
Total members’ equity | 255,301 | 63,325 | 96,022 | (158,276 | ) | 256,372 | |||||||||||||
Total liabilities and members’ equity | $ | 1,231,628 | $ | 63,325 | $ | 996,632 | $ | (344,404 | ) | $ | 1,947,181 |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Revenues: | |||||||||||||||||||
Servicing fee income | $ | 174,660 | $ | 1,730 | $ | — | $ | (9,264 | ) | $ | 167,126 | ||||||||
Other fee income | 8,259 | 7,551 | 1,148 | — | 16,958 | ||||||||||||||
Total fee income | 182,919 | 9,281 | 1,148 | (9,264 | ) | 184,084 | |||||||||||||
Gain on mortgage loans held for sale | 77,344 | — | — | — | 77,344 | ||||||||||||||
Total Revenues | 260,263 | 9,281 | 1,148 | (9,264 | ) | 261,428 | |||||||||||||
Expenses and impairments: | |||||||||||||||||||
Salaries, wages and benefits | 146,746 | 2,369 | — | — | 149,115 | ||||||||||||||
General and administrative | 57,329 | 1,642 | (58 | ) | — | 58,913 | |||||||||||||
Provision for loan losses | 1,558 | — | 1,740 | — | 3,298 | ||||||||||||||
Loss on foreclosed real estate and other | — | — | 205 | — | 205 | ||||||||||||||
Occupancy | 9,289 | 156 | — | — | 9,445 | ||||||||||||||
Total expenses and impairments | 214,922 | 4,167 | 1,887 | — | 220,976 | ||||||||||||||
Other income / (expense): | |||||||||||||||||||
Interest income | 17,019 | 6 | 72,606 | 9,264 | 98,895 | ||||||||||||||
Interest expense | (54,075 | ) | — | (62,088 | ) | — | (116,163 | ) | |||||||||||
Loss on interest rate swaps and caps | — | — | (9,801 | ) | — | (9,801 | ) | ||||||||||||
Fair value changes in ABS securitizations | — | — | (23,748 | ) | 451 | (23,297 | ) | ||||||||||||
Gain / (loss) from subsidiaries | (18,650 | ) | — | — | 18,650 | — | |||||||||||||
Total other income / (expense) | (55,706 | ) | 6 | (23,031 | ) | 28,365 | (50,366 | ) | |||||||||||
Net income / (loss) | (10,365 | ) | 5,120 | (23,770 | ) | 19,101 | (9,914 | ) | |||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||
Change in value of cash flow hedges | 1,071 | — | 1,071 | (1,071 | ) | 1,071 | |||||||||||||
Reclassification adjustments for gain (loss) included in earnings | — | — | — | — | — | ||||||||||||||
Comprehensive income / (loss) | $ | (9,294 | ) | $ | 5,120 | $ | (22,699 | ) | $ | 18,030 | $ | (8,843 | ) |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Operating activities: | |||||||||||||||||||
Net income/(loss) | $ | (10,365 | ) | $ | 5,120 | $ | (23,770 | ) | $ | 19,101 | $ | (9,914 | ) | ||||||
Adjustments to reconcile net income/(loss) to net cash provided by/(used in) operating activities: | |||||||||||||||||||
Share-based compensation | 12,856 | — | — | — | 12,856 | ||||||||||||||
Gain on mortgage loans held for sale | (77,344 | ) | — | — | — | (77,344 | ) | ||||||||||||
Provision for loan losses | 1,558 | — | 1,740 | — | 3,298 | ||||||||||||||
Loss on foreclosed real estate and other | — | — | 205 | — | 205 | ||||||||||||||
(Gain)/loss on ineffectiveness on interest rate swaps and cap | — | — | 8,872 | — | 8,872 | ||||||||||||||
Fair value changes in ABS securitizations | — | — | 23,297 | — | 23,297 | ||||||||||||||
Loss from subsidiaries | 18,650 | — | — | (18,650 | ) | — | |||||||||||||
Depreciation and amortization | 2,104 | 13 | — | — | 2,117 | ||||||||||||||
Change in fair value of mortgage servicing rights | 6,043 | — | — | — | 6,043 | ||||||||||||||
Amortization of debt discount | 12,380 | — | 6,351 | — | 18,731 | ||||||||||||||
Amortization of premiums/(discounts) | — | — | (4,526 | ) | — | (4,526 | ) | ||||||||||||
Mortgage loans originated and purchased, net of fees | (2,791,639 | ) | — | — | — | (2,791,639 | ) | ||||||||||||
Cost of loans sold and principal payments and prepayments, and other changes in mortgage loans originated as held for sale, net of fees | 2,670,577 | — | (16,634 | ) | — | 2,653,943 | |||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Accounts receivable | 73,124 | 3 | (31,979 | ) | — | 41,148 | |||||||||||||
Receivables from/(payables to) affiliates | (52,594 | ) | (5,110 | ) | 61,662 | — | 3,958 | ||||||||||||
Other assets | (861 | ) | — | — | — | (861 | ) | ||||||||||||
Accounts payable and accrued liabilities | 8,444 | (96 | ) | (185 | ) | — | 8,163 | ||||||||||||
Net cash provided by/(used) in operating activities | (127,067 | ) | (70 | ) | 25,033 | 451 | (101,653 | ) | |||||||||||
Investing activities: | |||||||||||||||||||
Principal payments received and other changes on mortgage loans held for investment, subject to ABS nonrecourse debt | — | — | 48,838 | — | 48,838 | ||||||||||||||
Property and equipment additions, net of disposals | (3,923 | ) | (13 | ) | — | — | (3,936 | ) | |||||||||||
Purchase of mortgage servicing rights | (17,812 | ) | — | — | — | (17,812 | ) | ||||||||||||
Proceeds from sales of REO | 504 | — | 73,603 | — | 74,107 | ||||||||||||||
Net cash provided by/(used) in investing activities | (21,231 | ) | (13 | ) | 122,441 | — | 101,197 | ||||||||||||
Financing activities: | |||||||||||||||||||
Transfers to/from restricted cash | (38,617 | ) | — | 4,886 | — | (33,731 | ) |
Issuer (Parent) | Guarantor (Subsidiaries) | Non- Guarantor (Subsidiaries) | Eliminations | Consolidated | |||||||||||||||
Issuance of unsecured notes, net of issue discount | 243,013 | — | — | — | 243,013 | ||||||||||||||
Decrease in notes payable, net | (57,972 | ) | — | (4,127 | ) | — | (62,099 | ) | |||||||||||
Repayment of nonrecourse debt–Legacy assets | — | — | (45,364 | ) | — | (45,364 | ) | ||||||||||||
Repayment of ABS nonrecourse debt | (146 | ) | — | (102,869 | ) | (451 | ) | (103,466 | ) | ||||||||||
Debt financing costs | (14,923 | ) | — | — | — | (14,923 | ) | ||||||||||||
Tax related share-based settlement of units by members | (3,396 | ) | — | — | — | (3,396 | ) | ||||||||||||
Net cash provided by/(used) in financing activities | 127,959 | — | (147,474 | ) | (451 | ) | (19,966 | ) | |||||||||||
Net increase/(decrease) in cash | (20,339 | ) | (83 | ) | — | — | (20,422 | ) | |||||||||||
Cash and cash equivalents at beginning of period | 41,243 | 402 | — | — | 41,645 | ||||||||||||||
Cash and cash equivalents at end of period | $ | 20,904 | $ | 319 | $ | — | $ | — | $ | 21,223 |
2012 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total fee income | $ | 93,560 | $ | 100,414 | $ | 145,611 | $ | 157,566 | |||||||
Gain on mortgage loans held for sale | 70,512 | 102,345 | 139,259 | 175,048 | |||||||||||
Total revenues | 164,072 | 202,759 | 284,870 | 332,614 | |||||||||||
Total expenses and impairments | 96,577 | 130,372 | 154,828 | 200,268 | |||||||||||
Total other income/(expense) | (14,164 | ) | (23,332 | ) | (50,261 | ) | (37,930 | ) | |||||||
Income before taxes | 53,331 | 49,055 | 79,781 | 94,416 | |||||||||||
Income taxes | 3,145 | 12,780 | 24,714 | 30,657 | |||||||||||
Net income | $ | 50,186 | $ | 36,275 | $ | 55,067 | $ | 63,759 | |||||||
Earnings per share: | |||||||||||||||
Basic earnings per share | $ | 0.67 | $ | 0.41 | $ | 0.62 | $ | 0.72 | |||||||
Diluted earnings per share | $ | 0.67 | $ | 0.41 | $ | 0.61 | $ | 0.71 |
2011 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total fee income | $ | 64,686 | $ | 59,898 | $ | 61,141 | $ | 82,980 | |||||||
Gain on mortgage loans held for sale | 20,506 | 22,822 | 30,232 | 35,576 | |||||||||||
Total revenues | 85,192 | 82,720 | 91,373 | 118,556 | |||||||||||
Total expenses and impairments | 68,121 | 68,402 | 83,194 | 86,466 | |||||||||||
Total other income/(expense) | (9,702 | ) | (12,592 | ) | (11,279 | ) | (17,198 | ) | |||||||
Net income/(loss) | $ | 7,369 | $ | 1,726 | $ | (3,100 | ) | $ | 14,892 | ||||||
Earnings (loss) per share: | |||||||||||||||
Basic earnings (loss) per share | $ | 0.11 | $ | 0.02 | $ | (0.04 | ) | $ | 0.21 | ||||||
Diluted earnings (loss) per share | $ | 0.11 | $ | 0.02 | $ | (0.04 | ) | $ | 0.21 |
2010 | |||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||
Total fee income | $ | 38,750 | $ | 44,878 | $ | 39,142 | $ | 61,314 | |||||||
Gain on mortgage loans held for sale | 12,429 | 13,489 | 25,836 | 25,590 | |||||||||||
Total revenues | 51,179 | 58,367 | 64,978 | 86,904 | |||||||||||
Total expenses and impairments | 40,110 | 45,999 | 59,513 | 75,354 | |||||||||||
Total other income/(expense) | (10,337 | ) | (14,694 | ) | (11,280 | ) | (14,055 | ) | |||||||
Net income/(loss) | $ | 732 | $ | (2,326 | ) | $ | (5,815 | ) | $ | (2,505 | ) | ||||
Earnings (loss) per share: | |||||||||||||||
Basic earnings (loss) per share | $ | 0.01 | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.04 | ) | ||||
Diluted earnings (loss) per share | $ | 0.01 | $ | (0.03 | ) | $ | (0.08 | ) | $ | (0.04 | ) |
1. | Financial Statements: |
2. | Financial Statement Schedules: |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
2.1 | Master Pre-IPO Restructuring Agreement, dated as of February 17, 2012, by and among FIF HE Holdings LLC, Nationstar Mortgage Holdings Inc., Nationstar Mortgage LLC and the other parties thereto | S-1/A | 333-174246 | 2.1 | 2/24/2012 | |
2.2+ | Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, between Nationstar Mortgage LLC and Bank of America, National Association | 8-K | 001-35449 | 2.1 | 1/10/2013 | |
3.1 | Amended and Restated Certificate of Incorporation of Nationstar Mortgage Holdings Inc. | S-1/A | 333-174246 | 3.1 | 2/24/2012 | |
3.2 | Amended and Restated Bylaws of Nationstar Mortgage Holdings Inc. | S-1/A | 333-174246 | 3.2 | 2/24/2012 | |
4.1 | Form of Stock Certificate | S-1/A | 333-174246 | 4.8 | 2/24/2012 | |
4.2 | Stockholders Agreement, dated as of February 17, 2012, between Nationstar Mortgage Holdings Inc. and FIF HE Holdings LLC | S-1/A | 333-174246 | 4.1 | 2/24/2012 | |
4.3 | Indenture, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.1 | 12/23/2010 | |
4.4 | Supplemental Indenture, dated as of August 31, 2010, between NSM Recovery Services Inc. and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.2 | 12/23/2010 | |
4.5 | Supplemental Indenture, dated as of December 13, 2010, between NSM Foreclosure Services Inc. and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.3 | 12/23/2010 | |
4.6 | Third Supplemental Indenture, dated as of December 19, 2011, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 333-171370 | 4.1 | 12/19/2011 | |
4.7 | Fourth Supplemental Indenture, dated as of August 9, 2012, among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 8/9/2012 | |
4.8 | Fifth Supplemental Indenture, dated as of August 30, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 9/4/2012 | |
4.9 | Sixth Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
4.10 | Indenture, dated as of September 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 9/24/2012 | |
4.11 | First Supplemental Indenture, dated as of September 28, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 9/28/2012 | |
4.12 | Second Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
4.13 | Indenture, dated as of April 25, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 4/25/2012 | |
4.14 | First Supplemental Indenture, dated as of July 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 7/24/2012 | |
4.15 | Second Supplemental Indenture, dated as of August 9, 2012, among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 8/9/2012 | |
4.16 | Third Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
4.17 | Indenture, dated as of February 7, 2013, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 2/7/2013 | |
4.18± | Indenture, dated as of June 12, 2012, between Nationstar Agency Advance Funding Trust 2012-AW and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.2 | 8/14/2012 | |
4.19± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-W and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.3 | 8/14/2012 | |
4.20± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-R and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.4 | 8/14/2012 | |
4.21± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.5 | 8/14/2012 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
4.22* | Amendment No. 1, dated July 18, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.23* | Amendment No. 2, dated August 24, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.24* | Amendment No. 3, dated November 30, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.25 | Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as servicer and as administrator, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.1 | 2/6/2013 | |
4.26 | Series 2013-VF1 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.2 | 2/6/2013 | |
4.27 | Series 2013-T1 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.3 | 2/6/2013 | |
4.28 | Series 2013-T2 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.4 | 2/6/2013 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.1 | Registration Rights Agreement, dated as of April 25, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 4/25/2012 | |
10.2 | Registration Rights Agreement, dated as of July 24, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 7/24/2012 | |
10.3 | Registration Rights Agreement, dated as of September 24, 2012, among the issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 9/24/2012 | |
10.4 | Registration Rights Agreement, dated as of September 28, 2012, among the issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 9/28/2012 | |
10.5 | Registration Rights Agreement, dated February 7, 2013, among the issuers, the guarantors party thereto, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Wells Fargo Securities, LLC and RBS Securities Inc., as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 2/7/2013 | |
10.6 | Amended and Restated Receivables Pooling Agreement, dated January 31, 2013, between Nationstar Agency Advance Funding LLC (depositor) and Nationstar Agency Advance Funding Trust (issuer) | 8-K | 001-35449 | 10.5 | 2/6/2013 | |
10.7 | Amended and Restated Receivables Sale Agreement, dated January 31, 2013, between Nationstar Mortgage LLC (receivables seller and servicer) and Nationstar Agency Advance Funding LLC (depositor) | 8-K | 001-35449 | 10.6 | 2/6/2013 | |
10.8 | Asset Purchase Agreement, dated as of May 13, 2012, among Nationstar Mortgage LLC and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC and the additional Sellers identified on Schedule A thereto | 8-K | 001-35449 | 10.1 | 5/16/2012 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.9 | Amended and Restated Asset Purchase Agreement, dated as of June 28, 2012, among Nationstar Mortgage LLC and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services LLC, ETS of Washington, Inc., EPRE LLC, GMACM Borrower LLC and RFC Borrower LLC | 8-K | 001-35449 | 2.1 | 7/5/2012 | |
10.10* | Addendum to Mortgage Selling and Servicing Contract (Early Advance Funding Agreement), dated December 20, 2012, between Fannie Mae and Nationstar Mortgage LLC (restates and supersedes prior EAF facility) | X | ||||
10.11* | First Amendment, dated January 31, 2013, to the Addendum to Mortgage Selling and Servicing Contract (Early Advance Funding Agreement), dated December 20, 2012, between Fannie Mae and Nationstar Mortgage LLC | X | ||||
10.12 | Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.13 | Amendment and Waiver, dated February 21, 2012, to the Master Repurchase Agreement, dated March 25, 2011, and the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.14 | Amendment Number One, dated February 29, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.15 | Amendment Number Two, dated June 28, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.16 | Amendment Number Three, dated August 28, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.17 | Amendment Number Four, dated December 24, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.18 | Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.19 | Amendment Number One, dated February 29, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.20 | Amendment Number Two, dated August 28, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, among Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.21 | Amendment Number Three, dated December 24, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2012, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.22 | Asset Purchase Agreement, dated as of March 6, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 333-171370 | 10.1 | 3/6/2012 | |
10.23 | Amended and Restated Asset Purchase Agreement, dated as of June 12, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.1 | 6/14/2012 | |
10.24 | First Letter Agreement, dated as of June 1, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.1 | 6/7/2012 | |
10.25 | Second Letter Agreement, dated as of June 1, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.2 | 6/7/2012 | |
10.26 | Mortgage Selling and Servicing Contract, dated July 31, 1997, between Fannie Mae and Centex Home Equity Corp. | S-1/A | 333-174246 | 10.37 | 1/20/2012 | |
10.27 | Future Spread Agreement for FNMA Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.3 | 3/6/2012 | |
10.28 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.2 | 3/6/2012 | |
10.29 | Future Spread Agreement for FHLMC Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.5 | 3/6/2012 | |
10.30 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.4 | 3/6/2012 | |
10.31 | Future Spread Agreement for Non-Agency Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.7 | 3/6/2012 | |
10.32 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.6 | 3/6/2012 | |
10.33 | Future Spread Agreement for FHLMC Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.5 | 5/16/2012 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.34 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.4 | 5/16/2012 | |
10.35 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.2 | 7/5/2012 | |
10.36 | Future Spread Agreement for FNMA Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.3 | 5/16/2012 | |
10.37 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.2 | 5/16/2012 | |
10.38 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.1 | 7/5/2012 | |
10.39 | Future Spread Agreement for Non-Agency Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.7 | 5/16/2012 | |
10.40 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.6 | 5/16/2012 | |
10.41 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.3 | 7/5/2012 | |
10.42 | Future Spread Agreement for GNMA Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.9 | 5/16/2012 | |
10.43 | Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.8 | 5/16/2012 | |
10.44 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.4 | 7/5/2012 | |
10.45 | Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XIII LLC | X | ||||
10.46 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XIII LLC | X | ||||
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.47 | Future Spread Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR IX LLC | X | ||||
10.48 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR IX LLC | X | ||||
10.49 | Future Spread Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR X LLC | X | ||||
10.50 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR X LLC | X | ||||
10.51 | Future Spread Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XI LLC | X | ||||
10.52 | Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XI LLC | X | ||||
10.53 | Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XII LLC | X | ||||
10.54 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XII LLC | X | ||||
10.55 | Receivables Purchase Agreement, dated as of June 12, 2012, among Nationstar Agency Advance Funding Trust 2012-AW, Nationstar Agency Advance Funding 2012-AW, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.19 | 8/14/2012 | |
10.56 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-W, Nationstar Advance Funding 2012-W, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.22 | 8/14/2012 | |
10.57 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-R, Nationstar Advance Funding 2012-R, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.21 | 8/14/2012 | |
10.58 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-C, Nationstar Advance Funding 2012-C, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.20 | 8/14/2012 | |
10.59 | Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.31 | 1/20/2012 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.60 | Amendment and Waiver to the Amended and Restated Master Repurchase Agreement and the Transition Subservicing Agreement, dated as of February 21, 2012, between Nationstar Mortgage LLC and Bank of America, N.A. | S-1/A | 333-174246 | 10.50 | 2/242012 | |
10.61 | Amendment Number One, dated November 24, 2010, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.33 | 1/20/2012 | |
10.62 | Amendment Number Two, dated October 20, 2011, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.34 | 1/20/2012 | |
10.63 | Amendment Number Three to the Amended and Restated Master Repurchase Agreement, dated January 17, 2012, between Bank of America, N.A., as buyer, and Nationstar Mortgage LLC, as seller | S-1/A | 333-174246 | 10.35 | 1/20/2012 | |
10.64 | Amendment Number Four to the Amended and Restated Master Repurchase Agreement, dated June 1, 2012, between Nationstar Mortgage LLC and Bank of America, N.A. | 8-K | 001-35449 | 10.1 | 9/4/2012 | |
10.65 | Request for Temporary Increase, dated June 26, 2012, between Bank of America, N.A. and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.2 | 9/4/2012 | |
10.66 | Amendment Number Five, dated January 30, 2013, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | X | ||||
10.67* | Transaction Terms Letter for Amended and Restated Master Repurchase Agreement, dated January 30, 2013, between Bank of America, N.A. and Nationstar Mortgage LLC | X | ||||
10.68 | Amendment to the Fifth Amended and Restated Master Repurchase Agreement, dated as of February 21, 2012, between Nationstar Mortgage LLC and The Royal Bank of Scotland plc | S-1/A | 333-174246 | 10.49 | 2/24/2012 | |
10.69 | Amendment Number Four to Fifth Amended and Restated Master Repurchase Agreement, dated as of February 25, 2012, between The Royal Bank of Scotland plc and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.58 | 2/24/2012 | |
10.70** | Employment Agreement, dated as of January 29, 2008, between Nationstar Mortgage LLC and Robert L. Appel | S-4 | 333-171370 | 10.5 | 12/23/2010 | |
10.71** | Amendment, dated as of September 17, 2010, to Employment Agreement, dated January 29, 2008, between Nationstar Mortgage LLC and Robert L. Appel | S-4 | 333-171370 | 10.6 | 12/23/2010 | |
10.72** | Employment Agreement between David Hisey and Nationstar Mortgage Holdings Inc. | 8-K | 001-35449 | 10.1 | 2/21/2013 | |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
10.73** | Employment Agreement between Harold Lewis and Nationstar Mortgage Holdings Inc. | X | ||||
10.74** | Employment Agreement between Ramesh Lakshminarayanan and Nationstar Mortgage Holdings Inc. | X | ||||
10.75** | Nationstar Mortgage Holdings Inc. 2012 Incentive Compensation Plan | S-1/A | 333-174246 | 10.57 | 2/24/2012 | |
10.76** | Form of Restricted Stock Grant Agreement for Employees (IPO) under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.1 | 11/16/2012 | |
10.77** | Form of Restricted Stock Grant Agreement for Employees under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.2 | 11/16/2012 | |
10.78** | Form of Restricted Stock Grant Agreement for Non-Employee Directors (IPO) under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.3 | 11/16/2012 | |
10.79** | Form of Restricted Stock Grant Agreement for Non-Employee Directors under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.4 | 11/16/2012 | |
10.80** | Form of Cash Award Agreement for Employees under the 2012 Incentive Compensation Plan | X | ||||
10.81** | Nationstar Mortgage LLC Annual Incentive Compensation Plan | X | ||||
10.82** | Nationstar Mortgage LLC Management Incentive Plan (MIP) | X | ||||
10.83** | Nationstar Mortgage LLC Long-Term Incentive Plan | S-4 | 333-171370 | 10.16 | 12/23/2010 | |
10.84** | Amendment Number Two to Nationstar Mortgage LLC Long-Term Incentive Plan | X | ||||
10.85 | Form of Indemnification Agreement with directors and officers | S-1/A | 333-174246 | 10.52 | 2/24/2012 | |
21.1 | Subsidiaries of the Registrant | X | ||||
23.1 | Consent of Ernst & Young LLP | X | ||||
31.1 | Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
31.2 | Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
101.INS | XBRL Instance Document | X | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X |
* | Certain portions of this exhibit have been omitted and have been filed separately with the SEC pursuant to a request for confidential treatment under Rule 24b-2 as promulgated with the Securities Exchange Act of 1934, as amended. |
± | Certain portions of this exhibit have been omitted pursuant to confidential treatment granted by the SEC under Rule 24b-2 as promulgated with the Securities Exchange Act of 1934, as amended. |
** | Management contract, compensatory plan or arrangement. |
+ | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant hereby undertakes to furnish supplementally a copy of any referenced schedule to the SEC upon request. |
/s/ Jay Bray | March 15, 2013 |
Jay Bray, Chief Executive Officer and Director (Principal Executive Officer) | |
/s/ David C. Hisey | March 15, 2013 |
David C. Hisey, Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | |
/s/ Wesley R. Edens | March 15, 2013 |
Wesley R. Edens, Chairman of the Board of Directors | |
/s/ Robert Gidel | March 15, 2013 |
Robert Gidel, Director | |
/s/ Roy Guthrie | March 15, 2013 |
Roy Guthrie, Director | |
/s/ Brett Hawkins | March 15, 2013 |
Brett Hawkins, Director | |
/s/ Michael D. Malone | March 15, 2013 |
Michael D. Malone, Director |
Incorporated by Reference | ||||||
Exhibit Number | Description | Form | File No. | Exhibit | Filing Date | Filed or Furnished Herewith |
2.1 | Master Pre-IPO Restructuring Agreement, dated as of February 17, 2012, by and among FIF HE Holdings LLC, Nationstar Mortgage Holdings Inc., Nationstar Mortgage LLC and the other parties thereto | S-1/A | 333-174246 | 2.1 | 2/24/2012 | |
2.2+ | Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, between Nationstar Mortgage LLC and Bank of America, National Association | 8-K | 001-35449 | 2.1 | 1/10/2013 | |
3.1 | Amended and Restated Certificate of Incorporation of Nationstar Mortgage Holdings Inc. | S-1/A | 333-174246 | 3.1 | 2/24/2012 | |
3.2 | Amended and Restated Bylaws of Nationstar Mortgage Holdings Inc. | S-1/A | 333-174246 | 3.2 | 2/24/2012 | |
4.1 | Form of Stock Certificate | S-1/A | 333-174246 | 4.8 | 2/24/2012 | |
4.2 | Stockholders Agreement, dated as of February 17, 2012, between Nationstar Mortgage Holdings Inc. and FIF HE Holdings LLC | S-1/A | 333-174246 | 4.1 | 2/24/2012 | |
4.3 | Indenture, dated as of March 26, 2010, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.1 | 12/23/2010 | |
4.4 | Supplemental Indenture, dated as of August 31, 2010, between NSM Recovery Services Inc. and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.2 | 12/23/2010 | |
4.5 | Supplemental Indenture, dated as of December 13, 2010, between NSM Foreclosure Services Inc. and Wells Fargo Bank, National Association, as trustee | S-4 | 333-171370 | 4.3 | 12/23/2010 | |
4.6 | Third Supplemental Indenture, dated as of December 19, 2011, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 333-171370 | 4.1 | 12/19/2011 | |
4.7 | Fourth Supplemental Indenture, dated as of August 9, 2012, among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 8/9/2012 | |
4.8 | Fifth Supplemental Indenture, dated as of August 30, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 9/4/2012 | |
4.9 | Sixth Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
4.10 | Indenture, dated as of September 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 9/24/2012 | |
4.11 | First Supplemental Indenture, dated as of September 28, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 9/28/2012 | |
4.12 | Second Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
4.13 | Indenture, dated as of April 25, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 4/25/2012 | |
4.14 | First Supplemental Indenture, dated as of July 24, 2012, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 7/24/2012 | |
4.15 | Second Supplemental Indenture, dated as of August 9, 2012, among Nationstar Mortgage Holdings Inc., Nationstar Sub1 LLC, Nationstar Sub2 LLC and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.2 | 8/9/2012 | |
4.16 | Third Supplemental Indenture, dated as of December 10, 2012, between Champion Mortgage LLC and Wells Fargo Bank, National Association, as trustee | X | ||||
4.17 | Indenture, dated as of February 7, 2013, by and among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors thereto and Wells Fargo Bank, National Association, as trustee | 8-K | 001-35449 | 4.1 | 2/7/2013 | |
4.18± | Indenture, dated as of June 12, 2012, between Nationstar Agency Advance Funding Trust 2012-AW and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.2 | 8/14/2012 | |
4.19± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-W and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.3 | 8/14/2012 | |
4.20± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-R and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.4 | 8/14/2012 | |
4.21± | Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | 10-Q | 001-35449 | 4.5 | 8/14/2012 | |
4.22* | Amendment No. 1, dated July 18, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.23* | Amendment No. 2, dated August 24, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.24* | Amendment No. 3, dated November 30, 2012, to Indenture, dated as of June 26, 2012, between Nationstar Advance Funding Trust 2012-C and Wells Fargo Bank, National Association, as indenture trustee | X | ||||
4.25 | Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as servicer and as administrator, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.1 | 2/6/2013 | |
4.26 | Series 2013-VF1 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.2 | 2/6/2013 | |
4.27 | Series 2013-T1 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.3 | 2/6/2013 | |
4.28 | Series 2013-T2 Indenture Supplement to Fourth Amended and Restated Indenture, dated January 31, 2013, among Nationstar Agency Advance Funding Trust, as issuer, The Bank of New York Mellon, as indenture trustee, calculation agent, paying agent and securities intermediary, Nationstar Mortgage LLC, as administrator and as servicer, and Barclays Bank PLC, as administrative agent | 8-K | 001-35449 | 10.4 | 2/6/2013 | |
10.1 | Registration Rights Agreement, dated as of April 25, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 4/25/2012 | |
10.2 | Registration Rights Agreement, dated as of July 24, 2012, among Nationstar Mortgage LLC, Nationstar Capital Corporation, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 7/24/2012 | |
10.3 | Registration Rights Agreement, dated as of September 24, 2012, among the issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 9/24/2012 | |
10.4 | Registration Rights Agreement, dated as of September 28, 2012, among the issuers, the guarantors party thereto, and Credit Suisse Securities (USA) LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities, LLC, as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 9/28/2012 | |
10.5 | Registration Rights Agreement, dated February 7, 2013, among the issuers, the guarantors party thereto, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Barclays Capital Inc., Wells Fargo Securities, LLC and RBS Securities Inc., as representatives of the several initial purchasers | 8-K | 001-35449 | 10.1 | 2/7/2013 | |
10.6 | Amended and Restated Receivables Pooling Agreement, dated January 31, 2013, between Nationstar Agency Advance Funding LLC (depositor) and Nationstar Agency Advance Funding Trust (issuer) | 8-K | 001-35449 | 10.5 | 2/6/2013 | |
10.7 | Amended and Restated Receivables Sale Agreement, dated January 31, 2013, between Nationstar Mortgage LLC (receivables seller and servicer) and Nationstar Agency Advance Funding LLC (depositor) | 8-K | 001-35449 | 10.6 | 2/6/2013 | |
10.8 | Asset Purchase Agreement, dated as of May 13, 2012, among Nationstar Mortgage LLC and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC and the additional Sellers identified on Schedule A thereto | 8-K | 001-35449 | 10.1 | 5/16/2012 | |
10.9 | Amended and Restated Asset Purchase Agreement, dated as of June 28, 2012, among Nationstar Mortgage LLC and Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services LLC, ETS of Washington, Inc., EPRE LLC, GMACM Borrower LLC and RFC Borrower LLC | 8-K | 001-35449 | 2.1 | 7/5/2012 | |
10.10* | Addendum to Mortgage Selling and Servicing Contract (Early Advance Funding Agreement), dated December 20, 2012, between Fannie Mae and Nationstar Mortgage LLC (restates and supersedes prior EAF facility) | X | ||||
10.11* | First Amendment, dated January 31, 2013, to the Addendum to Mortgage Selling and Servicing Contract (Early Advance Funding Agreement), dated December 20, 2012, between Fannie Mae and Nationstar Mortgage LLC | X | ||||
10.12 | Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.13 | Amendment and Waiver, dated February 21, 2012, to the Master Repurchase Agreement, dated March 25, 2011, and the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.14 | Amendment Number One, dated February 29, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.15 | Amendment Number Two, dated June 28, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.16 | Amendment Number Three, dated August 28, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.17 | Amendment Number Four, dated December 24, 2012, to the Master Repurchase Agreement, dated March 25, 2011, between Barclays Bank, PLC and Nationstar Mortgage LLC | X | ||||
10.18 | Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.19 | Amendment Number One, dated February 29, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.20 | Amendment Number Two, dated August 28, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2011, among Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.21 | Amendment Number Three, dated December 24, 2012, to the Mortgage Loan Participation Purchase and Sale Agreement, dated March 25, 2012, between Barclays Bank PLC and Nationstar Mortgage LLC | X | ||||
10.22 | Asset Purchase Agreement, dated as of March 6, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 333-171370 | 10.1 | 3/6/2012 | |
10.23 | Amended and Restated Asset Purchase Agreement, dated as of June 12, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.1 | 6/14/2012 | |
10.24 | First Letter Agreement, dated as of June 1, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.1 | 6/7/2012 | |
10.25 | Second Letter Agreement, dated as of June 1, 2012, among Aurora Bank FSB, Aurora Loan Services LLC and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.2 | 6/7/2012 | |
10.26 | Mortgage Selling and Servicing Contract, dated July 31, 1997, between Fannie Mae and Centex Home Equity Corp. | S-1/A | 333-174246 | 10.37 | 1/20/2012 | |
10.27 | Future Spread Agreement for FNMA Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.3 | 3/6/2012 | |
10.28 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.2 | 3/6/2012 | |
10.29 | Future Spread Agreement for FHLMC Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.5 | 3/6/2012 | |
10.30 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.4 | 3/6/2012 | |
10.31 | Future Spread Agreement for Non-Agency Mortgage Loans, dated March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.7 | 3/6/2012 | |
10.32 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of March 6, 2012, between Nationstar Mortgage LLC and NIC MSR II LLC | 8-K | 333-171370 | 10.6 | 3/6/2012 | |
10.33 | Future Spread Agreement for FHLMC Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.5 | 5/16/2012 | |
10.34 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.4 | 5/16/2012 | |
10.35 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR IV LLC | 8-K | 001-35449 | 10.2 | 7/5/2012 | |
10.36 | Future Spread Agreement for FNMA Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.3 | 5/16/2012 | |
10.37 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.2 | 5/16/2012 | |
10.38 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR V LLC | 8-K | 001-35449 | 10.1 | 7/5/2012 | |
10.39 | Future Spread Agreement for Non-Agency Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.7 | 5/16/2012 | |
10.40 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.6 | 5/16/2012 | |
10.41 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR VI LLC | 8-K | 001-35449 | 10.3 | 7/5/2012 | |
10.42 | Future Spread Agreement for GNMA Mortgage Loans, dated May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.9 | 5/16/2012 | |
10.43 | Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of May 13, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.8 | 5/16/2012 | |
10.44 | Amended and Restated Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of June 28, 2012, between Nationstar Mortgage LLC and NIC MSR VII LLC | 8-K | 001-35449 | 10.4 | 7/5/2012 | |
10.45 | Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XIII LLC | X | ||||
10.46 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XIII LLC | X | ||||
10.47 | Future Spread Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR IX LLC | X | ||||
10.48 | Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR IX LLC | X | ||||
10.49 | Future Spread Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR X LLC | X | ||||
10.50 | Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR X LLC | X | ||||
10.51 | Future Spread Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XI LLC | X | ||||
10.52 | Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XI LLC | X | ||||
10.53 | Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XII LLC | X | ||||
10.54 | Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013, between Nationstar Mortgage LLC and MSR XII LLC | X | ||||
10.55 | Receivables Purchase Agreement, dated as of June 12, 2012, among Nationstar Agency Advance Funding Trust 2012-AW, Nationstar Agency Advance Funding 2012-AW, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.19 | 8/14/2012 | |
10.56 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-W, Nationstar Advance Funding 2012-W, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.22 | 8/14/2012 | |
10.57 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-R, Nationstar Advance Funding 2012-R, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.21 | 8/14/2012 | |
10.58 | Receivables Purchase Agreement, dated as of June 26, 2012, among Nationstar Advance Funding Trust 2012-C, Nationstar Advance Funding 2012-C, LLC and Nationstar Mortgage LLC | 10-Q | 001-35449 | 10.20 | 8/14/2012 | |
10.59 | Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.31 | 1/20/2012 | |
10.60 | Amendment and Waiver to the Amended and Restated Master Repurchase Agreement and the Transition Subservicing Agreement, dated as of February 21, 2012, between Nationstar Mortgage LLC and Bank of America, N.A. | S-1/A | 333-174246 | 10.50 | 2/242012 | |
10.61 | Amendment Number One, dated November 24, 2010, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.33 | 1/20/2012 | |
10.62 | Amendment Number Two, dated October 20, 2011, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.34 | 1/20/2012 | |
10.63 | Amendment Number Three to the Amended and Restated Master Repurchase Agreement, dated January 17, 2012, between Bank of America, N.A., as buyer, and Nationstar Mortgage LLC, as seller | S-1/A | 333-174246 | 10.35 | 1/20/2012 | |
10.64 | Amendment Number Four to the Amended and Restated Master Repurchase Agreement, dated June 1, 2012, between Nationstar Mortgage LLC and Bank of America, N.A. | 8-K | 001-35449 | 10.1 | 9/4/2012 | |
10.65 | Request for Temporary Increase, dated June 26, 2012, between Bank of America, N.A. and Nationstar Mortgage LLC | 8-K | 001-35449 | 10.2 | 9/4/2012 | |
10.66 | Amendment Number Five, dated January 30, 2013, to the Amended and Restated Master Repurchase Agreement, dated October 21, 2010, between Bank of America, N.A. and Nationstar Mortgage LLC | X | ||||
10.67* | Transaction Terms Letter for Amended and Restated Master Repurchase Agreement, dated January 30, 2013, between Bank of America, N.A. and Nationstar Mortgage LLC | X | ||||
10.68 | Amendment to the Fifth Amended and Restated Master Repurchase Agreement, dated as of February 21, 2012, between Nationstar Mortgage LLC and The Royal Bank of Scotland plc | S-1/A | 333-174246 | 10.49 | 2/24/2012 | |
10.69 | Amendment Number Four to Fifth Amended and Restated Master Repurchase Agreement, dated as of February 25, 2012, between The Royal Bank of Scotland plc and Nationstar Mortgage LLC | S-1/A | 333-174246 | 10.58 | 2/24/2012 | |
10.70** | Employment Agreement, dated as of January 29, 2008, between Nationstar Mortgage LLC and Robert L. Appel | S-4 | 333-171370 | 10.5 | 12/23/2010 | |
10.71** | Amendment, dated as of September 17, 2010, to Employment Agreement, dated January 29, 2008, between Nationstar Mortgage LLC and Robert L. Appel | S-4 | 333-171370 | 10.6 | 12/23/2010 | |
10.72** | Employment Agreement between David Hisey and Nationstar Mortgage Holdings Inc. | 8-K | 001-35449 | 10.1 | 2/21/2013 | |
10.73** | Employment Agreement between Harold Lewis and Nationstar Mortgage Holdings Inc. | X | ||||
10.74** | Employment Agreement between Ramesh Lakshminarayanan and Nationstar Mortgage Holdings Inc. | X | ||||
10.75** | Nationstar Mortgage Holdings Inc. 2012 Incentive Compensation Plan | S-1/A | 333-174246 | 10.57 | 2/24/2012 | |
10.76** | Form of Restricted Stock Grant Agreement for Employees (IPO) under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.1 | 11/16/2012 | |
10.77** | Form of Restricted Stock Grant Agreement for Employees under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.2 | 11/16/2012 | |
10.78** | Form of Restricted Stock Grant Agreement for Non-Employee Directors (IPO) under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.3 | 11/16/2012 | |
10.79** | Form of Restricted Stock Grant Agreement for Non-Employee Directors under the 2012 Incentive Compensation Plan | 8-K | 001-35449 | 10.4 | 11/16/2012 | |
10.80** | Form of Cash Award Agreement for Employees under the 2012 Incentive Compensation Plan | X | ||||
10.81** | Nationstar Mortgage LLC Annual Incentive Compensation Plan | X | ||||
10.82** | Nationstar Mortgage LLC Management Incentive Plan (MIP) | X | ||||
10.83** | Nationstar Mortgage LLC Long-Term Incentive Plan | S-4 | 333-171370 | 10.16 | 12/23/2010 | |
10.84** | Amendment Number Two to Nationstar Mortgage LLC Long-Term Incentive Plan | X | ||||
10.85 | Form of Indemnification Agreement with directors and officers | S-1/A | 333-174246 | 10.52 | 2/24/2012 | |
21.1 | Subsidiaries of the Registrant | X | ||||
23.1 | Consent of Ernst & Young, LLP | X | ||||
31.1 | Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
31.2 | Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||
32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||
101.INS | XBRL Instance Document | X | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | X | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | X | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | X | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | X |
* | Certain portions of this exhibit have been omitted and have been filed separately with the SEC pursuant to a request for confidential treatment under Rule 24b-2 as promulgated with the Securities Exchange Act of 1934, as amended. |
± | Certain portions of this exhibit have been omitted pursuant to confidential treatment granted by the SEC under Rule 24b-2 as promulgated with the Securities Exchange Act of 1934, as amended. |
** | Management contract, compensatory plan or arrangement. |
+ | Pursuant to Item 601(b)(2) of Regulation S-K, the registrant hereby undertakes to furnish supplementally a copy of any referenced schedule to the SEC upon request. |
Section 1. | Defined Terms. |
Section 2. | Amendments. |
(c) with respect to Receivables related to Delinquency Ratio Securitization Trusts; | [***] |
(d) (i) on any date of determination on or prior October 15, 2012, with respect to Receivables related to Phase I WAMO Securitization Trusts; and | [***] |
(ii) on any date of determination following October 15, 2012, with respect to Receivables related to Phase II WAMO Securitization Trusts. | [***] |
Section 3. | Waiver. |
Section 4. | Expenses. |
Section 5. | Ratification of the Indenture. |
Section 6. | Successors and Assigns. |
Section 7. | Governing Law. |
Section 8. | Counterparts. |
Section 9. | Entire Agreement. |
(c) with respect to Receivables related to Delinquency Ratio Securitization Trusts; | [***] |
(d) (i) on any date of determination on or prior October 27, 2012, with respect to Receivables related to Phase I WAMO Securitization Trusts; | [***] |
(ii) (A) on any date of determination following October 27, 2012 and on or prior to January 27, 2013, with respect to Receivables related to Phase II WAMO Securitization Trusts, to the extent the aggregate Receivables Balance with respect to such Phase II WAMO Securitization Trust, when added to the aggregate Receivables Balance of all Phase II WAMO | [***] |
Securitization Trusts, does not cause the aggregate Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 20% of the Note Principal Balance; Securitization Trusts to exceed 20% of the Note Principal Balance; | |
(ii) (B) on any date of determination following October 27, 2012 and on or prior to January 27, 2013, with respect to Receivables related to Phase II WAMO Securitization Trusts, to the extent the aggregate Receivables Balance with respect to such Phase II WAMO Securitization Trust, when added to the aggregate Receivables Balance of all Phase II WAMO Securitization Trusts, causes the aggregate Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 20% of the Note Principal Balance but does not cause the aggregate Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 40% of the Note Principal Balance; | [***] |
(iii) on any date of determination following January 27, 2013 (or such earlier time as the Seller and the Agent may mutually agree), with respect to Receivables related to Phase III WAMO Securitization Trusts; and | [***] |
(iv) on any date of determination following January 27, 2013 (or such earlier time as the Seller and the Agent may mutually agree), with respect to Receivables related to Phase IV WAMO Securitization Trusts. | [***] |
Section 1. | Defined Terms. |
Section 2. | Amendments to the Indenture. |
(c) with respect to Receivables related to Delinquency Ratio Securitization Trusts; | [***] |
(d) (i) on any date of determination on or prior October 27, 2012, with respect to Sublimit Receivables related to Phase I WAMO Securitization Trusts; | [***] |
(ii) (A) on any date of determination following October 27, 2012 and on or prior to January 27, 2013, with respect to Sublimit Receivables related to Phase II WAMO Securitization Trusts, to the extent the aggregate Sublimit Receivables Balance with respect to such Phase II WAMO Securitization Trust, when added to the aggregate Sublimit Receivables Balance of all Phase II WAMO Securitization Trusts, does not cause the aggregate Sublimit Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 20% of the aggregate Sublimit Receivables Balances of all Sublimit Servicing Contracts; | [***] |
(ii) (B) on any date of determination following October 27, 2012 and on or prior to January 27, 2013, with respect to Sublimit Receivables related to Phase II WAMO Securitization Trusts, to the extent the aggregate Sublimit Receivables Balance with respect to such Phase II WAMO Securitization Trust, when added to the aggregate Sublimit Receivables Balance of all Phase II WAMO Securitization Trusts, causes the aggregate Sublimit Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 20% of the aggregate Sublimit Receivables Balances of all Sublimit Servicing Contracts but does not cause the aggregate Sublimit Receivables Balance with respect to Phase II WAMO Securitization Trusts to exceed 40% of the aggregate Sublimit Receivables Balances of all Sublimit Servicing Contracts; | [***] |
(iii) on any date of determination following January 27, 2013 (or such earlier time as the Seller and the Agent may mutually agree), with respect to Sublimit Receivables related to Phase III WAMO Securitization Trusts; and | [***] |
(iv) on any date of determination following January 27, 2013 (or such earlier time as the Seller and the Agent may mutually agree), with respect to Sublimit Receivables related to Phase IV WAMO Securitization Trusts. | [***] |
Section 8. | Ratification of the Indenture. |
Section 9. | Successors and Assigns. |
Section 10. | Governing Law. |
Section 11. | Counterparts. |
Section 12. | Entire Agreement. |
NO. | INVESTOR | DELINQUENCY ADVANCE | SERVICING ADVANCE |
E44 | Bank of America 2005-4 | X | |
M81 | QUAKER 2001 WL-1 | X | X |
J26 | GSR 2007-OA2 (Option ARM's) | X | |
J27 | GSR 2007-OA1 (Option ARM's) | X | |
J31 | HARBORVIEW 2007-7 (Option ARM's) | X | |
J33 | LUMINENT 2007-2 | X | |
J35 | MARM 2006-OA2 | X | |
J54 | WACHOVIA 2009-1/ Non-pledged loans (F16,F17, F18) | X | |
J55 | DEUTSCHE 2007-OA1 | X | |
J83 | SASCO 2002-12 | X | |
L18 | Sasco 2003-18XS | X | |
L62 | Sasco 2003-32 | X | |
L64 | Sasco 2003-34A | X | |
L68 | Sail 2003-BC11 | X | |
L84 | Sasco 2003-40A | X | |
L87 | SAIL 2004-1 | X | |
L89 | SARM 2004-1 | X | |
M29 | SASCO 2002-NP1 | X | |
M57 | SASCO 2003-3XS | X | |
M84 | SASCO 2001-19 | X |
M97 | SASCO 2002-6 | X | |
N82 | SASCO ALS 2001-1 | X | X |
N86 | SASCO 2001-2 ALS | X | X |
N95 | SASCO 2001-8A | X | X |
R68 | SASCO 1997-2 | X | |
M67 | SASCO 2003-7H | X | |
R79 | SASCO FHA/VA 98 RF-2 | X | X |
R81 | Sasco 1998-6 | X | |
R82 | SASCO 98-8 | X | |
R89 | SASCO FHA / VA RF-4 | X | X |
Fannie Mae | Nationstar Mortgage LLC (Servicer) | |||
By: | /s/ William L Wilson, Jr. | By: | /s/ Gregory Oniu | |
Name: | William L. Wilson, Jr. | Name: | Gregory Oniu | |
Title: | Vice President | Title: | Senior Vice President | |
Date: | December 20, 2012 | Date: | December 20, 2012 |
EARLY REIMBURSEMENT PERIOD: | The period (“Early Reimbursement Period”) during which Fannie Mae will make payments of Periodic Early Reimbursement Amounts (as defined below) in respect of Eligible Advances (as defined below), which will commence on the Closing Date and end on the first to occur of: (1) December 31, 2013 (unless extended or renewed in writing by Fannie Mae and Servicer); or (2) a Stop Event that is not waived by Fannie Mae During the Early Reimbursement Period, Fannie Mae will make payments of Periodic Early Reimbursement Amounts as provided herein. Upon termination of the Early Reimbursement Period, Fannie Mae will no longer pay Periodic Early Reimbursement Amounts and the Recoupment Period will commence. | |
ELIGIBLE ADVANCES FOR EARLY REIMBURSEMENT | Except as provided below, “Eligible Advance” shall include all of the following advances required to be made by the Servicer with respect to mortgage loans and real estate owned (REO) serviced by the Servicer (“Mortgage Loans”) pursuant to the MSSC and Fannie Mae Servicing Guide (the “Guide”) for which Servicer has not been repaid or reimbursed as of such date: | |
1. “P&I Delinquency Advances” which are advances of principal or interest payments, including a “Foreclosure Buyout”). A “Foreclosure Buyout” is an advance required to be remitted as the result of an action taken during the preceding month with respect to a property reported under Fannie Mae Action Codes 70, 71 or 72 at the start of the month in which the advance is due. | ||
2. “T&I Escrow Advances” which are advances for the payment of taxes, assessments, insurance premiums, ground rents, and other similar items and charges, and | ||
3. “Corporate Servicing Advances” which are advances other than P&I Delinquency Advances and T&I Escrow Advances. | ||
Eligible Advances shall also include any outstanding servicing advances previously paid or reimbursed by Servicer and identified on Schedule C in connection with a servicing transfer to the Servicer. Each such advance shall be deemed a “Legacy Servicing Advance”. | ||
Notwithstanding the foregoing and except as identified in Schedule C, Eligible Advances shall not include servicing advances paid or reimbursed by Servicer a) in connection with a servicing transfer to the Servicer, including servicing transfers after the date of this EAF Agreement, or b) relating to Mortgage Loans the servicing to which was acquired from a third party. However, the parties may by written agreement add additional Eligible Advances to Schedule C, which Eligible Advances shall be deemed incorporated into the EAF Agreement. | ||
Eligible Advances also shall not include advances applicable to the payment of any guaranty or excess servicing fees or lender paid mortgage insurance premiums. Eligible Advances must have been actually incurred by the Servicer, and T&I Escrow Advances and Corporate Servicing Advances must fall under one of the 571 Codes in the Fannie Mae 571 Claims Guide. | ||
Notwithstanding anything to the contrary herein, after the date on which the underlying real estate/collateral is sold or disposed, the loan or REO property is otherwise “liquidated” (including as a result of an event reported as Fannie Mae Action Code of 70, 71 or 72), or loans have a zero UPB as a result of an event reported as Fannie Mae Action Code of 60 or 65 (the “Final Liquidation Date”), no Periodic Early Reimbursement Amounts will be paid by Fannie Mae for advances made by the Servicer after the Final Liquidation Date on that Mortgage Loan. In addition, all Periodic Early Reimbursement Amounts must be repaid within 120 days after the Final Liquidation Date of the related loan, regardless of whether recoveries have actually been collected. | ||
PERIODIC EARLY REIMBURSEMENT AMOUNT: | For any Reporting Cycle (as defined below), an amount equal to the Funding Value (as defined below) of Eligible Advances, subject to the Early Reimbursement Amount Limit (as defined below). | |
If the Early Reimbursement Amount Limit is reached in a particular Reporting Cycle, Fannie Mae shall reimburse P&I Delinquency Advances before T&I Escrow Advances or Corporate Servicing Advances and, within each category, Eligible Advances applicable to Mortgage Loans held directly by Fannie Mae (“MRS Advances”) prior to those Mortgage Loans held in an MBS trust (“MBS Advances”.) | ||
AGGREGATE EARLY REIMBURSEMENT AMOUNT: | As of any date of determination, the excess, if any, of (i) the total Periodic Early Reimbursement Amounts previously paid to Servicer by Fannie Mae prior to such date over (ii) the aggregate, cumulative amount of Collections (as defined below) recouped by Fannie Mae prior to such date. In no event shall Fannie Mae be obligated to make payment of any Periodic Early Reimbursement Amount that would result in the Aggregate Early Reimbursement Amount exceeding the Early Reimbursement Amount Limit. | |
FUNDING VALUE: | With respect to any Eligible Advance as of any date of determination, the product of (x) the outstanding balance of such Eligible Advance as of such date and (y) the applicable Early Reimbursement Rate. | |
EARLY REIMBURSEMENT RATE: | P&I Delinquency Advances: [***]. | |
T&I Escrow Advances: [***] | ||
Corporate Servicing Advances: [***] | ||
Legacy Servicing Advances: See Schedule C | ||
The Early Reimbursement Rate for T&I Escrow Advances, Corporate Servicing Advances and applicable Legacy Servicing Advances will be recalculated on the first day of each calendar month based on the cumulative Curtailment Rate for the immediately preceding three (3) calendar months as follows: | ||
Curtailment Rate | Early Reimbursement Rate | |
80% - 100% | [***] | |
70% - <80% | [***] | |
Less than 70% | [***] | |
For purposes of this calculation, “Curtailment Rate” shall mean the percentage of the amount of T&I Escrow Advances, Corporate Servicing Advances and Legacy Servicing Advances requested by Servicer to be reimbursed under this EAF Agreement which Fannie Mae determines are Eligible Advances and subject to reimbursement by Fannie Mae hereunder. A Curtailment Rate of less than 60% may be considered a Stop Event by Fannie Mae. | ||
Notwithstanding the foregoing, the Early Reimbursement Rate for Legacy Servicing Advances attributable to the servicing transferred from Aurora Bank FSB shall be 60%. | ||
Any revised Early Reimbursement Rate shall become effective for the Periodic Early Reimbursement Amount applicable to the next Reporting Cycle. | ||
EARLY REIMBURSEMENT AMOUNT LIMIT: | Fannie Mae's obligation to make payment of Periodic Early Reimbursement Amounts will not exceed a maximum Aggregate Early Reimbursement Amount of Three Hundred Twenty Five Million ($325,000,000) dollars, provided that the total of such amount attributable to Legacy Advances applicable to servicing transferred from Aurora Bank FSB shall not exceed Sixty-Three Million ($63,000,000) dollars. | |
DEFICIENCY AMOUNT: | A Deficiency Amount shall exist on any date if, and to the extent that, on such date, the Aggregate Early Reimbursement Amount exceeds the Funding Value of all Eligible Advances. If a Deficiency Amount exists, the party that becomes aware of such event shall immediately notify the other party of the existence of any Deficiency Amount. Any such Deficiency Amount shall be cured by the Servicer within three business days of the Servicer becoming aware of the existence of a Deficiency Amount. Any Deficiency Amount attributable to the reduction of an Early Reimbursement Rate as provided herein shall be due and payable by Servicer no later than the Draft Date associated with the next Reporting Cycle. | |
FANNIE MAE DESIGNATED ACCOUNT: | “Designated Account” shall mean an account created by Fannie Mae in its name and under its control at a financial institution of Fannie Mae's choosing. A Designated Account may relate to either MBS Advances or MRS Advances but not both. | |
The Servicer hereby acknowledges and agrees that it has no right, title, interest or claim in or to any Designated Account or any funds or other assets therein (whether or not deposited by the Servicer), or any interest earned or accrued on the foregoing (notwithstanding anything to the contrary contained in the Guide or in any other agreement), all of which shall be the exclusive property of Fannie Mae. | ||
ONGOING RECONCILIATION PERIOD: | Anytime an Eligible Advance is requested by Servicer hereunder, Servicer shall provide Fannie Mae an Advance Request Form, a sample of which is attached hereto as Schedule A, and shall deliver such request form via e-mail to “advance_facilities_data@fanniemae.com | |
Beginning in the month of the effective date of this EAF Agreement, Servicer shall deliver the Reports (as defined below) as required in the Data Dictionary | ||
The calendar month covered by a Report, as applicable, shall constitute a “Reporting Cycle.” |
P&I Delinquency Advances | ||
No later than the second business day following the receipt by Fannie Mae of the Report applicable to P&I Delinquency Advances, Fannie Mae will notify the Servicer of any discrepancies, including any discrepancies between the (a) the sum of all reported loan-level P&I Delinquency Advances and (b) the aggregate P&I Delinquency Advances requested by the Servicer. | ||
On the business day each month prior to the draft date applicable to the standard Fannie Mae MBS remittance cycle (the “Draft Date”) published in the Guide, the following actions shall occur: | ||
(i)to the extent a Periodic Early Reimbursement Amount is required to be distributed, Fannie Mae shall deposit (such deposit shall be contingent on the fact that no discrepancy regarding the requested P&I Delinquency Advances remains outstanding) into the Designated Account the Periodic Early Reimbursement Amount relating to the P&I Delinquency Advances for the related Reporting Cycle; and | ||
(i)by 10:00 AM (Eastern Time) on such date, the Servicer shall deposit all remaining principal and interest required to be remitted on the Draft Date for all Fannie Mae MBS Mortgage Loans serviced by the Servicer. | ||
On the Draft Date, Fannie Mae shall draft from the Designated Account, in lieu of the Servicer's custodial account or accounts, the Required P&I and any amounts deposited by Fannie Mae as Periodic Early Reimbursement Amounts. | ||
The Servicer shall deposit into the Collections Account on the Draft Date any principal and interest reported as “uncollected” on the Report, and received between the business day immediately preceding the Report Date and the Draft Date. | ||
T&I Escrow Advances and Corporate Servicing Advances. | ||
No later than the second business day following the Report Date applicable to T&I Escrow Advance and Corporate Servicing Advances, Fannie Mae will notify the Servicer of any discrepancies regarding T&I Escrow Advance and Corporate Servicing Advances. | ||
Servicer may also receive Periodic Early Reimbursement Amounts at month end by submitting to Fannie Mae a Report applicable T&I Escrow Advance and Corporate Servicing Advances six business days prior to month end. No later than the second business day following receipt of this Report Fannie Mae will notify the Servicer of any discrepancies regarding T&I Escrow Advance and Corporate Servicing Advances. | ||
On the business day immediately preceding both the Draft Date and the last business day of the month, Fannie Mae shall fund (to the extent a Periodic Early Reimbursement Amount is required to be distributed) the Periodic Early Reimbursement Amount for T&I Escrow Advance and Corporate Servicing Advances (as requested by the Servicer on an Advance Request Form) to the Servicer. Such funding shall be contingent on the fact that no discrepancy regarding the requested T&I Escrow Advances and Corporate Servicing Advances remains outstanding. | ||
Subject to the conditions identified below, Fannie Mae additionally agrees that it will reimburse Servicer for T&I Escrow Advance and Corporate Servicing Advances on a daily basis as may be requested by Servicer and agreed to by Fannie Mae. Therefore in addition to the reporting requirements identified herein, not later than the fifth (5th) business day prior to the business day on which Servicer requests that Fannie Mae make reimbursement to Servicer (or such other time period as mutually agreed to by the parties), Servicer shall deliver to Fannie Mae or its designee a Report applicable to T&I Escrow Advance and Corporate Servicing Advances. Fannie Mae and/or its designee will reconcile the same within two (2) business days, and if it determines that an amount is due and owing by Fannie Mae to Servicer, such amount shall be reimbursed to Servicer by Fannie Mae on the date requested by Servicer, or at such time as may otherwise be mutually agreed to by Fannie Mae and Servicer. Applicable to each reimbursement of T&I Escrow Advances and Corporate Servicing Advances made by Fannie Mae herein, Servicer shall pay Fannie Mae a fee equal to the greater of 1) $1,000, or 2) the Compensation Rate divided by twenty-four (24), multiplied by the T&I Escrow Advance and Corporate Servicing Advances reimbursed by Fannie Mae. Servicer will not be required to pay such administrative fee for the reimbursements made 1) on the business day immediately preceding the Draft Date, and 2) one business day prior to the last business day of each calendar month. Fannie Mae will provide to Servicer an invoice for such administrative fees on or about the tenth (10th) day of each calendar month, and within thirty days of receipt of the invoice Servicer agrees to wire to Fannie Mae such invoiced amount as directed in the invoice, or as otherwise directed by Fannie Mae. |
At any time Fannie Mae may notify the Servicer of any material discrepancy between the P&I Delinquency Advances, T&I Escrow Advances or Corporate Servicing Advances as previously reported by the Servicer and the amounts reflected in Fannie Mae's internal systems of record. Such discrepancies shall constitute a material Due Diligence issue and the Servicer and Fannie Mae will work in good faith to resolve any such material discrepancies. | ||
REPORTS: | In addition to any required reporting obligations in the Guide, during the periods identified in the section herein titled “Ongoing Reconciliation Period” Servicer shall deliver to Fannie Mae or its designee reports and loan level listings (each a “Report”) in a format reasonably acceptable to Fannie Mae containing the data and within the time periods identified in Schedule B (“EAF Data Dictionary”) to this EAF Agreement (as such Attachment may be modified by Fannie Mae in writing from time to time), including (i) such reason codes to conform to information and codes required by Fannie Mae Form 571 (Cash Disbursement Request) and (ii) upon request, reconciliations and supporting documentation (including invoices) of general ledger receivables applicable to Eligible Advances. | |
The Servicer shall also provide to Fannie Mae by the 25th day of each month for the time period directed by Fannie Mae (i) provided that a P&I Delinquency Advance was made (excluding Foreclosure Buyouts), a completed Fannie Mae Form 496 (“Principal and Interest (P&I) Custodial Account Analysis”), including all applicable schedules, and (ii) Fannie Mae Form 496a (“Taxes and Insurance (T&I) Custodial Account Analysis”), including all applicable schedules. | ||
COLLECTIONS ACCOUNT OVER COLLECTION: | All collections and reimbursements related to Eligible Advances, other than Foreclosure Buyouts, received on the related Mortgage Loans by the Servicer from Fannie Mae, mortgagors or as liquidation proceeds or other recoveries (in the aggregate, the “Collections”), must be deposited by the Servicer into a Collections Account established by Fannie Mae and under Fannie Mae's control no later than 6:00 pm ET on the second business day following Servicer's receipt thereof, subject to the following: | |
(i)During the Early Reimbursement Period the Servicer may retain any Collections in excess of the Periodic Early Reimbursement Amount outstanding with respect to the related Mortgage Loan; and | ||
(i)During the period between the final disbursement of a Periodic Early Reimbursement Amount and the last day for recoupment as provided below, the Servicer may retain any Collections in excess of the Aggregate Early Reimbursement Amount. | ||
All Periodic Early Reimbursement Amounts related to Foreclosure Buyouts shall be repaid to the Collections Account within one business day after the Servicer receives a monthly reimbursement of foreclosure advances from Fannie Mae, without regard to the amount actually reimbursed. Further, all Periodic Early Reimbursement Amounts for P&I Delinquency Advances and applicable to Mortgage Loans which have undergone a reclassification as provided in the Guide shall be repaid to the Collections Account within two business days of such reclassification. | ||
However, following the occurrence of, and during the continuance of, a Stop Event that has not been waived by Fannie Mae, clauses (i) and (ii) above shall not apply and further, all reimbursements of Eligible Advances due from Fannie Mae shall be deposited directly into the Collections Account by Fannie Mae. | ||
Servicer shall notify Fannie Mae in the event it determines that any Periodic Early Reimbursement Amount relates to an advance other than an Eligible Advance. In addition, Fannie Mae shall provide Servicer with a monthly report listing any Periodic Early Reimbursement Amounts outstanding on advances it has determined to be ineligible, including any relating to loans more than 90 days past their Final Liquidation Date. Servicer shall deposit any such amounts into the Collections Account within 15 calendar days after the date of such determination or report, regardless of whether recoveries have actually been collected. | ||
If the amount in the Collections Account exceeds the Aggregate Early Reimbursement Amount (“Over Collection”), then simultaneously with the first to occur of the payment of the next Periodic Early Reimbursement Amount or the commencement of the Recoupment Period, the Over Collection amount shall be applied to reduce the Aggregate Early Reimbursement Amount outstanding. Any amount by which the Over Collection exceeds such Aggregate Early Reimbursement Amount will be returned to the Servicer within five business days following the date the Aggregate Early Reimbursement Amount is reduced to zero. | ||
MONTHLY SETTLEMENTS / SETTLEMENT DATES: | On the third business day of each month, Fannie Mae shall notify Servicer of the Early Reimbursement Compensation amount. On the fifth business day of each calendar month, Servicer shall fund to an account designated by Fannie Mae the Early Reimbursement Compensation. Such date shall be deemed a “Settlement Date.” | |
In the event that Fannie Mae does not timely receive such funding, on the following business day Fannie Mae may withdraw an amount equal to such unpaid Early Reimbursement Compensation directly from the Collections Account prior to the calculation of the Periodic Early Reimbursement Amount for that month. Such withdrawal will not avoid the occurrence of a Stop Event. | ||
Following the occurrence of, and during the continuance of, a Stop Event that has not been waived by Fannie Mae, a Settlement Dates shall occur with such frequency (e.g., weekly or daily) as Fannie Mae shall direct. | ||
EARLY REIMBURSEMENT COMPENSATION: | In consideration of Fannie Mae's reimbursing to Servicer Eligible Advances earlier than as provided under the MSSC and Guide, the Servicer will pay Fannie Mae a monthly compensation amount equal to the aggregate amount obtained by daily application of the Compensation Rate to the amount of the Aggregate Early Reimbursement Amount on a 360 day per year basis for the actual number of days elapsed since the prior Settlement Date (or, with respect to the first Settlement Date following the Closing Date, since the Closing Date). The Servicer will pay the Early Reimbursement Compensation to Fannie Mae on each Settlement Date. | |
COMPENSATION RATE: | [***] basis points over One-Month LIBOR. LIBOR will be set as of the last business day of the second month preceding the month in which the Settlement Date occurs. (For example, if the Settlement Date is August 3rd, LIBOR will be as of the last business day in June.) Notwithstanding the foregoing, the Compensation Rate shall be [***] basis points over One-Month LIBOR on Eligible Advances related to those mortgage servicing rights acquired by Servicer (i) from Flagstar Capital Markets Corporation on September 15, 2009; (ii) from Flagstar Capital Markets Corporation on September 1, 2011; and (iii) from GMAC Mortgage, LLC on November 14, 2008. | |
FACILITY RENEWAL/AMENDMENT FEE: | On the Closing Date Servicer shall pay [***] of the Early Reimbursement Amount Limit. If extended or renewed in writing by Fannie Mae and Servicer, [***] of the Early Reimbursement Amount Limit shall thereafter be payable as a renewal fee annually. If the Early Reimbursement Amount Limit is increased, [***] of the additional amount shall be payable as an Amendment Fee on the first business day following the effective date of the increase and pro rated from such effective date to the scheduled end of the Early Reimbursement Period. | |
CLOSING DATE: | December 31, 2012 | |
RECOUPMENT: | Periodic Early Reimbursement Amounts shall be recouped by Fannie Mae primarily through Collections, however the Servicer can pay any or all outstanding amounts due at any time, and is obligated to pay, if applicable, the outstanding Aggregate Early Reimbursement Amount on or prior to the completion of an eighteen (18) month period starting on the earlier of (i) the first day of the month following the end of the Early Reimbursement Period or (ii) the occurrence of a Stop Event. Such eighteen (18) month period is referred to herein as the “Recoupment Period.” | |
STOP EVENTS: | Unless otherwise waived by Fannie Mae, Stop Events are as follows: | |
1.Failure of Servicer to comply with the terms or conditions of this EAF Agreement, specifically including but not limited to, | ||
a. Failure of the Servicer to pay any Early Reimbursement Compensation amount or any Deficiency Amount when due. | ||
b. Failure of the Servicer to deposit Collections into the Collection Account by 6:00 pm ET on the second business day following the receipt thereof by Servicer. | ||
c. Failure of the Servicer to repay in a timely manner any portion of the Aggregate Early Reimbursement Amount relating to an advance that is not an Eligible Advance. | ||
2. Failure of the Servicer to be an approved Fannie Mae Servicer. | ||
3. Occurrence of a change in the Servicer's organization as described in the Part I, Chapter 2, Section 204 of the Guide. |
4. Failure of the Servicer to resolve a material Due Diligence issue within 30 business days of notification, unless the parties mutually agree to extend such cure period, it being understood that (a) Fannie Mae has the option to suspend funding of Periodic Early Reimbursement Amounts while a material Due Diligence issue remains unresolved, even if no Stop Event has occurred, and (b) Fannie Mae will act in good faith to determine materiality of Due Diligence issues. | ||
5. Insolvency, Receivership or Bankruptcy of the Servicer, as established by a court of competent jurisdiction. | ||
6. Failure of the Servicer to submit any required Reports or other reporting and such failure continues for 5 business days. | ||
7. The occurrence of an Event of Default by the Servicer under any Master Agreement or the MSSC, as applicable, which has not been waived or cured as may be allowed under such agreement or contract, if applicable. | ||
8. Failure by the Servicer to deposit into the Designated Account all principal and interest as provided herein; provided, however, that such failure shall be subject to a cure period of one business day; provided, further, however, that such cure period shall be unavailable if such failure occurs more than once in any four-month period or more than twice in any twelve-month period. | ||
9. 120 days after written notice by Fannie Mae. | ||
10. The earlier of 120 days or such earlier date as set forth in such Proceeding following written notice by Fannie Mae or Servicer, as applicable, that either Fannie Mae or Servicer, as applicable, becomes subject to any order, or litigation, claim, action, suit, arbitration, inquiry, proceeding, investigation or similar proceeding initiated by a governmental authority (a “Proceeding”) which impairs such party's ability to discharge its obligations hereunder in any material respect. | ||
Upon occurrence of a Stop Event not waived by Fannie Mae, the Early Reimbursement Period may be terminated. | ||
DUE DILIGENCE REQUIREMENTS: | Fannie Mae has the right to perform due diligence activities related to Eligible Advances and Periodic Early Reimbursement Amounts prior to the Closing Date and at any such time thereafter (“Due Diligence”). Promptly upon Fannie Mae's (or its agent's) request, the Servicer is required to provide reasonable access to Servicer's system's and personnel, books and records whether stored in tangible or electronic form. Failure of the Servicer to provide such access will constitute a material Due Diligence issue and a Stop Event. Servicer shall bear all reasonable costs and expenses of Fannie Mae associated with any Due Diligence, including without limitation third-party vendor fees. | |
In the event non-material issues are discovered during the Due Diligence process, the Servicer will be notified in writing by Fannie Mae or its agent and will have a reasonable amount of time to cure such issues. However, failure to cure will constitute a material Due Diligence event. | ||
SERVICING TRANSFER: | Unless consented to in a writing by Fannie Mae specifically referencing this EAF Agreement, no servicing of Mortgage Loans for which there exists any outstanding Periodic Early Reimbursement Amount shall be transferred to another servicer unless the Periodic Early Reimbursement Amount applicable to such Mortgage Loan is deposited into the Collections Account, or the Servicer otherwise makes a payment to Fannie Mae in an amount equal to such Periodic Early Reimbursement Amount. | |
FANNIE MAE SERVICING REQUIREMENTS: | Except as specifically set forth herein, entering into this EAF Agreement does not alter or diminish any obligations or duties required of the Servicer according to the MSSC and the Fannie Mae Selling and Servicing Guides, as applicable. | |
ASSIGNMENT: | Neither Fannie Mae nor the Servicer may assign, transfer or participate its rights under this EAF Agreement. | |
TERMINATION: | Fannie Mae may terminate this EAF Agreement: | |
(i) after the Early Reimbursement Period is completed; | ||
(ii) and the Aggregate Early Reimbursement Amount is zero; | ||
(iii) for the convenience (i.e., for any reason or no reason) of Fannie Mae, upon 120 days prior written notice to Servicer; or | ||
(iv) on the occurrence of a Stop Event not waived by Fannie Mae. | ||
Except for a termination under clause (iii) or a termination under clause (iv) due to a subsection 9 or 10 Stop Event, upon termination of this EAF Agreement, all outstanding Periodic Early Reimbursement Amounts shall be immediately due and payable to Fannie Mae. |
File Name | Number of Files Submitted | Total FNMA Advance Amount | Advance Dates From | Advance Dates To | Bank Name | Account# | Routing# |
P&I Advance Detail | |||||||
Corp/Escrow Advance Detail | |||||||
Total | |||||||
Original Advancing Servicer | Legacy Advance Type: Early Reimbursement Rate (except as may be modified as provided herein) | Transfer Date |
AmTrust | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | December 10, 2010 |
Flagstar Capital Markets Corporation | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | May 1, 2010 |
Flagstar Capital Markets Corporation | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | September 1, 2011 |
Aurora Bank FSB | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | June 30, 2012 |
GMAC Mortgage | Not Applicable |
Original Advancing Servicer | Legacy Advance Type: Early Reimbursement Rate (except as may be modified as provided herein) | Transfer Date |
AmTrust | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | December 10, 2010 |
Flagstar Capital Markets Corporation | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | May 1, 2010 |
Flagstar Capital Markets Corporation | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | September 1, 2011 |
Aurora Bank FSB | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | June 30, 2012 |
GMAC Mortgage | Not Applicable | |
Bank of America, National Association | P&I Delinquency Advance: [***] T&I Escrow Advances: [***] Corporate Servicing Advances: [***] | (Various - 2013) |
1 | APPLICABILITY | 1 | ||
2 | DEFINITIONS AND INTERPRETATION | 1 | ||
3 | THE TRANSACTIONS | 18 | ||
4 | CONFRIMATION | 21 | ||
5 | TAKEOUT COMMITMENTS | 21 | ||
6 | PAYMENT AND TRANSFERS | 21 | ||
7 | MARGIN MAINTENANCE | 21 | ||
8 | TAXES; TAX TREATMENT | 22 | ||
9 | SECURITY INTEREST; PURCHASER'S APPOINTMENT AS ATTORNEY-IN-FACT | 23 | ||
10 | CONDITIONS PRECEDENT | 25 | ||
11 | RELEASE OF PURCHASED ASSETS | 28 | ||
12 | RELIANCE | 28 | ||
13 | REPRESENTATIONS AND WARRANTIES | 28 | ||
14 | COVENANTS OF SELLER | 31 | ||
15 | REPURCHASE OF PURCHASED ASSETS | 38 | ||
16 | SERVICING OF THE MORTGAGE LOANS' SERVICER TERMINATION | 38 | ||
17 | EVENTS OF DEFAULT | 41 | ||
18 | REMEDIES | 43 | ||
19 | DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE | 45 | ||
20 | USE OF EMPLOYEE PLAN ASSETS | 46 | ||
21 | INDEMNITY | 46 | ||
22 | WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS | 47 | ||
23 | REIMBURSEMENT; SET-OFF | 47 | ||
24 | FURTHER ASSURANCES | 48 | ||
25 | ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION | 48 | ||
26 | TERMINATION | 48 | ||
27 | REHYPOTHECATION; ASSIGNMENT | 49 | ||
28 | AMENDMENTS, ETC. | 49 | ||
29 | SERVERBILITY | 50 | ||
30 | BINDING EFFECT; GOVERNING LAW | 50 | ||
31 | WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS | 50 | ||
32 | SINGLE AGREEMENT | 50 | ||
33 | INTENT | 51 | ||
34 | NOTICES AND OTHER COMMUNICATIONS | 51 | ||
35 | CONFIDENTIALITY | 53 | ||
36 | DUE DILIGENCE | 53 |
EXHIBIT A | MONTHLY CERTIFICATION |
EXHIBIT B | REPRESENTATIONS AND WARRANTIES WITH RESPECT TO MORTGAGE LOANS |
EXHIBIT C | FORM OF TRANSACTION NOTICE |
EXHIBIT D | FORM OF GOODBYE LETTER |
EXHIBIT E | FORM OF WAREHOUSE LENDER'S RELEASE |
EXHIBIT F | [RESERVED] |
EXHIBIT G | [RESERVED] |
1. | APPLICABILITY |
2. | DEFINITIONS AND INTERPRETATION |
3. | THE TRANSACTIONS |
(A) | Seller shall have paid to Purchaser and Purchaser shall have received all accrued and unpaid fees and expenses owed to Purchaser in accordance with the Program Documents in immediately available funds, and without deduction, set-off or counterclaim; |
(B) | The Transaction Notice and Seller Mortgage Loan Schedule with respect to such Purchased Assets, delivered pursuant to Section 3(c); |
(C) | Such certificates, customary opinions of counsel or other documents as Purchaser or Agent may reasonably request, provided that such opinions of counsel shall not be required routinely in connection with each Transaction but shall only be required from time to time as deemed necessary by Purchaser in its commercially reasonable judgment; |
(D) | Purchaser shall have received the Structuring Fee in respect of such Transaction then due and owing pursuant to Section 2 of the Pricing Side Letter, in immediately available funds, and without deduction, set-off or counterclaim; |
(E) | With respect to Mortgage Loans that are not Wet-Ink Mortgage Loans, an original trust receipt executed by the Custodian without exceptions; |
(F) | Such other certifications of Custodian as are required under Sections 2 and 4 of the Custodial Agreement; |
(G) | With respect to any table-funded Wet-Ink Mortgage Loan that is the subject of such Transaction, (i) a copy of the Closing Instruction Letter delivered to the applicable Settlement Agent and (ii)(a) a copy of the Closing Protection Letter from the applicable title company, or (b) a copy of the Escrow Instruction Letter signed by the applicable Settlement Agent; |
(H) | With respect to any Transaction with respect to which there are Wet-Ink Mortgage Loans proposed to be sold, a Wet-Ink Mortgage Loan Funding Confirmation from Bank; and |
(I) | a duly executed Warehouse Lender's Release from any Warehouse Lender (including any party that has a precautionary security interest in a Mortgage Loan) having a security interest in any Mortgage Loans, substantially in the form of Exhibit E, addressed to Purchaser, releasing any and all of its right, title and interest in, to and under such Mortgage Loan (including, without limitation, any security interest that such secured party or secured party's agent may have by virtue of its possession, custody or control thereof) and, to the extent applicable, has filed Uniform Commercial Code termination statements in respect of any Uniform Commercial Code filings made in respect of such Mortgage Loan, and each such Warehouse Lender's Release and Uniform Commercial Code termination statement has been delivered to Purchaser prior to such Transaction and to the Custodian as part of the Mortgage Loan File. |
(A) | Financial Statements |
(A) | Warehouse Capacity. On or prior to the date on which Seller is required to deliver the monthly financial report required Section 14(g)(i)(A)(iii), Seller shall provide to Agent a report detailing its total warehouse capacity and utilization for the prior calendar month. Such warehouse capacity shall be (i) issued directly to Seller, (ii) adequate to fund Seller's average sixty (60) day origination production pipeline and (iii) in an amount equal to or greater than $1,000,000 or such other amount as may be required by a Governmental Authority. |
(B) | Other Information. Upon the request of Purchaser or Agent, such other information or reports as Purchaser or Agent may from time to time reasonably request. |
(A) | Seller's Tangible Net Worth shall at all times exceed $150,000,000; |
(B) | the ratio of Seller's total Indebtedness to Tangible Net Worth shall not at any time exceed 12:1; and |
(C) | Seller's Liquidity shall not be less than $20,000,000 as of the last day of any calendar month. |
if to Seller: | Nationstar Mortgage LLC |
(i) | To the best of my knowledge, no Default or Event of Default has occurred and is continuing; |
(ii) | Attached hereto as Schedule One is a schedule of each financial covenant that the Seller is subject to under any agreement (other than this Agreement), and a calculation which demonstrates compliance with each such financial covenant; and |
(iii) | The Seller has complied with each of the covenants set forth in Section 14(g)(ii), as evidenced by the worksheet attached hereto as Schedule Two. |
Re: | Master Repurchase Agreement, dated as of March 25, 2011 by and between Barclays Bank PLC (“Purchaser” and “Agent”) and Nationstar Mortgage LLC (“Seller”) |
Page | |||
Section 1. | Definitions | 2 | |
Section 2. | Procedures for Purchases of Participation Certificate | 15 | |
Section 3. | Takeout Commitments | 16 | |
Section 4. | Completion Fee | 17 | |
Section 5. | Issuance of Securities | 17 | |
Section 6. | Servicing of the Mortgage Loans; Servicer Termination; Backup Servicer | 19 | |
Section 7. | Transfers of Participation Certificates and Securities by Purchase | 23 | |
Section 8. | Record Title to Mortgage Loans; Intent of Parties; Security Interest | 24 | |
Section 9. | Representations and Warranties | 25 | |
Section 10. | Covenants of Seller | 29 | |
Section 11. | Term | 33 | |
Section 12. | Set-Off | 33 | |
Section 13. | Indemnification | 33 | |
Section 14. | Exclusive Benefit of Parties; Assignment | 34 | |
Section 15. | Amendments; Waivers; Cumulative Rights | 34 | |
Section 16. | Execution in Counterparts | 34 | |
Section 17. | Effect of Invalidity of Provisions | 35 | |
Section 18. | Governing Law | 35 | |
Section 19. | Notices | 35 | |
Section 20. | Entire Agreement | 35 | |
Section 21. | Costs of Enforcement | 36 | |
Section 22. | Securities Contract; Netting Agreement | 36 | |
Section 23. | Consent to Service | 37 | |
Section 24. | Construction | 37 | |
Section 25. | Further Assurances | 37 | |
Section 26. | Due Diligence | 37 |
(a) | Form HUD 11706 (Schedule of Pooled Mortgages); | |
(b) | Fannie Mae Form 2005 (Schedule of Mortgages); or | |
(c) | Freddie Mac Form 1034 (Fixed-Rate Custodial Certification Schedule) or Selling System computer tape. |
Government National Mortgage Association; | |
Federal National Mortgage Association; or | |
Federal Home Loan Mortgage Corporation. |
*A = weighted average Trade Price (expressed as a percentage of the initial aggregate principal balance of the Mortgage Loans) B = principal amount of the Mortgage Loans backing the Security C = 1 minus the Discount |
Pool No. (or Freddie Mac Contract No.) |
Applicable Agency |
Purchase Date |
Anticipated Delivery Date |
Settlement Date |
Trade Price |
Purchase Price: |
Initial Purchase Price Installment |
Final Purchase Price Installment |
Face Amount of the Security_________________________ |
Pass Through Rate |
[Other information TBD] |
1. | Attached hereto as Attachment I is a true and correct copy of the certificate of formation and operating agreement of Seller as are in full force and effect on the date hereof. |
2. | Attached hereto as Attachment II is a Certificate of Good Standing of Seller, issued by the Secretary of the State of Delaware dated _______, ____. No event has occurred since _______, ____ which has affected the good standing of Seller under the laws of the State of Delaware. |
3. | Each person who, as an officer or attorney-in-fact of Seller, signed (a) the Mortgage Repurchase Agreement (the “Repurchase Agreement”) dated as of March 25, 2011 by and between Seller and Barclays Bank PLC (“Purchaser” and “Agent”), (b) the Mortgage Loan Participation Purchase and Sale Agreement (the “Purchase Agreement”), dated as of March 25, 2011, by and between Seller and Purchaser and Agent; (c) the Custodial Agreement (the “Custodial Agreement”), dated as of March 25, 2011, by and among Seller, the Purchaser and Bank of New York Mellon Trust Company, N.A.; and (d) any other document delivered prior hereto or on the date hereof in connection with transactions contemplated in the Repurchase Agreement or the Purchase Agreement was, at the respective times of such signing and delivery, and is as of the date hereof, duly elected or appointed, qualified and acting as such officer or attorney-in-fact, and the signatures of such persons appearing on such documents are their genuine signatures. |
4. | Attached hereto as Attachment III is a true and correct copy of the resolutions duly adopted by the board of directors of Seller on __________, ____ (the “Resolutions”) with respect to the authorization and approval of the transactions contemplated in the Repurchase Agreement and the Purchase Agreement; said Resolutions have not been amended, modified, annulled or revoked and are in full force and effect on the date hereof. |
5. | All of the representations and warranties of Seller contained in the Repurchase Agreement and the Purchase Agreement were true and correct in all material respects as of the date thereof and are true and correct in all material respects as of the date hereof. |
6. | Seller has performed all of its duties and has satisfied all the material conditions on its part to be performed or satisfied pursuant to the Repurchase Agreement and the Purchase Agreement on or prior to the date hereof. |
7. | There are no actions, suits or proceedings pending or, to my knowledge, threatened, against or affecting Seller which, if adversely determined either individually or in the aggregate, would adversely affect Seller's obligations under the Repurchase Agreement , the Purchase Agreement or the Custodial Agreement. |
8. | No proceedings that could result in the liquidation or dissolution of Seller are pending or contemplated. |
9. | Incumbency of Officers. The below named persons have been duly elected or appointed, and have been duly qualified as officers of Seller holding the respective office below set opposite his or her name, and the signature below set opposite his or her name is his or her genuine signature. |
Name | Office | Signature | ||
1. | There has been no change in the certificate of formation and operating agreement of Seller since the date such documents were provided to the Purchaser and Agent and such documents are in full force and effect on the date hereof. |
2. | No event has occurred since the date of the last good standing certificate of Seller provided to the Purchaser and Agent which has affected the good standing of Seller under the laws of the State of Delaware. |
3. | All of the representations and warranties of Seller contained in Section 9(a) of the Purchase Agreement, are true and correct in all material respects as of the date hereof and all of the representations and warranties of Seller contained in Section 9(b) of the Purchase Agreement are true and correct in all material respects as to the Related Mortgage Loans subject to the Participation Certificate being sold to Purchaser on the date hereof. |
4. | Seller has performed all of its duties and has satisfied all the material conditions on its part to be performed or satisfied pursuant to the Purchase Agreement on or prior to the date hereof. |
5. | There are no actions, suits or proceedings pending or, to my knowledge, threatened, against or affecting Seller which, if adversely determined either individually or in the aggregate, would adversely affect Seller's obligations under the Purchase Agreement or the Custodial Agreement. |
6. | No proceedings that could result in the liquidation or dissolution of Seller are pending or contemplated. |
7. | Under generally accepted and regulatory accounting principles (“GAAP”) and for federal income tax purposes, Seller will report the sale of each Participation Certificate to the Purchaser as a sale of the 100% undivided beneficial ownership interest in the Mortgage Loans evidenced by that Participation Certificate. Seller has been advised by, or has confirmed with, its independent public accountants that the foregoing transactions will be so classified. |
8. | Each Mortgage Loan that is subject to a Participation Certificate to be sold to the Purchaser on the date hereof was originated or by Seller or purchased from an Originator not more than (i) forty-five (45) days prior to the date hereof, with respect to Fannie Mae Mortgage Loans and Freddie Mac Mortgage Loans, and (ii) sixty (60) days prior to the date hereof, with respect to Ginnie Mae Mortgage Loans. No Related Mortgage Loan was rejected for purchase or financing by any third party. |
Name: | Barclays Bank PLC - Mortgage Finance |
Address: | 745 Seventh Avenue, 4th Floor New York, New York 10019 Attention: Joseph O'Doherty |
Telephone: | (212) 412-7990 |
Telecopy: | (212) 412-7333 |
Email: | joseph.o'doherty@barclayscapital.com |
Name: | Barclays Bank PLC - Mortgage Finance |
Address: | 745 Seventh Avenue, 4th Floor New York, New York 10019 Attention: Joseph O'Doherty |
Telephone: | (212) 412-7990 |
Telecopy: | (212) 412-7333 |
Email: | joseph.o'doherty@barclayscapital.com |
Name: | Nationstar Mortgage LLC |
Address: | 350 Highland Drive Lewisville, Texas 75067 Attention: General Counsel |
Telephone: | (469) 549-2000 |
Telecopy: | (469) 549-2085 |
Exhibit 10.45
FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XIII LLC
(Purchaser) Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||
Section 1.01 |
Definitions | 1 | ||
Section 1.02 |
General Interpretive Principles | 12 | ||
ARTICLE II ITEMS TO BE DELIVERED |
13 | |||
Section 2.01 |
Items to be Delivered | 13 | ||
Section 2.02 |
Grant of Security Interest | 14 | ||
ARTICLE III REPLACEMENT OF MORTGAGE LOANS |
15 | |||
Section 3.01 |
Refinancing and Substitution of Mortgage Loans | 15 | ||
Section 3.02 |
Criteria for Mortgage Loans | 15 | ||
Section 3.03 |
Refinancing Incentives | 16 | ||
Section 3.04 |
Selection Procedures | 18 | ||
Section 3.05 |
Assignment of Future Excess Servicing Spread | 19 | ||
ARTICLE IV PAYMENTS AND DISTRIBUTIONS |
19 | |||
Section 4.01 |
Purchase Price | 19 | ||
Section 4.02 |
Payments by Purchaser | 20 | ||
Section 4.03 |
Accounts | 20 | ||
Section 4.04 |
Priority of Payments | 22 | ||
Section 4.05 |
Withdrawals from the Future Spread Reserve Account | 23 | ||
Section 4.06 |
Payment to Seller of Base Servicing Fee | 23 | ||
Section 4.07 |
Correction of Principal Balance Error | 24 | ||
Section 4.08 |
Intent and Characterization | 24 | ||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||
Section 5.01 |
Due Organization and Good Standing | 25 | ||
Section 5.02 |
Authority and Capacity | 25 | ||
Section 5.03 |
Owner Consents | 25 | ||
Section 5.04 |
Title to the Mortgage Servicing Rights | 25 | ||
Section 5.05 |
Effective Agreements | 26 | ||
Section 5.06 |
No Accrued Liabilities | 26 | ||
Section 5.07 |
Seller/Servicer Standing | 26 | ||
Section 5.08 |
MERS Membership | 26 | ||
Section 5.09 |
Owner Set-off Rights | 26 | ||
Section 5.10 |
Ability to Perform; Solvency | 27 | ||
Section 5.11 |
Obligations with Respect to Origination | 27 | ||
Section 5.12 |
Purchase of Mortgage Servicing Rights | 27 | ||
Section 5.13 |
No Actions | 27 |
i
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
27 | |||
Section 6.01 |
Servicing Agreements; Applicable Laws | 27 | ||
Section 6.02 |
Related Escrow Accounts | 28 | ||
Section 6.03 |
No Purchaser Responsibility | 28 | ||
Section 6.04 |
Location of Credit Files | 28 | ||
Section 6.05 |
Representations Concerning the Future Excess Servicing Spread | 28 | ||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
29 | |||
Section 7.01 |
Due Organization and Good Standing | 29 | ||
Section 7.02 |
Authority and Capacity | 29 | ||
Section 7.03 |
Effective Agreements | 29 | ||
Section 7.04 |
Sophisticated Investor | 30 | ||
Section 7.05 |
No Actions | 30 | ||
ARTICLE VIII SELLER COVENANTS |
30 | |||
Section 8.01 |
Servicing Obligations | 30 | ||
Section 8.02 |
Cooperation; Further Assurances | 31 | ||
Section 8.03 |
Financing Statements | 31 | ||
Section 8.04 |
Supplemental Information | 31 | ||
Section 8.05 |
Access to Information | 31 | ||
Section 8.06 |
Home Affordable Modification Program | 32 | ||
Section 8.07 |
Distribution Date Data Tapes and Reports | 32 | ||
Section 8.08 |
Financial Statements and Officers Certificates | 34 | ||
Section 8.09 |
Monthly Management Calls | 34 | ||
Section 8.10 |
Timely Payment of Owner Obligations | 34 | ||
Section 8.11 |
Servicing Agreements | 34 | ||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 35 | ||
Section 8.13 |
Consents to Transaction Documents | 35 | ||
Section 8.14 |
Accounts | 35 | ||
Section 8.15 |
Notification of Certain Events | 35 | ||
Section 8.16 |
Financing; Pledge of Future Excess Servicing Spread | 36 | ||
Section 8.17 |
Existence, etc | 36 | ||
Section 8.18 |
Consent to Sub-Servicing | 37 | ||
Section 8.19 |
Nonpetition Covenant | 37 | ||
Section 8.20 |
Schedule of Mortgage Loans | 37 | ||
Section 8.21 |
True Sale Opinion | 37 | ||
Section 8.22 |
Valuation | 38 | ||
Section 8.23 |
Material Documents | 38 | ||
Section 8.24 |
Insurance. | 38 | ||
Section 8.25 |
Defense of Title | 38 | ||
Section 8.26 |
Refinancing of Mortgage Loans. | 38 |
ii
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
38 | |||
Section 9.01 |
Correctness of Representations and Warranties | 38 | ||
Section 9.02 |
Compliance with Conditions | 39 | ||
Section 9.03 |
Corporate Resolution | 39 | ||
Section 9.04 |
No Material Adverse Change | 39 | ||
Section 9.05 |
Consents | 39 | ||
Section 9.06 |
Delivery of Transaction Documents | 39 | ||
Section 9.07 |
Certificate of Seller | 39 | ||
Section 9.08 |
Opinions of Counsel | 40 | ||
Section 9.09 |
Good Standing Certificate of Seller | 40 | ||
Section 9.10 |
No Actions or Proceedings | 40 | ||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
40 | |||
Section 10.01 |
Correctness of Representations and Warranties | 40 | ||
Section 10.02 |
Compliance with Conditions | 40 | ||
Section 10.03 |
Corporate Resolution | 41 | ||
Section 10.04 |
No Material Adverse Change | 41 | ||
Section 10.05 |
Certificate of Purchaser | 41 | ||
Section 10.06 |
Good Standing Certificate of Purchaser | 41 | ||
ARTICLE XI INDEMNIFICATION |
41 | |||
Section 11.01 |
Indemnification by Seller | 41 | ||
Section 11.02 |
Indemnification by Purchaser | 43 | ||
Section 11.03 |
Other Rights | 44 | ||
ARTICLE XII MISCELLANEOUS |
44 | |||
Section 12.01 |
Costs and Expenses | 44 | ||
Section 12.02 |
Confidentiality | 44 | ||
Section 12.03 |
Brokers Fees | 45 | ||
Section 12.04 |
Relationship of Parties | 45 | ||
Section 12.05 |
Survival of Representations and Warranties | 45 | ||
Section 12.06 |
Notices | 46 | ||
Section 12.07 |
Waivers | 46 | ||
Section 12.08 |
Entire Agreement; Amendment | 46 | ||
Section 12.09 |
Binding Effect | 47 | ||
Section 12.10 |
Headings | 47 | ||
Section 12.11 |
Applicable Law | 47 | ||
Section 12.12 |
Incorporation of Exhibits | 47 | ||
Section 12.13 |
Counterparts | 47 | ||
Section 12.14 |
Severability of Provisions | 47 | ||
Section 12.15 |
Assignment | 48 | ||
Section 12.16 |
Termination | 48 | ||
Section 12.17 |
Third Party Beneficiaries | 48 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement
Annex A
Exhibit B Example of Calculations of Maximum Retained Refinancing Loan Amounts
Exhibit C Schedule of Mortgage Loans
Exhibit D Sellers Officers Certificate
Exhibit E Purchasers Officers Certificate
Exhibit F Location of Credit Files
Exhibit G Form of Summary Remittance Report
Exhibit H Form of Delinquency Report
Exhibit I Form of Disbursement Report
Exhibit J Seller Jurisdictions and Recording Offices
iv
FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS
This FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XIII LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into the Current Excess Servicing Spread Acquisition Agreement For Non-Agency Mortgage Loans, dated as of the date hereof (as amended, restated, or otherwise modified and in effect, the Current Spread Agreement), pursuant to which Purchaser will purchase and assume all right, title and interest in the excess servicing spread with respect to a pool of residential mortgage loans to be serviced by Seller;
WHEREAS, Seller desires to retain the right to refinance the residential mortgage loans in the pool, and Purchaser is willing to grant such right, as long as the excess servicing spread with respect to the newly-originated residential mortgage loans and replacement residential mortgage loans is assigned to the Purchaser as described herein; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which residential mortgage loans in the pool may be refinanced.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
1
Agency: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, the Federal National Mortgage Association, or any successor thereto, the Government National Mortgage Association, or any successor thereto, the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto, the Department of Veterans Affairs, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An assignment agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Assignment Date: With respect to a Refinanced Mortgage Loan and its related Mortgage Loan, the Distribution Date in the third calendar month following the Refinanced Mortgage Loans Refinancing Date.
Available Portfolio: As defined in Section 3.04(a) hereof.
Bank: Wells Fargo Bank, National Association, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Future Spread Custodial Account Control Agreement or the Future Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Initial Applicable Subsequent Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: With respect to the Mortgage Loans (other than GNMA Mortgage Loans), 0.06% per annum and with respect to GNMA Mortgage Loans, 0.12% per annum.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Carryover Retained Amount: As defined in Section 3.03 hereof.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: As defined in Section 2.02 hereof.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the servicing of a Mortgage Loan.
Current Mortgage Loan: A residential mortgage loan that is a Mortgage Loan under the Current Spread Agreement.
Current Spread Agreement: As defined in the recitals to this Agreement.
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the first Assignment Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
3
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the first Assignment Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) the Owner Consents relating to such Servicing Agreement have been obtained;
(b) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (b) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(c) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(d) with respect to any Servicing Agreement relating to Non-Agency Mortgage Loans, an agreement pursuant to which the Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Excess Refinancing Percentage: As defined in Section 3.03 hereof.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
4
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, Seller and MSR IX LLC, in form and substance reasonably acceptable to MSR IX LLC, dated on or before the Sale Date, pursuant to which the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Federal National Mortgage Association, or any successor thereto, Seller and MSR X LLC, in form and substance reasonably acceptable to MSR X LLC, dated on or before the Sale Date, pursuant to which the Federal National Mortgage Association, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
Future Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Future Excess Servicing Spread Percentage.
Future Excess Servicing Spread Assignment Obligation: As defined in Section 3.01 hereof.
Future Excess Servicing Spread Percentage: A percentage equal to the Current Excess Servicing Spread Percentage in the Current Spread Agreement.
Future Excess Servicing Spread Rights: As defined in Section 3.01 hereof.
Future Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Future Spread Custodial Account.
Future Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Initial Applicable Subsequent Sale Date, entered into with respect to the Third Party Controlled Future Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account: The account specified in the Future Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser.
Future Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Future Spread Reserve Account.
Future Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Initial Applicable Subsequent Sale Date, entered into with respect to the Future Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
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Future Spread Reserve Account Deposit Event: As defined in Section 4.03(c) hereof.
Future Spread Reserve Account Required Amount: As defined in Section 4.03(c) hereof.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
GNMA: Government National Mortgage Association, or any successor thereto.
GNMA Acknowledgment Agreement: The acknowledgment agreement by and among GNMA, or any successor thereto, Seller and MSR XI LLC, in form and substance reasonably acceptable to MSR XI LLC, dated on or before the Sale Date, pursuant to which GNMA, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
GNMA Mortgage Loan: A Mortgage Loan which is owned by GNMA, or any successor thereto.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: As defined in Section 8.06 hereof.
HAMP Loans: As defined in Section 8.06 hereof.
Holder Register: As defined in Section 12.15(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Initial Applicable Subsequent Sale Date: As defined in the Current Spread Agreement.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Future Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) and (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Maximum Retained Refinancing Loan Amount: As defined in Section 3.03 hereof.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: A residential mortgage loan that satisfies the conditions set forth in Section 3.02 and whose Future Excess Servicing Spread is assigned to Purchaser hereunder in satisfaction of Sellers Future Excess Servicing Spread Assignment Obligation.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Loan Identification Date: With respect to a Refinanced Mortgage Loan and its related replacement Mortgage Loan, the 25th day of the second calendar month following the Refinanced Mortgage Loans Refinancing Date.
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Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
New Mortgage Loan: As defined in Section 3.02(a)(i)(1) hereof.
Non-Agency Mortgage Loan: Any Mortgage Loan where the Owner is not an Agency.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: As defined in Section 4.03(c) hereof.
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, including the FHLMC Acknowledgment Agreement, the FNMA Acknowledgment Agreement and GNMA Acknowledgment Agreement, if applicable, pursuant to which an Owner approves or consents to the sale of the Future Excess Servicing Spread from Seller to Purchaser and any other consents, acknowledgements or similar instruments that may be required from an Owner in connection with the transactions contemplated herein.
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Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of an Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Future Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: As defined in Section 4.04 hereof.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: As defined in Section 4.01 hereof.
Purchaser: As defined in the preamble hereof.
Purchaser Indemnitees: As defined in Section 11.01(a) hereof.
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
Quarterly Collection Period: As defined in Section 3.03 hereof.
Refinanced Mortgage Loan: A Current Mortgage Loan or a Mortgage Loan that has been refinanced in whole or in part by Seller or an affiliate thereof.
Refinancing Date: The date on which a Current Mortgage Loan or Mortgage Loan is refinanced by Seller or an affiliate thereof.
Refinancing Split Percentage: As defined in Section 3.03 hereof.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
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REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Collection Period: With respect to an Assignment Date, the Collection Period in the third calendar month prior to such Assignment Date, and with respect to a Mortgage Loan Identification Date, the second calendar month prior to such Mortgage Loan Identification Date.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: As defined in Section 4.03(c) hereof.
Replacement Portfolio: As defined in Section 3.04(a) hereof.
Replacement Shortfall: As defined in Section 3.03 hereof.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Portfolio: As defined in Section 3.04(a) hereof.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to 100% minus the Future Excess Servicing Spread Percentage.
Sale Date: As defined in the Purchase and Sale Agreement.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (c) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Future Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement as updated by the Seller and Purchaser on each Assignment Date and maintained as Exhibit C hereto.
Selection Period: As defined in Section 3.04(b) hereof.
Seller: As defined in the preamble hereof.
Seller Indemnitees: As defined in Section 11.02 hereof.
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Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans, or with respect to Mortgage Loans owned by the Seller, the credit and collection standards, policies, procedures and practices of Seller relating to residential mortgage loans owned and serviced by Seller.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: As defined in Section 12.15 hereof.
Third Party Assignment: As defined in Section 12.15 hereof.
Third Party Future Spread Agreement: As defined in Section 12.15 hereof.
Third Party Claim: As defined in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Future Spread Custodial Account: The account specified in the Future Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections, all Sales Proceeds and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Initial Applicable Subsequent Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all other amounts payable by an Owner to Seller (or Purchaser under an Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by an Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements and (c) all Sales Proceeds received during such Collection Period.
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Transaction Documents: The Future Spread Custodial Account Agreement, the Future Spread Custodial Account Control Agreement, the Future Spread Reserve Account Agreement, the Future Spread Reserve Account Control Agreement, the Current Spread Agreement and this Agreement.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
ITEMS TO BE DELIVERED
Section 2.01 Items to be Delivered.
(a) On the Agreement Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) This Agreement;
(ii) The Current Spread Agreement and all agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Agreement Date, if any;
(b) On the Initial Applicable Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) The executed Future Spread Custodial Account Agreement;
(ii) The executed Future Spread Custodial Account Control Agreement;
(iii) The executed Future Spread Reserve Account Agreement;
(iv) The executed Future Spread Reserve Account Control Agreement;
(v) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(vi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Future Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(vii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Future Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(viii) The duly executed corporate certificate of Seller required by Section 9.07;
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(ix) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date to be delivered by Seller;
(x) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xi) The duly executed corporate certificate of Purchaser required by Section 10.05;
(xii) A certificate of good standing of Purchaser dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date to be delivered by Purchaser;
(xiii) A UCC-1 financing statement relating to the sale of the Future Excess Servicing Spread and relating to the security interest of Purchaser in the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, in form and substance reasonably acceptable to Purchaser; and
(xiv) All agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Initial Applicable Subsequent Sale Date.
(c) On or before the Assignment Date with respect to a Mortgage Loan, Seller shall provide Purchaser with executed copies of the related Owner Consents, and any amendments thereto.
(d) On or before the first Assignment Date, the executed Power of Attorney.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Future Excess Servicing Spread and perform its obligations hereunder, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
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ARTICLE III
REPLACEMENT OF MORTGAGE LOANS
Section 3.01 Refinancing and Substitution of Mortgage Loans.
Subject to, and upon the terms and conditions of this Agreement, and, more particularly, the conditions of this ARTICLE III, if Seller or any of its affiliates refinances any Current Mortgage Loan or Mortgage Loan, it shall designate a residential mortgage loan as a replacement Mortgage Loan pursuant to this ARTICLE III and assign the Future Excess Servicing Spread with respect to such replacement Mortgage Loan on the applicable Assignment Date to Purchaser as provided in this Agreement (such obligations of Seller, the Future Excess Servicing Spread Assignment Obligation), and the rights of Purchaser to such Future Excess Servicing Spread, the Future Excess Servicing Spread Rights).
Section 3.02 Criteria for Mortgage Loans.
(a) As of the applicable Assignment Date, unless otherwise agreed upon by Seller and Purchaser, either:
(i) The Mortgage Loan shall satisfy the following criteria:
(1) The proceeds of such Mortgage Loan (the New Mortgage Loan) were use to repay the Refinanced Mortgage Loan in whole or in part;
(2) All consents, if any, required by the applicable Owner to assign the related Future Excess Servicing Spread with respect to the New Mortgage Loan shall have been obtained;
(3) The servicing fee rate for the New Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such New Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such New Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such New Mortgage Loan is owned by GNMA; and
(4) The New Mortgage Loan is secured by the same property as the Refinanced Mortgage Loan; or
(ii) if Seller is unable to satisfy the conditions in Section 3.02(a)(i) after using commercially reasonable efforts, Seller shall use its best efforts to substitute the New Mortgage Loan with a Mortgage Loan satisfying the following criteria:
(1) The servicing fee rate (which results in the Servicing Spread Collections) for the Mortgage Loan is equal to or greater than the servicing fee rate of the New Mortgage Loan; provided however if the servicing fee rate of the New Mortgage Loan is less than the applicable rate set forth in Section 3.02(a)(i)(3), the servicing fee rate on the Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such Mortgage Loan is owned by GNMA;
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(2) The interest accrual rate per annum on the Mortgage Loan is within 12.5 basis points per annum of the interest accrual rate on the New Mortgage Loan;
(3) The final maturity date of the Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;
(4) The principal balance of the Mortgage Loan is no less than the principal balance of the Refinanced Mortgage Loan;
(5) The remaining credit characteristics of the Mortgage Loan (other than as specified in clauses (1), (2), (3) and (4) above) are substantially the same as the credit characteristics of the New Mortgage Loan;
(6) The Mortgage Loan is current as of the applicable Assignment Date; and
(7) The Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not in process of any modification, workout or other loss mitigation process; and is not involved in litigation.
(b) If a New Mortgage Loan would otherwise meet the criteria set forth in Section 3.02(a)(i) and is still owned by Seller as of the Mortgage Loan Identification Date, in lieu of a substitution pursuant to Section 3.02(a)(ii) above, the Seller may include such New Mortgage Loan as a Mortgage Loan in the Available Portfolio; provided (i) the servicing fee rate (which results in the Servicing Spread Collections) for such Mortgage Loan shall be deemed to be 0.30% per annum and (ii) if at any time such Mortgage Loan fails to otherwise meet the criteria set forth in Section 3.02(a)(i) (e.g. the Mortgage Loan is sold to an Agency and the Seller is unable to obtain an Owner Consent), the Seller shall be required to substitute a loan for such New Mortgage Loan pursuant to Section 3.02(a)(ii) above.
(c) Notwithstanding the provisions of Section 3.02(a)(ii)(4), Seller shall not be in breach of Section 3.01 on any Assignment Date if, after using best efforts to select residential mortgage loans to substitute New Mortgage Loans pursuant to Section 3.02(a)(ii), the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date is equal to or greater than 90% of the aggregate outstanding principal balance of the New Mortgage Loans during the Related Collection Period as measured on the opening of business on their respective Refinancing Date.
Section 3.03 Refinancing Incentives.
For any Assignment Date beginning with the Assignment Date in the sixth calendar month after the Initial Applicable Subsequent Sale Date and subject to Section 4.04 hereof, Sellers Future Excess Servicing Spread Assignment Obligation shall be reduced by the Maximum Retained Refinancing Loan Amount for such Assignment Date. For purposes of this Section 3.03, the following definitions shall apply:
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Replacement Shortfall: With respect to any Assignment Date and the Related Collection Period, the aggregate outstanding principal balance of the New Mortgage Loans that were originated by Seller or an affiliate thereof during the Related Collection Period as measured on the opening of business on their respective Refinancing Date, minus the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date.
Excess Refinancing Percentage: With respect to any Assignment Date, a percentage equal to the excess, if any, of (a) a fraction, expressed as a percentage, the numerator of which is equal to the aggregate principal balance of New Mortgage Loans that were originated by Seller or an affiliate thereof over the Related Collection Period and the two Collection Periods immediately prior to such Related Collection Period (the Quarterly Collection Period) as measured on their respective Refinancing Date, minus the aggregate Replacement Shortfall over such Quarterly Collection Period, and the denominator of which is the aggregate principal balance of all Mortgage Loans that voluntarily prepaid in full over the Quarterly Collection Period (measured as of the date of such prepayment), over (b) 35%.
Refinancing Split Percentage: With respect to any Assignment Date, the Refinancing Split Percentage shown in the column of the table below corresponding to the Excess Refinancing Percentage therein:
Three Month Average Recapture Percentage |
Excess Refinancing Percentage |
Refinancing Split Percentage | ||
35% or Less | 0% | 0% | ||
> 35%, <= 40% | >0.00% and <=5.00% | 25% | ||
> 40%, <= 45% | >5.00% and <=10.00% | 30% | ||
> 45%, <= 50% | >10.00% and <=15.00% | 35% | ||
> 50%, <= 55% | >15.00% and <=20.00% | 40% | ||
> 55%, <= 60% | >20.00% and <=25.00% | 45% | ||
Greater than 60% | >25.00% | 50% |
Maximum Retained Refinancing Loan Amount: With respect to any Assignment Date, an amount, not less than zero, equal to the sum of (a) the product of (i) the Refinancing Split Percentage, if any, applicable to such Assignment Date, (ii) the Excess Refinancing Percentage applicable to such Assignment Date and (iii) the aggregate principal balance of New Mortgage Loans that were refinanced with Seller or an affiliate thereof during the Related Collection Period, plus (b) the Carryover Retained Amount, minus (c) the applicable Replacement Shortfall.
Carryover Retained Amount: With respect to any Assignment Date beginning with the Assignment Date in the seventh calendar month after the Initial Applicable Subsequent Sale Date, the excess, if any, of the Maximum Retained Refinancing Loan Amount for the prior Assignment Date over the aggregate outstanding principal balance of the Mortgage Loans that were retained by Seller pursuant to this Section 3.03 on the prior Assignment Date.
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Section 3.04 Selection Procedures.
(a) Not later than the Mortgage Loan Identification Date, Seller shall (i) notify Purchaser of the identity of each Current Mortgage Loan and each Mortgage Loan that became a Refinanced Mortgage Loan during the Related Collection Period, (ii) calculate the Excess Refinancing Percentage, the Refinancing Split Percentage, the Maximum Retained Refinancing Loan Amount and the Carryover Retained Amount for the following Assignment Date, and notify Purchaser of such amounts in writing, (iii) provide Purchaser with a list of potential Mortgage Loans (the Available Portfolio), selected on the basis that the Excess Refinancing Percentage is equal to zero, and (iv) provide Purchaser with a list of residential mortgage loans selected from the Available Portfolio to be designated as Mortgage Loans (the Replacement Portfolio) on the following Assignment Date and a list of residential mortgage loans selected from the Available Portfolio to be excluded from the pool of Mortgage Loans (the Retained Portfolio) on the following Assignment Date in accordance with Section 3.03.
(b) Purchaser may submit an objection to the proposed Available Portfolio, the proposed Replacement Portfolio or the proposed Retained Portfolio not later than five Business Days following receipt of the notice of the proposed portfolios pursuant to Section 3.04(a). If Purchaser submits an objection, Seller and Buyer shall work together in good faith over the next five Business Days (the Selection Period) to mutually agree on the Replacement Portfolio and the Retained Portfolio. During the Selection Period, Seller may suggest alternative Mortgage Loans that meet the criteria of Section 3.02. If Seller and Purchaser are unable to agree on a Replacement Portfolio and a Retained Portfolio (if applicable) by close of business on the Business Day prior to the Assignment Date, Seller and Purchaser may modify the percentages in the definitions of Future Excess Servicing Spread and Retained Servicing Spread and in the Priority of Payments, as applicable, to reflect the relative values that Seller and Purchaser would have had in the Future Excess Servicing Spread and Retained Servicing Spread but for the inability of Seller and Purchaser to mutually agree on such portfolios.
(c) Unless mutually agreed upon by Seller and Purchaser, the Retained Portfolio and the Replacement Portfolio with respect to any Assignment Date shall satisfy the following criteria:
(i) The aggregate outstanding principal balance of the residential mortgage loans in the Retained Portfolio shall not exceed the Maximum Retained Refinancing Loan Amount;
(ii) The weighted average servicing fee rate for the residential mortgage loans in the Retained Portfolio shall be substantially equal to the weighted average servicing fee rate for the Mortgage Loans in the Replacement Portfolio;
(iii) The weighted average interest accrual rate per annum of the residential mortgage loans in the Retained Portfolio shall be within 12.5 basis points per annum of the weighted average interest rate of the Mortgage Loans in the Replacement Portfolio;
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(iv) The weighted average final maturity date of the residential mortgage loans in the Retained Portfolio shall be within six months of the weighted average final maturity date of the Mortgage Loans in the Replacement Portfolio; and
(v) The remaining credit characteristics of the pool of residential mortgage loans in the Retained Portfolio (other than as specified in clauses (ii), (iii) and (iv) above) shall be substantially the same as the credit characteristics of the pool of Mortgage Loans in the Replacement Portfolio.
(d) Exhibit B provides an example of the calculations to be made pursuant to Section 3.04(c)(i).
Section 3.05 Assignment of Future Excess Servicing Spread.
Subject to the satisfaction of the terms and conditions in this Agreement, on each Assignment Date, Seller shall execute and deliver an Assignment Agreement for the Future Excess Servicing Spread to be assigned on such Assignment Date with respect to the Mortgage Loans included in the applicable Replacement Portfolio; provided, however, that
(a) Purchaser shall be entitled to all Future Excess Servicing Spread and Seller shall be entitled to all Retained Servicing Spread arising with respect to each such Mortgage Loan on and after the Refinancing Date with respect to the related Refinanced Mortgage Loan,
(b) Seller shall deposit all Servicing Spread Collections received with respect to such Mortgage Loans on and after the Refinancing Date with respect to the related Refinanced Mortgage Loans into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date, and
(c) for each Mortgage Loan that was originated on or after the Refinancing Date of the related Refinanced Mortgage Loan, Seller shall deposit all Servicing Spread Collections with respect to amounts prepaid at the time of closing of such Mortgage Loan, if applicable, into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date.
ARTICLE IV
PAYMENTS AND DISTRIBUTIONS
Section 4.01 Purchase Price.
In full consideration for Purchasers right to receive any Future Excess Servicing Spread assigned to Purchaser, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Purchase Price) that shall be determined by the Parties on the Initial Applicable Subsequent Sale Date in accordance with Section 3.01 of the Current Spread Agreement.
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Section 4.02 Payments by Purchaser.
Payment shall be made by Purchaser to Seller by wire transfer of immediately available federal funds, to an account designated by Seller.
Section 4.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments to the Lockbox Account. Payments of all Servicing Spread Collections received on and after the first Assignment Date shall be transferred from the Lockbox Account to the Third Party Controlled Future Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Future Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Future Spread Custodial Account.
(i) The Third Party Controlled Future Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Sales Proceeds and Servicing Agreement termination payments with respect to the Mortgage Loans. The Third Party Controlled Future Spread Custodial Account will be established pursuant to the Future Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Future Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Future Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Future Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Future Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable with respect to the Mortgage Loans directly to the Third Party Controlled Future Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Future Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
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(iii) If Seller is to receive any Sales Proceeds, Seller shall direct the Person making such payments to deposit such payments into the Third Party Controlled Future Spread Custodial Account.
(iv) If Seller receives any amounts required to be deposited into the Third Party Controlled Future Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Future Spread Custodial Account.
(c) Future Spread Reserve Account. The Future Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Future Spread Reserve Account will be established pursuant to the Future Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Future Spread Reserve Account strictly in accordance with Section 4.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Future Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Future Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Future Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Future Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Future Spread Custodial Account to the Future Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Future Spread Reserve Account is equal to the Future Spread Reserve Account Required Amount. The Future Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Future Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Future Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Future Spread Reserve Account in excess of the Future Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Future Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any
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objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 4.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Future Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Future Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Future Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Future Spread Custodial Account attributable to Servicing Agreement termination payments paid by an Owner with respect to any Mortgage Loans, pro rata, (A) the Future Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Excess Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
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(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 4.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Future Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); provided, that (I) prior to the distribution to Purchaser of any Future Excess Servicing Spread pursuant to clause (A), the Future Excess Servicing Spread shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Future Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 4.05 Withdrawals from the Future Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Future Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Future Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Future Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Future Spread Reserve Account after the Future Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 4.06 Payment to Seller of Base Servicing Fee.
(a) Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Future Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage
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Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Future Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
(b) The Base Servicing Fee with respect to a Mortgage Loan shall begin to accrue as of the Collection Period prior to the applicable Assignment Date. In no event shall Base Servicing Fees accrue concurrently on any day for a Refinanced Mortgage Loan and for a Mortgage Loan.
Section 4.07 Correction of Principal Balance Error.
If, subsequent to the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile such amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 4.08 Intent and Characterization.
(a) Seller and Purchaser intend that the assignments of the Future Excess Servicing Spread pursuant to this Agreement and each Assignment Agreement constitute valid sales of such Future Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to such Future Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Future Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the aggregate Purchase Price (as defined in the Current Spread Agreement).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date, the Initial Applicable Subsequent Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
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Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Owner Consents.
Prior to an Assignment Date, Seller has obtained all necessary and applicable Owner Consents.
Section 5.04 Title to the Mortgage Servicing Rights.
As of an Assignment Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Future Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Future Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
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Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Future Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Future Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Future Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
As of the applicable Assignment Date, Seller is approved by each applicable Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with the applicable Agency eligibility requirements or which would require notification to the applicable Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for any Agency which is an Owner of a Mortgage Loan.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system or another similar system reasonable acceptable to the Purchaser.
Section 5.09 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to an Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including without limitation any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for an Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to an Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to an Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
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Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Future Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Future Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Future Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 Purchase of Mortgage Servicing Rights.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of each Assignment Date (or as of the date specified below, as applicable), as follows:
Section 6.01 Servicing Agreements; Applicable Laws.
Seller, the originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
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Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.04 Location of Credit Files.
All of the Mortgage Loan Documents are held by Custodians or, if held by Seller, in the locations specified in Exhibit F, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by Seller in Exhibit F.
Section 6.05 Representations Concerning the Future Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Future Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Future Excess Servicing Spread, Seller was the sole owner of the Future Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the applicable Owner under the Servicing Agreements), free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Future Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Future Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Future Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 4.08(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Future Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit J attached hereto, the sale and security interests granted hereunder in the Future Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Future Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Future Excess Servicing Spread, and the Future Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to applicable Owner Consents.
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(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Seller as of the Agreement Date, the Initial Applicable Subsequent Sale Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
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Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Future Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions.
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and, with respect to any Mortgage Loans owned by an Agency, such Agency.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller.
(c) With respect to any Servicing Agreement relating to a Non-Agency Mortgage Loan, subject to a nonrecoverability determination made in accordance with the related Servicing Agreement and to the extent the Seller as servicer has an obligation to advance principal and interest on delinquent Mortgage Loans, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
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(d) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(e) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of each Agency relating to the Mortgage Loans.
Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser, in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Future Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of its Future Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Future Spread Agreement in accordance with Section 12.15.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Future Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Future Excess Servicing Spread, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the applicable Assignment Date with respect to each Mortgage Loan, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Future Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with
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Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Current Mortgage Loan and each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to each of the pool of Current Mortgage Loans and the pool of Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
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(ix) aggregate principal balance of Refinanced Mortgage Loans, and (1) for each Refinanced Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Current Mortgage Loan and each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Current Mortgage Loans and Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans and percentages of the aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Non-delinquent Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Current Mortgage Loans and Mortgage Loans in Foreclosure,
(7) Current Mortgage Loans and Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Current Mortgage Loans and Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Current Mortgage Loans and Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
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(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Future Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Future Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Future Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Current Mortgage Loans and Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to an Owner in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing
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Agreements and Applicable Law. In particular, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the applicable Owner that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the applicable Owner that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the applicable Owner will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Current Mortgage Loans or Mortgage Loans owned by Seller which do not affect the Future Excess Servicing Spread with respect to such Current Mortgage Loans or Mortgage Loans and are not reasonably material to the Purchaser.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from the applicable Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the applicable Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any
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servicing agreement entered into between Seller and that Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Future Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Future Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, without limitation, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit J unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
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(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party and each other agreement entered into with an Owner.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Future Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Schedule of Mortgage Loans.
Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of each Assignment Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 True Sale Opinion.
Seller shall cause a written opinion of counsel to be furnished, in form and substance satisfactory to Purchaser, dated the Initial Applicable Subsequent Sale Date with respect to the characterization of the transfer of the Future Excess Servicing Spread by Seller to Purchaser as a true sale. Purchaser may request additional opinions regarding such characterization subsequent to the Initial Applicable Subsequent Sale Date as advised by Purchasers counsel in light of changes in law and other circumstances. To the extent Seller is unable to provide such opinions with respect to any Mortgage Loans, Seller shall substitute such Mortgage Loans with residential mortgage loans have substantially the same credit characteristics.
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Section 8.22 Valuation.
As of the Initial Applicable Subsequent Sale Date, Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Future Excess Servicing Spread is fair and reasonable.
Section 8.23 Material Documents.
Seller shall provide Purchaser with executed copies of all material agreements and documents, and any amendments thereto, as of each Assignment Date relating to Sellers acquisition of the related Mortgage Servicing Rights and the servicing of the Mortgage Loans assigned.
Section 8.24 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.25 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to all Future Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.26 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date and the Initial Applicable Subsequent Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Initial Applicable Subsequent Sale Date are true and correct in all material respects.
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Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller on or prior to the Initial Applicable Subsequent Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Purchaser shall have received from Seller a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Future Excess Servicing Spread.
Section 9.05 Consents.
The Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Initial Applicable Subsequent Sale Date, and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to Purchaser copies of each executed Transaction Document that is to be entered on or prior to such date in the form and substance acceptable to the Purchaser and each of the items required to be delivered pursuant to Section 2.01 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by
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Seller at or prior to the Initial Applicable Subsequent Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Initial Applicable Subsequent Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.01(b)(v), Section 2.01(b)(vi) and Section 2.01(b)(vii).
Section 9.09 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date.
Section 9.10 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Initial Applicable Subsequent Sale Date:
Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Initial Applicable Subsequent Sale Date are true and correct in all material respects.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Initial Applicable Subsequent Sale Date shall have been duly complied with and performed in all material respects.
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Section 10.03 Corporate Resolution.
Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit E, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Agreement Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date.
ARTICLE XI
INDEMNIFICATION
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Agreement Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
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(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreement termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Future Excess Servicing Spread; and
(v) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(iv) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01(a) but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01(a). Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01(a) or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a), in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under Section 11.01(a) hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than
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the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to Section 11.01 of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders,
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injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Purchaser and Seller shall each pay the expenses incurred by it or its affiliates pursuant to the Current Spread Agreement in connection with the transactions contemplated hereby.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing
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is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date and each applicable Assignment Date.
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Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
46
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
47
Section 12.15 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Future Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Future Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Future Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Future Excess Servicing Spread and each holders interest in the Future Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.15(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Future Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.16 Termination.
If the Current Spread Agreement is terminated on or prior to the Initial Applicable Subsequent Sale Date, this Agreement shall terminate and neither Party shall have any further obligations to the other Party hereunder.
Section 12.17 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
48
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XIII LLC | ||
Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer |
NATIONSTAR MORTGAGE LLC | ||
Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
49
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XIII LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Future Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the applicable Assignment Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC | ||
Seller | ||
By: | ||
Name: | ||
Title: |
50
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) |
(e) |
(g) |
(h) |
(i) (column (g) |
(j) ([ ]% of | ||||||||
Refinancing Date |
Loan #
of |
Principal |
Loan # of |
Principal |
Servicing |
Base Servicing |
Net Servicing |
Future Excess |
51
EXHIBIT B
Example of calculations of Maximum Retained Refinancing Loan Amounts
Recaptured Loan Incentive |
Range of Loans Retained as a Percentage of Total Recapture | |||||
3 Month Avg Recapture | Retained Percentage(1) | Nationstar | Portfolio | |||
35% or Less |
0% | 0.00% | 100.00% | |||
> 35%, <= 40% |
25% | 0.00% to 1.25% | 100.00% to 98.75% | |||
> 40%, <= 45% |
30% | 1.50% to 3.00% | 98.50% to 97.00% | |||
> 45%, <= 50% |
35% | 3.50% to 5.25% | 96.50% to 94.75% | |||
> 50%, <= 55% |
40% | 6.00% to 8.00% | 94.00% to 92.00% | |||
> 55%, <= 60% |
45% | 9.00% to 11.25% | 91.00% to 88.75% | |||
> 60%, <= 65% |
50% | 12.50% to 15.00% | 87.50% to 85.00% | |||
> 65%, <= 70% |
50% | 15.00% to 17.50% | 85.00% to 82.50% | |||
> 70%, <= 75% |
50% | 17.50% to 20.00% | 82.50% to 80.00% | |||
Greater than 75% |
50% | 20.00% to 32.50% | 80.00% to 67.50% |
1 | Represents the percentage of loans Seller retains above 35% recapture. |
52
EXHIBIT C
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT D
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Initial Applicable Subsequent Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Future Spread Agreement for Non-Agency Mortgage Loans by and between MSR XIII LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of the Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By:
EXHIBIT E
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Initial Applicable Subsequent Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XIII LLC (the Company), pursuant to Section 10.05 of the Future Spread Agreement for Non-Agency Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) The condition set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
[ ] | ||
By: [ ], as member | ||
By: |
EXHIBIT F
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT G
FORM OF SUMMARY REMITTANCE REPORT
[SEPARATELY DELIVERED]
EXHIBIT H
FORM OF DELINQUENCY REPORT
[SEPARATELY DELIVERED]
EXHIBIT I
FORM OF DISBURSEMENT REPORT
[SEPARATELY DELIVERED]
EXHIBIT J
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
Exhibit 10.46
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT
FOR NON-AGENCY MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XIII LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||||
Section 1.01 |
Definitions | 1 | ||||
Section 1.02 |
General Interpretive Principles | 13 | ||||
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED |
14 | |||||
Section 2.01 |
Sale of Current Excess Servicing Spread | 14 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
Section 2.03 |
Items to be Delivered on the Agreement Date | 14 | ||||
Section 2.04 |
Items to be Delivered on the Sale Date | 15 | ||||
Section 2.05 |
Sale Date Transactions | 17 | ||||
ARTICLE III PAYMENTS AND DISTRIBUTIONS |
18 | |||||
Section 3.01 |
Purchase Price | 18 | ||||
Section 3.02 |
Payments by Purchaser | 19 | ||||
Section 3.03 |
Accounts | 19 | ||||
Section 3.04 |
Priority of Payments | 22 | ||||
Section 3.05 |
Withdrawals from the Current Spread Reserve Account | 23 | ||||
Section 3.06 |
Payment to Seller of Base Servicing Fee | 23 | ||||
Section 3.07 |
Intent and Characterization | 24 | ||||
ARTICLE IV [RESERVED] |
24 | |||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||||
Section 5.01 |
Due Organization and Good Standing | 24 | ||||
Section 5.02 |
Authority and Capacity | 25 | ||||
Section 5.03 |
Title to the Mortgage Servicing Rights; Owner Consents | 25 | ||||
Section 5.04 |
Effective Agreements | 26 | ||||
Section 5.05 |
No Accrued Liabilities | 26 | ||||
Section 5.06 |
Seller/Servicer Standing | 26 | ||||
Section 5.07 |
MERS Membership | 26 | ||||
Section 5.08 |
Owner Set-off Rights | 26 | ||||
Section 5.09 |
Ability to Perform; Solvency | 27 | ||||
Section 5.10 |
Material Documents | 27 | ||||
Section 5.11 |
Obligations with Respect to Origination | 27 | ||||
Section 5.12 |
No Actions | 27 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
27 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 28 | ||||
Section 6.02 |
Related Escrow Accounts | 28 |
i
Section 6.03 |
Accuracy of Servicing Information | 28 | ||||
Section 6.04 |
No Purchaser Responsibility | 28 | ||||
Section 6.05 |
Location of Credit Files | 28 | ||||
Section 6.06 |
Representations Concerning the Current Excess Servicing Spread | 28 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
29 | |||||
Section 7.01 |
Due Organization and Good Standing | 29 | ||||
Section 7.02 |
Authority and Capacity | 29 | ||||
Section 7.03 |
Effective Agreements | 30 | ||||
Section 7.04 |
Sophisticated Investor | 30 | ||||
Section 7.05 |
No Actions | 30 | ||||
ARTICLE VIII SELLER COVENANTS |
31 | |||||
Section 8.01 |
Servicing Obligations | 31 | ||||
Section 8.02 |
Cooperation | 32 | ||||
Section 8.03 |
Financing Statements | 32 | ||||
Section 8.04 |
Supplemental Information | 32 | ||||
Section 8.05 |
Access to Information | 32 | ||||
Section 8.06 |
Home Affordable Modification Program | 33 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 33 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 35 | ||||
Section 8.09 |
Monthly Management Calls | 36 | ||||
Section 8.10 |
Timely Payment of Owner Obligations | 36 | ||||
Section 8.11 |
Servicing Agreements | 36 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 37 | ||||
Section 8.13 |
Consents to Transaction Documents | 37 | ||||
Section 8.14 |
Accounts | 37 | ||||
Section 8.15 |
Notification of Certain Events | 37 | ||||
Section 8.16 |
Financing; Pledge of Current Excess Servicing Spread | 37 | ||||
Section 8.17 |
Existence, etc | 37 | ||||
Section 8.18 |
Consent to Sub-Servicing | 39 | ||||
Section 8.19 |
Nonpetition Covenant | 39 | ||||
Section 8.20 |
Data Tape; Schedule of Mortgage Loans | 39 | ||||
Section 8.21 |
Insurance | 39 | ||||
Section 8.22 |
Defense of Title | 39 | ||||
Section 8.23 |
Refinancing of Mortgage Loans | 39 | ||||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
40 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 40 | ||||
Section 9.02 |
Compliance with Conditions | 40 | ||||
Section 9.03 |
Corporate Resolution | 41 |
ii
Section 9.04 |
No Material Adverse Change | 41 | ||||
Section 9.05 |
Consents | 41 | ||||
Section 9.06 |
Delivery of Transaction Documents | 41 | ||||
Section 9.07 |
Certificate of Seller | 41 | ||||
Section 9.08 |
Valuation | 42 | ||||
Section 9.09 |
Opinions of Counsel | 42 | ||||
Section 9.10 |
Acquisition of Mortgage Servicing Rights by Seller | 42 | ||||
Section 9.11 |
Good Standing Certificate of Seller | 42 | ||||
Section 9.12 |
No Actions or Proceedings | 42 | ||||
Section 9.13 |
Fees, Costs and Expenses | 42 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
43 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 43 | ||||
Section 10.02 |
Compliance with Conditions | 43 | ||||
Section 10.03 |
Corporate Resolution | 43 | ||||
Section 10.04 |
No Material Adverse Change | 43 | ||||
Section 10.05 |
Certificate of Purchaser | 43 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 44 | ||||
ARTICLE XI INDEMNIFICATION; CURE |
44 | |||||
Section 11.01 |
Indemnification by Seller | 44 | ||||
Section 11.02 |
Indemnification by Purchaser | 46 | ||||
Section 11.03 |
Award of Damages | 47 | ||||
Section 11.04 |
Other Rights | 48 | ||||
ARTICLE XII MISCELLANEOUS |
48 | |||||
Section 12.01 |
Costs and Expenses | 48 | ||||
Section 12.02 |
Confidentiality | 48 | ||||
Section 12.03 |
Brokers Fees | 49 | ||||
Section 12.04 |
Relationship of Parties | 49 | ||||
Section 12.05 |
Survival of Representations and Warranties | 49 | ||||
Section 12.06 |
Notices | 50 | ||||
Section 12.07 |
Waivers | 50 | ||||
Section 12.08 |
Entire Agreement; Amendment | 51 | ||||
Section 12.09 |
Binding Effect | 51 | ||||
Section 12.10 |
Headings | 51 | ||||
Section 12.11 |
Applicable Law | 51 | ||||
Section 12.12 |
Incorporation of Exhibits | 51 | ||||
Section 12.13 |
Counterparts | 52 | ||||
Section 12.14 |
Severability of Provisions | 52 | ||||
Section 12.15 |
Public Announcement | 52 | ||||
Section 12.16 |
Assignment | 52 | ||||
Section 12.17 |
Termination | 53 | ||||
Section 12.18 |
Third Party Beneficiaries | 53 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement
Exhibit B Schedule of Mortgage Loans
Exhibit C Sellers Officers Certificate
Exhibit D Purchasers Officers Certificate
Exhibit E Location of Credit Files
Exhibit F Form of Summary Remittance Report
Exhibit G Form of Delinquency Report
Exhibit H Form of Disbursement Report
Exhibit I Seller Jurisdictions and Recording Offices
Exhibit J Servicing Agreements
iv
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR
NON-AGENCY MORTGAGE LOANS
This CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR NON-AGENCY MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XIII LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Bank of America, National Association (Bank of America) have entered into the Purchase and Sale Agreement, pursuant to which, among other things, Seller will acquire and assume all right, title and interest in mortgage servicing rights to a portfolio of residential mortgage loans owned or securitized by the Owners (as defined herein);
WHEREAS, by acquiring such mortgage servicing rights, Seller is entitled to a servicing spread and other incidental fees with respect to the related residential mortgage loans;
WHEREAS, the servicing spread, together with the Ancillary Income (as defined below), exceeds the compensation that Seller requires to service the related residential mortgage loans;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, a portion of the servicing spread that exceeds such required compensation amount; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which Seller will sell, transfer and assign to Purchaser, all of Sellers right, title and interest in and to a portion of the servicing spread, that exceeds the Sellers required compensation amount, and Purchaser will purchase all right, title and interest in and to such portion of the servicing spread;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
1
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
Agency: Any of Fannie Mae, Freddie Mac or Ginnie Mae, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Bank: Wells Fargo Bank, National Association, or any successor thereto, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Current Spread Custodial Account Control Agreement or the Current Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Bank of America: As defined in the recitals hereof.
Base Purchase Price: The meaning given to such term in Section 3.01.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the sum for each Mortgage Loan of the product of (A) the outstanding principal balance of such Mortgage Loan with respect to the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period following the Subsequent Sale Date for such Mortgage Loan, a fraction, the numerator of which is the number of days in the period from and including such Subsequent Sale Date to and including the last day of the such Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods for a Mortgage Loan, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: 0.235% per annum, except that, for the period during which the Interim Servicer is servicer of the Mortgage Loans, the Base Servicing Fee Rate shall be the lesser of (a) 0.235% per annum or (b) the interim servicing fee payable to the Interim Servicer.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: The meaning given to such term in Section 2.02.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the Servicing of a Mortgage Loan.
Current Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Current Excess Servicing Spread Percentage.
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans: The current excess servicing spread acquisition agreement for certain Freddie Mac mortgage loans, dated the date hereof, between the Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Fannie Mae mortgage loans, dated the date hereof, between the Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
3
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Ginnie Mae mortgage loans, dated the date hereof, between the Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The current excess servicing spread acquisition agreement for certain Non-Agency Mortgage Loans, dated the date hereof, between the Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Percentage: 66.67%.
Current Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Current Spread Custodial Account.
Current Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated as of the Initial Applicable Subsequent Sale Date, entered into with respect to the Third Party Controlled Current Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account: The account specified in the Current Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or any other third party custodian or trustee selected by Purchaser.
Current Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Current Spread Reserve Account.
Current Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated on or before the Initial Applicable Subsequent Sale Date, entered into with respect to the Current Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account Deposit Event: The meaning given to such term in Section 3.03(c).
Current Spread Reserve Account Required Amount: The meaning given to such term in Section 3.03(c).
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the related Subsequent Sale Date, as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
4
Cut-Off Date: With respect to each Mortgage Loan, the opening of business on the related Subsequent Sale Date.
Data Tape: The list of all mortgage loans, dated as of the date specified therein, whose Mortgage Servicing Rights will be sold, or that are anticipated to be sold, as applicable, to Seller under the Purchase and Sale Agreement.
Deposit: As defined in the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the Initial Applicable Subsequent Sale Date hereunder, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) either (i) the Owner Consents relating to such Servicing Agreement have been obtained or (ii) a final order entered by the bankruptcy court providing that an Owner Consent with respect to such Servicing Agreement is not required has been obtained;
(b) such Servicing Agreement is an Eligible Servicing Agreement (as such term is defined in the Purchase and Sale Agreement);
(c) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (c) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(d) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(e) the Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
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Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
FHLMC Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR IX LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans.
FNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR X LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
Future Spread Agreements: The Future Spread Agreement for FHLMC Mortgage Loans, the Future Spread Agreement for FNMA Mortgage Loans, the Future Spread Agreement for GNMA Mortgage Loans, the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Future Spread Agreement for FHLMC Mortgage Loans: The Future Spread Agreement for FHLMC Mortgage Loans, dated January 6, 2013, by and between Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for FNMA Mortgage Loans: The Future Spread Agreement for FNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for GNMA Mortgage Loans: The Future Spread Agreement for GNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
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GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
Ginnie Mae: Government National Mortgage Association, or any successor thereto.
GNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XI LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: The meaning given to such term in Section 8.06.
HAMP Loans: The meaning given to such term in Section 8.06.
Holder Register: As defined in Section 12.16(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Initial Applicable Subsequent Sale Date: As defined in Section 2.04 hereof.
Interim Servicer: Bank of America or its successors or assigns acting as interim servicer with respect to the Mortgage Loans pursuant to the interim servicing addendum of the Purchase and Sale Agreement.
IRS: The United States Internal Revenue Service.
Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
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Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Current Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) or (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: Each of those mortgage loans listed on the Schedule of Mortgage Loans.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to
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the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
Net Servicing Fee: As defined in the Purchase and Sale Agreement.
Non-Agency Mortgage Loans: Each of the mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XII LLC or MSR XIII LLC pursuant to the applicable Sale Agreement.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: The meaning given to such term in Section 3.03(c).
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, consents, approvals, confirmations and other items required pursuant to a Servicing Agreement to complete the sale of the Mortgage Servicing Rights (including the Total Excess Spread) to Seller.
Party or Parties: As defined in the preamble hereof.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Current Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: The meaning given to such term in Section 3.04.
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Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: The meaning given to such term in Section 3.01.
Purchase Price Percentage: 3.78 multiplied by the excess of (i) the Net Servicing Fee (as such Net Servicing Fees are determined in accordance with Exhibit F to the Purchase and Sale Agreement), expressed as an annualized rate on the unpaid principal balances of the related Mortgage Loans as of the Subsequent Sale Date over (ii) the Base Servicing Fee Rate.
Purchased Assets: As defined in the Purchase and Sale Agreement.
Purchaser: As defined in the preamble hereof.
Purchaser Enforcement Expenses: An amount equal to the Current Excess Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Purchaser Indemnitees: The meaning given to such term in Section 11.01(a).
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: The meaning given to such term in Section 3.03(c).
Repurchase Price: As defined in the Purchase and Sale Agreement.
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Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to the Retained Servicing Spread Percentage of the Total Servicing Spread.
Retained Servicing Spread Percentage: 100% minus the Current Excess Servicing Spread Percentage.
Sale Agreements: This Agreement, the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans and the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC.
Sale Date: As defined in the Purchase and Sale Agreement.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (b) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Current Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement delivered initially accordance with Section 2.04, updated in accordance with Section 3.01 and maintained as Exhibit B hereto.
Seller: As defined in the preamble hereof.
Seller Enforcement Expenses: An amount equal to the Retained Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Seller Indemnitees: The meaning given to such term in Section 11.02.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller or the Interim Servicer is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans.
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Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Servicing Transfer Date: As defined in the Purchase and Sale Agreement with respect to the Mortgage Loans.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Subsequent Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Termination Date: As defined in the Purchase and Sale Agreement.
Third Party Assignee: The meaning given to such term in Section 12.16.
Third Party Assignment: The meaning given to such term in Section 12.16.
Third Party Current Spread Agreement: The meaning given to such term in Section 12.16.
Third Party Claim: The meaning given to such term in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Current Spread Custodial Account: The account specified in the Current Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Initial Applicable Subsequent Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all Sales Proceeds received during such Collection Period; (c) all Repurchase Prices received during such Collection Period; and (d) all other amounts payable by an Owner to Seller with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by the applicable Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans,
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but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures, if any, from the applicable Owner by Seller in accordance with the Servicing Agreements.
Transaction Documents: The Purchase and Sale Agreement (including any order, bill of sale, assignment agreement or other transfer agreement related to the sale of the Mortgage Servicing Rights thereunder), the Owner Consents, the Current Spread Custodial Account Agreement, the Current Spread Custodial Account Control Agreement, the Current Spread Reserve Account Agreement, the Current Spread Reserve Account Control Agreement, the Sale Agreements and the Future Spread Agreements.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
PROCEDURES; ITEMS TO BE DELIVERED
Section 2.01 Sale of Current Excess Servicing Spread.
Subject to, and upon the terms and conditions of this Agreement, on each Subsequent Sale Date occurring more than ninety (90) days following the Sale Date, Seller will sell, transfer and assign to Purchaser, and Purchaser will acquire from Seller, all of Sellers right, title and interest in and to the Current Excess Servicing Spread and all proceeds thereof with respect to the related Mortgage Loans.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Current Excess Servicing Spread and perform its obligations hereunder and under the Purchase and Sale Agreement, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
Section 2.03 Items to be Delivered on the Agreement Date.
On the Agreement Date, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(a) The Sale Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement on the Agreement Date;
(b) The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and
(c) The executed Purchase and Sale Agreement.
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Section 2.04 Items to be Delivered on the Initial Applicable Subsequent Sale Date.
(a) On the initial Subsequent Sale Date on which Current Excess Servicing Spread is sold by Seller to Purchaser in accordance with Section 2.01 (the Initial Applicable Subsequent Sale Date), subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) All agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement and Future Spread Agreement on or prior to such Subsequent Sale Date;
(ii) All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on or prior to such Subsequent Sale Date;
(iii) The executed Current Spread Custodial Account Agreement;
(iv) The executed Current Spread Custodial Account Control Agreement;
(v) The executed Current Spread Reserve Account Agreement;
(vi) The executed Current Spread Reserve Account Control Agreement;
(vii) An Opinion of Counsel of Seller reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(viii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy or receivership purposes, as applicable;
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(ix) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Current Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(x) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date to be delivered by Seller;
(xi) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xii) An officers certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);
(xiii) A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Initial Applicable Subsequent Sale Date;
(xiv) A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Initial Applicable Subsequent Sale Date;
(xv) A certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Initial Applicable Subsequent Sale Date to be delivered by Purchaser; and
(xvi) A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, in form and substance reasonably acceptable to Purchaser.
(b) On the Initial Applicable Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:
(i) Any amendments, modifications or restatements of the Purchase and Sale Agreement;
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(ii) Each bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller pursuant to the Purchase and Sale Agreement; and
(iii) The executed Power of Attorney.
(c) On each Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) With respect to each related Mortgage Loan, either (i) an Owner Consent relating to the Servicing Agreement for such Mortgage Loan or (ii) a final order entered by the bankruptcy court providing that such Owner Consent is not required;
(ii) Each bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller; and
(iii) An Assignment Agreement with respect to such Subsequent Sale Date;
(iv) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on such Subsequent Sale Date.
Section 2.05 Subsequent Sale Date Transactions.
On each Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein:
(a) The Parties shall execute and deliver the Assignment Agreement;
(b) Purchaser shall remit to Seller the Purchase Price; and
(c) Ownership of the Current Excess Servicing Spread shall be transferred to Purchaser.
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ARTICLE III
PAYMENTS AND DISTRIBUTIONS
Section 3.01 Purchase Price.
MSR XIII LLC shall act as Purchaser for any Subsequent Sale Date occurring after 90 days following the Sale Date with respect to purchases of current excess servicing spread relating to any Non-Agency Mortgage Loan pursuant to the Purchase and Sale Agreement until the Termination Date. For avoidance of doubt, the purchaser for the Sale Date and any Subsequent Sale Date occurring within 90 days following the Sale Date will be MSR XII LLC and not MSR XIII LLC, and any related current excess servicing spread shall be sold pursuant to the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC and not this Agreement, and MSR XIII LLC shall not acquire any interest in such current excess servicing spread.
In full consideration for the purchase of the Current Excess Servicing Spread and the rights under the Future Spread Agreement for Non-Agency Mortgage Loans, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Base Purchase Price) equal to the product of (x) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-Off Date, (y) the Purchase Price Percentage and (z) the Current Excess Servicing Spread Percentage. The Base Purchase Price shall be allocated by the Parties on the related Subsequent Sale Date to reflect the consideration for the purchase of the Current Excess Servicing Spread hereunder (the Purchase Price) and the consideration for the rights acquired by Purchaser under the Future Spread Agreement for Non-Agency Mortgage Loans.
The Base Purchase Price shall be payable by the Purchaser to the Seller as follows: (a) 50% of the estimated Base Purchase Price net of the portion of the Deposit with respect to the applicable Servicing Agreements shall be payable on the related Subsequent Sale Date and (b) the portion of the Base Purchase Price with respect to the Mortgage Servicing Rights transferred on such Servicing Transfer Date that has not been paid to Seller by Purchaser as of such date, including with respect to Mortgage Loans that have prepaid between either (x) the Subsequent Sale Date and the initial applicable Servicing Transfer Date or (y) two Servicing Transfer Dates pertaining to the same Mortgage Servicing Rights, plus interest thereon at the Federal Funds Rate for the period from the Subsequent Sale Date to such Servicing Transfer Date or between such Servicing Transfer Dates, shall be payable on the Servicing Transfer Date.
On the Initial Applicable Subsequent Sale Date, MSR XIII LLC shall pay any unused portion of the Deposit to MSR XII LLC. On the Termination Date, any unused portion of the Deposit shall be paid by Seller to Purchaser.
The Seller shall deliver the Schedule of Mortgage Loans no later ten (10) Business Days after each Subsequent Sale Date following the Initial Applicable Subsequent Sale Date. In the event there is an adjustment and reconciliation of the Sellers purchase price pursuant to the terms of Section 3.01(d) of the Purchase and Sale Agreement, the Base Purchase Price shall be subject to a corresponding adjustment and any adjustment amounts (including interest) shall be paid by Purchaser or the Seller, as applicable, to the other party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
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Section 3.02 Payments by Purchaser.
(a) Payments shall be made by Purchaser to Seller by wire transfer of immediately available funds to an account designated by Seller.
(b) If, subsequent to the payment of the Purchase Price or the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, or if for any reason the Purchase Price or such other amounts is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price or such other amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 3.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments due on or after the Servicing Transfer Date to the Lockbox Account. All amounts on deposit in the Lockbox Account will be maintained and applied in accordance with the Servicing Agreement. Payments of all Servicing Spread Collections received on and after the Servicing Transfer Date shall be transferred from the Lockbox Account to the Third Party Controlled Current Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Current Spread Account within two Business Days of receipt thereof. Any deferred servicing fees purchased by the Seller with respect to the Mortgage Loans under the Purchase and Sale Agreement shall only be retained by Seller after all Servicing Spread Collections with respect to the applicable Mortgage Loan for the related Collection Period (and any unpaid Servicing Spread Collections from prior Collection Periods) have been remitted to the Third Party Controlled Current Spread Custodial Account.
(b) Third Party Controlled Current Spread Custodial Account.
(i) The Third Party Controlled Current Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Servicing Agreement termination payments with respect to the Mortgage Loans, Sales
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Proceeds and Repurchase Prices. The Third Party Controlled Current Spread Custodial Account will be established pursuant to the Current Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Current Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Current Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable after the related Subsequent Sale Date directly to the Third Party Controlled Current Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Current Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
(iii) Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Custodial Account.
(iv) Seller shall direct Bank of America to remit (i) Servicing Spread Collections received by it prior to the Servicing Transfer Date and (ii) any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Custodial Account.
(v) If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Custodial Account.
(c) Current Spread Reserve Account. The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current
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Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Current Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Current Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Current Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Current Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Current Spread Custodial Account to the Current Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Current Spread Reserve Account is equal to the Current Spread Reserve Account Required Amount. The Current Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Current Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Current Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Current Spread Reserve Account in excess of the Current Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Current Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
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Section 3.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Current Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Current Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Current Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Current Spread Custodial Account attributable to Servicing Agreement termination payments made by an Owner with respect to any Mortgage Loans, pro rata, (A) the Current Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable, to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Current Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Current Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
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(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant to clause (A), the Current Excess Servicing Spread shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 3.05 Withdrawals from the Current Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Current Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Current Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Current Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Current Spread Reserve Account after the Current Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 3.06 Payment to Seller of Base Servicing Fee.
Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Current Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred
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to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Current Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
Section 3.07 Intent and Characterization.
(a) Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.
ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Subsequent Sale Date (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or
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impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary corporate action. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Title to the Mortgage Servicing Rights; Owner Consents
(a) As of the Subsequent Sale Date, Seller will be the lawful owner of the related Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Current Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Current Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever.
(b) As of the Subsequent Sale Date, Seller has obtained all related Owner Consents or, with respect to any Servicing Agreement relating to the Mortgage Loans for which an Owner Consent has not been obtained, a final order entered by the bankruptcy court providing that such Owner Consent is not required.
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Section 5.04 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document that has been executed by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Current Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Current Excess Servicing Spread.
Section 5.05 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Current Excess Servicing Spread.
Section 5.06 Seller/Servicer Standing.
Seller is qualified to act as servicer under, and meets all eligibility criteria required by, each applicable Servicing Agreement, and has adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with any such requirements or which would require notification to the applicable Owner. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any eligibility requirements under any Servicing Agreement, it shall immediately notify the Purchaser.
Section 5.07 MERS Membership.
Seller is a member in good standing under the MERS system.
Section 5.08 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to such Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for such Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to such Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to such Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
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Section 5.09 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Current Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Current Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Current Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.10 Material Documents.
Seller has provided Purchaser with executed copies of all material agreements and documents, and any amendments thereto, relating to Sellers acquisition of the Mortgage Servicing Rights and the servicing of the Mortgage Loans.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of the Agreement Date and each Subsequent Sale Date on and after the Initial Applicable Subsequent Sale Date (or as of the date specified below, as applicable):
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Section 6.01 Servicing Agreements; Applicable Laws.
The originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 Accuracy of Servicing Information.
The information in the Data Tape dated as of November 30, 2012 is true and correct in all material respects as of the date specified therein; provided that if there is no date specified in the Data Tape, as of November 30, 2012.
Section 6.04 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.05 Location of Credit Files.
All of the Mortgage Loan Documents are or upon delivery by Bank of America will be held by Custodians, or if held by the Seller, in the locations specified in Exhibit E, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by the Seller in Exhibit E.
Section 6.06 Representations Concerning the Current Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person and immediately prior to the sale of the Current Excess Servicing Spread on the related Subsequent Sale Date, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto, free and clear of all Liens, and no Person, other than Purchaser, has any Lien on the Current Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or
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continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the sale and security interests granted hereunder in the Current Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Purchaser as of the Agreement Date and each Subsequent Sale Date on and after the Initial Applicable Subsequent Sale Date (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of
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this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Current Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions.
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
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ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall (or, prior to the Servicing Transfer Date, shall cause the Interim Servicer to,) pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.
(c) Any deferred servicing fees purchased by the Seller with respect to the Mortgage Loans under the Purchase and Sale Agreement shall only be retained by Seller after all Servicing Spread Collections with respect to the applicable Mortgage Loan for the related Collection Period (and any unpaid Servicing Spread Collections from prior Collection Periods) have been remitted to the Third Party Controlled Current Spread Custodial Account.
(d) Subject to a nonrecoverability determination made pursuant to the related Servicing Agreement, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
(e) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(f) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards.
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Section 8.02 Cooperation ; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser (except as otherwise provided in Section 12.01), in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Current Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of the Current Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Current Spread Agreement in accordance with Section 12.16.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Current Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the Subsequent Sale Date, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the related Mortgage Loans and the payment of the related Current Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
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Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
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(viii) short sales,
(ix) (1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the Mortgage Loans and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Current Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Mortgage Loans in Foreclosure,
(7) Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Mortgage Loans in which the Mortgagor is in bankruptcy;
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(ii) For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Current Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Current Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Current Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) (b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to the Owners in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
After the Serving Transfer Date, Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, after the Servicing Transfer Date, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with any Owner that may be reasonably material to Purchaser either verbally or in writing or (d) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that no Owner will have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Mortgage Loans owned by Seller which do not affect the Current Excess Servicing Spread with respect to such Mortgage Loans and are not reasonably material to the Purchaser.
The Seller shall monitor the obligations of the Interim Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement.
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Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from any Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and such Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and such Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, and (b) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Current Excess Servicing Spread.
Seller shall not pledge, obtain Seller financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Current Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
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(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party.
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Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, and except as contemplated under the Purchase and Sale Agreement with respect to transition services hereunder, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than (i) the Interim Servicer (prior to the Servicing Transfer Date) and (ii) third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Current Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Data Tape; Schedule of Mortgage Loans.
The information in the Data Tape delivered to Purchaser on the Subsequent Sale Date will be true and correct in all material respects as of the date specified. Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of the Subsequent Sale Date. The information in the Schedule of Mortgage Loans pertaining to the related Mortgage Loans and the related Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.22 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to the Current Excess Servicing Spread against all adverse claims and demands.
Section 8.23 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement and under the Assignment Agreement are subject to the satisfaction of the following conditions as of each Subsequent Sale Date on and after the Initial Applicable Subsequent Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Subsequent Sale Date are true and correct in all material respects; provided however, that, if the representations and warranties made in Section 5.03(b) and 6.06(e) hereof with respect to any Servicing Agreement are not true and correct in all material respects on the Subsequent Sale Date, unless otherwise agreed in writing by Purchaser, (a) the Current Excess Servicing Spread for the related Mortgage Loans relating to the affected Servicing Agreements shall not be sold to Purchaser and (b) such Servicing Agreements shall be removed from the definition of Servicing Agreements. In the event that the representations and warranties made in Section 5.03(b) and 6.06(e) hereof are not true and correct in all material respects on the Subsequent Sale Date with respect to a Servicing Agreement (a) unless the Purchaser elects to waive the failure of such representations and warranties with respect to any such Servicing Agreement and purchase the related Current Excess Servicing Spread, Seller shall have no further obligations to Purchaser with respect to such Servicing Agreement or the related Mortgage Loans and (b) the failure of such representations and warranties to be true and correct in all material respects on the related Subsequent Sale Date with respect to a Servicing Agreement or any number of Servicing Agreements shall not be considered a failure of the condition precedent contained in this Section 9.01 for the consummation of the transactions contemplated hereby with respect to those Servicing Agreements that do satisfy this condition.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller and Bank of America on or prior to Subsequent Sale Date shall have been duly complied with and performed in all material respects.
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Section 9.03 Corporate Resolution.
Receipt by the Purchaser of a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition, or in the Mortgage Servicing Rights, the Mortgage Loans or the Related Escrow Accounts that in each case will likely have a material adverse effect the consummation of the transactions contemplated hereby or the Current Excess Servicing Spread.
Section 9.05 Consents.
Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Subsequent Sale Date. No consents are required for the sale of the Current Excess Servicing Spread from Seller to Purchaser. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to the Purchaser copies of each executed Transaction Document that is to be entered into on or prior to such date and each of the items required to be delivered pursuant to Section 2.04 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit C, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the related Subsequent Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the related Subsequent Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or
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any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Valuation.
Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Current Excess Servicing Spread is fair and reasonable.
Section 9.09 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.04(a)(vii), Section 2.04(a)(viii) and Section 2.04(a)(ix).
Section 9.10 Acquisition of Mortgage Servicing Rights by Seller.
Seller shall have acquired the Mortgage Servicing Rights and the other Purchased Assets from Bank of America pursuant to the Purchase and Sale Agreement as of the related Subsequent Sale Date.
Section 9.11 Good Standing Certificate of Seller
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the related Subsequent Sale Date.
Section 9.12 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
Section 9.13 Fees, Costs and Expenses.
The fees, costs and expenses payable by the Seller on or prior to the related Subsequent Sale Date, as applicable pursuant to Section 12.01 hereof and any other Transaction Document shall have been paid.
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ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date or the Subsequent Sale Date, as applicable:
Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Agreement Date or the Subsequent Sale Date, are true and correct in all material respects as of the date thereof.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the related Subsequent Sale Date shall have been duly complied with and performed in all material respects as of the date thereof.
Section 10.03 Corporate Resolution.
As of the date hereof, Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the related Subsequent Sale Date, have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
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Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the related Subsequent Sale Date.
ARTICLE XI
INDEMNIFICATION; CURE
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the related Subsequent Sale Date, which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreements termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Current Excess Servicing Spread;
(v) Any breach by Seller of the Purchase and Sale Agreement; and
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(vi) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i) (v) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01. Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to ARTICLE XI of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof
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to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser
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shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Award of Damages.
(a)
(i) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee
(ii) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.
(b) In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Partys designee in possession of the applicable amount shall promptly notify the other Party or the other Partys designee as to the awards existence and request that the other Party or other
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Partys designee, as applicable, designate an account to which the amount shall be remitted. Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.
(c) Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.
Section 11.04 Other Rights
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Except as otherwise provided herein, Purchaser and Seller shall share the expenses incurred by Seller and Purchaser or their respective affiliates in connection with the transactions contemplated hereby, with the expense allocation percentage to be mutually agreed upon by the Parties.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If
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Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date.
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Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
50
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
51
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Public Announcement.
No public release or statement concerning the subject matter of this Agreement shall be made by either party without the express written consent and approval of the other party, except as required by law or stock exchange rule, and provided that on and after the Agreement Date, either party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.16 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Current Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holders interest in the Current Excess Servicing Spread (the Holder Register) for each transaction described
52
in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.17 Termination.
If the Purchase and Sale Agreement is terminated, this Agreement shall be terminated concurrently therewith, without any further action of either Party. In the event this agreement is terminated as set forth in the prior sentence or in Section 8.13, neither Party shall have any further obligations to the other Party hereunder except as expressly set forth herein. If all conditions to Purchasers or Sellers obligations to close set forth in ARTICLE IX and ARTICLE X, respectively, are not satisfied on the related Subsequent Sale Date, Purchaser or Seller, as applicable based on the condition or conditions not satisfied, may terminate this agreement by written notice to the other party, and neither party shall have any further obligations to the other party hereunder, except as expressly set forth herein.
Section 12.18 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
53
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XIII LLC | ||
Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer | |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR NON-AGENCY MORTGAGE LOANS
54
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XIII LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Current Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the Subsequent Sale Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price..
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: |
| |
Name: |
| |
Title: |
|
55
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR
MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) |
(e) |
(f) (column (d) column (e)) |
(g) ([ ]% of column (f)) | ||||||
Subsequent Sale Date |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Subsequent Sale Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Current Excess Servicing Spread | ||||||
EXHIBIT B
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT C
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Subsequent Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans by and between MSR XIII LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
1viii
EXHIBIT D
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Subsequent Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XIII LLC (the Company), pursuant to Section 10.05 of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) All conditions set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR XIII LLC | ||
By: [ ], as member | ||
By: |
|
EXHIBIT E
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT F
FORM OF SUMMARY REMITTANCE REPORT
[DELIVERED SEPARATELY]
EXHIBIT G
FORM OF DELINQUENCY REPORT
[DELIVERED SEPARATELY]
EXHIBIT H
FORM OF DISBURSEMENT REPORT
[DELIVERED SEPARATELY]
EXHIBIT I
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
EXHIBIT J
SERVICING AGREEMENTS
[DELIVERED SEPARATELY]
65
Exhibit 10.47
FUTURE SPREAD AGREEMENT FOR FHLMC MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR IX LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES | 1 | |||||
Section 1.01 | Definitions |
1 | ||||
Section 1.02 | General Interpretive Principles |
12 | ||||
ARTICLE II ITEMS TO BE DELIVERED | 13 | |||||
Section 2.01 | Items to be Delivered |
13 | ||||
Section 2.02 | Grant of Security Interest |
14 | ||||
ARTICLE III REPLACEMENT OF MORTGAGE LOANS | 14 | |||||
Section 3.01 | Refinancing and Substitution of Mortgage Loans |
14 | ||||
Section 3.02 | Criteria for Mortgage Loans |
15 | ||||
Section 3.03 | Refinancing Incentives |
16 | ||||
Section 3.04 | Selection Procedures |
18 | ||||
Section 3.05 | Assignment of Future Excess Servicing Spread |
19 | ||||
ARTICLE IV PAYMENTS AND DISTRIBUTIONS | 19 | |||||
Section 4.01 | Purchase Price |
19 | ||||
Section 4.02 | Payments by Purchaser |
20 | ||||
Section 4.03 | Accounts |
20 | ||||
Section 4.04 | Priority of Payments |
22 | ||||
Section 4.05 | Withdrawals from the Future Spread Reserve Account |
23 | ||||
Section 4.06 | Payment to Seller of Base Servicing Fee |
24 | ||||
Section 4.07 | Correction of Principal Balance Error |
24 | ||||
Section 4.08 | Intent and Characterization |
24 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER | 25 | |||||
Section 5.01 | Due Organization and Good Standing |
25 | ||||
Section 5.02 | Authority and Capacity |
25 | ||||
Section 5.03 | Owner Consents |
25 | ||||
Section 5.04 | Title to the Mortgage Servicing Rights |
26 | ||||
Section 5.05 | Effective Agreements |
26 | ||||
Section 5.06 | No Accrued Liabilities |
26 | ||||
Section 5.07 | Seller/Servicer Standing |
26 | ||||
Section 5.08 | MERS Membership |
26 | ||||
Section 5.09 | Owner Set-off Rights |
26 | ||||
Section 5.10 | Ability to Perform; Solvency |
27 | ||||
Section 5.11 | Obligations with Respect to Origination |
27 | ||||
Section 5.12 | Purchase of Mortgage Servicing Rights |
27 | ||||
Section 5.13 | No Actions |
27 |
i
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING | 27 | |||||
Section 6.01 | Servicing Agreements; Applicable Laws |
28 | ||||
Section 6.02 | Related Escrow Accounts |
28 | ||||
Section 6.03 | No Purchaser Responsibility |
28 | ||||
Section 6.04 | Location of Credit Files |
28 | ||||
Section 6.05 | Representations Concerning the Future Excess Servicing Spread |
28 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER | 29 | |||||
Section 7.01 | Due Organization and Good Standing |
29 | ||||
Section 7.02 | Authority and Capacity |
29 | ||||
Section 7.03 | Effective Agreements |
30 | ||||
Section 7.04 | Sophisticated Investor |
30 | ||||
Section 7.05 | No Actions |
30 | ||||
ARTICLE VIII SELLER COVENANTS | 30 | |||||
Section 8.01 | Servicing Obligations |
30 | ||||
Section 8.02 | Cooperation; Further Assurances |
31 | ||||
Section 8.03 | Financing Statements |
31 | ||||
Section 8.04 | Supplemental Information |
31 | ||||
Section 8.05 | Access to Information |
32 | ||||
Section 8.06 | Home Affordable Modification Program |
32 | ||||
Section 8.07 | Distribution Date Data Tapes and Reports |
32 | ||||
Section 8.08 | Financial Statements and Officers Certificates |
34 | ||||
Section 8.09 | Monthly Management Calls |
34 | ||||
Section 8.10 | Timely Payment of Owner Obligations |
35 | ||||
Section 8.11 | Servicing Agreements |
35 | ||||
Section 8.12 | Transfer of Mortgage Servicing Rights |
35 | ||||
Section 8.13 | Consents to Transaction Documents |
35 | ||||
Section 8.14 | Accounts |
36 | ||||
Section 8.15 | Notification of Certain Events |
36 | ||||
Section 8.16 | Financing; Pledge of Future Excess Servicing Spread |
36 | ||||
Section 8.17 | Existence, etc |
36 | ||||
Section 8.18 | Consent to Sub-Servicing |
37 | ||||
Section 8.19 | Nonpetition Covenant |
37 | ||||
Section 8.20 | Schedule of Mortgage Loans |
37 | ||||
Section 8.21 | True Sale Opinion |
38 | ||||
Section 8.22 | Valuation |
38 | ||||
Section 8.23 | Material Documents |
38 | ||||
Section 8.24 | Insurance |
38 | ||||
Section 8.25 | Defense of Title |
38 | ||||
Section 8.26 | Refinancing of Mortgage Loans |
38 |
ii
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER | 39 | |||||
Section 9.01 | Correctness of Representations and Warranties |
39 | ||||
Section 9.02 | Compliance with Conditions |
39 | ||||
Section 9.03 | Corporate Resolution |
39 | ||||
Section 9.04 | No Material Adverse Change |
39 | ||||
Section 9.05 | Consents |
39 | ||||
Section 9.06 | Delivery of Transaction Documents |
40 | ||||
Section 9.07 | Certificate of Seller |
40 | ||||
Section 9.08 | Opinions of Counsel |
40 | ||||
Section 9.09 | Good Standing Certificate of Seller |
40 | ||||
Section 9.10 | No Actions or Proceedings |
40 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER | 40 | |||||
Section 10.01 | Correctness of Representations and Warranties |
41 | ||||
Section 10.02 | Compliance with Conditions |
41 | ||||
Section 10.03 | Corporate Resolution |
41 | ||||
Section 10.04 | No Material Adverse Change |
41 | ||||
Section 10.05 | Certificate of Purchaser |
41 | ||||
Section 10.06 | Good Standing Certificate of Purchaser |
41 | ||||
ARTICLE XI INDEMNIFICATION | 42 | |||||
Section 11.01 | Indemnification by Seller |
42 | ||||
Section 11.02 | Indemnification by Purchaser |
43 | ||||
Section 11.03 | Other Rights |
44 | ||||
ARTICLE XII MISCELLANEOUS | 44 | |||||
Section 12.01 | Costs and Expenses |
44 | ||||
Section 12.02 | Confidentiality |
44 | ||||
Section 12.03 | Brokers Fees |
45 | ||||
Section 12.04 | Relationship of Parties |
46 | ||||
Section 12.05 | Survival of Representations and Warranties |
46 | ||||
Section 12.06 | Notices |
46 | ||||
Section 12.07 | Waivers |
46 | ||||
Section 12.08 | Entire Agreement; Amendment |
47 | ||||
Section 12.09 | Binding Effect |
47 | ||||
Section 12.10 | Headings |
47 | ||||
Section 12.11 | Applicable Law |
47 | ||||
Section 12.12 | Incorporation of Exhibits |
47 | ||||
Section 12.13 | Counterparts |
48 | ||||
Section 12.14 | Severability of Provisions |
48 | ||||
Section 12.15 | Assignment |
48 | ||||
Section 12.16 | Termination |
48 | ||||
Section 12.17 | Third Party Beneficiaries |
49 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement
Annex A
Exhibit B Example of Calculations of Maximum Retained Refinancing Loan Amounts Exhibit
C Schedule of Mortgage Loans Exhibit
D Sellers Officers Certificate Exhibit
E Purchasers Officers Certificate Exhibit
F Location of Credit Files Exhibit
G Form of Summary Remittance Report Exhibit
H Form of Delinquency Report Exhibit
I Form of Disbursement Report Exhibit
J Seller Jurisdictions and Recording Offices
iv
FUTURE SPREAD AGREEMENT FOR FHLMC MORTGAGE LOANS
This FUTURE SPREAD AGREEMENT FOR FHLMC MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR IX LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of the date hereof (as amended, restated, or otherwise modified and in effect, the Current Spread Agreement), pursuant to which Purchaser will purchase and assume all right, title and interest in the excess servicing spread with respect to a pool of residential mortgage loans to be serviced by Seller;
WHEREAS, Seller desires to retain the right to refinance the residential mortgage loans in the pool, and Purchaser is willing to grant such right, as long as the excess servicing spread with respect to the newly-originated residential mortgage loans and replacement residential mortgage loans is assigned to the Purchaser as described herein; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which residential mortgage loans in the pool may be refinanced.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
1
Agency: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, the Federal National Mortgage Association, or any successor thereto, the Government National Mortgage Association, or any successor thereto, the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto, the Department of Veterans Affairs, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An assignment agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Assignment Date: With respect to a Refinanced Mortgage Loan and its related Mortgage Loan, the Distribution Date in the third calendar month following the Refinanced Mortgage Loans Refinancing Date.
Available Portfolio: As defined in Section 3.04(a) hereof.
Bank: Wells Fargo Bank, National Association, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Future Spread Custodial Account Control Agreement or the Future Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: With respect to the Mortgage Loans (other than GNMA Mortgage Loans), 0.06% per annum and with respect to GNMA Mortgage Loans, 0.12% per annum.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Carryover Retained Amount: As defined in Section 3.03 hereof.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: As defined in Section 2.02 hereof.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the servicing of a Mortgage Loan.
Current Mortgage Loan: A residential mortgage loan that is a Mortgage Loan under the Current Spread Agreement.
Current Spread Agreement: As defined in the recitals to this Agreement.
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the first Assignment Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
3
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the first Assignment Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) the Owner Consents relating to such Servicing Agreement have been obtained;
(b) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (b) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(c) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(d) with respect to any Servicing Agreement relating to Non-Agency Mortgage Loans, an agreement pursuant to which the Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Excess Refinancing Percentage: As defined in Section 3.03 hereof.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
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Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, Seller and Purchaser, in form and substance reasonably acceptable to Purchaser, dated on or before the Sale Date, pursuant to which the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Federal National Mortgage Association, or any successor thereto, Seller and MSR X LLC, in form and substance reasonably acceptable to MSR X LLC, dated on or before the Sale Date, pursuant to which the Federal National Mortgage Association, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
Future Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Future Excess Servicing Spread Percentage.
Future Excess Servicing Spread Assignment Obligation: As defined in Section 3.01 hereof.
Future Excess Servicing Spread Percentage: A percentage equal to the Current Excess Servicing Spread Percentage in the Current Spread Agreement.
Future Excess Servicing Spread Rights: As defined in Section 3.01 hereof.
Future Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Future Spread Custodial Account.
Future Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Future Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account: The account specified in the Future Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser.
Future Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Future Spread Reserve Account.
Future Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Future Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
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Future Spread Reserve Account Deposit Event: As defined in Section 4.03(c) hereof.
Future Spread Reserve Account Required Amount: As defined in Section 4.03(c) hereof.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
GNMA: Government National Mortgage Association, or any successor thereto.
GNMA Acknowledgment Agreement: The acknowledgment agreement by and among GNMA, or any successor thereto, Seller and MSR XI LLC, in form and substance reasonably acceptable to MSR XI LLC, dated on or before the Sale Date, pursuant to which GNMA, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
GNMA Mortgage Loan: A Mortgage Loan which is owned by GNMA, or any successor thereto.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: As defined in Section 8.06 hereof.
HAMP Loans: As defined in Section 8.06 hereof.
Holder Register: As defined in Section 12.15(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Future Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) and (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Maximum Retained Refinancing Loan Amount: As defined in Section 3.03 hereof.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: A residential mortgage loan that satisfies the conditions set forth in Section 3.02 and whose Future Excess Servicing Spread is assigned to Purchaser hereunder in satisfaction of Sellers Future Excess Servicing Spread Assignment Obligation.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Loan Identification Date: With respect to a Refinanced Mortgage Loan and its related replacement Mortgage Loan, the 25th day of the second calendar month following the Refinanced Mortgage Loans Refinancing Date.
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Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
New Mortgage Loan: As defined in Section 3.02(a)(i)(1) hereof.
Non-Agency Mortgage Loan: Any Mortgage Loan where the Owner is not an Agency.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: As defined in Section 4.03(c) hereof.
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, including the FHLMC Acknowledgment Agreement, the FNMA Acknowledgment Agreement and GNMA Acknowledgment Agreement, if applicable, pursuant to which an Owner approves or consents to the sale of the Future Excess Servicing Spread from Seller to Purchaser and any other consents, acknowledgements or similar instruments that may be required from an Owner in connection with the transactions contemplated herein.
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Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of an Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Future Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: As defined in Section 4.04 hereof.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: As defined in Section 4.01 hereof.
Purchaser: As defined in the preamble hereof.
Purchaser Indemnitees: As defined in Section 11.01(a) hereof.
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
Quarterly Collection Period: As defined in Section 3.03 hereof.
Refinanced Mortgage Loan: A Current Mortgage Loan or a Mortgage Loan that has been refinanced in whole or in part by Seller or an affiliate thereof.
Refinancing Date: The date on which a Current Mortgage Loan or Mortgage Loan is refinanced by Seller or an affiliate thereof.
Refinancing Split Percentage: As defined in Section 3.03 hereof.
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REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Collection Period: With respect to an Assignment Date, the Collection Period in the third calendar month prior to such Assignment Date, and with respect to a Mortgage Loan Identification Date, the second calendar month prior to such Mortgage Loan Identification Date.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: As defined in Section 4.03(c) hereof.
Replacement Portfolio: As defined in Section 3.04(a) hereof.
Replacement Shortfall: As defined in Section 3.03 hereof.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Portfolio: As defined in Section 3.04(a) hereof.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to 100% minus the Future Excess Servicing Spread Percentage.
Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related assignment agreement under the Current Spread Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (c) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Future Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement as updated by the Seller and Purchaser on each Assignment Date and maintained as Exhibit C hereto.
Selection Period: As defined in Section 3.04(b) hereof.
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Seller: As defined in the preamble hereof.
Seller Indemnitees: As defined in Section 11.02 hereof.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans, or with respect to Mortgage Loans owned by the Seller, the credit and collection standards, policies, procedures and practices of Seller relating to residential mortgage loans owned and serviced by Seller.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: As defined in Section 12.15 hereof.
Third Party Assignment: As defined in Section 12.15 hereof.
Third Party Future Spread Agreement: As defined in Section 12.15 hereof.
Third Party Claim: As defined in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Future Spread Custodial Account: The account specified in the Future Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections, all Sales Proceeds and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all other amounts payable by an
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Owner to Seller (or Purchaser under an Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by an Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements and (c) all Sales Proceeds received during such Collection Period.
Transaction Documents: The Future Spread Custodial Account Agreement, the Future Spread Custodial Account Control Agreement, the Future Spread Reserve Account Agreement, the Future Spread Reserve Account Control Agreement, the Current Spread Agreement and this Agreement.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
ITEMS TO BE DELIVERED
Section 2.01 Items to be Delivered.
(a) On the Agreement Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) This Agreement;
(ii) The Current Spread Agreement and all agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Agreement Date, if any;
(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) The executed Future Spread Custodial Account Agreement;
(ii) The executed Future Spread Custodial Account Control Agreement;
(iii) The executed Future Spread Reserve Account Agreement;
(iv) The executed Future Spread Reserve Account Control Agreement;
(v) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(vi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Future Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(vii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Future Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(viii) The duly executed corporate certificate of Seller required by Section 9.07;
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(ix) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Seller;
(x) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xi) The duly executed corporate certificate of Purchaser required by Section 10.05;
(xii) A certificate of good standing of Purchaser dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser;
(xiii) A UCC-1 financing statement relating to the sale of the Future Excess Servicing Spread and relating to the security interest of Purchaser in the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, in form and substance reasonably acceptable to Purchaser; and
(xiv) All agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Sale Date.
(c) On or before the Assignment Date with respect to a Mortgage Loan, Seller shall provide Purchaser with executed copies of the related Owner Consents, and any amendments thereto.
(d) On or before the first Assignment Date, the executed Power of Attorney.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Future Excess Servicing Spread and perform its obligations hereunder, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
ARTICLE III
REPLACEMENT OF MORTGAGE LOANS
Section 3.01 Refinancing and Substitution of Mortgage Loans.
Subject to, and upon the terms and conditions of this Agreement, and, more particularly, the conditions of this ARTICLE III, if Seller or any of its affiliates refinances any Current Mortgage Loan or Mortgage Loan, it shall designate a residential mortgage loan as a replacement
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Mortgage Loan pursuant to this ARTICLE III and assign the Future Excess Servicing Spread with respect to such replacement Mortgage Loan on the applicable Assignment Date to Purchaser as provided in this Agreement (such obligations of Seller, the Future Excess Servicing Spread Assignment Obligation), and the rights of Purchaser to such Future Excess Servicing Spread, the Future Excess Servicing Spread Rights).
Section 3.02 Criteria for Mortgage Loans.
(a) As of the applicable Assignment Date, unless otherwise agreed upon by Seller and Purchaser, either:
(i) The Mortgage Loan shall satisfy the following criteria:
(1) The proceeds of such Mortgage Loan (the New Mortgage Loan) were use to repay the Refinanced Mortgage Loan in whole or in part;
(2) All consents, if any, required by the applicable Owner to assign the related Future Excess Servicing Spread with respect to the New Mortgage Loan shall have been obtained;
(3) The servicing fee rate for the New Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such New Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such New Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such New Mortgage Loan is owned by GNMA; and
(4) The New Mortgage Loan is secured by the same property as the Refinanced Mortgage Loan; or
(ii) if Seller is unable to satisfy the conditions in Section 3.02(a)(i) after using commercially reasonable efforts, Seller shall use its best efforts to substitute the New Mortgage Loan with a Mortgage Loan satisfying the following criteria:
(1) The servicing fee rate (which results in the Servicing Spread Collections) for the Mortgage Loan is equal to or greater than the servicing fee rate of the New Mortgage Loan; provided however if the servicing fee rate of the New Mortgage Loan is less than the applicable rate set forth in Section 3.02(a)(i)(3), the servicing fee rate on the Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such Mortgage Loan is owned by GNMA;
(2) The interest accrual rate per annum on the Mortgage Loan is within 12.5 basis points per annum of the interest accrual rate on the New Mortgage Loan;
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(3) The final maturity date of the Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;
(4) The principal balance of the Mortgage Loan is no less than the principal balance of the Refinanced Mortgage Loan;
(5) The remaining credit characteristics of the Mortgage Loan (other than as specified in clauses (1), (2), (3) and (4) above) are substantially the same as the credit characteristics of the New Mortgage Loan;
(6) The Mortgage Loan is current as of the applicable Assignment Date; and
(7) The Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not in process of any modification, workout or other loss mitigation process; and is not involved in litigation.
(b) If a New Mortgage Loan would otherwise meet the criteria set forth in Section 3.02(a)(i) and is still owned by Seller as of the Mortgage Loan Identification Date, in lieu of a substitution pursuant to Section 3.02(a)(ii) above, the Seller may include such New Mortgage Loan as a Mortgage Loan in the Available Portfolio; provided (i) the servicing fee rate (which results in the Servicing Spread Collections) for such Mortgage Loan shall be deemed to be 0.30% per annum and (ii) if at any time such Mortgage Loan fails to otherwise meet the criteria set forth in Section 3.02(a)(i) (e.g. the Mortgage Loan is sold to an Agency and the Seller is unable to obtain an Owner Consent), the Seller shall be required to substitute a loan for such New Mortgage Loan pursuant to Section 3.02(a)(ii) above.
(c) Notwithstanding the provisions of Section 3.02(a)(ii)(4), Seller shall not be in breach of Section 3.01 on any Assignment Date if, after using best efforts to select residential mortgage loans to substitute New Mortgage Loans pursuant to Section 3.02(a)(ii), the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date is equal to or greater than 90% of the aggregate outstanding principal balance of the New Mortgage Loans during the Related Collection Period as measured on the opening of business on their respective Refinancing Date.
Section 3.03 Refinancing Incentives.
For any Assignment Date beginning with the Assignment Date in the sixth calendar month after the Sale Date and subject to Section 4.04 hereof, Sellers Future Excess Servicing Spread Assignment Obligation shall be reduced by the Maximum Retained Refinancing Loan Amount for such Assignment Date. For purposes of this Section 3.03, the following definitions shall apply:
Replacement Shortfall: With respect to any Assignment Date and the Related Collection Period, the aggregate outstanding principal balance of the New Mortgage Loans that were originated by Seller or an affiliate thereof during the Related Collection Period as measured on the opening of business on their respective Refinancing Date, minus the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date.
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Excess Refinancing Percentage: With respect to any Assignment Date, a percentage equal to the excess, if any, of (a) a fraction, expressed as a percentage, the numerator of which is equal to the aggregate principal balance of New Mortgage Loans that were originated by Seller or an affiliate thereof over the Related Collection Period and the two Collection Periods immediately prior to such Related Collection Period (the Quarterly Collection Period) as measured on their respective Refinancing Date, minus the aggregate Replacement Shortfall over such Quarterly Collection Period, and the denominator of which is the aggregate principal balance of all Mortgage Loans that voluntarily prepaid in full over the Quarterly Collection Period (measured as of the date of such prepayment), over (b) 35%.
Refinancing Split Percentage: With respect to any Assignment Date, the Refinancing Split Percentage shown in the column of the table below corresponding to the Excess Refinancing Percentage therein:
Three Month Average Recapture Percentage |
Excess Refinancing Percentage |
Refinancing Split Percentage | ||
35% or Less | 0% | 0% | ||
> 35%, <= 40% | >0.00% and <=5.00% | 25% | ||
> 40%, <= 45% | >5.00% and <=10.00% | 30% | ||
> 45%, <= 50% | >10.00% and <=15.00% | 35% | ||
> 50%, <= 55% | >15.00% and <=20.00% | 40% | ||
> 55%, <= 60% | >20.00% and <=25.00% | 45% | ||
Greater than 60% | >25.00% | 50% |
Maximum Retained Refinancing Loan Amount: With respect to any Assignment Date, an amount, not less than zero, equal to the sum of (a) the product of (i) the Refinancing Split Percentage, if any, applicable to such Assignment Date, (ii) the Excess Refinancing Percentage applicable to such Assignment Date and (iii) the aggregate principal balance of New Mortgage Loans that were refinanced with Seller or an affiliate thereof during the Related Collection Period, plus (b) the Carryover Retained Amount, minus (c) the applicable Replacement Shortfall.
Carryover Retained Amount: With respect to any Assignment Date beginning with the Assignment Date in the seventh calendar month after the Sale Date, the excess, if any, of the Maximum Retained Refinancing Loan Amount for the prior Assignment Date over the aggregate outstanding principal balance of the Mortgage Loans that were retained by Seller pursuant to this Section 3.03 on the prior Assignment Date.
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Section 3.04 Selection Procedures.
(a) Not later than the Mortgage Loan Identification Date, Seller shall (i) notify Purchaser of the identity of each Current Mortgage Loan and each Mortgage Loan that became a Refinanced Mortgage Loan during the Related Collection Period, (ii) calculate the Excess Refinancing Percentage, the Refinancing Split Percentage, the Maximum Retained Refinancing Loan Amount and the Carryover Retained Amount for the following Assignment Date, and notify Purchaser of such amounts in writing, (iii) provide Purchaser with a list of potential Mortgage Loans (the Available Portfolio), selected on the basis that the Excess Refinancing Percentage is equal to zero, and (iv) provide Purchaser with a list of residential mortgage loans selected from the Available Portfolio to be designated as Mortgage Loans (the Replacement Portfolio) on the following Assignment Date and a list of residential mortgage loans selected from the Available Portfolio to be excluded from the pool of Mortgage Loans (the Retained Portfolio) on the following Assignment Date in accordance with Section 3.03.
(b) Purchaser may submit an objection to the proposed Available Portfolio, the proposed Replacement Portfolio or the proposed Retained Portfolio not later than five Business Days following receipt of the notice of the proposed portfolios pursuant to Section 3.04(a). If Purchaser submits an objection, Seller and Buyer shall work together in good faith over the next five Business Days (the Selection Period) to mutually agree on the Replacement Portfolio and the Retained Portfolio. During the Selection Period, Seller may suggest alternative Mortgage Loans that meet the criteria of Section 3.02. If Seller and Purchaser are unable to agree on a Replacement Portfolio and a Retained Portfolio (if applicable) by close of business on the Business Day prior to the Assignment Date, Seller and Purchaser may modify the percentages in the definitions of Future Excess Servicing Spread and Retained Servicing Spread and in the Priority of Payments, as applicable, to reflect the relative values that Seller and Purchaser would have had in the Future Excess Servicing Spread and Retained Servicing Spread but for the inability of Seller and Purchaser to mutually agree on such portfolios.
(c) Unless mutually agreed upon by Seller and Purchaser, the Retained Portfolio and the Replacement Portfolio with respect to any Assignment Date shall satisfy the following criteria:
(i) The aggregate outstanding principal balance of the residential mortgage loans in the Retained Portfolio shall not exceed the Maximum Retained Refinancing Loan Amount;
(ii) The weighted average servicing fee rate for the residential mortgage loans in the Retained Portfolio shall be substantially equal to the weighted average servicing fee rate for the Mortgage Loans in the Replacement Portfolio;
(iii) The weighted average interest accrual rate per annum of the residential mortgage loans in the Retained Portfolio shall be within 12.5 basis points per annum of the weighted average interest rate of the Mortgage Loans in the Replacement Portfolio;
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(iv) The weighted average final maturity date of the residential mortgage loans in the Retained Portfolio shall be within six months of the weighted average final maturity date of the Mortgage Loans in the Replacement Portfolio; and
(v) The remaining credit characteristics of the pool of residential mortgage loans in the Retained Portfolio (other than as specified in clauses (ii), (iii) and (iv) above) shall be substantially the same as the credit characteristics of the pool of Mortgage Loans in the Replacement Portfolio.
(d) Exhibit B provides an example of the calculations to be made pursuant to Section 3.04(c)(i).
Section 3.05 Assignment of Future Excess Servicing Spread.
Subject to the satisfaction of the terms and conditions in this Agreement, on each Assignment Date, Seller shall execute and deliver an Assignment Agreement for the Future Excess Servicing Spread to be assigned on such Assignment Date with respect to the Mortgage Loans included in the applicable Replacement Portfolio; provided, however, that
(a) Purchaser shall be entitled to all Future Excess Servicing Spread and Seller shall be entitled to all Retained Servicing Spread arising with respect to each such Mortgage Loan on and after the Refinancing Date with respect to the related Refinanced Mortgage Loan,
(b) Seller shall deposit all Servicing Spread Collections received with respect to such Mortgage Loans on and after the Refinancing Date with respect to the related Refinanced Mortgage Loans into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date, and
(c) for each Mortgage Loan that was originated on or after the Refinancing Date of the related Refinanced Mortgage Loan, Seller shall deposit all Servicing Spread Collections with respect to amounts prepaid at the time of closing of such Mortgage Loan, if applicable, into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date.
ARTICLE IV
PAYMENTS AND DISTRIBUTIONS
Section 4.01 Purchase Price.
In full consideration for Purchasers right to receive any Future Excess Servicing Spread assigned to Purchaser, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Purchase Price) that shall be determined by the Parties on the Sale Date in accordance with Section 3.01 of the Current Spread Agreement.
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Section 4.02 Payments by Purchaser.
Payment shall be made by Purchaser to Seller by wire transfer of immediately available federal funds, to an account designated by Seller.
Section 4.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments to the Lockbox Account. Payments of all Servicing Spread Collections received on and after the first Assignment Date shall be transferred from the Lockbox Account to the Third Party Controlled Future Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Future Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Future Spread Custodial Account.
(i) The Third Party Controlled Future Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Sales Proceeds and Servicing Agreement termination payments with respect to the Mortgage Loans. The Third Party Controlled Future Spread Custodial Account will be established pursuant to the Future Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Future Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Future Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Future Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Future Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable with respect to the Mortgage Loans directly to the Third Party Controlled Future Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Future Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
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(iii) If Seller is to receive any Sales Proceeds, Seller shall direct the Person making such payments to deposit such payments into the Third Party Controlled Future Spread Custodial Account.
(iv) If Seller receives any amounts required to be deposited into the Third Party Controlled Future Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Future Spread Custodial Account.
(c) Future Spread Reserve Account. The Future Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Future Spread Reserve Account will be established pursuant to the Future Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Future Spread Reserve Account strictly in accordance with Section 4.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Future Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Future Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Future Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Future Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Future Spread Custodial Account to the Future Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Future Spread Reserve Account is equal to the Future Spread Reserve Account Required Amount. The Future Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Future Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Future Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Future Spread Reserve Account in excess of the Future Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Future Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers
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receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 4.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Future Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Future Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Future Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Future Spread Custodial Account attributable to Servicing Agreement termination payments paid by an Owner with respect to any Mortgage Loans, pro rata, (A) the Future Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Excess Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
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(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 4.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Future Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); provided, that (I) prior to the distribution to Purchaser of any Future Excess Servicing Spread pursuant to clause (A), the Future Excess Servicing Spread shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Future Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 4.05 Withdrawals from the Future Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Future Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Future Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Future Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Future Spread Reserve Account after the Future Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
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Section 4.06 Payment to Seller of Base Servicing Fee.
(a) Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Future Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Future Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
(b) The Base Servicing Fee with respect to a Mortgage Loan shall begin to accrue as of the Collection Period prior to the applicable Assignment Date. In no event shall Base Servicing Fees accrue concurrently on any day for a Refinanced Mortgage Loan and for a Mortgage Loan.
Section 4.07 Correction of Principal Balance Error.
If, subsequent to the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile such amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 4.08 Intent and Characterization.
(a) Seller and Purchaser intend that the assignments of the Future Excess Servicing Spread pursuant to this Agreement and each Assignment Agreement constitute valid sales of such Future Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to such Future Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Future Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the aggregate Purchase Price (as defined in the Current Spread Agreement).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Owner Consents.
Prior to an Assignment Date, Seller has obtained all necessary and applicable Owner Consents.
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Section 5.04 Title to the Mortgage Servicing Rights.
As of an Assignment Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Future Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Future Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Future Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Future Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Future Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
As of the applicable Assignment Date, Seller is approved by each applicable Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with the applicable Agency eligibility requirements or which would require notification to the applicable Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for any Agency which is an Owner of a Mortgage Loan.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system or another similar system reasonable acceptable to the Purchaser.
Section 5.09 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to an Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including without limitation any unmet mortgage repurchase obligation), (ii) any unperformed obligation with
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respect to mortgage loans that Seller is servicing for an Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to an Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to an Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Future Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Future Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Future Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 Purchase of Mortgage Servicing Rights.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of each Assignment Date (or as of the date specified below, as applicable), as follows:
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Section 6.01 Servicing Agreements; Applicable Laws.
Seller, the originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.04 Location of Credit Files.
All of the Mortgage Loan Documents are held by Custodians or, if held by the Seller, in the locations specified in Exhibit F, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by Seller in Exhibit F.
Section 6.05 Representations Concerning the Future Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Future Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Future Excess Servicing Spread, Seller was the sole owner of the Future Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the applicable Owner under the Servicing Agreements), free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Future Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Future Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Future Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
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(c) As contemplated under Section 4.08(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Future Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit J attached hereto, the sale and security interests granted hereunder in the Future Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Future Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Future Excess Servicing Spread, and the Future Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to applicable Owner Consents.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Seller as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
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Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Future Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and, with respect to any Mortgage Loans owned by an Agency, such Agency.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller.
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(c) With respect to any Servicing Agreement relating to a Non-Agency Mortgage Loan, subject to a nonrecoverability determination made in accordance with the related Servicing Agreement and to the extent the Seller as servicer has an obligation to advance principal and interest on delinquent Mortgage Loans, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
(d) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(e) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of each Agency relating to the Mortgage Loans.
Section 8.02 Cooperation; Further Assurances
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser, in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Future Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of its Future Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Future Spread Agreement in accordance with Section 12.15.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Future Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Future Excess Servicing Spread, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the applicable Assignment Date with respect to each Mortgage Loan, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Future Excess Servicing Spread.
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Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Current Mortgage Loan and each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to each of the pool of Current Mortgage Loans and the pool of Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
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(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
(ix) aggregate principal balance of Refinanced Mortgage Loans, and (1) for each Refinanced Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Current Mortgage Loan and each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Current Mortgage Loans and Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans and percentages of the aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Non-delinquent Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Current Mortgage Loans and Mortgage Loans in Foreclosure,
(7) Current Mortgage Loans and Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Current Mortgage Loans and Mortgage Loans in which the Mortgagor is in bankruptcy;
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(ii) For each of the above categories, a roll report showing the migration of Current Mortgage Loans and Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Future Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Future Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Future Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Current Mortgage Loans and Mortgage Loans and the performance of the parties under the Transaction Documents.
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Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to an Owner in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the applicable Owner that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the applicable Owner that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the applicable Owner will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Current Mortgage Loans or Mortgage Loans owned by Seller which do not affect the Future Excess Servicing Spread with respect to such Current Mortgage Loans or Mortgage Loans and are not reasonably material to the Purchaser.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
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Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from the applicable Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the applicable Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and that Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Future Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Future Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, without limitation, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
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(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit J unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party and each other agreement entered into with an Owner.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Future Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Schedule of Mortgage Loans.
Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of each Assignment Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
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Section 8.21 True Sale Opinion.
Seller shall cause a written opinion of counsel to be furnished, in form and substance satisfactory to Purchaser, dated the Sale Date with respect to the characterization of the transfer of the Future Excess Servicing Spread by Seller to Purchaser as a true sale. Purchaser may request additional opinions regarding such characterization subsequent to the Sale Date as advised by Purchasers counsel in light of changes in law and other circumstances. To the extent Seller is unable to provide such opinions with respect to any Mortgage Loans, Seller shall substitute such Mortgage Loans with residential mortgage loans have substantially the same credit characteristics.
Section 8.22 Valuation.
As of the Sale Date, Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Future Excess Servicing Spread is fair and reasonable.
Section 8.23 Material Documents.
Seller shall provide Purchaser with executed copies of all material agreements and documents, and any amendments thereto, as of each Assignment Date relating to Sellers acquisition of the related Mortgage Servicing Rights and the servicing of the Mortgage Loans assigned.
Section 8.24 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.25 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to all Future Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.26 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Purchaser shall have received from Seller a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Future Excess Servicing Spread.
Section 9.05 Consents.
The Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Sale Date, and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
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Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to Purchaser copies of each executed Transaction Document that is to be entered on or prior to the Sale Date in the form and substance acceptable to the Purchaser and each of the items required to be delivered pursuant to Section 2.01 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.01(b)(v), Section 2.01(b)(vi) and Section 2.01(b)(vii).
Section 9.09 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.10 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
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Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Sale Date are true and correct in all material respects.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 10.03 Corporate Resolution.
Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit E, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Agreement Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Agreement Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreement termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Future Excess Servicing Spread; and
(v) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(iv) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01(a) but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01(a). Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01(a) or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account.
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(b) REIT Requirements. Notwithstanding anything in Section 11.01(a), in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under Section 11.01(a) hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to Section 11.01 of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
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(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Purchaser and Seller shall each pay the expenses incurred by it or its affiliates pursuant to the Current Spread Agreement in connection with the transactions contemplated hereby.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift
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Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
45
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date and each applicable Assignment Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
46
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
47
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Future Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Future Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Future Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Future Excess Servicing Spread and each holders interest in the Future Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.15(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Future Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.16 Termination.
If the Current Spread Agreement is terminated on or prior to the Sale Date, this Agreement shall terminate and neither Party shall have any further obligations to the other Party hereunder.
48
Section 12.17 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
49
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR IX LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
50
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Future Spread Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR IX LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Future Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the applicable Assignment Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
51
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE,
CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) | (e) | (g) | (h) | (i) (column (g) column (h)) |
(j) ([ ]% of column (i)) | ||||||||
Refinancing |
Loan #
of |
Principal Loan |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Assignment Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Future Excess Servicing Spread |
52
EXHIBIT B
Example of calculations of Maximum Retained Refinancing Loan Amounts
Recaptured Loan Incentive | Range of Loans Retained as a Percentage of Total Recapture | |||||
3 Month Avg Recapture |
Retained Percentage(1) |
Nationstar | Portfolio | |||
35% or Less |
0% | 0.00% | 100.00% | |||
> 35%, <= 40% |
25% | 0.00% to 1.25% | 100.00% to 98.75% | |||
> 40%, <= 45% |
30% | 1.50% to 3.00% | 98.50% to 97.00% | |||
> 45%, <= 50% |
35% | 3.50% to 5.25% | 96.50% to 94.75% | |||
> 50%, <= 55% |
40% | 6.00% to 8.00% | 94.00% to 92.00% | |||
> 55%, <= 60% |
45% | 9.00% to 11.25% | 91.00% to 88.75% | |||
> 60%, <= 65% |
50% | 12.50% to 15.00% | 87.50% to 85.00% | |||
> 65%, <= 70% |
50% | 15.00% to 17.50% | 85.00% to 82.50% | |||
> 70%, <= 75% |
50% | 17.50% to 20.00% | 82.50% to 80.00% | |||
Greater than 75% |
50% | 20.00% to 32.50% | 80.00% to 67.50% |
1 | Represents the percentage of loans Seller retains above 35% recapture. |
53
EXHIBIT C
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT D
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Future Spread Agreement for FHLMC Mortgage Loans by and between MSR IX LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Section 9.04 and Section 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: | ||
EXHIBIT E
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR IX LLC (the Company), pursuant to Section 10.05 of the Future Spread Agreement for FHLMC Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) The condition set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR IX LLC | ||
By: [ ], as member | ||
By: |
EXHIBIT F
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT G
FORM OF SUMMARY REMITTANCE REPORT
[SEPARATELY DELIVERED]
EXHIBIT H
FORM OF DELINQUENCY REPORT
[SEPARATELY DELIVERED]
EXHIBIT I
FORM OF DISBURSEMENT REPORT
[SEPARATELY DELIVERED]
EXHIBIT J
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
61
Exhibit 10.48
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT
FOR FHLMC MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR IX LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
2 | |||||
Section 1.01 |
Definitions | 2 | ||||
Section 1.02 |
General Interpretive Principles | 13 | ||||
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED |
14 | |||||
Section 2.01 |
Sale of Current Excess Servicing Spread | 14 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
Section 2.03 |
Items to be Delivered on the Agreement Date | 14 | ||||
Section 2.04 |
Items to be Delivered on the Sale Date | 15 | ||||
Section 2.05 |
Sale Date Transactions | 17 | ||||
ARTICLE III PAYMENTS AND DISTRIBUTIONS |
17 | |||||
Section 3.01 |
Purchase Price | 17 | ||||
Section 3.02 |
Payments by Purchaser | 18 | ||||
Section 3.03 |
Accounts | 18 | ||||
Section 3.04 |
Priority of Payments | 21 | ||||
Section 3.05 |
Withdrawals from the Current Spread Reserve Account | 22 | ||||
Section 3.06 |
Payment to Seller of Base Servicing Fee | 22 | ||||
Section 3.07 |
Intent and Characterization | 23 | ||||
ARTICLE IV [RESERVED] |
24 | |||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||||
Section 5.01 |
Due Organization and Good Standing | 24 | ||||
Section 5.02 |
Authority and Capacity | 24 | ||||
Section 5.03 |
Agency Consents | 25 | ||||
Section 5.04 |
Title to the Mortgage Servicing Rights | 25 | ||||
Section 5.05 |
Effective Agreements | 25 | ||||
Section 5.06 |
No Accrued Liabilities | 25 | ||||
Section 5.07 |
Seller/Servicer Standing | 25 | ||||
Section 5.08 |
MERS Membership | 26 | ||||
Section 5.09 |
Agency Set-off Rights | 26 | ||||
Section 5.10 |
Ability to Perform; Solvency | 26 | ||||
Section 5.11 |
Material Documents | 26 | ||||
Section 5.12 |
Obligations with Respect to Origination | 26 | ||||
Section 5.13 |
No Actions | 26 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
27 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 27 |
i
Section 6.02 |
Related Escrow Accounts | 27 | ||||
Section 6.03 |
Accuracy of Servicing Information | 27 | ||||
Section 6.04 |
No Purchaser Responsibility | 27 | ||||
Section 6.05 |
Location of Credit Files | 28 | ||||
Section 6.06 |
Representations Concerning the Current Excess Servicing Spread | 28 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
29 | |||||
Section 7.01 |
Due Organization and Good Standing | 29 | ||||
Section 7.02 |
Authority and Capacity | 29 | ||||
Section 7.03 |
Effective Agreements | 29 | ||||
Section 7.04 |
Sophisticated Investor | 30 | ||||
Section 7.05 |
No Actions | 30 | ||||
ARTICLE VIII SELLER COVENANTS |
30 | |||||
Section 8.01 |
Servicing Obligations | 30 | ||||
Section 8.02 |
Cooperation; Further Assurances | 31 | ||||
Section 8.03 |
Financing Statements | 31 | ||||
Section 8.04 |
Supplemental Information | 31 | ||||
Section 8.05 |
Access to Information | 31 | ||||
Section 8.06 |
Home Affordable Modification Program | 32 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 32 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 34 | ||||
Section 8.09 |
Monthly Management Calls | 35 | ||||
Section 8.10 |
Timely Payment of Agency Obligations | 35 | ||||
Section 8.11 |
Servicing Agreements | 35 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 36 | ||||
Section 8.13 |
Consents to Transaction Documents | 36 | ||||
Section 8.14 |
Accounts | 36 | ||||
Section 8.15 |
Notification of Certain Events | 36 | ||||
Section 8.16 |
Financing; Pledge of Current Excess Servicing Spread | 37 | ||||
Section 8.17 |
Existence, etc | 37 | ||||
Section 8.18 |
Consent to Sub-Servicing | 38 | ||||
Section 8.19 |
Nonpetition Covenant | 38 | ||||
Section 8.20 |
Data Tape; Schedule of Mortgage Loans | 38 | ||||
Section 8.21 |
Insurance | 38 | ||||
Section 8.22 |
Defense of Title | 39 | ||||
Section 8.23 |
Refinancing of Mortgage Loans | 39 | ||||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
39 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 39 | ||||
Section 9.02 |
Compliance with Conditions | 39 |
ii
Section 9.03 |
Corporate Resolution | 39 | ||||
Section 9.04 |
No Material Adverse Change | 40 | ||||
Section 9.05 |
Consents | 40 | ||||
Section 9.06 |
Delivery of Transaction Documents | 40 | ||||
Section 9.07 |
Certificate of Seller | 40 | ||||
Section 9.08 |
Valuation | 41 | ||||
Section 9.09 |
Opinions of Counsel | 41 | ||||
Section 9.10 |
Acquisition of Mortgage Servicing Rights by Seller | 41 | ||||
Section 9.11 |
Good Standing Certificate of Seller | 41 | ||||
Section 9.12 |
No Actions or Proceedings | 41 | ||||
Section 9.13 |
Fees, Costs and Expenses | 41 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
41 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 42 | ||||
Section 10.02 |
Compliance with Conditions | 42 | ||||
Section 10.03 |
Corporate Resolution | 42 | ||||
Section 10.04 |
No Material Adverse Change | 42 | ||||
Section 10.05 |
Certificate of Purchaser | 42 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 42 | ||||
ARTICLE XI INDEMNIFICATION; CURE |
43 | |||||
Section 11.01 |
Indemnification by Seller | 43 | ||||
Section 11.02 |
Indemnification by Purchaser | 45 | ||||
Section 11.03 |
Award of Damages | 46 | ||||
Section 11.04 |
Other Rights | 47 | ||||
ARTICLE XII MISCELLANEOUS |
47 | |||||
Section 12.01 |
Costs and Expenses | 47 | ||||
Section 12.02 |
Confidentiality | 47 | ||||
Section 12.03 |
Brokers Fees | 48 | ||||
Section 12.04 |
Relationship of Parties | 48 | ||||
Section 12.05 |
Survival of Representations and Warranties | 48 | ||||
Section 12.06 |
Notices | 48 | ||||
Section 12.07 |
Waivers | 49 | ||||
Section 12.08 |
Entire Agreement; Amendment | 49 | ||||
Section 12.09 |
Binding Effect | 50 | ||||
Section 12.10 |
Headings | 50 | ||||
Section 12.11 |
Applicable Law | 50 | ||||
Section 12.12 |
Incorporation of Exhibits | 50 | ||||
Section 12.13 |
Counterparts | 50 | ||||
Section 12.14 |
Severability of Provisions | 50 | ||||
Section 12.15 |
Public Announcement | 51 |
iii
Section 12.16 |
Assignment | 51 | ||||
Section 12.17 |
Termination | 51 | ||||
Section 12.18 |
Third Party Beneficiaries | 52 |
EXHIBITS
Exhibit A Form of Assignment Agreement
Exhibit B Schedule of Mortgage Loans
Exhibit C Sellers Officers Certificate
Exhibit D Purchasers Officers Certificate
Exhibit E Location of Credit Files
Exhibit F Form of Summary Remittance Report
Exhibit G Form of Delinquency Report
Exhibit H Form of Disbursement Report
Exhibit I Seller Jurisdictions and Recording Offices
iv
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR
FHLMC MORTGAGE LOANS
This CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR FHLMC MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR IX LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Bank of America, National Association (Bank of America) have entered into the Purchase and Sale Agreement, pursuant to which, among other things, Seller will acquire and assume all right, title and interest in mortgage servicing rights to a portfolio of residential mortgage loans owned or securitized by the Agency (as defined herein);
WHEREAS, by acquiring such mortgage servicing rights, Seller is entitled to a servicing spread and other incidental fees with respect to the related residential mortgage loans;
WHEREAS, the servicing spread, together with the Ancillary Income (as defined below), exceeds the compensation that Seller requires to service the related residential mortgage loans;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, a portion of the servicing spread that exceeds such required compensation amount; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which Seller will sell, transfer and assign to Purchaser, all of Sellers right, title and interest in and to a portion of the servicing spread that exceeds the Sellers required compensation amount, and Purchaser will purchase all right, title and interest in and to such portion of the servicing spread;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
7 Year Swap Rate: The yield reported by Bloomberg under USSWAP7 <Index> HP <GO> at ten a.m. (10:00 a.m.), East Coast Time, on the applicable date. The 7 Year Swap Rate on December 7, 2012 was 1.1451%.
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with Agency servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
Agency: The Federal Home Loan Mortgage Corporation, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Bank of America: As defined in the recitals hereof.
Bank: Wells Fargo Bank, National Association, or any successor thereto, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Current Spread Custodial Account Control Agreement or the Current Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
2
Base Purchase Price: The meaning given to such term in Section 3.01.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
Base Servicing Fee Rate: 0.09% per annum, except that, for the period during which the Interim Servicer is servicer of the Mortgage Loans, the Base Servicing Fee Rate shall be the lesser of (a) 0.09% per annum or (b) the interim servicing fee payable to the Interim Servicer.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: The meaning given to such term in Section 2.02.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the Servicing of a Mortgage Loan.
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Current Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Current Excess Servicing Spread Percentage.
Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Fannie Mae mortgage loans, dated the date hereof, between the Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Ginnie Mae mortgage loans, dated the date hereof, between the Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Percentage: 66.67%.
Current Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Current Spread Custodial Account.
Current Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Current Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account: The account specified in the Current Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association or any successor thereto, or any other third party custodian or trustee selected by Purchaser.
Current Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Current Spread Reserve Account.
Current Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated on or before the Sale Date, entered into with respect to the Current Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
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Current Spread Reserve Account Deposit Event: The meaning given to such term in Section 3.03(c).
Current Spread Reserve Account Required Amount: The meaning given to such term in Section 3.03(c).
Custodian: A custodian of Credit Files or any part thereof identified by the Seller to the Purchaser in writing on or prior to the Sale Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
Cut-Off Date: The opening of business on the Sale Date.
Data Tape: The list of all mortgage loans, dated as of the date specified therein, whose Mortgage Servicing Rights will be sold, or that are anticipated to be sold, as applicable, to Seller pursuant to the Purchase and Sale Agreement.
Deposit: As defined in Section 3.01 hereof.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the Sale Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (a) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein; and
(b) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause).
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
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Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Federal Funds Rate: For any date of determination, the federal funds rate as reported in the Federal Reserve H.15(519) Statistical Release as of the first Business Day of the month in which such date of determination falls, or if such Statistical Release is no longer published, the average of the high and the low interest rate for reserves traded among commercial banks for overnight use in amounts of one million dollars ($1,000,000.00) or more, as reported by The Wall Street Journal under Federal Funds rates as of the first Business Day of the month in which such date of determination falls.
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the Agency, Seller and Purchaser, in form and substance reasonably acceptable to such purchasers, dated on or before the Sale Date, pursuant to which, among other things, the Agency consents to (a) the sale of the Mortgage Servicing Rights (including the Total Servicing Spread) to Seller and (b) the sale of the Current Excess Servicing Spread from Seller to the Purchaser and any other arrangements specified therein.
FHLMC Mortgage Loans: Each of the Mortgage Loans on the Schedule of Mortgage Loans.
FNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR X LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
Future Spread Agreements: The Future Spread Agreement for FHLMC Mortgage Loans, the Future Spread Agreement for FNMA Mortgage Loans, the Future Spread Agreement for GNMA Mortgage Loans, the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Future Spread Agreement for FHLMC Mortgage Loans: The Future Spread Agreement for FHLMC Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for FNMA Mortgage Loans: The Future Spread Agreement for FNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for GNMA Mortgage Loans: The Future Spread Agreement for GNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
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Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
Ginnie Mae: Government National Mortgage Association, or any successor thereto.
GNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XI LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: The meaning given to such term in Section 8.06.
HAMP Loans: The meaning given to such term in Section 8.06.
Holder Register: As defined in Section 12.16(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Interim Servicer: Bank of America or its successors or assigns acting as interim servicer with respect to the Mortgage Loans pursuant to the interim servicing addendum of the Purchase and Sale Agreement.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Current Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) or (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: Each of those mortgage loans listed on the Schedule of Mortgage Loans.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, reimbursements or indemnification for
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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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
Net Servicing Fee: As defined in the Purchase and Sale Agreement.
Non-Agency Mortgage Loans: Each of the mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XII LLC or MSR XIII LLC pursuant to the applicable Sale Agreement.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: The meaning given to such term in Section 3.03(c).
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner Consent: The FHLMC Acknowledgment Agreement.
Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of the Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Current Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
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Priority of Payments: The meaning given to such term in Section 3.04.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: The meaning given to such term in Section 3.01.
Purchase Price Percentage: 3.11 multiplied by the excess of (i) the Net Servicing Fee (as such Net Servicing Fees are determined in accordance with Exhibit F to the Purchase and Sale Agreement), expressed as an annualized rate on the unpaid principal balances of the related Mortgage Loans as of the Sale Date over (ii) the Base Servicing Fee Rate; provided however, that for every plus or minus 1 basis point (0.01%) movement in the 7 Year Swap Rate between December 7, 2012 and the Sale Date, the Purchase Price Percentage will be adjusted plus or minus by 0. 00065%. As necessary, the percentage to be determined pursuant to this definition will be based on linear interpolation.
Purchased Assets: As defined in the Purchase and Sale Agreement.
Purchaser: As defined in the preamble hereof.
Purchaser Enforcement Expenses: An amount equal to the Current Excess Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Purchaser Indemnitees: The meaning given to such term in Section 11.01(a).
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
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Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: The meaning given to such term in Section 3.03(c).
Repurchase Price: As defined in the Purchase and Sale Agreement.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreement, to the Retained Servicing Spread Percentage of the Total Servicing Spread.
Retained Servicing Spread Percentage: 100% minus the Current Excess Servicing Spread Percentage.
Sale Agreements: This Agreement, the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Sale Date: The Sale Date or the Subsequent Sale Date, in each case, as defined in the Purchase and Sale Agreement with respect to the Mortgage Loans; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (b) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Current Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement delivered initially accordance with Section 2.04, updated in accordance with Section 3.01 and maintained as Exhibit B hereto.
Seller: As defined in the preamble hereof.
Seller Enforcement Expenses: An amount equal to the Retained Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the
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enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Seller Indemnitees: The meaning given to such term in Section 11.02.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller or the Interim Servicer is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from the Agency by Seller in accordance with the Servicing Agreements.
Servicing Transfer Date: As defined in the Purchase and Sale Agreement with respect to the Mortgage Loans.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: The meaning given to such term in Section 12.16.
Third Party Assignment: The meaning given to such term in Section 12.16.
Third Party Current Spread Agreement: The meaning given to such term in Section 12.16.
Third Party Claim: The meaning given to such term in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Current Spread Custodial Account: The account specified in the Current Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
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Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all Sales Proceeds received during such Collection Period; (c) all Repurchase Prices received during such Collection Period; and (d) all other amounts payable by the Agency to Seller (or Purchaser under the Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by the Agency to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from the Agency by Seller in accordance with the Servicing Agreements.
Transaction Documents: The Purchase and Sale Agreement (including any order, bill of sale, assignment agreement or other transfer agreement related to the sale of the Mortgage Servicing Rights thereunder), the Tri-Party Agreement, the Owner Consent, the Current Spread Custodial Account Agreement, the Current Spread Custodial Account Control Agreement, the Current Spread Reserve Account Agreement, the Current Spread Reserve Account Control Agreement, the Sale Agreements and the Future Spread Agreements.
Tri-Party Agreement: An agreement by, between and among Bank of America, the Agency and Seller (including any amendments thereto) pursuant to which the Agency acknowledges that it will look solely to Bank of America or any of its affiliates, and not to Seller, for any claims relating to the selling representations and warranties on Mortgage Loans and the servicing of such Mortgage Loans prior to the Sale Date.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
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(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
ARTICLE II
PROCEDURES; ITEMS TO BE DELIVERED
Section 2.01 Sale of Current Excess Servicing Spread.
Subject to, and upon the terms and conditions of this Agreement, Seller will sell, transfer and assign to Purchaser, and Purchaser will acquire from Seller, all of Sellers right, title and interest in and to the Current Excess Servicing Spread and all proceeds thereof with respect to the Mortgage Loans.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Current Excess Servicing Spread and perform its obligations hereunder and under the Purchase and Sale Agreement, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
Section 2.03 Items to be Delivered on the Agreement Date.
On the Agreement Date, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(a) The Sale Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement on the Agreement Date;
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(b) The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and
(c) The executed Purchase and Sale Agreement.
Section 2.04 Items to be Delivered on the Sale Date.
(a) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) The Owner Consent;
(ii) The Assignment Agreement;
(iii) All agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement and Future Spread Agreement on the Sale Date;
(iv) All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on the Sale Date;
(v) The executed Current Spread Custodial Account Agreement;
(vi) The executed Current Spread Custodial Account Control Agreement;
(vii) The executed Current Spread Reserve Account Agreement;
(viii) The executed Current Spread Reserve Account Control Agreement;
(ix) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
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(x) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(xi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Current Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(xii) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Closing Date to be delivered by Seller;
(xiii) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xiv) An officers certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);
(xv) A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Sale Date;
(xvi) A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Sale Date;
(xvii) A certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser; and
(xviii) A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, in form and substance reasonably acceptable to Purchaser.
(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:
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(i) Any amendments, modifications or restatements of the Purchase and Sale Agreement;
(ii) The bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller;
(iii) The Tri-Party Agreement;
(iv) The executed Power of Attorney; and
(v) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on the Sale Date as of November 30, 2012.
Section 2.05 Sale Date Transactions.
On the Sale Date, subject to the satisfaction of the terms and conditions herein:
(a) The Parties shall execute and deliver the Assignment Agreement;
(b) Purchaser shall remit to Seller the Purchase Price; and
(c) Ownership of the Current Excess Servicing Spread shall be transferred to Purchaser.
ARTICLE III
PAYMENTS AND DISTRIBUTIONS
Section 3.01 Purchase Price.
On the first Business Day following the Agreement Date, Purchaser shall pay Seller an amount (the Deposit) equal to the product of (i) $11,453,605 and (ii) Current Excess Servicing Spread Percentage, without any of the adjustments provided in the Purchase and Sale Agreement for such calculation, as an earnest money deposit.
In full consideration for the purchase of the Current Excess Servicing Spread and the rights under the Future Spread Agreement for FHLMC Mortgage Loans, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Base Purchase
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Price) equal to the product of (x) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-Off Date, (y) the Purchase Price Percentage and (z) the Current Excess Servicing Spread Percentage. The Base Purchase Price shall be allocated by the Parties on the Sale Date to reflect the consideration for the purchase of the Current Excess Servicing Spread hereunder (the Purchase Price) and the consideration for the rights acquired by Purchaser under the Future Spread Agreement for FHLMC Mortgage Loans.
The Base Purchase Price shall be payable by the Purchaser to the Seller as follows: (a) the Deposit shall be payable on the first Business Day following the Agreement Date, (b) 50% of the estimated Base Purchase Price net of the Deposit shall be payable on the Sale Date and (c) the portion of the Base Purchase Price that has not been paid to Seller by Purchaser as of such date, including with respect to Mortgage Loans that have prepaid between the Sale Date and the Servicing Transfer Date, plus interest thereon at the Federal Funds Rate for the period from the Sale Date to the Servicing Transfer Date shall be payable on the Servicing Transfer Date.
The Seller shall deliver the Schedule of Mortgage Loans no later ten (10) Business Days after the Sale Date. In the event there is an adjustment and reconciliation of the Sellers purchase price pursuant to the terms of Section 3.01(d) of the Purchase and Sale Agreement, the Base Purchase Price shall be subject to a corresponding adjustment and any adjustment amounts (including interest) shall be paid by the Purchaser or the Seller, as applicable, to the other party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 3.02 Payments by Purchaser.
(a) Payments shall be made by Purchaser to Seller by wire transfer of immediately available funds to an account designated by Seller.
(b) If, subsequent to the payment of the Purchase Price or the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, or if for any reason the Purchase Price or such other amounts is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price or such other amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 3.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments due on or after the Servicing Transfer Date to the Lockbox Account. All amounts on deposit in the Lockbox Account will be maintained and applied in accordance with the Servicing Agreement. Payments of all Servicing Spread Collections received on and after the Servicing Transfer Date shall be transferred from the
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Lockbox Account to the Third Party Controlled Current Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Current Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Current Spread Custodial Account.
(i) The Third Party Controlled Current Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Servicing Agreement termination payments with respect to the Mortgage Loans, Sales Proceeds and Repurchase Prices. The Third Party Controlled Current Spread Custodial Account will be established pursuant to the Current Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Current Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Current Spread Custodial Account.
(ii) Seller shall inform the Agency to remit the applicable portion of any Servicing Agreement termination payments payable after the Sale Date directly to the Third Party Controlled Current Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Current Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
(iii) Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Custodial Account.
(iv) Seller shall direct Bank of America to remit (i) Servicing Spread Collections received by it prior to the Servicing Transfer Date and (ii) any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Custodial Account.
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(v) If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Custodial Account.
(c) Current Spread Reserve Account. The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Current Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Current Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Current Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Current Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Current Spread Custodial Account to the Current Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Current Spread Reserve Account is equal to the Current Spread Reserve Account Required Amount. The Current Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Current Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Current Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Current Spread Reserve Account in excess of the Current Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Current Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers
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receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 3.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Current Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Current Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Current Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(A) first, from amounts in the Third Party Controlled Current Spread Custodial Account attributable to Servicing Agreement termination payments made by the Agency with respect to any Mortgage Loans, pro rata, (A) the Current Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount.
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller;
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(b), any accrued and unpaid Base Servicing Fee to Seller;
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(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any
Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior
Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant
to clause (A), the Current Excess Servicing Spread shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and
payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to
clause (B), the Retained Servicing Spread shall be applied first, to
the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit
to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 3.05 Withdrawals from the Current Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Current Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Current Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Current Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Current Spread Reserve Account after the Current Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 3.06 Payment to Seller of Base Servicing Fee.
Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Current Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Current Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
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Section 3.07 Intent and Characterization.
(a) Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.
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ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity, subject to the approvals required pursuant to Section 5.03, to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
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Section 5.03 Agency Consents.
Seller will have obtained the FHLMC Acknowledgment Agreement and all other necessary approvals, agreements and consents, if any, of the Agency with respect to the Transaction Documents on or prior to the Sale Date.
Section 5.04 Title to the Mortgage Servicing Rights.
As of the Sale Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Current Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Current Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document that has been executed by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Current Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Current Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Current Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
Seller is approved by the Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make Seller unable to comply with the Agency eligibility requirements or which would require notification to the Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for the Agency.
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Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system.
Section 5.09 Agency Set-off Rights.
Seller has no actual notice, including any notice received from the Agency, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to the Agency for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to the Agency under servicing agreements relating to Sellers entire servicing portfolio for the Agency (including any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for the Agency under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to the Agency by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to the Agency under a servicing contract relating to Sellers entire servicing portfolio with the Agency.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Current Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Current Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Current Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Material Documents.
Seller has provided Purchaser with executed copies of all material agreements and documents, and any amendments thereto, relating to Sellers acquisition of the Mortgage Servicing Rights and the servicing of the Mortgage Loans.
Section 5.12 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the Agency.
Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened, any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 6.01 Servicing Agreements; Applicable Laws.
The originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 Accuracy of Servicing Information.
The information in the Data Tape dated as of November 30, 2012 is true and correct in all material respects as of the date specified therein; provided that if there is no date specified in the Data Tape, as of November 30, 2012.
Section 6.04 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees. Notwithstanding the sale of the Mortgage Servicing Rights for a Mortgage Loan by Bank of America to Seller, based on and subject to the terms of the Tri-Party Agreement, Seller does not retain any obligations to the Agency under the Servicing Agreements with Agency for Mortgage Loans, including repurchase, indemnification and make-whole obligations, in respect of a breach of the selling representations and warranties in connection with the sale of Mortgage Loans to Agency, or the failure of Bank of America or prior servicers to comply with the servicing obligations with respect to Mortgage Loans prior to the date on which Seller assumes responsibility for servicing a Mortgage Loan.
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Section 6.05 Location of Credit Files.
All of the Mortgage Loan Documents are or upon delivery by Bank of America will be held by Custodians, or if held by the Seller, in the locations specified in Exhibit E, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by the Seller in Exhibit E.
Section 6.06 Representations Concerning the Current Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Current Excess Servicing Spread on the Sale Date, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the Agency under the Servicing Agreements and the Tri-Party Agreement, free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Current Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the sale and security interests granted hereunder in the Current Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to the Agencys consent.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
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Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Current Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions.
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall, or prior to the Servicing Transfer Date, shall cause the Interim Servicer to, pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Agency, the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.
(c) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the Agency for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(d) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of the Agency.
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Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser (except as provided in Section 12.01), in obtaining consents from the Agency as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Current Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of the Current Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Current Spread Agreement in accordance with Section 12.16.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Current Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the Sale Date, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Current Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
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Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
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(viii) short sales,
(ix)(1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the Mortgage Loans and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Current Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Mortgage Loans in Foreclosure,
(7) Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Mortgage Loans in which the Mortgagor is in bankruptcy;
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(ii) For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Current Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Current Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Current Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Agency Obligations.
Seller shall pay all of its obligations to the Agency in a timely manner so as to avoid exercise of any right of set-off by the Agency against Seller.
Section 8.11 Servicing Agreements.
After the Servicing Transfer Date, Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, without limitation, after the Servicing Transfer Date, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the Agency that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the Agency that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the Agency will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Mortgage Loans owned by Seller which do not affect the Current Excess Servicing Spread with respect to such Mortgage Loans and are not reasonably material to the Purchaser.
The Seller shall monitor the obligations of the Interim Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement.
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Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between (i) Seller and the Agency, (ii) Seller and Fannie Mae or (iii) Seller and Ginnie Mae. Seller shall provide Purchaser with copies of any notices from the Agency, Fannie Mae or Ginnie Mae of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the Agency, Fannie Mae or Ginnie Mae and with copies of any notices from the Agency, Fannie Mae or Ginnie Mae of any termination, potential termination or threatened termination of any servicing agreement entered into between (i) Seller and the Agency, (ii) Seller and Fannie Mae or (iii) Seller and Ginnie Mae. Seller shall promptly forward copies of any material notices received from the Agency or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with the Agency that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
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Section 8.16 Financing; Pledge of Current Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Current Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
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(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party, and each other agreement entered into with the Agency.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Agency and except as contemplated under the Purchase and Sale Agreement with respect to transition services thereunder, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than (i) the Interim Servicer (prior to the Servicing Transfer Date) and (ii) third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Current Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Data Tape; Schedule of Mortgage Loans.
The information in the Data Tape delivered to Purchaser on the Sale Date will be true and correct in all material respects as of the date specified. Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of the Sale Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
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Section 8.22 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to the Current Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.23 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement and under the Assignment Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller and Bank of America on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Receipt by the Purchaser of a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
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Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition, or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency, that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Current Excess Servicing Spread.
Section 9.05 Consents.
Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents, including Agency approval as contemplated by Section 5.03 and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to the Purchaser copies of each executed Transaction Document that is to be entered into on or prior to such date and each of the items required to be delivered pursuant to Section 2.04 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit C, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 9.08 Valuation.
Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Current Excess Servicing Spread is fair and reasonable.
Section 9.09 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.04(a)(ix), Section 2.04(a)(x) and Section 2.04(a)(xi).
Section 9.10 Acquisition of Mortgage Servicing Rights by Seller.
Seller shall have acquired the Mortgage Servicing Rights and other Purchased Assets from Bank of America pursuant to the Purchase and Sale Agreement as of the Sale Date.
Section 9.11 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.12 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
Section 9.13 Fees, Costs and Expenses.
The fees, costs and expenses payable by the Seller on or prior to the Sale Date pursuant to Section 12.01 hereof and any other Transaction Document shall have been paid.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date, as applicable:
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Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Agreement Date or Sale Date, as applicable, are true and correct in all material respects as of the date thereof.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects as of the date thereof.
Section 10.03 Corporate Resolution.
As of the date hereof, Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Sale Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION; CURE
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Sale Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by the Agency against Seller that results in a decrease in Servicing Agreements termination payments due to Seller with respect to the Mortgage Loans from the Agency or in a shortfall of funds to pay the Current Excess Servicing Spread;
(v) Any breach by Seller of the Purchase and Sale Agreement; and
(vi) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i) (v) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01 but may affect the amount of such obligation; and further provided, that any Losses
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incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01. Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to ARTICLE XI of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense
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Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
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Section 11.03 Award of Damages.
(a)
(i) In the event that an award of damages or other payments is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee.
(ii) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.
(b) In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Partys designee in possession of the applicable amount shall promptly notify the other Party or the other Partys designee as to the awards existence and request that the other Party or other Partys designee, as applicable, designate an account to which the amount shall be remitted. Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.
(c) Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.
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Section 11.04 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Except as otherwise provided herein, Purchaser and Seller shall share the expenses incurred by Seller and Purchaser or their respective affiliates in connection with the transactions contemplated hereby, with the expense allocation percentage to be mutually agreed upon by the Parties.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any
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tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
48
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
49
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
50
Section 12.15 Public Announcement.
No public release or statement concerning the subject matter of this Agreement shall be made by either party without the express written consent and approval of the other party, except as required by law or stock exchange rule, and provided that on and after the Agreement Date, either party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.16 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Current Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holders interest in the Current Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.17 Termination.
If all necessary Owner Consents are not received by the Sale Date, or if the Purchase and Sale Agreement is terminated, this Agreement shall be terminated concurrently therewith, without any further action of either Party. In the event this agreement is terminated as set forth in the prior sentence or in Section 8.13, neither Party shall have any further obligations to the
51
other Party hereunder except as expressly set forth herein. If all conditions to Purchasers or Sellers obligations to close set forth in Article IX and Article X, respectively, are not satisfied on the Sale Date, Purchaser or Seller, as applicable based on the condition or conditions not satisfied, may terminate this agreement by written notice to the other party, and neither party shall have any further obligations to the other party hereunder, except as expressly set forth herein.
Section 12.18 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
52
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR IX LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer | |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR IX LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Current Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the Sale Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: |
| |
Name: |
| |
Title: |
|
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR
MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) | (e) | (f) (column (d) column (e)) |
(g) ([ ]% of column (f)) | ||||||
Sale Date |
Loan # of Loan |
Principal Balance of Mortgage Loan as of the Sale Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Current Excess Servicing Spread |
EXHIBIT B
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT C
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans by and between MSR IX LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of the Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
EXHIBIT D
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR IX LLC (the Company), pursuant to Section 10.05 of the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) All conditions set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR IX LLC | ||
By: | [ ], as member | |
By: |
EXHIBIT E
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT F
FORM OF SUMMARY REMITTANCE REPORT
[DELIVERED SEPARATELY]
EXHIBIT G
FORM OF DELINQUENCY REPORT
[DELIVERED SEPARATELY]
EXHIBIT H
FORM OF DISBURSEMENT REPORT
[DELIVERED SEPARATELY]
EXHIBIT I
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
Exhibit 10.49
FUTURE SPREAD AGREEMENT FOR FNMA MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR X LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||||
Section 1.01 |
Definitions | 1 | ||||
Section 1.02 |
General Interpretive Principles | 12 | ||||
ARTICLE II ITEMS TO BE DELIVERED |
13 | |||||
Section 2.01 |
Items to be Delivered | 13 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
ARTICLE III REPLACEMENT OF MORTGAGE LOANS |
14 | |||||
Section 3.01 |
Refinancing and Substitution of Mortgage Loans | 14 | ||||
Section 3.02 |
Criteria for Mortgage Loans | 15 | ||||
Section 3.03 |
Refinancing Incentives | 16 | ||||
Section 3.04 |
Selection Procedures | 18 | ||||
Section 3.05 |
Assignment of Future Excess Servicing Spread | 19 | ||||
ARTICLE IV PAYMENTS AND DISTRIBUTIONS |
19 | |||||
Section 4.01 |
Purchase Price | 19 | ||||
Section 4.02 |
Payments by Purchaser | 20 | ||||
Section 4.03 |
Accounts | 20 | ||||
Section 4.04 |
Priority of Payments | 22 | ||||
Section 4.05 |
Withdrawals from the Future Spread Reserve Account | 23 | ||||
Section 4.06 |
Payment to Seller of Base Servicing Fee | 24 | ||||
Section 4.07 |
Correction of Principal Balance Error | 24 | ||||
Section 4.08 |
Intent and Characterization | 24 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
25 | |||||
Section 5.01 |
Due Organization and Good Standing | 25 | ||||
Section 5.02 |
Authority and Capacity | 25 | ||||
Section 5.03 |
Owner Consents | 25 | ||||
Section 5.04 |
Title to the Mortgage Servicing Rights | 26 | ||||
Section 5.05 |
Effective Agreements | 26 | ||||
Section 5.06 |
No Accrued Liabilities | 26 | ||||
Section 5.07 |
Seller/Servicer Standing | 26 | ||||
Section 5.08 |
MERS Membership | 26 | ||||
Section 5.09 |
Owner Set-off Rights | 26 | ||||
Section 5.10 |
Ability to Perform; Solvency | 27 | ||||
Section 5.11 |
Obligations with Respect to Origination | 27 | ||||
Section 5.12 |
Purchase of Mortgage Servicing Rights | 27 | ||||
Section 5.13 |
No Actions | 27 |
i
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
27 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 28 | ||||
Section 6.02 |
Related Escrow Accounts | 28 | ||||
Section 6.03 |
No Purchaser Responsibility | 28 | ||||
Section 6.04 |
Location of Credit Files | 28 | ||||
Section 6.05 |
Representations Concerning the Future Excess Servicing Spread | 28 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER | 29 | |||||
Section 7.01 |
Due Organization and Good Standing | 29 | ||||
Section 7.02 |
Authority and Capacity | 29 | ||||
Section 7.03 |
Effective Agreements | 30 | ||||
Section 7.04 |
Sophisticated Investor | 30 | ||||
Section 7.05 |
No Actions | 30 | ||||
ARTICLE VIII SELLER COVENANTS | 30 | |||||
Section 8.01 |
Servicing Obligations | 30 | ||||
Section 8.02 |
Cooperation; Further Assurances | 31 | ||||
Section 8.03 |
Financing Statements | 31 | ||||
Section 8.04 |
Supplemental Information | 31 | ||||
Section 8.05 |
Access to Information | 32 | ||||
Section 8.06 |
Home Affordable Modification Program | 32 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 32 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 34 | ||||
Section 8.09 |
Monthly Management Calls | 34 | ||||
Section 8.10 |
Timely Payment of Owner Obligations | 35 | ||||
Section 8.11 |
Servicing Agreements | 35 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 35 | ||||
Section 8.13 |
Consents to Transaction Documents | 35 | ||||
Section 8.14 |
Accounts | 35 | ||||
Section 8.15 |
Notification of Certain Events | 36 | ||||
Section 8.16 |
Financing; Pledge of Future Excess Servicing Spread | 36 | ||||
Section 8.17 |
Existence, etc | 36 | ||||
Section 8.18 |
Consent to Sub-Servicing | 37 | ||||
Section 8.19 |
Nonpetition Covenant | 37 | ||||
Section 8.20 |
Schedule of Mortgage Loans | 37 | ||||
Section 8.21 |
True Sale Opinion | 38 | ||||
Section 8.22 |
Valuation | 38 | ||||
Section 8.23 |
Material Documents | 38 | ||||
Section 8.24 |
Insurance | 38 | ||||
Section 8.25 |
Defense of Title | 38 |
ii
Section 8.26 |
Refinancing of Mortgage Loans. | 38 | ||||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER | 39 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 39 | ||||
Section 9.02 |
Compliance with Conditions | 39 | ||||
Section 9.03 |
Corporate Resolution | 39 | ||||
Section 9.04 |
No Material Adverse Change | 39 | ||||
Section 9.05 |
Consents | 39 | ||||
Section 9.06 |
Delivery of Transaction Documents | 40 | ||||
Section 9.07 |
Certificate of Seller | 40 | ||||
Section 9.08 |
Opinions of Counsel | 40 | ||||
Section 9.09 |
Good Standing Certificate of Seller | 40 | ||||
Section 9.10 |
No Actions or Proceedings. | 40 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER | 40 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 41 | ||||
Section 10.02 |
Compliance with Conditions | 41 | ||||
Section 10.03 |
Corporate Resolution | 41 | ||||
Section 10.04 |
No Material Adverse Change | 41 | ||||
Section 10.05 |
Certificate of Purchaser | 41 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 41 | ||||
ARTICLE XI INDEMNIFICATION | 42 | |||||
Section 11.01 |
Indemnification by Seller | 42 | ||||
Section 11.02 |
Indemnification by Purchaser | 43 | ||||
Section 11.03 |
Other Rights | 44 | ||||
ARTICLE XII MISCELLANEOUS | 44 | |||||
Section 12.01 |
Costs and Expenses | 44 | ||||
Section 12.02 |
Confidentiality | 44 | ||||
Section 12.03 |
Brokers Fees | 45 | ||||
Section 12.04 |
Relationship of Parties | 46 | ||||
Section 12.05 |
Survival of Representations and Warranties | 46 | ||||
Section 12.06 |
Notices | 46 | ||||
Section 12.07 |
Waivers | 46 | ||||
Section 12.08 |
Entire Agreement; Amendment | 47 | ||||
Section 12.09 |
Binding Effect | 47 | ||||
Section 12.10 |
Headings | 47 | ||||
Section 12.11 |
Applicable Law | 47 | ||||
Section 12.12 |
Incorporation of Exhibits | 47 | ||||
Section 12.13 |
Counterparts | 48 | ||||
Section 12.14 |
Severability of Provisions | 48 | ||||
Section 12.15 |
Assignment | 48 | ||||
Section 12.16 |
Termination | 48 | ||||
Section 12.17 |
Third Party Beneficiaries | 49 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement
Annex A
Exhibit B Example of Calculations of Maximum Retained Refinancing Loan Amounts
Exhibit C Schedule of Mortgage Loans
Exhibit D Sellers Officers Certificate
Exhibit E Purchasers Officers Certificate
Exhibit F Location of Credit Files
Exhibit G Form of Summary Remittance Report
Exhibit H Form of Delinquency Report
Exhibit I Form of Disbursement Report
Exhibit J Seller Jurisdictions and Recording Offices
iv
FUTURE SPREAD AGREEMENT FOR FNMA MORTGAGE LOANS
This FUTURE SPREAD AGREEMENT FOR FNMA MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR X LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of the date hereof (as amended, restated, or otherwise modified and in effect, the Current Spread Agreement), pursuant to which Purchaser will purchase and assume all right, title and interest in the excess servicing spread with respect to a pool of residential mortgage loans to be serviced by Seller;
WHEREAS, Seller desires to retain the right to refinance the residential mortgage loans in the pool, and Purchaser is willing to grant such right, as long as the excess servicing spread with respect to the newly-originated residential mortgage loans and replacement residential mortgage loans is assigned to the Purchaser as described herein; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which residential mortgage loans in the pool may be refinanced.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
1
Agency: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, the Federal National Mortgage Association, or any successor thereto, the Government National Mortgage Association, or any successor thereto, the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto, the Department of Veterans Affairs, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An assignment agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Assignment Date: With respect to a Refinanced Mortgage Loan and its related Mortgage Loan, the Distribution Date in the third calendar month following the Refinanced Mortgage Loans Refinancing Date.
Available Portfolio: As defined in Section 3.04(a) hereof.
Bank: Wells Fargo Bank, National Association, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Future Spread Custodial Account Control Agreement or the Future Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: With respect to the Mortgage Loans (other than GNMA Mortgage Loans), 0.06% per annum and with respect to GNMA Mortgage Loans, 0.12% per annum.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Carryover Retained Amount: As defined in Section 3.03 hereof.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: As defined in Section 2.02 hereof.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the servicing of a Mortgage Loan.
Current Mortgage Loan: A residential mortgage loan that is a Mortgage Loan under the Current Spread Agreement.
Current Spread Agreement: As defined in the recitals to this Agreement.
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the first Assignment Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
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Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the first Assignment Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) The Owner Consents relating to such Servicing Agreement have been obtained;
(b) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (b) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(c) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(d) with respect to any Servicing Agreement relating to Non-Agency Mortgage Loans, an agreement pursuant to which Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Excess Refinancing Percentage: As defined in Section 3.03 hereof.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
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Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, Seller and MSR IX LLC, in form and substance reasonably acceptable to MSR IX LLC, dated on or before the Sale Date, pursuant to which the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Federal National Mortgage Association, or any successor thereto, Seller and Purchaser, in form and substance reasonably acceptable to Purchaser, dated on or before the Sale Date, pursuant to which the Federal National Mortgage Association, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
Future Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Future Excess Servicing Spread Percentage.
Future Excess Servicing Spread Assignment Obligation: As defined in Section 3.01 hereof.
Future Excess Servicing Spread Percentage: A percentage equal to the Current Excess Servicing Spread Percentage in the Current Spread Agreement.
Future Excess Servicing Spread Rights: As defined in Section 3.01 hereof.
Future Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Future Spread Custodial Account.
Future Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Future Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account: The account specified in the Future Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser.
Future Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Future Spread Reserve Account.
Future Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Future Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
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Future Spread Reserve Account Deposit Event: As defined in Section 4.03(c) hereof.
Future Spread Reserve Account Required Amount: As defined in Section 4.03(c) hereof.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
GNMA: Government National Mortgage Association, or any successor thereto.
GNMA Acknowledgment Agreement: The acknowledgment agreement by and among GNMA, or any successor thereto, Seller and MSR XI LLC, in form and substance reasonably acceptable to MSR XI LLC, dated on or before the Sale Date, pursuant to which GNMA, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
GNMA Mortgage Loan: A Mortgage Loan which is owned by GNMA, or any successor thereto.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: As defined in Section 8.06 hereof.
HAMP Loans: As defined in Section 8.06 hereof.
Holder Register: As defined in Section 12.15(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Future Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) and (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Maximum Retained Refinancing Loan Amount: As defined in Section 3.03 hereof.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: A residential mortgage loan that satisfies the conditions set forth in Section 3.02 and whose Future Excess Servicing Spread is assigned to Purchaser hereunder in satisfaction of Sellers Future Excess Servicing Spread Assignment Obligation.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Loan Identification Date: With respect to a Refinanced Mortgage Loan and its related replacement Mortgage Loan, the 25th day of the second calendar month following the Refinanced Mortgage Loans Refinancing Date.
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Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
New Mortgage Loan: As defined in Section 3.02(a)(i)(1) hereof.
Non-Agency Mortgage Loan: Any Mortgage Loan where the Owner is not an Agency.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: As defined in Section 4.03(c) hereof.
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, including the FHLMC Acknowledgment Agreement, the FNMA Acknowledgment Agreement and GNMA Acknowledgment Agreement, if applicable, pursuant to which an Owner approves or consents to the sale of the Future Excess Servicing Spread from Seller to Purchaser and any other consents, acknowledgements or similar instruments that may be required from an Owner in connection with the transactions contemplated herein.
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Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of an Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Future Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: As defined in Section 4.04 hereof.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: As defined in Section 4.01 hereof.
Purchaser: As defined in the preamble hereof.
Purchaser Indemnitees: As defined in Section 11.01(a) hereof.
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
Quarterly Collection Period: As defined in Section 3.03 hereof.
Refinanced Mortgage Loan: A Current Mortgage Loan or a Mortgage Loan that has been refinanced in whole or in part by Seller or an affiliate thereof.
Refinancing Date: The date on which a Current Mortgage Loan or Mortgage Loan is refinanced by Seller or an affiliate thereof.
Refinancing Split Percentage: As defined in Section 3.03 hereof.
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REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Collection Period: With respect to an Assignment Date, the Collection Period in the third calendar month prior to such Assignment Date, and with respect to a Mortgage Loan Identification Date, the second calendar month prior to such Mortgage Loan Identification Date.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: As defined in Section 4.03(c) hereof.
Replacement Portfolio: As defined in Section 3.04(a) hereof.
Replacement Shortfall: As defined in Section 3.03 hereof.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Portfolio: As defined in Section 3.04(a) hereof.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to 100% minus the Future Excess Servicing Spread Percentage.
Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related assignment agreement under the Current Spread Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (c) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Future Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement as updated by the Seller and Purchaser on each Assignment Date and maintained as Exhibit C hereto.
Selection Period: As defined in Section 3.04(b) hereof.
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Seller: As defined in the preamble hereof.
Seller Indemnitees: As defined in Section 11.02 hereof.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans, or with respect to Mortgage Loans owned by the Seller, the credit and collection standards, policies, procedures and practices of Seller relating to residential mortgage loans owned and serviced by Seller.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: As defined in Section 12.15 hereof.
Third Party Assignment: As defined in Section 12.15 hereof.
Third Party Future Spread Agreement: As defined in Section 12.15 hereof.
Third Party Claim: As defined in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Future Spread Custodial Account: The account specified in the Future Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections, all Sales Proceeds and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all other amounts payable by an
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Owner to Seller (or Purchaser under an Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by an Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements and (c) all Sales Proceeds received during such Collection Period.
Transaction Documents: The Future Spread Custodial Account Agreement, the Future Spread Custodial Account Control Agreement, the Future Spread Reserve Account Agreement, the Future Spread Reserve Account Control Agreement, the Current Spread Agreement and this Agreement.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
ITEMS TO BE DELIVERED
Section 2.01 Items to be Delivered.
(a) On the Agreement Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) This Agreement;
(ii) The Current Spread Agreement and all agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Agreement Date, if any;
(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) The executed Future Spread Custodial Account Agreement;
(ii) The executed Future Spread Custodial Account Control Agreement;
(iii) The executed Future Spread Reserve Account Agreement;
(iv) The executed Future Spread Reserve Account Control Agreement;
(v) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(vi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Future Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(vii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Future Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(viii) The duly executed corporate certificate of Seller required by Section 9.07;
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(ix) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Seller;
(x) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xi) The duly executed corporate certificate of Purchaser required by Section 10.05;
(xii) A certificate of good standing of Purchaser dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser;
(xiii) A UCC-1 financing statement relating to the sale of the Future Excess Servicing Spread and relating to the security interest of Purchaser in the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, in form and substance reasonably acceptable to Purchaser; and
(xiv) All agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Sale Date.
(c) On or before the Assignment Date with respect to a Mortgage Loan, Seller shall provide Purchaser with executed copies of the related Owner Consents, and any amendments thereto.
(d) On or before the first Assignment Date, the executed Power of Attorney.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Future Excess Servicing Spread and perform its obligations hereunder, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
ARTICLE III
REPLACEMENT OF MORTGAGE LOANS
Section 3.01 Refinancing and Substitution of Mortgage Loans.
Subject to, and upon the terms and conditions of this Agreement, and, more particularly, the conditions of this ARTICLE III, if Seller or any of its affiliates refinances any Current Mortgage Loan or Mortgage Loan, it shall designate a residential mortgage loan as a replacement
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Mortgage Loan pursuant to this ARTICLE III and assign the Future Excess Servicing Spread with respect to such replacement Mortgage Loan on the applicable Assignment Date to Purchaser as provided in this Agreement (such obligations of Seller, the Future Excess Servicing Spread Assignment Obligation), and the rights of Purchaser to such Future Excess Servicing Spread, the Future Excess Servicing Spread Rights).
Section 3.02 Criteria for Mortgage Loans.
(a) As of the applicable Assignment Date, unless otherwise agreed upon by Seller and Purchaser, either:
(i) The Mortgage Loan shall satisfy the following criteria:
(1) The proceeds of such Mortgage Loan (the New Mortgage Loan) were use to repay the Refinanced Mortgage Loan in whole or in part;
(2) All consents, if any, required by the applicable Owner to assign the related Future Excess Servicing Spread with respect to the New Mortgage Loan shall have been obtained;
(3) The servicing fee rate for the New Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such New Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such New Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such New Mortgage Loan is owned by GNMA; and
(4) The New Mortgage Loan is secured by the same property as the Refinanced Mortgage Loan; or
(ii) if Seller is unable to satisfy the conditions in Section 3.02(a)(i) after using commercially reasonable efforts, Seller shall use its best efforts to substitute the New Mortgage Loan with a Mortgage Loan satisfying the following criteria:
(1) The servicing fee rate (which results in the Servicing Spread Collections) for the Mortgage Loan is equal to or greater than the servicing fee rate of the New Mortgage Loan; provided however if the servicing fee rate of the New Mortgage Loan is less than the applicable rate set forth in Section 3.02(a)(i)(3), the servicing fee rate on the Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such Mortgage Loan is owned by GNMA;
(2) The interest accrual rate per annum on the Mortgage Loan is within 12.5 basis points per annum of the interest accrual rate on the New Mortgage Loan;
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(3) The final maturity date of the Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;
(4) The principal balance of the Mortgage Loan is no less than the principal balance of the Refinanced Mortgage Loan;
(5) The remaining credit characteristics of the Mortgage Loan (other than as specified in clauses (1), (2), (3) and (4) above) are substantially the same as the credit characteristics of the New Mortgage Loan;
(6) The Mortgage Loan is current as of the applicable Assignment Date; and
(7) The Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not in process of any modification, workout or other loss mitigation process; and is not involved in litigation.
(b) If a New Mortgage Loan would otherwise meet the criteria set forth in Section 3.02(a)(i) and is still owned by Seller as of the Mortgage Loan Identification Date, in lieu of a substitution pursuant to Section 3.02(a)(ii) above, the Seller may include such New Mortgage Loan as a Mortgage Loan in the Available Portfolio; provided (i) the servicing fee rate (which results in the Servicing Spread Collections) for such Mortgage Loan shall be deemed to be 0.30% per annum and (ii) if at any time such Mortgage Loan fails to otherwise meet the criteria set forth in Section 3.02(a)(i) (e.g. the Mortgage Loan is sold to an Agency and the Seller is unable to obtain an Owner Consent), the Seller shall be required to substitute a loan for such New Mortgage Loan pursuant to Section 3.02(a)(ii) above.
(c) Notwithstanding the provisions of Section 3.02(a)(ii)(4), Seller shall not be in breach of Section 3.01 on any Assignment Date if, after using best efforts to select residential mortgage loans to substitute New Mortgage Loans pursuant to Section 3.02(a)(ii), the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date is equal to or greater than 90% of the aggregate outstanding principal balance of the New Mortgage Loans during the Related Collection Period as measured on the opening of business on their respective Refinancing Date.
Section 3.03 Refinancing Incentives.
For any Assignment Date beginning with the Assignment Date in the sixth calendar month after the Sale Date and subject to Section 4.04 hereof, Sellers Future Excess Servicing Spread Assignment Obligation shall be reduced by the Maximum Retained Refinancing Loan Amount for such Assignment Date. For purposes of this Section 3.03, the following definitions shall apply:
Replacement Shortfall: With respect to any Assignment Date and the Related Collection Period, the aggregate outstanding principal balance of the New Mortgage Loans that were originated by Seller or an affiliate thereof during the Related Collection Period as measured on the opening of business on their respective Refinancing Date, minus the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date.
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Excess Refinancing Percentage: With respect to any Assignment Date, a percentage equal to the excess, if any, of (a) a fraction, expressed as a percentage, the numerator of which is equal to the aggregate principal balance of New Mortgage Loans that were originated by Seller or an affiliate thereof over the Related Collection Period and the two Collection Periods immediately prior to such Related Collection Period (the Quarterly Collection Period) as measured on their respective Refinancing Date, minus the aggregate Replacement Shortfall over such Quarterly Collection Period, and the denominator of which is the aggregate principal balance of all Mortgage Loans that voluntarily prepaid in full over the Quarterly Collection Period (measured as of the date of such prepayment), over (b) 35%.
Refinancing Split Percentage: With respect to any Assignment Date, the Refinancing Split Percentage shown in the column of the table below corresponding to the Excess Refinancing Percentage therein:
Three Month Average Recapture Percentage |
Excess Refinancing |
Refinancing Split Percentage | ||
35% or Less |
0% | 0% | ||
> 35%, <= 40% |
>0.00% and <=5.00% | 25% | ||
> 40%, <= 45% |
>5.00% and <=10.00% | 30% | ||
> 45%, <= 50% |
>10.00% and <=15.00% | 35% | ||
> 50%, <= 55% |
>15.00% and <=20.00% | 40% | ||
> 55%, <= 60% |
>20.00% and <=25.00% | 45% | ||
Greater than 60% |
>25.00% | 50% |
Maximum Retained Refinancing Loan Amount: With respect to any Assignment Date, an amount, not less than zero, equal to the sum of (a) the product of (i) the Refinancing Split Percentage, if any, applicable to such Assignment Date, (ii) the Excess Refinancing Percentage applicable to such Assignment Date and (iii) the aggregate principal balance of New Mortgage Loans that were refinanced with Seller or an affiliate thereof during the Related Collection Period, plus (b) the Carryover Retained Amount, minus (c) the applicable Replacement Shortfall.
Carryover Retained Amount: With respect to any Assignment Date beginning with the Assignment Date in the seventh calendar month after the Sale Date, the excess, if any, of the Maximum Retained Refinancing Loan Amount for the prior Assignment Date over the aggregate outstanding principal balance of the Mortgage Loans that were retained by Seller pursuant to this Section 3.03 on the prior Assignment Date.
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Section 3.04 Selection Procedures.
(a) Not later than the Mortgage Loan Identification Date, Seller shall (i) notify Purchaser of the identity of each Current Mortgage Loan and each Mortgage Loan that became a Refinanced Mortgage Loan during the Related Collection Period, (ii) calculate the Excess Refinancing Percentage, the Refinancing Split Percentage, the Maximum Retained Refinancing Loan Amount and the Carryover Retained Amount for the following Assignment Date, and notify Purchaser of such amounts in writing, (iii) provide Purchaser with a list of potential Mortgage Loans (the Available Portfolio), selected on the basis that the Excess Refinancing Percentage is equal to zero, and (iv) provide Purchaser with a list of residential mortgage loans selected from the Available Portfolio to be designated as Mortgage Loans (the Replacement Portfolio) on the following Assignment Date and a list of residential mortgage loans selected from the Available Portfolio to be excluded from the pool of Mortgage Loans (the Retained Portfolio) on the following Assignment Date in accordance with Section 3.03.
(b) Purchaser may submit an objection to the proposed Available Portfolio, the proposed Replacement Portfolio or the proposed Retained Portfolio not later than five Business Days following receipt of the notice of the proposed portfolios pursuant to Section 3.04(a). If Purchaser submits an objection, Seller and Buyer shall work together in good faith over the next five Business Days (the Selection Period) to mutually agree on the Replacement Portfolio and the Retained Portfolio. During the Selection Period, Seller may suggest alternative Mortgage Loans that meet the criteria of Section 3.02. If Seller and Purchaser are unable to agree on a Replacement Portfolio and a Retained Portfolio (if applicable) by close of business on the Business Day prior to the Assignment Date, Seller and Purchaser may modify the percentages in the definitions of Future Excess Servicing Spread and Retained Servicing Spread and in the Priority of Payments, as applicable, to reflect the relative values that Seller and Purchaser would have had in the Future Excess Servicing Spread and Retained Servicing Spread but for the inability of Seller and Purchaser to mutually agree on such portfolios.
(c) Unless mutually agreed upon by Seller and Purchaser, the Retained Portfolio and the Replacement Portfolio with respect to any Assignment Date shall satisfy the following criteria:
(i) The aggregate outstanding principal balance of the residential mortgage loans in the Retained Portfolio shall not exceed the Maximum Retained Refinancing Loan Amount;
(ii) The weighted average servicing fee rate for the residential mortgage loans in the Retained Portfolio shall be substantially equal to the weighted average servicing fee rate for the Mortgage Loans in the Replacement Portfolio;
(iii) The weighted average interest accrual rate per annum of the residential mortgage loans in the Retained Portfolio shall be within 12.5 basis points per annum of the weighted average interest rate of the Mortgage Loans in the Replacement Portfolio;
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(iv) The weighted average final maturity date of the residential mortgage loans in the Retained Portfolio shall be within six months of the weighted average final maturity date of the Mortgage Loans in the Replacement Portfolio; and
(v) The remaining credit characteristics of the pool of residential mortgage loans in the Retained Portfolio (other than as specified in clauses (ii), (iii) and (iv) above) shall be substantially the same as the credit characteristics of the pool of Mortgage Loans in the Replacement Portfolio.
(d) Exhibit B provides an example of the calculations to be made pursuant to Section 3.04(c)(i).
Section 3.05 Assignment of Future Excess Servicing Spread.
Subject to the satisfaction of the terms and conditions in this Agreement, on each Assignment Date, Seller shall execute and deliver an Assignment Agreement for the Future Excess Servicing Spread to be assigned on such Assignment Date with respect to the Mortgage Loans included in the applicable Replacement Portfolio; provided, however, that
(a) Purchaser shall be entitled to all Future Excess Servicing Spread and Seller shall be entitled to all Retained Servicing Spread arising with respect to each such Mortgage Loan on and after the Refinancing Date with respect to the related Refinanced Mortgage Loan,
(b) Seller shall deposit all Servicing Spread Collections received with respect to such Mortgage Loans on and after the Refinancing Date with respect to the related Refinanced Mortgage Loans into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date, and
(c) for each Mortgage Loan that was originated on or after the Refinancing Date of the related Refinanced Mortgage Loan, Seller shall deposit all Servicing Spread Collections with respect to amounts prepaid at the time of closing of such Mortgage Loan, if applicable, into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date.
ARTICLE IV
PAYMENTS AND DISTRIBUTIONS
Section 4.01 Purchase Price.
In full consideration for Purchasers right to receive any Future Excess Servicing Spread assigned to Purchaser, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Purchase Price) that shall be determined by the Parties on the Sale Date in accordance with Section 3.01 of the Current Spread Agreement.
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Section 4.02 Payments by Purchaser.
Payment shall be made by Purchaser to Seller by wire transfer of immediately available federal funds, to an account designated by Seller.
Section 4.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments to the Lockbox Account. Payments of all Servicing Spread Collections received on and after the first Assignment Date shall be transferred from the Lockbox Account to the Third Party Controlled Future Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Future Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Future Spread Custodial Account.
(i) The Third Party Controlled Future Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Sales Proceeds and Servicing Agreement termination payments with respect to the Mortgage Loans. The Third Party Controlled Future Spread Custodial Account will be established pursuant to the Future Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Future Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Future Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Future Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Future Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable with respect to the Mortgage Loans directly to the Third Party Controlled Future Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Future Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
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(iii) If Seller is to receive any Sales Proceeds, Seller shall direct the Person making such payments to deposit such payments into the Third Party Controlled Future Spread Custodial Account.
(iv) If Seller receives any amounts required to be deposited into the Third Party Controlled Future Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Future Spread Custodial Account.
(c) Future Spread Reserve Account. The Future Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Future Spread Reserve Account will be established pursuant to the Future Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Future Spread Reserve Account strictly in accordance with Section 4.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Future Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Future Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Future Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Future Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Future Spread Custodial Account to the Future Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Future Spread Reserve Account is equal to the Future Spread Reserve Account Required Amount. The Future Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Future Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Future Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Future Spread Reserve Account in excess of the Future Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Future Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers
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receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 4.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Future Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Future Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Future Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Future Spread Custodial Account attributable to Servicing Agreement termination payments paid by an Owner with respect to any Mortgage Loans, pro rata, (A) the Future Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Excess Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
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(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 4.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Future Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); provided, that (I) prior to the distribution to Purchaser of any Future Excess Servicing Spread pursuant to clause (A), the Future Excess Servicing Spread shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Future Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 4.05 Withdrawals from the Future Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Future Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Future Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Future Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Future Spread Reserve Account after the Future Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
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Section 4.06 Payment to Seller of Base Servicing Fee.
(a) Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Future Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Future Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
(b) The Base Servicing Fee with respect to a Mortgage Loan shall begin to accrue as of the Collection Period prior to the applicable Assignment Date. In no event shall Base Servicing Fees accrue concurrently on any day for a Refinanced Mortgage Loan and for a Mortgage Loan.
Section 4.07 Correction of Principal Balance Error.
If, subsequent to the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile such amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 4.08 Intent and Characterization.
(a) Seller and Purchaser intend that the assignments of the Future Excess Servicing Spread pursuant to this Agreement and each Assignment Agreement constitute valid sales of such Future Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to such Future Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Future Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the aggregate Purchase Price (as defined in the Current Spread Agreement).
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Owner Consents.
Prior to an Assignment Date, Seller has obtained all necessary and applicable Owner Consents.
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Section 5.04 Title to the Mortgage Servicing Rights.
As of an Assignment Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Future Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Future Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Future Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Future Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Future Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
As of the applicable Assignment Date, Seller is approved by each applicable Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with the applicable Agency eligibility requirements or which would require notification to the applicable Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for any Agency which is an Owner of a Mortgage Loan.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system or another similar system reasonable acceptable to the Purchaser.
Section 5.09 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to an Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including without limitation any unmet mortgage repurchase obligation), (ii) any unperformed obligation with
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respect to mortgage loans that Seller is servicing for an Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to an Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to an Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Future Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Future Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Future Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 Purchase of Mortgage Servicing Rights.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
Section 5.13 No Actions
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of each Assignment Date (or as of the date specified below, as applicable), as follows:
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Section 6.01 Servicing Agreements; Applicable Laws.
Seller, the originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.04 Location of Credit Files.
All of the Mortgage Loan Documents are held by Custodians, or, if held by Seller, in the locations specified in Exhibit F, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by Seller in Exhibit F.
Section 6.05 Representations Concerning the Future Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Future Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Future Excess Servicing Spread, Seller was the sole owner of the Future Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the applicable Owner under the Servicing Agreements), free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Future Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Future Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Future Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
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(c) As contemplated under Section 4.08(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Future Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit J attached hereto, the sale and security interests granted hereunder in the Future Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Future Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Future Excess Servicing Spread, and the Future Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to applicable Owner Consents.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Seller as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
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Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Future Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and, with respect to any Mortgage Loans owned by an Agency, such Agency.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller.
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(c) With respect to any Servicing Agreement relating to a Non-Agency Mortgage Loan, subject to a nonrecoverability determination made in accordance with the related Servicing Agreement and to the extent the Seller as servicer has an obligation to advance principal and interest on delinquent Mortgage Loans, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
(d) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(e) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of each Agency relating to the Mortgage Loans.
Section 8.02 Cooperation; Further Assurances
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser, in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Future Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of its Future Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Future Spread Agreement in accordance with Section 12.15.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Future Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Future Excess Servicing Spread, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the applicable Assignment Date with respect to each Mortgage Loan, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Future Excess Servicing Spread.
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Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Current Mortgage Loan and each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to each of the pool of Current Mortgage Loans and the pool of Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
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(vii) liquidations,
(viii) short sales,
(ix) aggregate principal balance of Refinanced Mortgage Loans, and (1) for each Refinanced Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Current Mortgage Loan and each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Current Mortgage Loans and Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans and percentages of the aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Non-delinquent Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Current Mortgage Loans and Mortgage Loans in Foreclosure,
(7) Current Mortgage Loans and Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Current Mortgage Loans and Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Current Mortgage Loans and Mortgage Loans in such category from the last day of the second prior Collection Period;
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(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Future Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Future Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Future Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Current Mortgage Loans and Mortgage Loans and the performance of the parties under the Transaction Documents.
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Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to an Owner in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the applicable Owner that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the applicable Owner that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the applicable Owner will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Current Mortgage Loans or Mortgage Loans owned by Seller which do not affect the Future Excess Servicing Spread with respect to such Current Mortgage Loans or Mortgage Loans and are not reasonably material to the Purchaser.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
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Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from the applicable Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the applicable Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and that Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Future Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Future Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, without limitation, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit J unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
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(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party and each other agreement entered into with an Owner.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Future Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Schedule of Mortgage Loans.
Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of each Assignment Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
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Section 8.21 True Sale Opinion.
Seller shall cause a written opinion of counsel to be furnished, in form and substance satisfactory to Purchaser, dated the Sale Date with respect to the characterization of the transfer of the Future Excess Servicing Spread by Seller to Purchaser as a true sale. Purchaser may request additional opinions regarding such characterization subsequent to the Sale Date as advised by Purchasers counsel in light of changes in law and other circumstances. To the extent Seller is unable to provide such opinions with respect to any Mortgage Loans, Seller shall substitute such Mortgage Loans with residential mortgage loans have substantially the same credit characteristics.
Section 8.22 Valuation.
As of the Sale Date, Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Future Excess Servicing Spread is fair and reasonable.
Section 8.23 Material Documents.
Seller shall provide Purchaser with executed copies of all material agreements and documents, and any amendments thereto, as of each Assignment Date relating to Sellers acquisition of the related Mortgage Servicing Rights and the servicing of the Mortgage Loans assigned.
Section 8.24 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.25 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to all Future Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.26 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Purchaser shall have received from Seller a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Future Excess Servicing Spread.
Section 9.05 Consents.
The Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Sale Date, and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
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Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to Purchaser copies of each executed Transaction Document that is to be entered on or prior to the Sale Date in the form and substance acceptable to the Purchaser and each of the items required to be delivered pursuant to Section 2.01 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.01(b)(v), Section 2.01(b)(vi) and Section 2.01(b)(vii).
Section 9.09 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.10 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
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Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Sale Date are true and correct in all material respects.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 10.03 Corporate Resolution.
Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit E, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Agreement Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Agreement Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreement termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Future Excess Servicing Spread; and
(v) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(iv) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01(a) but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01(a). Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01(a) or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account.
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(b) REIT Requirements. Notwithstanding anything in Section 11.01(a), in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under Section 11.01(a) hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to Section 11.01 of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
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(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Purchaser and Seller shall each pay the expenses incurred by it or its affiliates pursuant to the Current Spread Agreement in connection with the transactions contemplated hereby.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift
44
Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
45
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date and each applicable Assignment Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) | If to Purchaser, to: |
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) | If to Seller, to: |
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
46
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
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Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Future Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Future Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Future Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Future Excess Servicing Spread and each holders interest in the Future Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.15(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Future Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.16 Termination.
If the Current Spread Agreement is terminated on or prior to the Sale Date, this Agreement shall terminate and neither Party shall have any further obligations to the other Party hereunder.
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Section 12.17 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
49
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR X LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer | |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
50
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Future Spread Agreement for FNMA Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR X LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Future Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the applicable Assignment Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
51
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE,
CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) | (e) | (g) | (h) | (i) (column (g) column (h)) |
(j) ([ ]% of column (i)) | ||||||||
Refinancing |
Loan #
of |
Principal Loan |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Assignment Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Future Excess Servicing Spread |
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EXHIBIT B
Example of calculations of Maximum Retained Refinancing Loan Amounts
Recaptured Loan Incentive |
Range of Loans Retained as a Percentage of Total Recapture | |||||
3 Month Avg Recapture |
Retained Percentage(1) |
Nationstar | Portfolio | |||
35% or Less |
0% | 0.00% | 100.00% | |||
> 35%, <= 40% |
25% | 0.00% to 1.25% | 100.00% to 98.75% | |||
> 40%, <= 45% |
30% | 1.50% to 3.00% | 98.50% to 97.00% | |||
> 45%, <= 50% |
35% | 3.50% to 5.25% | 96.50% to 94.75% | |||
> 50%, <= 55% |
40% | 6.00% to 8.00% | 94.00% to 92.00% | |||
> 55%, <= 60% |
45% | 9.00% to 11.25% | 91.00% to 88.75% | |||
> 60%, <= 65% |
50% | 12.50% to 15.00% | 87.50% to 85.00% | |||
> 65%, <= 70% |
50% | 15.00% to 17.50% | 85.00% to 82.50% | |||
> 70%, <= 75% |
50% | 17.50% to 20.00% | 82.50% to 80.00% | |||
Greater than 75% |
50% | 20.00% to 32.50% | 80.00% to 67.50% |
1 | Represents the percentage of loans Seller retains above 35% recapture. |
53
EXHIBIT C
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT D
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Future Spread Agreement for FNMA Mortgage Loans by and between MSR X LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Section 9.04 and Section 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
EXHIBIT E
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR X LLC (the Company), pursuant to Section 10.05 of the Future Spread Agreement for FNMA Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) The condition set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR X LLC | ||
By: | [ ], as member | |
By: |
EXHIBIT F
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT G
FORM OF SUMMARY REMITTANCE REPORT
[SEPARATELY DELIVERED]
EXHIBIT H
FORM OF DELINQUENCY REPORT
[SEPARATELY DELIVERED]
EXHIBIT I
FORM OF DISBURSEMENT REPORT
[SEPARATELY DELIVERED]
EXHIBIT J
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
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Exhibit 10.50
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT
FOR FNMA MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR X LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
2 | |||
Section 1.01 |
Definitions | 2 | ||
Section 1.02 |
General Interpretive Principles | 13 | ||
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED |
14 | |||
Section 2.01 |
Sale of Current Excess Servicing Spread | 14 | ||
Section 2.02 |
Grant of Security Interest | 14 | ||
Section 2.03 |
Items to be Delivered on the Agreement Date | 14 | ||
Section 2.04 |
Items to be Delivered on the Sale Date | 15 | ||
Section 2.05 |
Sale Date Transactions | 17 | ||
ARTICLE III PAYMENTS AND DISTRIBUTIONS |
17 | |||
Section 3.01 |
Purchase Price | 17 | ||
Section 3.02 |
Payments by Purchaser | 18 | ||
Section 3.03 |
Accounts | 19 | ||
Section 3.04 |
Priority of Payments | 21 | ||
Section 3.05 |
Withdrawals from the Current Spread Reserve Account | 23 | ||
Section 3.06 |
Payment to Seller of Base Servicing Fee | 23 | ||
Section 3.07 |
Intent and Characterization | 23 | ||
ARTICLE IV [Reserved] |
24 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||
Section 5.01 |
Due Organization and Good Standing | 24 | ||
Section 5.02 |
Authority and Capacity | 24 | ||
Section 5.03 |
Agency Consents | 25 | ||
Section 5.04 |
Title to the Mortgage Servicing Rights | 25 | ||
Section 5.05 |
Effective Agreements | 25 | ||
Section 5.06 |
No Accrued Liabilities | 25 | ||
Section 5.07 |
Seller/Servicer Standing | 25 | ||
Section 5.08 |
MERS Membership | 26 | ||
Section 5.09 |
Agency Set-off Rights | 26 | ||
Section 5.10 |
Ability to Perform; Solvency | 26 | ||
Section 5.11 |
Material Documents | 26 | ||
Section 5.12 |
Obligations with Respect to Origination | 26 | ||
Section 5.13 |
No Actions | 26 | ||
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE |
27 | |||
Section 6.01 |
Servicing Agreements; Applicable Laws | 27 |
i
Section 6.02 |
Related Escrow Accounts | 27 | ||
Section 6.03 |
Accuracy of Servicing Information | 27 | ||
Section 6.04 |
No Purchaser Responsibility | 27 | ||
Section 6.05 |
Location of Credit Files | 28 | ||
Section 6.06 |
Representations Concerning the Current Excess Servicing Spread | 28 | ||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
29 | |||
Section 7.01 |
Due Organization and Good Standing | 29 | ||
Section 7.02 |
Authority and Capacity | 29 | ||
Section 7.03 |
Effective Agreements | 29 | ||
Section 7.04 |
Sophisticated Investor | 30 | ||
Section 7.05 |
No Actions | 30 | ||
ARTICLE VIII SELLER COVENANTS |
30 | |||
Section 8.01 |
Servicing Obligations | 30 | ||
Section 8.02 |
Cooperation; Further Assurances | 31 | ||
Section 8.03 |
Financing Statements | 31 | ||
Section 8.04 |
Supplemental Information | 31 | ||
Section 8.05 |
Access to Information | 31 | ||
Section 8.06 |
Home Affordable Modification Program | 32 | ||
Section 8.07 |
Distribution Date Data Tapes and Reports | 32 | ||
Section 8.08 |
Financial Statements and Officers Certificates | 34 | ||
Section 8.09 |
Monthly Management Calls | 35 | ||
Section 8.10 |
Timely Payment of Agency Obligations | 35 | ||
Section 8.11 |
Servicing Agreements | 35 | ||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 36 | ||
Section 8.13 |
Consents to Transaction Documents | 36 | ||
Section 8.14 |
Accounts | 36 | ||
Section 8.15 |
Notification of Certain Events | 36 | ||
Section 8.16 |
Financing; Pledge of Current Excess Servicing Spread | 36 | ||
Section 8.17 |
Existence, etc | 37 | ||
Section 8.18 |
Consent to Sub-Servicing | 38 | ||
Section 8.19 |
Nonpetition Covenant | 38 | ||
Section 8.20 |
Data Tape; Schedule of Mortgage Loans | 38 | ||
Section 8.21 |
Insurance. | 38 | ||
Section 8.22 |
Defense of Title | 39 | ||
Section 8.23 |
Refinancing of Mortgage Loans | 39 | ||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
39 | |||
Section 9.01 |
Correctness of Representations and Warranties | 39 | ||
Section 9.02 |
Compliance with Conditions | 39 |
ii
Section 9.03 |
Corporate Resolution | 39 | ||
Section 9.04 |
No Material Adverse Change | 40 | ||
Section 9.05 |
Consents | 40 | ||
Section 9.06 |
Delivery of Transaction Documents | 40 | ||
Section 9.07 |
Certificate of Seller | 40 | ||
Section 9.08 |
Valuation | 41 | ||
Section 9.09 |
Opinions of Counsel | 41 | ||
Section 9.10 |
Acquisition of Mortgage Servicing Rights by Seller | 41 | ||
Section 9.11 |
Good Standing Certificate of Seller | 41 | ||
Section 9.12 |
No Actions or Proceedings | 41 | ||
Section 9.13 |
Fees, Costs and Expenses | 41 | ||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
41 | |||
Section 10.01 |
Correctness of Representations and Warranties | 42 | ||
Section 10.02 |
Compliance with Conditions | 42 | ||
Section 10.03 |
Corporate Resolution | 42 | ||
Section 10.04 |
No Material Adverse Change | 42 | ||
Section 10.05 |
Certificate of Purchaser | 42 | ||
Section 10.06 |
Good Standing Certificate of Purchaser | 42 | ||
ARTICLE XI INDEMNIFICATION; CURE |
43 | |||
Section 11.01 |
Indemnification by Seller | 43 | ||
Section 11.02 |
Indemnification by Purchaser | 45 | ||
Section 11.03 |
Award of Damages | 46 | ||
Section 11.04 |
Other Rights | 47 | ||
ARTICLE XII MISCELLANEOUS |
47 | |||
Section 12.01 |
Costs and Expenses | 47 | ||
Section 12.02 |
Confidentiality | 47 | ||
Section 12.03 |
Brokers Fees | 48 | ||
Section 12.04 |
Relationship of Parties | 48 | ||
Section 12.05 |
Survival of Representations and Warranties | 48 | ||
Section 12.06 |
Notices | 48 | ||
Section 12.07 |
Waivers | 49 | ||
Section 12.08 |
Entire Agreement; Amendment | 49 | ||
Section 12.09 |
Binding Effect | 50 | ||
Section 12.10 |
Headings | 50 | ||
Section 12.11 |
Applicable Law | 50 | ||
Section 12.12 |
Incorporation of Exhibits | 50 | ||
Section 12.13 |
Counterparts | 50 | ||
Section 12.14 |
Severability of Provisions | 51 | ||
Section 12.15 |
Public Announcement | 51 |
iii
Section 12.16 |
Assignment | 51 | ||
Section 12.17 |
Termination | 52 | ||
Section 12.18 |
Third Party Beneficiaries | 52 |
EXHIBITS
Exhibit A Form of Assignment Agreement
Exhibit B Schedule of Mortgage Loans
Exhibit C Sellers Officers Certificate
Exhibit D Purchasers Officers Certificate
Exhibit E Location of Credit Files
Exhibit F Form of Summary Remittance Report
Exhibit G Form of Delinquency Report
Exhibit H Form of Disbursement Report
Exhibit I Seller Jurisdictions and Recording Offices
iv
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR FNMA MORTGAGE LOANS
This CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR FNMA MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR X LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Bank of America, National Association (Bank of America) have entered into the Purchase and Sale Agreement, pursuant to which, among other things, Seller will acquire and assume all right, title and interest in mortgage servicing rights to a portfolio of residential mortgage loans owned or securitized by the Agency (as defined herein);
WHEREAS, by acquiring such mortgage servicing rights, Seller is entitled to a servicing spread and other incidental fees with respect to the related residential mortgage loans;
WHEREAS, the servicing spread, together with the Ancillary Income (as defined below), exceeds the compensation that Seller requires to service the related residential mortgage loans;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, a portion of the servicing spread that exceeds such required compensation amount; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which Seller will sell, transfer and assign to Purchaser, all of Sellers right, title and interest in and to a portion of the servicing spread that exceeds the Sellers required compensation amount, and Purchaser will purchase all right, title and interest in and to such portion of the servicing spread;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
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ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
7 Year Swap Rate: The yield reported by Bloomberg under USSWAP7 <Index> HP <GO> at ten a.m. (10:00 a.m.), East Coast Time, on the applicable date. The 7 Year Swap Rate on December 7, 2012 was 1.1451%.
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with Agency servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
Agency: The Federal National Mortgage Association, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Bank: Wells Fargo Bank, National Association, or any successor thereto, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Current Spread Custodial Account Control Agreement or the Current Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
2
Bank of America: As defined in the recitals hereof.
Base Purchase Price: The meaning given to such term in Section 3.01.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
Base Servicing Fee Rate: 0.11% per annum, except that, for the period during which the Interim Servicer is servicer of the Mortgage Loans, the Base Servicing Fee Rate shall be the lesser of (a) 0.11% per annum or (b) the interim servicing fee payable to the Interim Servicer.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: The meaning given to such term in Section 2.02.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the Servicing of a Mortgage Loan.
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Current Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Current Excess Servicing Spread Percentage.
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans: The current excess servicing spread acquisition agreement for certain Freddie Mac mortgage loans, dated the date hereof, between the Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Ginnie Mae mortgage loans, dated the date hereof, between the Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Percentage: 66.67%.
Current Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Current Spread Custodial Account.
Current Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Current Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account: The account specified in the Current Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association or any successor thereto, or any other third party custodian or trustee selected by Purchaser.
Current Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Current Spread Reserve Account.
Current Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated on or before the Sale Date, entered into with respect to the Current Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
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Current Spread Reserve Account Deposit Event: The meaning given to such term in Section 3.03(c).
Current Spread Reserve Account Required Amount: The meaning given to such term in Section 3.03(c).
Custodian: A custodian of Credit Files or any part thereof identified by the Seller to the Purchaser in writing on or prior to the Sale Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
Cut-Off Date: The opening of business on the Sale Date.
Data Tape: The list of all mortgage loans, dated as of the date specified therein, whose Mortgage Servicing Rights will be sold, or that are anticipated to be sold, as applicable, to Seller pursuant to the Purchase and Sale Agreement.
Deposit: As defined in Section 3.01 hereof.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the Sale Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (a) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein; and
(b) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause).
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
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Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Federal Funds Rate: For any date of determination, the federal funds rate as reported in the Federal Reserve H.15(519) Statistical Release as of the first Business Day of the month in which such date of determination falls, or if such Statistical Release is no longer published, the average of the high and the low interest rate for reserves traded among commercial banks for overnight use in amounts of one million dollars ($1,000,000.00) or more, as reported by The Wall Street Journal under Federal Funds rates as of the first Business Day of the month in which such date of determination falls.
FHLMC Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR IX LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans.
FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Agency, Seller and Purchaser, in form and substance reasonably acceptable to such purchasers, dated on or before the Sale Date, pursuant to which, among other things, the Agency consents to (a) the sale of the Mortgage Servicing Rights (including the Total Servicing Spread) to Seller and (b) the sale of the Current Excess Servicing Spread from Seller to the Purchaser and any other arrangements specified therein.
FNMA Mortgage Loans: Each of the Mortgage Loans on the Schedule of Mortgage Loans.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
Future Spread Agreements: The Future Spread Agreement for FHLMC Mortgage Loans, the Future Spread Agreement for FNMA Mortgage Loans, the Future Spread Agreement for GNMA Mortgage Loans, the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Future Spread Agreement for FHLMC Mortgage Loans: The Future Spread Agreement for FHLMC Mortgage Loans, dated January 6, 2013, by and between Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for FNMA Mortgage Loans: The Future Spread Agreement for FNMA Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for GNMA Mortgage Loans: The Future Spread Agreement for GNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
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Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
Ginnie Mae: Government National Mortgage Association, or any successor thereto.
GNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XI LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: The meaning given to such term in Section 8.06.
HAMP Loans: The meaning given to such term in Section 8.06.
Holder Register: As defined in Section 12.16(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Interim Servicer: Bank of America or its successors or assigns acting as interim servicer with respect to the Mortgage Loans pursuant to the interim servicing addendum of the Purchase and Sale Agreement.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Current Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) or (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: Each of those mortgage loans listed on the Schedule of Mortgage Loans.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, reimbursements or indemnification for
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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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
Net Servicing Fee: As defined in the Purchase and Sale Agreement.
Non-Agency Mortgage Loans: Each of the mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XII LLC or MSR XIII LLC pursuant to the applicable Sale Agreement.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: The meaning given to such term in Section 3.03(c).
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner Consent: The FNMA Acknowledgment Agreement.
Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of the Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Current Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
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Priority of Payments: The meaning given to such term in Section 3.04.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: The meaning given to such term in Section 3.01.
Purchase Price Percentage: 3.15 multiplied by the excess of (i) the Net Servicing Fee (as such Net Servicing Fees are determined in accordance with Exhibit F to the Purchase and Sale Agreement), expressed as an annualized rate on the unpaid principal balances of the related Mortgage Loans as of the Sale Date over (ii) the Base Servicing Fee Rate; provided however, that for every plus or minus 1 basis point (0.01%) movement in the 7 Year Swap Rate between December 7, 2012 and the Sale Date, the Purchase Price Percentage will be adjusted plus or minus by 0.0005%. As necessary, the percentage to be determined pursuant to this definition will be based on linear interpolation.
Purchased Assets: As defined in the Purchase and Sale Agreement.
Purchaser: As defined in the preamble hereof.
Purchaser Enforcement Expenses: An amount equal to the Current Excess Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Purchaser Indemnitees: The meaning given to such term in Section 11.01(a).
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
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Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: The meaning given to such term in Section 3.03(c).
Repurchase Price: As defined in the Purchase and Sale Agreement.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreement, to the Retained Servicing Spread Percentage of the Total Servicing Spread.
Retained Servicing Spread Percentage: 100% minus the Current Excess Servicing Spread Percentage.
Sale Agreements: This Agreement, the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC.
Sale Date: The Sale Date or the Subsequent Sale Date, in each case, as defined in the Purchase and Sale Agreement with respect to the Mortgage Loans; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (b) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Current Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement delivered initially accordance with Section 2.04, updated in accordance with Section 3.01 and maintained as Exhibit B hereto.
Seller: As defined in the preamble hereof.
Seller Enforcement Expenses: An amount equal to the Retained Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the
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enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Seller Indemnitees: The meaning given to such term in Section 11.02.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller or the Interim Servicer is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from the Agency by Seller in accordance with the Servicing Agreements.
Servicing Transfer Agreement: The servicing transfer agreement by, between and among Bank of America, the Agency and Seller (including any amendments thereto) relating to the Mortgage Loans.
Servicing Transfer Date: As defined in the Purchase and Sale Agreement with respect to the Mortgage Loans.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: The meaning given to such term in Section 12.16.
Third Party Assignment: The meaning given to such term in Section 12.16.
Third Party Current Spread Agreement: The meaning given to such term in Section 12.16.
Third Party Claim: The meaning given to such term in Section 11.01 and Section 11.02, as applicable.
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Third Party Controlled Current Spread Custodial Account: The account specified in the Current Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee, (b) all Sales Proceeds received during such Collection Period; (c) all Repurchase Prices received during such Collection Period; and (d) all other amounts payable by the Agency to Seller (or Purchaser under the Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by the Agency to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from the Agency by Seller in accordance with the Servicing Agreements.
Transaction Documents: The Purchase and Sale Agreement (including any order, bill of sale, assignment agreement or other transfer agreement related to the sale of the Mortgage Servicing Rights thereunder), the Tri-Party Agreement, the Owner Consent, the Current Spread Custodial Account Agreement, the Current Spread Custodial Account Control Agreement, the Current Spread Reserve Account Agreement, the Current Spread Reserve Account Control Agreement, the Sale Agreements and the Future Spread Agreements.
Tri-Party Agreement: An agreement by, between and among Bank of America, the Agency and Seller (including any amendments thereto) pursuant to which the Agency acknowledges that it will look solely to Bank of America or any of its affiliates, and not to Seller, for any claims relating to the selling representations and warranties on Mortgage Loans and the servicing of such Mortgage Loans prior to the Sale Date.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
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(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
ARTICLE II
PROCEDURES; ITEMS TO BE DELIVERED
Section 2.01 Sale of Current Excess Servicing Spread .
Subject to, and upon the terms and conditions of this Agreement, Seller will sell, transfer and assign to Purchaser, and Purchaser will acquire from Seller, all of Sellers right, title and interest in and to the Current Excess Servicing Spread and all proceeds thereof with respect to the Mortgage Loans.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Current Excess Servicing Spread and perform its obligations hereunder and under the Purchase and Sale Agreement, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
Section 2.03 Items to be Delivered on the Agreement Date.
On the Agreement Date, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
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(a) The Sale Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement on the Agreement Date;
(b) The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and
(c) The executed Purchase and Sale Agreement.
Section 2.04 Items to be Delivered on the Sale Date.
(a) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) The Owner Consent;
(ii) The Assignment Agreement;
(iii) All agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement and Future Spread Agreement on the Sale Date;
(iv) All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on the Sale Date;
(v) The executed Current Spread Custodial Account Agreement;
(vi) The executed Current Spread Custodial Account Control Agreement;
(vii) The executed Current Spread Reserve Account Agreement;
(viii) The executed Current Spread Reserve Account Control Agreement;
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(ix) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(x) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(xi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Current Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(xii) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Closing Date to be delivered by Seller;
(xiii) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xiv) An officers certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);
(xv) A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Sale Date;
(xvi) A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Sale Date;
(xvii) A certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser; and
(xviii) A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, in form and substance reasonably acceptable to Purchaser.
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(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:
(i) Any amendments, modifications or restatements of the Purchase and Sale Agreement;
(ii) The bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller;
(iii) The Tri-Party Agreement;
(iv) The executed Power of Attorney; and
(v) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on the Sale Date as of November 30, 2012.
Section 2.05 Sale Date Transactions.
On the Sale Date, subject to the satisfaction of the terms and conditions herein:
(a) The Parties shall execute and deliver the Assignment Agreement;
(b) Purchaser shall remit to Seller the Purchase Price; and
(c) Ownership of the Current Excess Servicing Spread shall be transferred to Purchaser.
ARTICLE III
PAYMENTS AND DISTRIBUTIONS
Section 3.01 Purchase Price.
On the first Business Day following the Agreement Date, Purchaser shall pay Seller an amount (the Deposit) equal to the product of (i) $21,358,151 and (ii) Current Excess Servicing Spread Percentage, without any of the adjustments provided in the Purchase and Sale Agreement for such calculation, as an earnest money deposit.
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In full consideration for the purchase of the Current Excess Servicing Spread and the rights under the Future Spread Agreement for FNMA Mortgage Loans, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller on the Sale Date an amount (the Base Purchase Price) equal to the product of (x) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-Off Date, (y) the Purchase Price Percentage and (z) the Current Excess Servicing Spread Percentage. The Base Purchase Price shall be allocated by the Parties on the Sale Date to reflect the consideration for the purchase of the Current Excess Servicing Spread hereunder (the Purchase Price) and the consideration for the rights acquired by Purchaser under the Future Spread Agreement for FNMA Mortgage Loans.
The Base Purchase Price shall be payable by the Purchaser to the Seller as follows: (a) the Deposit shall be payable on the first Business Day following the Agreement Date, (b) 50% of the estimated Base Purchase Price net of the Deposit shall be payable on the Sale Date and (c) the portion of the Base Purchase Price with respect to the Mortgage Servicing Rights transferred on such Servicing Transfer Date that has not been paid to Seller by Purchaser as of such date, including with respect to Mortgage Loans that have prepaid between either (x) the Sale Date and the initial applicable Servicing Transfer Date or (y) two Servicing Transfer Dates pertaining to the same Mortgage Servicing Rights, plus interest thereon at the Federal Funds Rate for the period from the Sale Date to such Servicing Transfer Date or between such Servicing Transfer Dates, shall be payable on the Servicing Transfer Date.
The Seller shall deliver the Schedule of Mortgage Loans no later ten (10) Business Days after the Sale Date. In the event there is an adjustment and reconciliation of the Sellers purchase price pursuant to the terms of Section 3.01(d) of the Purchase and Sale Agreement, the Base Purchase Price shall be subject to a corresponding adjustment and any adjustment amounts (including interest) shall be paid by the Purchaser or the Seller, as applicable, to the other party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 3.02 Payments by Purchaser.
(a) Payments shall be made by Purchaser to Seller by wire transfer of immediately available funds to an account designated by Seller.
(b) If, subsequent to the payment of the Purchase Price or the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, or if for any reason the Purchase Price or such other amounts is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price or such other amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
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Section 3.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments due on or after the Servicing Transfer Date to the Lockbox Account. All amounts on deposit in the Lockbox Account will be maintained and applied in accordance with the Servicing Agreement. Payments of all Servicing Spread Collections received on and after the Servicing Transfer Date shall be transferred from the Lockbox Account to the Third Party Controlled Current Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Current Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Current Spread Custodial Account.
(i) The Third Party Controlled Current Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Servicing Agreement termination payments with respect to the Mortgage Loans, Sales Proceeds and Repurchase Prices. The Third Party Controlled Current Spread Custodial Account will be established pursuant to the Current Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Current Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Current Spread Custodial Account.
(ii) Seller shall inform the Agency to remit the applicable portion of any Servicing Agreement termination payments payable after the Sale Date directly to the Third Party Controlled Current Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Current Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
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(iii) Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Custodial Account.
(iv) Seller shall direct Bank of America to remit (i) Servicing Spread Collections received by it prior to the Servicing Transfer Date and (ii) any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Custodial Account.
(v) If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Custodial Account.
(c) Current Spread Reserve Account. The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Current Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Current Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Current Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Current Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Current Spread Custodial Account to the Current Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Current Spread Reserve Account is equal to the Current Spread Reserve Account Required Amount. The Current Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Current Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Current Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Current Spread Reserve Account in excess of the Current Spread Reserve Account Required Amount shall be released to Seller.
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For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Current Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 3.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Current Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Current Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Current Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Current Spread Custodial Account attributable to Servicing Agreement termination payments made by the Agency with respect to any Mortgage Loans, pro rata, (A) the Current Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount.
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(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller;
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(b), any accrued and unpaid Base Servicing Fee to Seller;
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant to clause (A), the Current Excess Servicing Spread shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
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Section 3.05 Withdrawals from the Current Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Current Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Current Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Current Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Current Spread Reserve Account after the Current Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 3.06 Payment to Seller of Base Servicing Fee.
Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Current Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Current Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
Section 3.07 Intent and Characterization.
(a) Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.
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ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity, subject to the approvals required pursuant to Section 5.03, to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
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Section 5.03 Agency Consents.
Seller will have obtained the FHLMC Acknowledgment Agreement and all other necessary approvals, agreements and consents, if any, of the Agency with respect to the Transaction Documents on or prior to the Sale Date.
Section 5.04 Title to the Mortgage Servicing Rights.
As of the Sale Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Current Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Current Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document that has been executed by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Current Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Current Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Current Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
Seller is approved by the Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make Seller unable to comply with the Agency eligibility requirements or which would require notification to the Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for the Agency.
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Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system.
Section 5.09 Agency Set-off Rights.
Seller has no actual notice, including any notice received from the Agency, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to the Agency for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to the Agency under servicing agreements relating to Sellers entire servicing portfolio for the Agency (including any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for the Agency under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to the Agency by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to the Agency under a servicing contract relating to Sellers entire servicing portfolio with the Agency.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Current Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Current Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Current Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Material Documents.
Seller has provided Purchaser with executed copies of all material agreements and documents, and any amendments thereto, relating to Sellers acquisition of the Mortgage Servicing Rights and the servicing of the Mortgage Loans.
Section 5.12 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the Agency.
Section 5.13 No Actions
There have not been commenced or, to the best of Sellers knowledge, threatened, any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 6.01 Servicing Agreements; Applicable Laws.
The originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 Accuracy of Servicing Information.
The information in the Data Tape dated as of November 30, 2012 is true and correct in all material respects as of the date specified; therein; provided that if there is no date specified in the Data Tape, as of November 30, 2012.
Section 6.04 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees. Notwithstanding the sale of the Mortgage Servicing Rights for a Mortgage Loan by Bank of America to Seller, based on and subject to the terms of the Tri-Party Agreement, Seller does not retain any obligations to the Agency under the Servicing Agreements with Agency for Mortgage Loans, including repurchase, indemnification and make-whole obligations, in respect of a breach of the selling representations and warranties in connection with the sale of Mortgage Loans to Agency, or the failure of Bank of America or prior servicers to comply with the servicing obligations with respect to Mortgage Loans prior to the date on which Seller assumes responsibility for servicing a Mortgage Loan.
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Section 6.05 Location of Credit Files.
All of the Mortgage Loan Documents are or upon delivery by Bank of America will be held by Custodians, or if held by the Seller, in the locations specified in Exhibit E, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by the Seller in Exhibit E.
Section 6.06 Representations Concerning the Current Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Current Excess Servicing Spread on the Sale Date, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the Agency under the Servicing Agreements and the Tri-Party Agreement, free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Current Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the sale and security interests granted hereunder in the Current Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to the Agencys consent.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
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Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Current Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall (or, prior to the Servicing Transfer Date, shall cause the Interim Servicer to,) pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Agency, the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.
(c) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the Agency for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(d) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of the Agency.
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Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser (except as provided in Section 12.01), in obtaining consents from the Agency as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Current Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of the Current Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Current Spread Agreement in accordance with Section 12.16.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Current Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the Sale Date, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Current Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
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Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
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(viii) short sales,
(ix)(1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the Mortgage Loans and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Current Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Mortgage Loans in Foreclosure,
(7) Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Mortgage Loans in which the Mortgagor is in bankruptcy;
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(ii) For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Current Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Current Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Current Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Agency Obligations.
Seller shall pay all of its obligations to the Agency in a timely manner so as to avoid exercise of any right of set-off by the Agency against Seller.
Section 8.11 Servicing Agreements.
After the Servicing Transfer Date, Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, without limitation, after the Servicing Transfer Date, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the Agency that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the Agency that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the Agency will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Mortgage Loans owned by Seller which do not affect the Current Excess Servicing Spread with respect to such Mortgage Loans and are not reasonably material to the Purchaser.
The Seller shall monitor the obligations of the Interim Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement.
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Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between (i) Seller and the Agency, (ii) Seller and Freddie Mac or (iii) Seller and Ginnie Mae. Seller shall provide Purchaser with copies of any notices from the Agency, Ginnie Mae or Freddie Mac of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the Agency, Ginnie Mae or Freddie Mac and with copies of any notices from the Agency, Ginnie Mae or Freddie Mac of any termination, potential termination or threatened termination of any servicing agreement entered into between (i) Seller and the Agency (ii) Seller and Freddie Mac or (iii) Seller and Ginnie Mae. Seller shall promptly forward copies of any material notices received from the Agency or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with the Agency that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Current Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Current Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
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Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
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(h) comply with its obligations under the Transaction Documents to which it is a party, and each other agreement entered into with the Agency.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Agency and except as contemplated under the Purchase and Sale Agreement with respect to transition services thereunder, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than (i) the Interim Servicer (prior to the Servicing Transfer Date) and (ii) third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Current Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Data Tape; Schedule of Mortgage Loans.
The information in the Data Tape delivered to Purchaser on the Sale Date will be true and correct in all material respects as of the date specified. Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of the Sale Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
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Section 8.22 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to the Current Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.23 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement and under the Assignment Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller and Bank of America on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Receipt by the Purchaser of a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
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Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition, or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency, that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Current Excess Servicing Spread.
Section 9.05 Consents.
Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents, including Agency approval as contemplated by Section 5.03 and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to the Purchaser copies of each executed Transaction Document that is to be entered into on or prior to such date and each of the items required to be delivered pursuant to Section 2.04 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit C, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries and, the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 9.08 Valuation.
Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Current Excess Servicing Spread is fair and reasonable.
Section 9.09 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.04(a)(ix), Section 2.04(a)(x) and Section 2.04(a)(xi).
Section 9.10 Acquisition of Mortgage Servicing Rights by Seller.
Seller shall have acquired the Mortgage Servicing Rights and other Purchased Assets from Bank of America pursuant to the Purchase and Sale Agreement as of the Sale Date.
Section 9.11 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.12 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
Section 9.13 Fees, Costs and Expenses.
The fees, costs and expenses payable by the Seller on or prior to the Sale Date pursuant to Section 12.01 hereof and any other Transaction Document shall have been paid.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date, as applicable:
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Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Agreement Date or Sale Date, as applicable, are true and correct in all material respects as of the date thereof.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects as of the date thereof.
Section 10.03 Corporate Resolution.
As of the date hereof, Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Sale Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION; CURE
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Sale Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by the Agency against Seller that results in a decrease in Servicing Agreements termination payments due to Seller with respect to the Mortgage Loans from the Agency or in a shortfall of funds to pay the Current Excess Servicing Spread;
(v) Any breach by Seller of the Purchase and Sale Agreement;
(vi) Any termination of Seller by the Agency pursuant to Section 10 of the Servicing Transfer Agreement; and
(vii) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(vi) above;
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provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01. Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to ARTICLE XI of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling
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issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not
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relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Award of Damages.
(a)
(i) In the event that an award of damages or other payments is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee.
(ii) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.
(b) In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Partys designee in possession of the applicable amount shall promptly notify the other Party or the other Partys designee as to the awards existence and request that the other Party or other Partys designee, as applicable, designate an account to which the amount shall be remitted. Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.
(c) Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.
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Section 11.04 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Except as otherwise provided herein, Purchaser and Seller shall share the expenses incurred by Seller and Purchaser or their respective affiliates in connection with the transactions contemplated hereby, with the expense allocation percentage to be mutually agreed upon by the Parties.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may
47
seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
48
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
49
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
50
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Public Announcement.
No public release or statement concerning the subject matter of this Agreement shall be made by either party without the express written consent and approval of the other party, except as required by law or stock exchange rule, and provided that on and after the Agreement Date, either party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.16 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Current Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holders interest in the Current Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
51
Section 12.17 Termination.
If all necessary Owner Consents are not received by the Sale Date, or if the Purchase and Sale Agreement is terminated, this Agreement shall be terminated concurrently therewith, without any further action of either Party. In the event this agreement is terminated as set forth in the prior sentence or in Section 8.13, neither Party shall have any further obligations to the other Party hereunder except as expressly set forth herein. If all conditions to Purchasers or Sellers obligations to close set forth in Article IX and Article X, respectively, are not satisfied on the Sale Date, Purchaser or Seller, as applicable based on the condition or conditions not satisfied, may terminate this agreement by written notice to the other party, and neither party shall have any further obligations to the other party hereunder, except as expressly set forth herein.
Section 12.18 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
52
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR X LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
53
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR X LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Current Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the Sale Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price..
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
54
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR
MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) | (c) | (d) | (e) | (f) (column (d) column (e)) |
(g) ([ ]% of column (f)) | ||||||
Sale Date |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Sale Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Current Excess Servicing Spread | ||||||
EXHIBIT B
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
1vi
EXHIBIT C
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans by and between MSR X LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of the Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
1vii
EXHIBIT D
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR X LLC (the Company), pursuant to Section 10.05 of the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) All conditions set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR X LLC | ||
By: [ ], as member | ||
By: | ||
EXHIBIT E
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT F
FORM OF SUMMARY REMITTANCE REPORT
[DELIVERED SEPARATELY]
EXHIBIT G
FORM OF DELINQUENCY REPORT
[DELIVERED SEPARATELY]
EXHIBIT H
FORM OF DISBURSEMENT REPORT
[DELIVERED SEPARATELY]
EXHIBIT I
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
Exhibit 10.51
FUTURE SPREAD AGREEMENT FOR GNMA MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XI LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||||
Section 1.01 |
Definitions | 1 | ||||
Section 1.02 |
General Interpretive Principles | 12 | ||||
ARTICLE II ITEMS TO BE DELIVERED |
12 | |||||
Section 2.01 |
Items to be Delivered | 12 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
ARTICLE III REPLACEMENT OF MORTGAGE LOANS |
14 | |||||
Section 3.01 |
Refinancing and Substitution of Mortgage Loans | 14 | ||||
Section 3.02 |
Criteria for Mortgage Loans | 14 | ||||
Section 3.03 |
[Reserved] | 16 | ||||
Section 3.04 |
Selection Procedures | 16 | ||||
Section 3.05 |
Assignment of Future Excess Servicing Spread | 17 | ||||
ARTICLE IV PAYMENTS AND DISTRIBUTIONS |
17 | |||||
Section 4.01 |
Purchase Price | 17 | ||||
Section 4.02 |
Payments by Purchaser | 17 | ||||
Section 4.03 |
Accounts | 18 | ||||
Section 4.04 |
Priority of Payments | 20 | ||||
Section 4.05 |
Withdrawals from the Future Spread Reserve Account | 21 | ||||
Section 4.06 |
Payment to Seller of Base Servicing Fee | 21 | ||||
Section 4.07 |
Correction of Principal Balance Error | 22 | ||||
Section 4.08 |
Intent and Characterization | 22 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
22 | |||||
Section 5.01 |
Due Organization and Good Standing | 23 | ||||
Section 5.02 |
Authority and Capacity | 23 | ||||
Section 5.03 |
Owner Consents | 23 | ||||
Section 5.04 |
Title to the Mortgage Servicing Rights | 23 | ||||
Section 5.05 |
Effective Agreements | 24 | ||||
Section 5.06 |
No Accrued Liabilities | 24 | ||||
Section 5.07 |
Seller/Servicer Standing | 24 | ||||
Section 5.08 |
MERS Membership | 24 | ||||
Section 5.09 |
Owner Set-off Rights | 24 | ||||
Section 5.10 |
Ability to Perform; Solvency | 25 | ||||
Section 5.11 |
Obligations with Respect to Origination | 25 | ||||
Section 5.12 |
Purchase of Mortgage Servicing Rights | 25 | ||||
Section 5.13 |
No Actions | 25 |
i
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
25 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 25 | ||||
Section 6.02 |
Related Escrow Accounts | 26 | ||||
Section 6.03 |
No Purchaser Responsibility | 26 | ||||
Section 6.04 |
Location of Credit Files | 26 | ||||
Section 6.05 |
Representations Concerning the Future Excess Servicing Spread | 26 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
27 | |||||
Section 7.01 |
Due Organization and Good Standing | 27 | ||||
Section 7.02 |
Authority and Capacity | 27 | ||||
Section 7.03 |
Effective Agreements | 27 | ||||
Section 7.04 |
Sophisticated Investor | 28 | ||||
Section 7.05 |
No Actions | 28 | ||||
ARTICLE VIII SELLER COVENANTS |
28 | |||||
Section 8.01 |
Servicing Obligations | 28 | ||||
Section 8.02 |
Cooperation; Further Assurances | 29 | ||||
Section 8.03 |
Financing Statements | 29 | ||||
Section 8.04 |
Supplemental Information | 29 | ||||
Section 8.05 |
Access to Information | 29 | ||||
Section 8.06 |
Home Affordable Modification Program | 30 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 30 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 32 | ||||
Section 8.09 |
Monthly Management Calls | 32 | ||||
Section 8.10 |
Timely Payment of Owner Obligations | 32 | ||||
Section 8.11 |
Servicing Agreements | 33 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 33 | ||||
Section 8.13 |
Consents to Transaction Documents | 33 | ||||
Section 8.14 |
Accounts | 33 | ||||
Section 8.15 |
Notification of Certain Events | 34 | ||||
Section 8.16 |
Financing; Pledge of Future Excess Servicing Spread | 34 | ||||
Section 8.17 |
Existence, etc | 34 | ||||
Section 8.18 |
Consent to Sub-Servicing | 35 | ||||
Section 8.19 |
Nonpetition Covenant | 35 | ||||
Section 8.20 |
Schedule of Mortgage Loans | 35 | ||||
Section 8.21 |
True Sale Opinion | 36 | ||||
Section 8.22 |
Valuation | 36 | ||||
Section 8.23 |
Material Documents | 36 | ||||
Section 8.24 |
Insurance | 36 | ||||
Section 8.25 |
Defense of Title | 36 | ||||
Section 8.26 |
Refinancing of Mortgage Loans | 36 |
ii
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
37 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 37 | ||||
Section 9.02 |
Compliance with Conditions | 37 | ||||
Section 9.03 |
Corporate Resolution | 37 | ||||
Section 9.04 |
No Material Adverse Change | 37 | ||||
Section 9.05 |
Consents | 37 | ||||
Section 9.06 |
Delivery of Transaction Documents | 38 | ||||
Section 9.07 |
Certificate of Seller | 38 | ||||
Section 9.08 |
Opinions of Counsel | 38 | ||||
Section 9.09 |
Good Standing Certificate of Seller | 38 | ||||
Section 9.10 |
No Actions or Proceedings | 38 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
38 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 39 | ||||
Section 10.02 |
Compliance with Conditions | 39 | ||||
Section 10.03 |
Corporate Resolution | 39 | ||||
Section 10.04 |
No Material Adverse Change | 39 | ||||
Section 10.05 |
Certificate of Purchaser | 39 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 39 | ||||
ARTICLE XI INDEMNIFICATION |
39 | |||||
Section 11.01 |
Indemnification by Seller | 39 | ||||
Section 11.02 |
Indemnification by Purchaser | 42 | ||||
Section 11.03 |
Other Rights | 42 | ||||
ARTICLE XII MISCELLANEOUS |
42 | |||||
Section 12.01 |
Costs and Expenses | 42 | ||||
Section 12.02 |
Confidentiality | 42 | ||||
Section 12.03 |
Brokers Fees | 43 | ||||
Section 12.04 |
Relationship of Parties | 44 | ||||
Section 12.05 |
Survival of Representations and Warranties | 44 | ||||
Section 12.06 |
Notices | 44 | ||||
Section 12.07 |
Waivers | 44 | ||||
Section 12.08 |
Entire Agreement; Amendment | 45 | ||||
Section 12.09 |
Binding Effect | 45 | ||||
Section 12.10 |
Headings | 45 | ||||
Section 12.11 |
Applicable Law | 45 | ||||
Section 12.12 |
Incorporation of Exhibits | 45 | ||||
Section 12.13 |
Counterparts | 46 | ||||
Section 12.14 |
Severability of Provisions | 46 | ||||
Section 12.15 |
Assignment | 46 | ||||
Section 12.16 |
Termination | 46 | ||||
Section 12.17 |
Third Party Beneficiaries | 47 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement Annex A
Exhibit B [RESERVED]
Exhibit C Schedule of Mortgage Loans
Exhibit D Sellers Officers Certificate
Exhibit E Purchasers Officers Certificate
Exhibit F Location of Credit Files
Exhibit G Form of Summary Remittance Report
Exhibit H Form of Delinquency Report
Exhibit I Form of Disbursement Report
Exhibit J Seller Jurisdictions and Recording Offices
iv
FUTURE SPREAD AGREEMENT FOR GNMA MORTGAGE LOANS
This FUTURE SPREAD AGREEMENT FOR GNMA MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XI LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of the date hereof (as amended, restated, or otherwise modified and in effect, the Current Spread Agreement), pursuant to which Purchaser will purchase and assume all right, title and interest in the excess servicing spread with respect to a pool of residential mortgage loans to be serviced by Seller;
WHEREAS, Seller desires to retain the right to refinance the residential mortgage loans in the pool, and Purchaser is willing to grant such right, as long as the excess servicing spread with respect to the newly-originated residential mortgage loans and replacement residential mortgage loans is assigned to the Purchaser as described herein; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which residential mortgage loans in the pool may be refinanced.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
1
Agency: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, the Federal National Mortgage Association, or any successor thereto, the Government National Mortgage Association, or any successor thereto, the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto, the Department of Veterans Affairs, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An assignment agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Assignment Date: With respect to a Refinanced Mortgage Loan and its related Mortgage Loan, the Distribution Date in the third calendar month following the Refinanced Mortgage Loans Refinancing Date.
Bank: Wells Fargo Bank, National Association, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Future Spread Custodial Account Control Agreement or the Future Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: With respect to the Mortgage Loans (other than GNMA Mortgage Loans), 0.06% per annum and with respect to GNMA Mortgage Loans, 0.12% per annum.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: As defined in Section 2.02 hereof.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the servicing of a Mortgage Loan.
Current Mortgage Loan: A residential mortgage loan that is a Mortgage Loan under the Current Spread Agreement.
Current Spread Agreement: As defined in the recitals to this Agreement.
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the first Assignment Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the first Assignment Date, or such other day as mutually agreed upon by Seller and Purchaser.
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Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) The Owner Consents relating to such Servicing Agreement have been obtained;
(b) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (b) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(c) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(d) with respect to any Servicing Agreement relating to Non-Agency Mortgage Loans, an agreement pursuant to which Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, Seller and MSR IX LLC, in form and substance reasonably acceptable to MSR IX LLC, dated on or before the Sale Date, pursuant to which the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
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FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Federal National Mortgage Association, or any successor thereto, Seller and MSR X LLC, in form and substance reasonably acceptable to MSR X LLC, dated on or before the Sale Date, pursuant to which the Federal National Mortgage Association, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
Future Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Future Excess Servicing Spread Percentage.
Future Excess Servicing Spread Assignment Obligation: As defined in Section 3.01 hereof.
Future Excess Servicing Spread Percentage: A percentage equal to the Current Excess Servicing Spread Percentage in the Current Spread Agreement.
Future Excess Servicing Spread Rights: As defined in Section 3.01 hereof.
Future Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Future Spread Custodial Account.
Future Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Future Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account: The account specified in the Future Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser.
Future Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Future Spread Reserve Account.
Future Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Future Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account Deposit Event: As defined in Section 4.03(c) hereof.
Future Spread Reserve Account Required Amount: As defined in Section 4.03(c) hereof.
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GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
GNMA: Government National Mortgage Association, or any successor thereto.
GNMA Acknowledgment Agreement: The acknowledgment agreement by and among GNMA, or any successor thereto, Seller and Purchaser, in form and substance reasonably acceptable to Purchaser, dated on or before the Sale Date, pursuant to which GNMA, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
GNMA Mortgage Loan: A Mortgage Loan which is owned by GNMA, or any successor thereto.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: As defined in Section 8.06 hereof.
HAMP Loans: As defined in Section 8.06 hereof.
Holder Register: As defined in Section 12.15(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
IRS: The United States Internal Revenue Service.
Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
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Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Future Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) and (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: A residential mortgage loan that satisfies the conditions set forth in Section 3.02 and whose Future Excess Servicing Spread is assigned to Purchaser hereunder in satisfaction of Sellers Future Excess Servicing Spread Assignment Obligation.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Loan Identification Date: With respect to a Refinanced Mortgage Loan and its related replacement Mortgage Loan, the 25th day of the second calendar month following the Refinanced Mortgage Loans Refinancing Date.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all
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rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
New Mortgage Loan: As defined in Section 3.02(a)(i)(1) hereof.
Non-Agency Mortgage Loan: Any Mortgage Loan where the Owner is not an Agency.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: As defined in Section 4.03(c) hereof.
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, including the FHLMC Acknowledgment Agreement, the FNMA Acknowledgment Agreement and GNMA Acknowledgment Agreement, if applicable, pursuant to which an Owner approves or consents to the sale of the Future Excess Servicing Spread from Seller to Purchaser and any other consents, acknowledgements or similar instruments that may be required from an Owner in connection with the transactions contemplated herein.
Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of an Agency required pursuant to the applicable Servicing Agreements.
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Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Potential Replacement Portfolio: As defined in Section 3.04(a) hereof.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Future Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: As defined in Section 4.04 hereof.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: As defined in Section 4.01 hereof.
Purchaser: As defined in the preamble hereof.
Purchaser Indemnitees: As defined in Section 11.01(a) hereof.
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
Refinanced Mortgage Loan: A Current Mortgage Loan or a Mortgage Loan that has been refinanced in whole or in part by Seller or an affiliate thereof.
Refinancing Date: The date on which a Current Mortgage Loan or Mortgage Loan is refinanced by Seller or an affiliate thereof.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Collection Period: With respect to an Assignment Date, the Collection Period in the third calendar month prior to such Assignment Date, and with respect to a Mortgage Loan Identification Date, the second calendar month prior to such Mortgage Loan Identification Date.
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Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: As defined in Section 4.03(c) hereof.
Replacement Portfolio: As defined in Section 3.04(a) hereof.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to 100% minus the Future Excess Servicing Spread Percentage.
Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related assignment agreement under the Current Spread Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (c) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Future Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement as updated by the Seller and Purchaser on each Assignment Date and maintained as Exhibit C hereto.
Selection Period: As defined in Section 3.04(b) hereof.
Seller: As defined in the preamble hereof.
Seller Indemnitees: As defined in Section 11.02 hereof.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans, or with respect to Mortgage Loans owned by the Seller, the credit and collection standards, policies, procedures and practices of Seller relating to residential mortgage loans owned and serviced by Seller.
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Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: As defined in Section 12.15 hereof.
Third Party Assignment: As defined in Section 12.15 hereof.
Third Party Future Spread Agreement: As defined in Section 12.15 hereof.
Third Party Claim: As defined in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Future Spread Custodial Account: The account specified in the Future Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections, all Sales Proceeds and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all other amounts payable by an Owner to Seller (or Purchaser under an Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by an Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements and (c) all Sales Proceeds received during such Collection Period.
Transaction Documents: The Future Spread Custodial Account Agreement, the Future Spread Custodial Account Control Agreement, the Future Spread Reserve Account Agreement, the Future Spread Reserve Account Control Agreement, the Current Spread Agreement and this Agreement.
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UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
ARTICLE II
ITEMS TO BE DELIVERED
Section 2.01 Items to be Delivered.
(a) On the Agreement Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) This Agreement;
(ii) The Current Spread Agreement and all agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Agreement Date, if any;
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(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) The executed Future Spread Custodial Account Agreement;
(ii) The executed Future Spread Custodial Account Control Agreement;
(iii) The executed Future Spread Reserve Account Agreement;
(iv) The executed Future Spread Reserve Account Control Agreement;
(v) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(vi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Future Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(vii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Future Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(viii) The duly executed corporate certificate of Seller required by Section 9.07;
(ix) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Seller;
(x) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xi) The duly executed corporate certificate of Purchaser required by Section 10.05;
(xii) A certificate of good standing of Purchaser dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser;
(xiii) A UCC-1 financing statement relating to the sale of the Future Excess Servicing Spread and relating to the security interest of Purchaser in the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, in form and substance reasonably acceptable to Purchaser; and
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(xiv) All agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Sale Date.
(c) On or before the Assignment Date with respect to a Mortgage Loan, Seller shall provide Purchaser with executed copies of the related Owner Consents, and any amendments thereto.
(d) On or before the first Assignment Date, the executed Power of Attorney.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Future Excess Servicing Spread and perform its obligations hereunder, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
ARTICLE III
REPLACEMENT OF MORTGAGE LOANS
Section 3.01 Refinancing and Substitution of Mortgage Loans.
Subject to, and upon the terms and conditions of this Agreement, and, more particularly, the conditions of this ARTICLE III, if Seller or any of its affiliates refinances any Current Mortgage Loan or Mortgage Loan, it shall designate a residential mortgage loan as a replacement Mortgage Loan pursuant to this ARTICLE III and assign the Future Excess Servicing Spread with respect to such replacement Mortgage Loan on the applicable Assignment Date to Purchaser as provided in this Agreement (such obligations of Seller, the Future Excess Servicing Spread Assignment Obligation), and the rights of Purchaser to such Future Excess Servicing Spread, the Future Excess Servicing Spread Rights).
Section 3.02 Criteria for Mortgage Loans.
(a) As of the applicable Assignment Date, unless otherwise agreed upon by Seller and Purchaser, either:
(i) The Mortgage Loan shall satisfy the following criteria:
(1) The proceeds of such Mortgage Loan (the New Mortgage Loan) were use to repay the Refinanced Mortgage Loan in whole or in part;
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(2) All consents, if any, required by the applicable Owner to assign the related Future Excess Servicing Spread with respect to the New Mortgage Loan shall have been obtained;
(3) The servicing fee rate for the New Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such New Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such New Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such New Mortgage Loan is owned by GNMA; and
(4) The New Mortgage Loan is secured by the same property as the Refinanced Mortgage Loan; or
(ii) if Seller is unable to satisfy the conditions in Section 3.02(a)(i) after using commercially reasonable efforts, Seller shall use its best efforts to substitute the New Mortgage Loan with a Mortgage Loan satisfying the following criteria:
(1) The servicing fee rate (which results in the Servicing Spread Collections) for the Mortgage Loan is equal to or greater than the servicing fee rate of the New Mortgage Loan; provided however if the servicing fee rate of the New Mortgage Loan is less than the applicable rate set forth in Section 3.02(a)(i)(3), the servicing fee rate on the Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such Mortgage Loan is owned by GNMA;
(2) The interest accrual rate per annum on the Mortgage Loan is within 12.5 basis points per annum of the interest accrual rate on the New Mortgage Loan;
(3) The final maturity date of the Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;
(4) The principal balance of the Mortgage Loan is no less than the principal balance of the Refinanced Mortgage Loan;
(5) The remaining credit characteristics of the Mortgage Loan (other than as specified in clauses (1), (2), (3) and (4) above) are substantially the same as the credit characteristics of the New Mortgage Loan;
(6) The Mortgage Loan is current as of the applicable Assignment Date; and
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(7) The Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not in process of any modification, workout or other loss mitigation process; and is not involved in litigation.
(b) If a New Mortgage Loan would otherwise meet the criteria set forth in Section 3.02(a)(i) and is still owned by Seller as of the Mortgage Loan Identification Date, in lieu of a substitution pursuant to Section 3.02(a)(ii) above, the Seller may include such New Mortgage Loan as a Mortgage Loan; provided (i) the servicing fee rate (which results in the Servicing Spread Collections) for such Mortgage Loan shall be deemed to be 0.30% per annum and (ii) if at any time such Mortgage Loan fails to otherwise meet the criteria set forth in Section 3.02(a)(i) (e.g. the Mortgage Loan is sold to an Agency and the Seller is unable to obtain an Owner Consent), the Seller shall be required to substitute a loan for such New Mortgage Loan pursuant to Section 3.02(a)(ii) above.
(c) Notwithstanding the provisions of Section 3.02(a)(ii)(4), Seller shall not be in breach of Section 3.01 on any Assignment Date if, after using best efforts to select residential mortgage loans to substitute New Mortgage Loans pursuant to Section 3.02(a)(ii), the aggregate outstanding principal balance of the residential mortgage loans in the Potential Replacement Portfolio as of such Assignment Date is equal to or greater than 90% of the aggregate outstanding principal balance of the Refinanced Mortgage Loans during the Related Collection Period as measured on the opening of business on their respective Refinancing Date.
Section 3.03 [Reserved].
Section 3.04 Selection Procedures.
(a) Not later than the Mortgage Loan Identification Date, Seller shall (i) notify Purchaser of the identity of each Current Mortgage Loan and each Mortgage Loan that became a Refinanced Mortgage Loan during the Related Collection Period, (ii) provide purchaser a list of New Mortgage Loans which meet the criteria set forth in Section 3.02(a)(i), (iii) with respect to any New Mortgage Loans which do not meet the criteria set forth in Section 3.02(a)(i), provide Purchaser with a list of potential residential mortgage loans in the Sellers portfolio that meet the criteria of Section 3.02(a)(ii) (the Potential Replacement Portfolio), and (iv) provide Purchaser with a list of residential mortgage loans selected from the Potential Replacement Portfolio to be designated as Mortgage Loans (the Replacement Portfolio) on the following Assignment Date.
(b) Purchaser may submit an objection to the proposed Replacement Portfolio not later than five Business Days following receipt of the notice of the proposed portfolios pursuant to Section 3.04(a). If Purchaser submits an objection, Seller and Buyer shall work together in good faith over the next five Business Days (the Selection Period) to mutually agree on the Replacement Portfolio. During the Selection Period, Seller may suggest alternative Mortgage Loans that meet the criteria of Section 3.02. If Seller and Purchaser are unable to agree on a Replacement Portfolio by close of business on the Business Day prior to the Assignment Date, Seller and Purchaser may modify the percentages in the definitions of Future
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Excess Servicing Spread and Retained Servicing Spread and in the Priority of Payments, as applicable, to reflect the relative values that Seller and Purchaser would have had in the Future Excess Servicing Spread and Retained Servicing Spread but for the inability of Seller and Purchaser to mutually agree on the Replacement Portfolio.
Section 3.05 Assignment of Future Excess Servicing Spread.
Subject to the satisfaction of the terms and conditions in this Agreement, on each Assignment Date, Seller shall execute and deliver an Assignment Agreement for the Future Excess Servicing Spread to be assigned on such Assignment Date with respect to the Mortgage Loans included in the applicable Replacement Portfolio; provided, however, that
(a) Purchaser shall be entitled to all Future Excess Servicing Spread and Seller shall be entitled to all Retained Servicing Spread arising with respect to each such Mortgage Loan on and after the Refinancing Date with respect to the related Refinanced Mortgage Loan,
(b) Seller shall deposit all Servicing Spread Collections received with respect to such Mortgage Loans on and after the Refinancing Date with respect to the related Refinanced Mortgage Loans into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date, and
(c) for each Mortgage Loan that was originated on or after the Refinancing Date of the related Refinanced Mortgage Loan, Seller shall deposit all Servicing Spread Collections with respect to amounts prepaid at the time of closing of such Mortgage Loan, if applicable, into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date.
ARTICLE IV
PAYMENTS AND DISTRIBUTIONS
Section 4.01 Purchase Price.
In full consideration for Purchasers right to receive any Future Excess Servicing Spread assigned to Purchaser, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Purchase Price) that shall be determined by the Parties on the Sale Date in accordance with Section 3.01 of the Current Spread Agreement.
Section 4.02 Payments by Purchaser.
Payment shall be made by Purchaser to Seller by wire transfer of immediately available federal funds, to an account designated by Seller.
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Section 4.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments to the Lockbox Account. Payments of all Servicing Spread Collections received on and after the first Assignment Date shall be transferred from the Lockbox Account to the Third Party Controlled Future Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Future Spread Account within two Business Days of receipt thereof.
(b) Third Party Controlled Future Spread Custodial Account.
(i) The Third Party Controlled Future Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Sales Proceeds and Servicing Agreement termination payments with respect to the Mortgage Loans. The Third Party Controlled Future Spread Custodial Account will be established pursuant to the Future Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Future Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Future Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Future Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Future Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable with respect to the Mortgage Loans directly to the Third Party Controlled Future Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Future Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
(iii) If Seller is to receive any Sales Proceeds, Seller shall direct the Person making such payments to deposit such payments into the Third Party Controlled Future Spread Custodial Account.
(iv) If Seller receives any amounts required to be deposited into the Third Party Controlled Future Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Future Spread Custodial Account.
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(c) Future Spread Reserve Account. The Future Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Future Spread Reserve Account will be established pursuant to the Future Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Future Spread Reserve Account strictly in accordance with Section 4.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Future Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Future Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Future Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Future Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Future Spread Custodial Account to the Future Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Future Spread Reserve Account is equal to the Future Spread Reserve Account Required Amount. The Future Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Future Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Future Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Future Spread Reserve Account in excess of the Future Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Future Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such
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objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 4.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Future Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Future Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Future Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Future Spread Custodial Account attributable to Servicing Agreement termination payments paid by an Owner with respect to any Mortgage Loans, pro rata, (A) the Future Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Excess Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 4.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing
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Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Future Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); provided, that (I) prior to the distribution to Purchaser of any Future Excess Servicing Spread pursuant to clause (A), the Future Excess Servicing Spread shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Future Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 4.05 Withdrawals from the Future Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Future Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Future Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Future Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Future Spread Reserve Account after the Future Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 4.06 Payment to Seller of Base Servicing Fee.
(a) Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Future Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Future Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
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(b) The Base Servicing Fee with respect to a Mortgage Loan shall begin to accrue as of the Collection Period prior to the applicable Assignment Date. In no event shall Base Servicing Fees accrue concurrently on any day for a Refinanced Mortgage Loan and for a Mortgage Loan.
Section 4.07 Correction of Principal Balance Error.
If, subsequent to the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile such amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 4.08 Intent and Characterization.
(a) Seller and Purchaser intend that the assignments of the Future Excess Servicing Spread pursuant to this Agreement and each Assignment Agreement constitute valid sales of such Future Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to such Future Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Future Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the aggregate Purchase Price (as defined in the Current Spread Agreement).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
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Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Owner Consents.
Prior to an Assignment Date, Seller has obtained all necessary and applicable Owner Consents.
Section 5.04 Title to the Mortgage Servicing Rights.
As of an Assignment Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Future Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Future Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
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Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Future Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Future Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Future Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
As of the applicable Assignment Date, Seller is approved by each applicable Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with the applicable Agency eligibility requirements or which would require notification to the applicable Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for any Agency which is an Owner of a Mortgage Loan.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system or another similar system reasonable acceptable to the Purchaser.
Section 5.09 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to an Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including without limitation any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for an Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to an Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to an Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
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Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Future Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Future Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Future Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 Purchase of Mortgage Servicing Rights.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened, any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of each Assignment Date (or as of the date specified below, as applicable), as follows:
Section 6.01 Servicing Agreements; Applicable Laws.
Seller, the originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
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Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.04 Location of Credit Files.
All of the Mortgage Loan Documents are held by Custodians or, if held by Seller, in the locations specified in Exhibit F, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by Seller in Exhibit F.
Section 6.05 Representations Concerning the Future Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Future Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Future Excess Servicing Spread, Seller was the sole owner of the Future Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the applicable Owner under the Servicing Agreements), free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Future Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Future Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Future Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 4.08(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Future Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit J attached hereto, the sale and security interests granted hereunder in the Future Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Future Excess Servicing Spread.
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(d) Purchaser has and will continue to have the full right, power and authority to pledge the Future Excess Servicing Spread, and the Future Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to applicable Owner Consents.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Seller as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation
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applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Future Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and, with respect to any Mortgage Loans owned by an Agency, such Agency.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller.
(c) With respect to any Servicing Agreement relating to a Non-Agency Mortgage Loan, subject to a nonrecoverability determination made in accordance with the related Servicing Agreement and to the extent the Seller as servicer has an obligation to advance principal and interest on delinquent Mortgage Loans, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
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(d) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(e) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of each Agency relating to the Mortgage Loans.
Section 8.02 Cooperation; Further Assurances
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser, in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Future Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of its Future Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Future Spread Agreement in accordance with Section 12.15.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Future Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Future Excess Servicing Spread, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the applicable Assignment Date with respect to each Mortgage Loan, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Future Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants.
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Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Current Mortgage Loan and each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to each of the pool of Current Mortgage Loans and the pool of Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
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(ix) aggregate principal balance of Refinanced Mortgage Loans, and (1) for each Refinanced Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Current Mortgage Loan and each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Current Mortgage Loans and Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans and percentages of the aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Non-delinquent Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Current Mortgage Loans and Mortgage Loans in Foreclosure,
(7) Current Mortgage Loans and Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Current Mortgage Loans and Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Current Mortgage Loans and Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
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(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Future Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Future Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Future Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Current Mortgage Loans and Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to an Owner in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
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Section 8.11 Servicing Agreements.
Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the applicable Owner that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the applicable Owner that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the applicable Owner will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Current Mortgage Loans or Mortgage Loans owned by Seller which do not affect the Future Excess Servicing Spread with respect to such Current Mortgage Loans or Mortgage Loans and are not reasonably material to the Purchaser.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
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Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from the applicable Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the applicable Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and that Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Future Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Future Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, without limitation, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit J unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
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(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party and each other agreement entered into with an Owner.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Future Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Schedule of Mortgage Loans.
Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of each Assignment Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
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Section 8.21 True Sale Opinion.
Seller shall cause a written opinion of counsel to be furnished, in form and substance satisfactory to Purchaser, dated the Sale Date with respect to the characterization of the transfer of the Future Excess Servicing Spread by Seller to Purchaser as a true sale. Purchaser may request additional opinions regarding such characterization subsequent to the Sale Date as advised by Purchasers counsel in light of changes in law and other circumstances. To the extent Seller is unable to provide such opinions with respect to any Mortgage Loans, Seller shall substitute such Mortgage Loans with residential mortgage loans have substantially the same credit characteristics.
Section 8.22 Valuation.
As of the Sale Date, Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Future Excess Servicing Spread is fair and reasonable.
Section 8.23 Material Documents.
Seller shall provide Purchaser with executed copies of all material agreements and documents, and any amendments thereto, as of each Assignment Date relating to Sellers acquisition of the related Mortgage Servicing Rights and the servicing of the Mortgage Loans assigned.
Section 8.24 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.25 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to all Future Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.26 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Purchaser shall have received from Seller a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Future Excess Servicing Spread.
Section 9.05 Consents.
The Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Sale Date, and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
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Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to Purchaser copies of each executed Transaction Document that is to be entered on or prior to the Sale Date in the form and substance acceptable to the Purchaser and each of the items required to be delivered pursuant to Section 2.01 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.01(b)(v), Section 2.01(b)(vi) and Section 2.01(b)(vii).
Section 9.09 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.10 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
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Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Sale Date are true and correct in all material respects.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 10.03 Corporate Resolution.
Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit E, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Agreement Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
ARTICLE XI
INDEMNIFICATION
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and
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advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Agreement Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreement termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Future Excess Servicing Spread; and
(v) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(iv) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01(a) but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01(a). Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01(a) or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account.
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(b) REIT Requirements. Notwithstanding anything in Section 11.01(a), in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under Section 11.01(a) hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to Section 11.01 of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
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(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Purchaser and Seller shall each pay the expenses incurred by it or its affiliates pursuant to the Current Spread Agreement in connection with the transactions contemplated hereby.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift
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Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
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Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date and each applicable Assignment Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
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(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
45
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Future Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Future Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Future Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Future Excess Servicing Spread and each holders interest in the Future Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.15(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Future Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.16 Termination.
If the Current Spread Agreement is terminated on or prior to the Sale Date, this Agreement shall terminate and neither Party shall have any further obligations to the other Party hereunder.
46
Section 12.17 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
47
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XI LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: Brian Sigman Title: Chief Financial Officer | ||
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: Amar Patel Title: Executive Vice President |
48
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Future Spread Agreement for GNMA Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XI LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Future Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the applicable Assignment Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: Title: |
49
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE,
CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) | (e) | (g) | (h) | (i) (column (g) column (h)) |
(j) ([ ]% of column (i)) | ||||||||
Refinancing Date |
Loan # of Refinanced Mortgage Loan |
Principal Balance of Refinanced Mortgage Loan |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Assignment Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Future Excess Servicing Spread | ||||||||
50
EXHIBIT C
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT D
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Future Spread Agreement for GNMA Mortgage Loans by and between MSR XI LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Section 9.04 and Section 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
EXHIBIT E
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XI LLC (the Company), pursuant to Section 10.05 of the Future Spread Agreement for GNMA Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) The condition set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR XI LLC | ||
By: [ ], as member | ||
By: |
EXHIBIT F
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT G
FORM OF SUMMARY REMITTANCE REPORT
[SEPARATELY DELIVERED]
EXHIBIT H
FORM OF DELINQUENCY REPORT
[SEPARATELY DELIVERED]
EXHIBIT I
FORM OF DISBURSEMENT REPORT
[SEPARATELY DELIVERED]
EXHIBIT J
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
58
Exhibit 10.52
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT
FOR GNMA MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XI LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
2 | |||
Section 1.01 |
Definitions | 2 | ||
Section 1.02 |
General Interpretive Principles | 14 | ||
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED |
15 | |||
Section 2.01 |
Sale of Current Excess Servicing Spread | 15 | ||
Section 2.02 |
[Reserved] | 15 | ||
Section 2.03 |
Items to be Delivered on the Agreement Date | 15 | ||
Section 2.04 |
Items to be Delivered on the Sale Date | 15 | ||
Section 2.05 |
Sale Date Transactions | 17 | ||
ARTICLE III PAYMENTS AND DISTRIBUTIONS |
18 | |||
Section 3.01 |
Purchase Price | 18 | ||
Section 3.02 |
Payments by Purchaser | 19 | ||
Section 3.03 |
Accounts | 19 | ||
Section 3.04 |
Priority of Payments | 22 | ||
Section 3.05 |
Withdrawals from the Current Spread Reserve Account | 23 | ||
Section 3.06 |
Payment to Seller of Base Servicing Fee | 23 | ||
Section 3.07 |
Intent and Characterization | 24 | ||
ARTICLE IV [RESERVED] |
24 | |||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||
Section 5.01 |
Due Organization and Good Standing | 24 | ||
Section 5.02 |
Authority and Capacity | 25 | ||
Section 5.03 |
Agency Agreements | 25 | ||
Section 5.04 |
Title to the Mortgage Servicing Rights | 25 | ||
Section 5.05 |
Effective Agreements | 26 | ||
Section 5.06 |
No Accrued Liabilities | 26 | ||
Section 5.07 |
Seller/Servicer Standing | 26 | ||
Section 5.08 |
MERS Membership | 26 | ||
Section 5.09 |
Agency Set-off Rights | 26 | ||
Section 5.10 |
Ability to Perform; Solvency | 27 | ||
Section 5.11 |
Material Documents | 27 | ||
Section 5.12 |
Obligations with Respect to Origination | 27 | ||
Section 5.13 |
No Actions. | 27 | ||
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE |
27 | |||
Section 6.01 |
Servicing Agreements; Applicable Laws | 28 |
i
Section 6.02 |
Related Escrow Accounts | 28 | ||
Section 6.03 |
Accuracy of Servicing Information | 28 | ||
Section 6.04 |
No Purchaser Responsibility | 28 | ||
Section 6.05 |
Location of Credit Files | 28 | ||
Section 6.06 |
Representations Concerning the Current Excess Servicing Spread | 28 | ||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
29 | |||
Section 7.01 |
Due Organization and Good Standing | 29 | ||
Section 7.02 |
Authority and Capacity | 30 | ||
Section 7.03 |
Effective Agreements | 30 | ||
Section 7.04 |
Sophisticated Investor | 30 | ||
Section 7.05 |
No Actions | 30 | ||
ARTICLE VIII SELLER COVENANTS |
31 | |||
Section 8.01 |
Servicing Obligations | 31 | ||
Section 8.02 |
Cooperation; Further Assurances | 31 | ||
Section 8.03 |
Financing Statements | 32 | ||
Section 8.04 |
Supplemental Information | 32 | ||
Section 8.05 |
Access to Information | 32 | ||
Section 8.06 |
Home Affordable Modification Program | 32 | ||
Section 8.07 |
Distribution Date Data Tapes and Reports | 33 | ||
Section 8.08 |
Financial Statements and Officers Certificates | 35 | ||
Section 8.09 |
Monthly Management Calls | 35 | ||
Section 8.10 |
Timely Payment of Agency Obligations | 36 | ||
Section 8.11 |
Servicing Agreements | 36 | ||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 36 | ||
Section 8.13 |
Consents to Transaction Documents | 37 | ||
Section 8.14 |
Accounts | 37 | ||
Section 8.15 |
Notification of Certain Events | 37 | ||
Section 8.16 |
Financing; Pledge of Current Excess Servicing Spread | 37 | ||
Section 8.17 |
Existence, etc | 38 | ||
Section 8.18 |
Consent to Sub-Servicing | 39 | ||
Section 8.19 |
Nonpetition Covenant | 39 | ||
Section 8.20 |
Data Tape; Schedule of Mortgage Loans | 39 | ||
Section 8.21 |
Insurance | 39 | ||
Section 8.22 |
Defense of Title | 40 | ||
Section 8.23 |
Refinancing of Mortgage Loans | 40 | ||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
40 | |||
Section 9.01 |
Correctness of Representations and Warranties | 40 | ||
Section 9.02 |
Compliance with Conditions | 40 |
ii
Section 9.03 |
Corporate Resolution | 40 | ||
Section 9.04 |
No Material Adverse Change | 41 | ||
Section 9.05 |
Consents | 41 | ||
Section 9.06 |
Delivery of Transaction Documents | 41 | ||
Section 9.07 |
Certificate of Seller | 41 | ||
Section 9.08 |
Valuation | 42 | ||
Section 9.09 |
Opinions of Counsel | 42 | ||
Section 9.10 |
Acquisition of Mortgage Servicing Rights by Seller | 42 | ||
Section 9.11 |
Good Standing Certificate of Seller | 42 | ||
Section 9.12 |
No Actions or Proceedings | 42 | ||
Section 9.13 |
Fees, Costs and Expenses | 42 | ||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
43 | |||
Section 10.01 |
Correctness of Representations and Warranties | 43 | ||
Section 10.02 |
Compliance with Conditions | 43 | ||
Section 10.03 |
Corporate Resolution | 43 | ||
Section 10.04 |
No Material Adverse Change | 43 | ||
Section 10.05 |
Certificate of Purchaser | 43 | ||
Section 10.06 |
Good Standing Certificate of Purchaser | 43 | ||
ARTICLE XI INDEMNIFICATION; CURE |
44 | |||
Section 11.01 |
Indemnification by Seller | 44 | ||
Section 11.02 |
Indemnification by Purchaser | 46 | ||
Section 11.03 |
Award of Damages | 47 | ||
Section 11.04 |
Other Rights | 48 | ||
ARTICLE XII MISCELLANEOUS |
48 | |||
Section 12.01 |
Costs and Expenses | 48 | ||
Section 12.02 |
Confidentiality | 48 | ||
Section 12.03 |
Brokers Fees | 49 | ||
Section 12.04 |
Relationship of Parties | 49 | ||
Section 12.05 |
Survival of Representations and Warranties | 50 | ||
Section 12.06 |
Notices | 50 | ||
Section 12.07 |
Waivers | 50 | ||
Section 12.08 |
Entire Agreement; Amendment | 51 | ||
Section 12.09 |
Binding Effect | 51 | ||
Section 12.10 |
Headings | 51 | ||
Section 12.11 |
Applicable Law | 51 | ||
Section 12.12 |
Incorporation of Exhibits | 51 | ||
Section 12.13 |
Counterparts | 52 | ||
Section 12.14 |
Severability of Provisions | 52 | ||
Section 12.15 |
Public Announcement | 52 | ||
Section 12.16 |
Assignment | 52 | ||
Section 12.17 |
Termination | 53 | ||
Section 12.18 |
Third Party Beneficiaries | 53 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement
Exhibit B Schedule of Mortgage Loans
Exhibit C Sellers Officers Certificate
Exhibit D Purchasers Officers Certificate
Exhibit E Location of Credit Files
Exhibit F Form of Summary Remittance Report
Exhibit G Form of Delinquency Report
Exhibit H Form of Disbursement Report
Exhibit I Seller Jurisdictions and Recording Offices
iv
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR GNMA
MORTGAGE LOANS
This CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR GNMA MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XI LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Bank of America, National Association (Bank of America) have entered into the Purchase and Sale Agreement, pursuant to which, among other things, Seller will acquire and assume all right, title and interest in mortgage servicing rights to a portfolio of residential mortgage loans owned or securitized by the Agency (as defined herein);
WHEREAS, by acquiring such mortgage servicing rights, Seller is entitled to a servicing spread and other incidental fees with respect to the related residential mortgage loans;
WHEREAS, the servicing spread, together with the Ancillary Income (as defined below), exceeds the compensation that Seller requires to service the related residential mortgage loans;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, a portion of the servicing spread that exceeds such required compensation amount; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which Seller will sell, transfer and assign to Purchaser, all of Sellers right, title and interest in and to a portion of the servicing spread that exceeds the Sellers required compensation amount, and Purchaser will purchase all right, title and interest in and to such portion of the servicing spread;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
7 Year Swap Rate: The yield reported by Bloomberg under USSWAP7 <Index> HP <GO> at ten a.m. (10:00 a.m.), East Coast Time, on the applicable date. The 7 Year Swap Rate on December 7, 2012 was 1.1451%.
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with servicing practices required to be followed by the Agency as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
Agency: Ginnie Mae, or any successor thereto.
Agency Reserve Account: The account created pursuant to Section 3.03(d) hereof and maintained by Wells Fargo Bank, National Association or any successor thereto, or any other third party custodian or trustee selected by Purchaser. Such account has been pledged by the Purchaser to Agency pursuant to the requirements of the GNMA Acknowledgement Agreement.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
2
Bank: Wells Fargo Bank, National Association, or any successor thereto, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Current Spread Distribution Account Control Agreement or the Current Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Bank of America: As defined in the recitals hereof.
Base Purchase Price: The meaning given to such term in Section 3.01.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
Base Servicing Fee Rate: 0.18% per annum, except that, for the period during which the Interim Servicer is servicer of the Mortgage Loans, the Base Servicing Fee Rate shall be the lesser of (a) 0.18% per annum or (b) the interim servicing fee payable to the Interim Servicer.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Claims and Losses: As defined in the GNMA Acknowledgment Agreement.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
3
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the Servicing of a Mortgage Loan.
Current Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Current Excess Servicing Spread Percentage.
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans: The current excess servicing spread acquisition agreement for certain Freddie Mac mortgage loans, dated the date hereof, between the Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Fannie Mae mortgage loans, dated the date hereof, between the Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The current excess servicing spread acquisition agreement for certain non-agency mortgage loans, dated the date hereof, between the Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Percentage: 66.67% .
Current Spread Distribution Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Current Spread Distribution Account.
Current Spread Distribution Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Current Spread Distribution Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account: The account specified in the Current Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association or any successor thereto, or any other third party custodian or trustee selected by Purchaser. Such account has been pledged by the Seller to Agency pursuant to the requirements of the GNMA Acknowledgement Agreement.
4
Current Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Current Spread Reserve Account.
Current Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated on or before the Sale Date, entered into with respect to the Current Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account Deposit Event: The meaning given to such term in Section 3.03(c).
Current Spread Reserve Account Required Amount: The meaning given to such term in Section 3.03(c).
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the Sale Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
Cut-Off Date: The opening of business on the Sale Date.
Data Tape: The list of all mortgage loans, dated as of the date specified therein, whose Mortgage Servicing Rights will be sold, or that are anticipated to be sold, as applicable, to Seller under the Purchase and Sale Agreement.
Deposit: As defined in Section 3.01 hereof.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the Sale Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (a) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein; and
5
(b) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause).
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Federal Funds Rate: For any date of determination, the federal funds rate as reported in the Federal Reserve H.15(519) Statistical Release as of the first Business Day of the month in which such date of determination falls, or if such Statistical Release is no longer published, the average of the high and the low interest rate for reserves traded among commercial banks for overnight use in amounts of one million dollars ($1,000,000.00) or more, as reported by The Wall Street Journal under Federal Funds rates as of the first Business Day of the month in which such date of determination falls.
FHLMC Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR IX LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans.
FNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR X LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
Future Spread Agreements: The Future Spread Agreement for FHLMC Mortgage Loans, the Future Spread Agreement for FNMA Mortgage Loans, the Future Spread Agreement for GNMA Mortgage Loans, the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Future Spread Agreement for FHLMC Mortgage Loans: The Future Spread Agreement for FHLMC Mortgage Loans, dated January 6, 2013, by and between Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
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Future Spread Agreement for FNMA Mortgage Loans: The Future Spread Agreement for FNMA Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for GNMA Mortgage Loans: The Future Spread Agreement for GNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
Ginnie Mae: Government National Mortgage Association, or any successor thereto.
Ginnie Mae Contract: The meaning given to that term in the GNMA Acknowledgment Agreement.
GNMA Acknowledgment Agreement: The acknowledgment agreement relating to the excess servicing spread by and among the Agency, Seller and Purchaser relating to the Mortgage Loans.
GNMA Mortgage Loans: Each of the Mortgage Loans on the Schedule of Mortgage Loans.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
HAMP: The meaning given to such term in Section 8.06.
HAMP Loans: The meaning given to such term in Section 8.06.
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Holder Register: As defined in Section 12.16(b) hereof.
HUD: The Federal Housing Administration of the United States Department of Housing and Urban Development or any successor thereto.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Interim Servicer: Bank of America or its successors or assigns acting as interim servicer with respect to the Mortgage Loans pursuant to the interim servicing addendum of the Purchase and Sale Agreement.
IRS: The United States Internal Revenue Service.
Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving payments from Mortgagors, which account is the relevant P&I custodial account maintained by Seller in accordance with the Ginnie Mae guide.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Current Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) or (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
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Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: Each of those mortgage loans listed on the Schedule of Mortgage Loans.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
MSR Successor Proceeds: Any proceeds received by the Seller or the Purchaser in connection with the sale of the Mortgage Servicing Rights and appointment of a successor servicer, as servicer of the Mortgage Loans, in accordance with the GNMA Acknowledgment Agreement. In the event that consideration for any such sale and appointment relates to mortgage loans in addition to the Mortgage Loans, MSR Successor Proceeds shall be equal to the pro rata amount of such consideration, based upon the proportionate amount of affected Mortgage Loans in relation to all affected mortgage loans of Seller (calculated in accordance with the method in which such MSR Successor Proceeds are calculated).
Net Servicing Fee: As defined in the Purchase and Sale Agreement.
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Non-Agency Mortgage Loans: Each of the mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XII LLC or MSR XIII LLC pursuant to the applicable Sale Agreement.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: The meaning given to such term in Section 3.03(c).
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of the Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Current Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: The meaning given to such term in Section 3.04.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: The meaning given to such term in Section 3.01.
Purchase Price Percentage: 2.79 multiplied by the excess of (i) Net Servicing Fee (as such Net Servicing Fees are determined in accordance with Exhibit F to the Purchase and Sale Agreement), expressed as an annualized rate on the unpaid principal balances of the related Mortgage Loans as of the Sale Date over (ii) the Base Servicing Fee Rate; provided however,
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that for every plus or minus 1 basis point (0.01%) movement in the 7 Year Swap Rate between December 7, 2012 and the Sale Date, the Purchase Price Percentage will be adjusted plus or minus by 0. 0015%. As necessary, the percentage to be determined pursuant to this definition will be based on linear interpolation.
Purchased Assets: As defined in the Purchase and Sale Agreement.
Purchaser: As defined in the preamble hereof.
Purchaser Enforcement Expenses: An amount equal to the Current Excess Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Purchaser Indemnitees: The meaning given to such term in Section 11.01(a).
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: The meaning given to such term in Section 3.03(c).
Repurchase Price: As defined in the Purchase and Sale Agreement.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Reserve Account Deposit Amount: An amount to be deposited in the Reserve Account on each Distribution Date as provided under the Ginnie Acknowledgment Agreement.
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Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreement, to the Retained Servicing Spread Percentage of the Total Servicing Spread.
Retained Servicing Spread Percentage: 100% minus the Current Excess Servicing Spread Percentage.
Sale Agreements: This Agreement, the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Sale Date: The Sale Date or the Subsequent Sale Date, in each case, as defined in the Purchase and Sale Agreement with respect to the Mortgage Loans; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (b) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Current Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement delivered initially accordance with Section 2.04, updated in accordance with Section 3.01 and maintained as Exhibit B hereto.
Seller: As defined in the preamble hereof.
Seller Enforcement Expenses: An amount equal to the Retained Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Seller Indemnitees: The meaning given to such term in Section 11.02.
Seller Purchase Price: The Purchase Price as defined in the Purchase and Sale Agreement.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreement: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller or the Interim Servicer is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans.
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Servicing Transfer Date: As defined in the Purchase and Sale Agreement with respect to the Mortgage Loans.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursement for out-of-pocket expenditures by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Target Reserve Amount: As defined in the Ginnie Acknowledgment Agreement.
Third Party Assignee: The meaning given to such term in Section 12.16.
Third Party Assignment: The meaning given to such term in Section 12.16.
Third Party Current Spread Agreement: The meaning given to such term in Section 12.16.
Third Party Claim: The meaning given to such term in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Current Spread Distribution Account: The account specified in the Current Spread Distribution Account Control Agreement and maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections in respect of the Mortgage Loans and all MSR Successor Proceeds shall be deposited. Such account has been pledged by Seller to Agency pursuant to the requirements of the GNMA Acknowledgment Agreement.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all Sales Proceeds received during such Collection Period; (c) all Repurchase Prices received during such Collection Period; (d) all MSR Successor Proceeds received during such Collection Period and (e) all other amounts payable by the Agency to Seller (or Purchaser under the GNMA Acknowledgement Agreement) with respect to the Mortgage Servicing Rights for Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures in accordance with the Servicing Agreements.
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Transaction Documents: The Purchase and Sale Agreement (including any order, bill of sale, assignment agreement or other transfer agreement related to the sale of the Mortgage Servicing Rights thereunder), the GNMA Acknowledgment Agreement, the Current Spread Distribution Account Agreement, the Current Spread Distribution Account Control Agreement, the Current Spread Reserve Account Agreement, the Current Spread Reserve Account Control Agreement, this Agreement and the Future Spread Agreement.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
PROCEDURES; ITEMS TO BE DELIVERED
Section 2.01 Sale of Current Excess Servicing Spread.
Subject to, and upon the terms and conditions of this Agreement, Seller will sell, transfer and assign to Purchaser, and Purchaser will acquire from Seller, all of Sellers right, title and interest in and to the Current Excess Servicing Spread and all proceeds thereof with respect to the Mortgage Loans.
Section 2.02 [Reserved].
Section 2.03 Items to be Delivered on the Agreement Date.
On the Agreement Date, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(a) The Sale Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement on the Agreement Date;
(b) The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and
(c) The executed Purchase and Sale Agreement.
Section 2.04 Items to be Delivered on the Sale Date.
(a) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) The GNMA Acknowledgment Agreement;
(ii) The Assignment Agreement;
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(iii) All agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement and Future Spread Agreement on the Sale Date;
(iv) All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on the Sale Date;
(v) The executed Current Spread Distribution Account Agreement;
(vi) The executed Current Spread Distribution Account Control Agreement;
(vii) The executed Current Spread Reserve Account Agreement;
(viii) The executed Current Spread Reserve Account Control Agreement;
(ix) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(x) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(xi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Current Excess Servicing Spread to Purchaser;
(xii) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Closing Date to be delivered by Seller;
(xiii) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
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(xiv) An officers certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);
(xv) A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Sale Date;
(xvi) A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Sale Date;
(xvii) A certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser; and
(xviii) A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, in form and substance reasonably acceptable to Purchaser.
(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:
(i) Any amendments, modifications or restatements of the Purchase and Sale Agreement;
(ii) The bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller;
(iii) The executed Power of Attorney; and
(iv) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on the Sale Date as of November 30, 2012.
Section 2.05 Sale Date Transactions.
On the Sale Date, subject to the satisfaction of the terms and conditions herein:
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(a) The Parties shall execute and deliver the Assignment Agreement;
(b) Purchaser shall remit to Seller the Purchase Price; and
(c) Ownership of the Current Excess Servicing Spread shall be transferred to Purchaser.
ARTICLE III
PAYMENTS AND DISTRIBUTIONS
Section 3.01 Purchase Price.
On the first Business Day following the Agreement Date, Purchaser shall pay Seller an amount (the Deposit) equal to the product of (i) $24,241,315 and (ii) Current Excess Servicing Spread Percentage, without any of the adjustments provided in the Purchase and Sale Agreement for such calculation, as an earnest money deposit.
In full consideration for the purchase of the Current Excess Servicing Spread and the rights under the Future Spread Agreement for GNMA Mortgage Loans, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Base Purchase Price) equal to the product of (x) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-Off Date, (y) the Purchase Price Percentage and (z) the Current Excess Servicing Spread Percentage. The Base Purchase Price shall be allocated by the Parties on the Sale Date to reflect the consideration for the purchase of the Current Excess Servicing Spread hereunder (the Purchase Price) and the consideration for the rights acquired by Purchaser under the Future Spread Agreement for GNMA Mortgage Loans.
The Base Purchase Price shall be payable by the Purchaser to the Seller as follows: (a) the Deposit shall be payable on the first Business Day following the Agreement Date, (b) 50% of the estimated Base Purchase Price net of the Deposit shall be payable on the Sale Date and (c) the portion of the Base Purchase Price that has not been paid to Seller by Purchaser as of such date, including with respect to Mortgage Loans that have prepaid between the Sale Date and the Servicing Transfer Date, plus interest thereon at the Federal Funds Rate for the period from the Sale Date to the Servicing Transfer Date shall be payable on the Servicing Transfer Date.
The Seller shall deliver the Schedule of Mortgage Loans no later ten (10) Business Days after the Sale Date. In the event there is an adjustment and reconciliation of the Sellers purchase price pursuant to the terms of Section 3.01(d) of the Purchase and Sale Agreement, the Base Purchase Price shall be subject to a corresponding adjustment and any adjustment amounts (including interest) shall be paid by the Purchaser or the Seller, as applicable, to the other party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
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Section 3.02 Payments by Purchaser
(a) Payments shall be made by Purchaser to Seller by wire transfer of immediately available funds to an account designated by Seller.
(b) If, subsequent to the payment of the Purchase Price or the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, or if for any reason the Purchase Price or such other amounts is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price or such other amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
Section 3.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments due on or after the Servicing Transfer Date to the Lockbox Account. All amounts on deposit in the Lockbox Account will be maintained and applied in accordance with the Servicing Agreement. Payments of all Servicing Spread Collections received on and after the Servicing Transfer Date shall be transferred from the Lockbox Account to the Third Party Controlled Current Spread Distribution Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof, subject, however, to the rights and remedies of Agency pursuant to the lien granted in its favor pursuant to the requirements of the GNMA Acknowledgment Agreement. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account or the Third Party Controlled Current Spread Distribution Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Current Spread Distribution Account within two Business Days of receipt thereof.
(b) Third Party Controlled Current Spread Distribution Account.
(i) The Third Party Controlled Current Spread Distribution Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections with respect to the Mortgage Loans, MSR Successor Proceeds, Sales Proceeds and Repurchase Prices. The Third Party Controlled Current Spread Distribution Account will be established pursuant to the Current Spread Distribution Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Distribution Account Control Agreement,
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Seller may direct the disposition of funds in the Third Party Controlled Current Spread Distribution Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Distribution Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Current Spread Distribution Account.
(ii) Each of the Seller and the Purchaser shall remit any MSR Successor Proceeds received by such party after the Sale Date directly to the Third Party Controlled Current Spread Distribution Account. The Purchaser shall remit any proceeds received by the Purchaser in connection with the sale of the Mortgage Servicing Rights and appointment of a successor servicer following the termination of the Seller, as servicer of the Mortgage Loans, by the Agency in excess of MSR Successor Proceeds to the Seller, as directed by the Seller.
(iii) Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Distribution Account.
(iv) Seller shall direct Bank of America to remit (i) Servicing Spread Collections received by it prior to the Servicing Transfer Date and (ii) any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Distribution Account.
(v) If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Distribution Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Distribution Account.
(c) Current Spread Reserve Account. The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Current Spread Reserve Account.
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If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Current Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Current Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Current Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Current Spread Distribution Account to the Current Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Current Spread Reserve Account is equal to the Current Spread Reserve Account Required Amount. The Current Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Current Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Current Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Current Spread Reserve Account in excess of the Current Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Current Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
(d) Agency Reserve Account. On the Closing Date, the Purchaser shall establish the Agency Reserve Account, which shall be pledged to Ginnie Mae pursuant to the GNMA Acknowledgment Agreement. The Agency Reserve Account shall be available for Claims and Losses payable to Ginnie Mae pursuant to Section 8(d) of the GNMA Acknowledgement Agreement. The Reserve Account Deposit Amount shall be deposited in the Agency Reserve Account pursuant to the Priority of Payments until the amounts on deposit in the Agency Reserve Account are equal to the Target Reserve Account. On any Distribution Date, if the amount on deposit in the Agency Reserve Account exceeds the Target Reserve Amount, such excess shall be released to Purchaser.
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Section 3.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Current Spread Distribution Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Current Spread Distribution Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Current Spread Distribution Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, on each Distribution Date, to pay to the parties necessary to cure the failure of the issuer to make a required remittance to security holders then-outstanding under the Ginnie Mae Contract;
(b) second, from amounts in the Third Party Controlled Current Spread Distribution Account attributable to MSR Successor Proceeds, pro rata, (A) the Current Excess Servicing Spread Percentage of such MSR Successor Proceeds to Purchaser, and (B) the Retained Servicing Spread Percentage of such MSR Successor Proceeds to Seller; provided, that (I) prior to the distribution to Purchaser of any MSR Successor Proceeds pursuant to clause (A), such MSR Successor Proceeds shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and second, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any MSR Successor Proceeds pursuant to clause (B), such MSR Successor Proceeds shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount.
(c) third, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller;
(d) fourth, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(c), any accrued and unpaid Base Servicing Fee to Seller;
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(e) fifth, on each Distribution Date, pro rata, (A) to Purchaser, any Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of MSR Successor Proceeds paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of MSR Successor Proceeds paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant to clause (A), the Current Excess Servicing Spread shall be applied first, to the Agency Reserve Account for the payment of the Reserve Account Deposit Amount, second, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and third, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and
(f) sixth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Distribution Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 3.05 Withdrawals from the Current Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Current Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Current Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Current Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Current Spread Reserve Account after the Current Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 3.06 Payment to Seller of Base Servicing Fee.
Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Current Spread Distribution Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is
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transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or MSR Successor Proceeds otherwise allocable to the Current Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
Section 3.07 Intent and Characterization.
(a) Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.
ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans.
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Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity, subject to the approvals required pursuant to Section 5.03, to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Agency Agreements.
Seller will have obtained the GNMA Acknowledgement Agreement and all other necessary approvals, agreements and consents, if any, of the Agency with respect to the Transaction Documents on or prior to the Sale Date.
Section 5.04 Title to the Mortgage Servicing Rights.
As of the Closing Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Current Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Current Excess Servicing Spread shall be subject to the Agencys rights under the Ginnie Mae Contract and shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever, other than such Agency rights and Permitted Liens.
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Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document that has been executed by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Current Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Current Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Current Excess Servicing Spread.
Section 5.07 Seller/Servicer Standing.
Seller is a Ginnie Mae issuer and a HUD approved mortgagee/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make Seller unable to comply with Ginnie Mae and HUD eligibility requirements or which would require notification to the Agency or HUD. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of Ginnie Mae or HUD eligibility requirements, it shall immediately notify the Purchaser that it is no longer a Ginnie Mae approved issuer or a HUD approved mortgagee/servicer of mortgage loans.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system.
Section 5.09 Agency Set-off Rights.
Seller has no actual notice, including any notice received from the Agency, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to the Agency for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to the Agency under servicing agreements relating to Sellers entire servicing portfolio for the Agency (including any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for the Agency under the regular servicing option or other mortgages
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subject to recourse agreements, (iii) any loss or damage to the Agency by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to the Agency under a servicing contract relating to Sellers entire servicing portfolio with the Agency.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Current Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Current Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Current Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Material Documents.
Seller has provided Purchaser with executed copies of all material agreements and documents, and any amendments thereto, relating to Sellers acquisition of the Mortgage Servicing Rights and the servicing of the Mortgage Loans.
Section 5.12 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the Agency.
Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened, any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
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Section 6.01 Servicing Agreements; Applicable Laws.
The originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 Accuracy of Servicing Information.
The information in the Data Tape dated as of November 30, 2012 is true and correct in all material respects as of the date specified therein; provided that if there is no date specified in the Data Tape, as of November 30, 2012.
Section 6.04 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, to pay any servicing fees thereunder or for repurchase or origination claims thereunder.
Section 6.05 Location of Credit Files.
All of the Mortgage Loan Documents are or upon delivery by Bank of America will be held by Custodians, or if held by the Seller, in the locations specified in Exhibit E, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by the Seller in Exhibit E.
Section 6.06 Representations Concerning the Current Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Current Excess Servicing Spread on the Sale Date, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the Agency under the Servicing Agreements, free and clear of all Liens
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(other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Current Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale by Seller to Purchaser of the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such sale.
(c) As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the Seller has taken all steps necessary under the UCC to perfect the sale of the Current Excess Servicing Spread to Purchaser and all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to the Agencys consent.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Purchaser as of the Agreement Date and the Sale Date (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
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Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Current Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
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ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall (or, prior to the Servicing Transfer Date, shall cause the Interim Servicer to,) pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Agency, the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.
(c) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the Agency for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(d) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of the Agency.
Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser (except as provided in Section 12.01), in obtaining consents from the Agency as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Current Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of the Current Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Current Spread Agreement in accordance with Section 12.16.
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Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Current Excess Servicing Spread granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Current Excess Servicing Spread.
Section 8.04 Supplemental Information.
From time to time after the Sale Date, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Current Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
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Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
(ix) (1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage, interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
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(c) A Delinquency Report with respect to the Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the Mortgage Loans and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Current Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
(6) Mortgage Loans in Foreclosure,
(7) Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
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(iii) The amount of the Current Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Current Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Distribution Account or the Current Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Current Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Mortgage Loans and the performance of the parties under the Transaction Documents.
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Section 8.10 Timely Payment of Agency Obligations.
Seller shall pay all of its obligations to the Agency in a timely manner so as to avoid exercise of any right of set-off by the Agency against Seller.
Section 8.11 Servicing Agreements.
After the Servicing Transfer Date, Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, without limitation, after the Servicing Transfer Date, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the Agency that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the Agency that may be material to the Purchaser (in the Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the Agency will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Mortgage Loans owned by Seller which do not affect the Current Excess Servicing Spread with respect to such Mortgage Loans and are not reasonably material to the Purchaser.
The Seller shall monitor the obligations of the Interim Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
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Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between (i) Seller and the Agency, (ii) Seller and Fannie Mae or (iii) Seller and Freddie Mac. Seller shall provide Purchaser with copies of any notices from the Agency, Fannie Mae or Freddie Mac of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the Agency, Fannie Mae or Freddie Mac and with copies of any notices from the Agency, Fannie Mae or Freddie Mac of any termination, potential termination or threatened termination of any servicing agreement entered into between (i) Seller and the Agency, (ii) Seller and Fannie Mae or (iii) Seller and Freddie Mac. Seller shall promptly forward copies of any material notices received from the Agency or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with the Agency that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Current Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Current Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
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Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document;
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(h) maintain its status as a Ginnie Mae issuer and as a HUD approved mortgagee/servicer; and
(i) comply with its obligations under the Transaction Documents to which it is a party, and each other agreement entered into with the Agency.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Agency and except as contemplated under the Purchase and Sale Agreement with respect to transition services thereunder, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than (i) the Interim Servicer (prior to the Servicing Transfer Date) and (ii) third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Current Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Data Tape; Schedule of Mortgage Loans.
The information in the Data Tape delivered to Purchaser on the Sale Date will be true and correct in all material respects as of the date specified. Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of the Sale Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
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Section 8.22 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to the Current Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.23 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement and under the Assignment Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller and Bank of America on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Receipt by the Purchaser of a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
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Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition, or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency, that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Current Excess Servicing Spread.
Section 9.05 Consents.
Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents, including Agency approval as contemplated by Section 5.03 and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to the Purchaser copies of each executed Transaction Document that is to be entered into on or prior to such date and each of the items required to be delivered pursuant to Section 2.04 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit C, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 9.08 Valuation.
Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Current Excess Servicing Spread is fair and reasonable.
Section 9.09 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.04(a)(ix), Section 2.04(a)(x) and Section 2.04(a)(xi).
Section 9.10 Acquisition of Mortgage Servicing Rights by Seller.
Seller shall have acquired the Mortgage Servicing Rights and the other Purchased Assets from Bank of America pursuant to the Purchase and Sale Agreement as of the Sale Date.
Section 9.11 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.12 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
Section 9.13 Fees, Costs and Expenses.
The fees, costs and expenses payable by the Seller on or prior to the Sale Date pursuant to Section 12.01 hereof and any other Transaction Document shall have been paid.
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ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date, as applicable:
Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Agreement Date or Sale Date, as applicable, are true and correct in all material respects as of the date thereof.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects as of the date thereof.
Section 10.03 Corporate Resolution.
As of the date hereof, Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Sale Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION; CURE
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Sale Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by the Agency against Seller that results in a decrease in MSR Successor Proceeds or in a shortfall of funds to pay the Current Excess Servicing Spread;
(v) Any breach by Seller of the Purchase and Sale Agreement;
(vi) Any payments made pursuant to clause first of Section 3.04(a) hereof;
(vii) Any amounts paid to Ginnie Mae from the Agency Reserve Account;
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(viii) Seller not maintaining a Secured Party under the GNMA Acknowledgment Agreement or any breach of the GNMA Acknowledgment Agreement by the Secured Party thereunder; and
(ix) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i) (viii) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01. Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Current Spread Distribution Account or the Current Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such
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amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to ARTICLE XI of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the
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amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Award of Damages.
(a)
(i) In the event that an award of damages or other payments is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee.
(ii) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.
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(b) In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Partys designee in possession of the applicable amount shall promptly notify the other Party or the other Partys designee as to the awards existence and request that the other Party or other Partys designee, as applicable, designate an account to which the amount shall be remitted. Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.
(c) Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.
Section 11.04 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the GNMA Acknowledgment Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Except as otherwise provided herein, Purchaser and Seller shall share the expenses incurred by Seller and Purchaser or their respective affiliates in connection with the transactions contemplated hereby, with the expense allocation percentage to be mutually agreed upon by the Parties.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives
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and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
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Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
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(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
51
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Public Announcement.
No public release or statement concerning the subject matter of this Agreement shall be made by either party without the express written consent and approval of the other party, except as required by law or stock exchange rule, and provided that on and after the Agreement Date, either party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.16 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Current Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
52
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holders interest in the Current Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.17 Termination.
If the GNMA Acknowledgment Agreement is not received by the Sale Date, or if the Purchase and Sale Agreement is terminated, this Agreement shall be terminated concurrently therewith, without any further action of either Party. In the event this agreement is terminated as set forth in the prior sentence, neither Party shall have any further obligations to the other Party hereunder except as expressly set forth herein. If all conditions to Purchasers or Sellers obligations to close set forth in Article IX and Article X, respectively, are not satisfied on the Sale Date, Purchaser or Seller, as applicable based on the condition or conditions not satisfied, may terminate this agreement by written notice to the other party, and neither party shall have any further obligations to the other party hereunder, except as expressly set forth herein.
Section 12.18 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
53
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XI LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: Title: |
Brian Sigman Chief Financial Officer |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: Title: |
Amar Patel Executive Vice President |
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XI LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Current Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the Sale Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR
MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) | (c) | (d) | (e) | (f) (column (d) column (e)) |
(g) ([ ]% of column (f)) | ||||||
Sale Date |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Sale Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Current Excess Servicing Spread | ||||||
EXHIBIT B
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT C
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans by and between MSR XI LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
EXHIBIT D
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XI LLC (the Company), pursuant to Section 10.05 of the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) All conditions set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR XI LLC | ||
By: [ ], as member | ||
By: |
EXHIBIT E
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT F
FORM OF SUMMARY REMITTANCE REPORT
[DELIVERED SEPARATELY]
EXHIBIT G
FORM OF DELINQUENCY REPORT
[DELIVERED SEPARATELY]
EXHIBIT H
FORM OF DISBURSEMENT REPORT
[DELIVERED SEPARATELY]
EXHIBIT I
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
Exhibit 10.53
FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XII LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||||
Section 1.01 |
Definitions | 1 | ||||
Section 1.02 |
General Interpretive Principles | 12 | ||||
ARTICLE II ITEMS TO BE DELIVERED |
12 | |||||
Section 2.01 |
Items to be Delivered | 12 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
ARTICLE III REPLACEMENT OF MORTGAGE LOANS |
14 | |||||
Section 3.01 |
Refinancing and Substitution of Mortgage Loans | 14 | ||||
Section 3.02 |
Criteria for Mortgage Loans | 14 | ||||
Section 3.03 |
Refinancing Incentives | 16 | ||||
Section 3.04 |
Selection Procedures | 17 | ||||
Section 3.05 |
Assignment of Future Excess Servicing Spread | 19 | ||||
ARTICLE IV PAYMENTS AND DISTRIBUTIONS |
19 | |||||
Section 4.01 |
Purchase Price | 19 | ||||
Section 4.02 |
Payments by Purchaser | 19 | ||||
Section 4.03 |
Accounts | 19 | ||||
Section 4.04 |
Priority of Payments | 21 | ||||
Section 4.05 |
Withdrawals from the Future Spread Reserve Account | 23 | ||||
Section 4.06 |
Payment to Seller of Base Servicing Fee | 23 | ||||
Section 4.07 |
Correction of Principal Balance Error | 23 | ||||
Section 4.08 |
Intent and Characterization | 24 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
24 | |||||
Section 5.01 |
Due Organization and Good Standing | 24 | ||||
Section 5.02 |
Authority and Capacity | 25 | ||||
Section 5.03 |
Owner Consents | 25 | ||||
Section 5.04 |
Title to the Mortgage Servicing Rights | 25 | ||||
Section 5.05 |
Effective Agreements | 25 | ||||
Section 5.06 |
No Accrued Liabilities | 25 | ||||
Section 5.07 |
Seller/Servicer Standing | 26 | ||||
Section 5.08 |
MERS Membership | 26 | ||||
Section 5.09 |
Owner Set-off Rights | 26 | ||||
Section 5.10 |
Ability to Perform; Solvency | 26 | ||||
Section 5.11 |
Obligations with Respect to Origination | 26 | ||||
Section 5.12 |
Purchase of Mortgage Servicing Rights | 26 | ||||
Section 5.13 |
No Actions | 27 |
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ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE |
||||||
LOANS AND SERVICING |
27 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 27 | ||||
Section 6.02 |
Related Escrow Accounts | 27 | ||||
Section 6.03 |
No Purchaser Responsibility | 27 | ||||
Section 6.04 |
Location of Credit Files | 27 | ||||
Section 6.05 |
Representations Concerning the Future Excess Servicing Spread | 28 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
28 | |||||
Section 7.01 |
Due Organization and Good Standing | 28 | ||||
Section 7.02 |
Authority and Capacity | 29 | ||||
Section 7.03 |
Effective Agreements | 29 | ||||
Section 7.04 |
Sophisticated Investor | 29 | ||||
Section 7.05 |
No Actions | 29 | ||||
ARTICLE VIII SELLER COVENANTS |
30 | |||||
Section 8.01 |
Servicing Obligations | 30 | ||||
Section 8.02 |
Cooperation; Further Assurances | 30 | ||||
Section 8.03 |
Financing Statements | 30 | ||||
Section 8.04 |
Supplemental Information | 31 | ||||
Section 8.05 |
Access to Information | 31 | ||||
Section 8.06 |
Home Affordable Modification Program | 31 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 31 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 33 | ||||
Section 8.09 |
Monthly Management Calls | 34 | ||||
Section 8.10 |
Timely Payment of Owner Obligations | 34 | ||||
Section 8.11 |
Servicing Agreements | 34 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 34 | ||||
Section 8.13 |
Consents to Transaction Documents | 35 | ||||
Section 8.14 |
Accounts | 35 | ||||
Section 8.15 |
Notification of Certain Events | 35 | ||||
Section 8.16 |
Financing; Pledge of Future Excess Servicing Spread | 35 | ||||
Section 8.17 |
Existence, etc | 35 | ||||
Section 8.18 |
Consent to Sub-Servicing | 36 | ||||
Section 8.19 |
Nonpetition Covenant | 36 | ||||
Section 8.20 |
Schedule of Mortgage Loans | 37 | ||||
Section 8.21 |
True Sale Opinion | 37 | ||||
Section 8.22 |
Valuation | 37 | ||||
Section 8.23 |
Material Documents | 37 | ||||
Section 8.24 |
Insurance | 37 | ||||
Section 8.25 |
Defense of Title | 37 |
ii
Section 8.26 |
Refinancing of Mortgage Loans | 37 | ||||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
38 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 38 | ||||
Section 9.02 |
Compliance with Conditions | 38 | ||||
Section 9.03 |
Corporate Resolution | 38 | ||||
Section 9.04 |
No Material Adverse Change | 38 | ||||
Section 9.05 |
Consents | 38 | ||||
Section 9.06 |
Delivery of Transaction Documents | 39 | ||||
Section 9.07 |
Certificate of Seller | 39 | ||||
Section 9.08 |
Opinions of Counsel | 39 | ||||
Section 9.09 |
Good Standing Certificate of Seller | 39 | ||||
Section 9.10 |
No Actions or Proceedings | 39 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
40 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 40 | ||||
Section 10.02 |
Compliance with Conditions | 40 | ||||
Section 10.03 |
Corporate Resolution | 40 | ||||
Section 10.04 |
No Material Adverse Change | 40 | ||||
Section 10.05 |
Certificate of Purchaser | 40 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 40 | ||||
ARTICLE XI INDEMNIFICATION |
41 | |||||
Section 11.01 |
Indemnification by Seller | 41 | ||||
Section 11.02 |
Indemnification by Purchaser | 42 | ||||
Section 11.03 |
Other Rights | 43 | ||||
ARTICLE XII MISCELLANEOUS |
44 | |||||
Section 12.01 |
Costs and Expenses | 44 | ||||
Section 12.02 |
Confidentiality | 44 | ||||
Section 12.03 |
Brokers Fees | 44 | ||||
Section 12.04 |
Relationship of Parties | 45 | ||||
Section 12.05 |
Survival of Representations and Warranties | 45 | ||||
Section 12.06 |
Notices | 45 | ||||
Section 12.07 |
Waivers | 45 | ||||
Section 12.08 |
Entire Agreement; Amendment | 46 | ||||
Section 12.09 |
Binding Effect | 46 | ||||
Section 12.10 |
Headings | 46 | ||||
Section 12.11 |
Applicable Law | 46 | ||||
Section 12.12 |
Incorporation of Exhibits | 47 | ||||
Section 12.13 |
Counterparts | 47 | ||||
Section 12.14 |
Severability of Provisions | 47 | ||||
Section 12.15 |
Assignment | 47 | ||||
Section 12.16 |
Termination | 47 | ||||
Section 12.17 |
Third Party Beneficiaries | 48 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement Annex A
Exhibit B Example of Calculations of Maximum Retained Refinancing Loan Amounts
Exhibit C Schedule of Mortgage Loans
Exhibit D Sellers Officers Certificate
Exhibit E Purchasers Officers Certificate
Exhibit F Location of Credit Files
Exhibit G Form of Summary Remittance Report
Exhibit H Form of Delinquency Report
Exhibit I Form of Disbursement Report
Exhibit J Seller Jurisdictions and Recording Offices
iv
FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS
This FUTURE SPREAD AGREEMENT FOR NON-AGENCY MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XII LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser have entered into the Current Excess Servicing Spread Acquisition Agreement For Non-Agency Mortgage Loans, dated as of the date hereof (as amended, restated, or otherwise modified and in effect, the Current Spread Agreement), pursuant to which Purchaser will purchase and assume all right, title and interest in the excess servicing spread with respect to a pool of residential mortgage loans to be serviced by Seller;
WHEREAS, Seller desires to retain the right to refinance the residential mortgage loans in the pool, and Purchaser is willing to grant such right, as long as the excess servicing spread with respect to the newly-originated residential mortgage loans and replacement residential mortgage loans is assigned to the Purchaser as described herein; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which residential mortgage loans in the pool may be refinanced.
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
1
Agency: The entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, the Federal National Mortgage Association, or any successor thereto, the Government National Mortgage Association, or any successor thereto, the Federal Housing Administration of the United States Department of Housing and Urban Development, or any successor thereto, the Department of Veterans Affairs, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An assignment agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Assignment Date: With respect to a Refinanced Mortgage Loan and its related Mortgage Loan, the Distribution Date in the third calendar month following the Refinanced Mortgage Loans Refinancing Date.
Available Portfolio: As defined in Section 3.04(a) hereof.
Bank: Wells Fargo Bank, National Association, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Future Spread Custodial Account Control Agreement or the Future Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the product of (A) the aggregate outstanding principal balance of the Mortgage Loans as of the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period, a fraction, the numerator of which is the number of days in the period from and including the Sale Date to and including the last day of the initial Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: With respect to the Mortgage Loans (other than GNMA Mortgage Loans), 0.06% per annum and with respect to GNMA Mortgage Loans, 0.12% per annum.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Carryover Retained Amount: As defined in Section 3.03 hereof.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: As defined in Section 2.02 hereof.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the servicing of a Mortgage Loan.
Current Mortgage Loan: A residential mortgage loan that is a Mortgage Loan under the Current Spread Agreement.
Current Spread Agreement: As defined in the recitals to this Agreement.
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the first Assignment Date as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
3
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the first Assignment Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) the Owner Consents relating to such Servicing Agreement have been obtained;
(b) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (b) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(c) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(d) with respect to any Servicing Agreement relating to Non-Agency Mortgage Loans, an agreement pursuant to which the Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
Excess Refinancing Percentage: As defined in Section 3.03 hereof.
Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
4
FHLMC Acknowledgment Agreement: The acknowledgment agreement by and among the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, Seller and MSR IX LLC, in form and substance reasonably acceptable to MSR IX LLC, dated on or before the Sale Date, pursuant to which the entity formerly known as the Federal Home Loan Mortgage Corporation, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
FNMA Acknowledgment Agreement: The acknowledgment agreement by and among the Federal National Mortgage Association, or any successor thereto, Seller and MSR X LLC, in form and substance reasonably acceptable to MSR X LLC, dated on or before the Sale Date, pursuant to which the Federal National Mortgage Association, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
Future Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Future Excess Servicing Spread Percentage.
Future Excess Servicing Spread Assignment Obligation: As defined in Section 3.01 hereof.
Future Excess Servicing Spread Percentage: A percentage equal to the Current Excess Servicing Spread Percentage in the Current Spread Agreement.
Future Excess Servicing Spread Rights: As defined in Section 3.01 hereof.
Future Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Future Spread Custodial Account.
Future Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Future Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Future Spread Reserve Account: The account specified in the Future Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser.
Future Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Future Spread Reserve Account.
Future Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any successor thereto, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Future Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
5
Future Spread Reserve Account Deposit Event: As defined in Section 4.03(c) hereof.
Future Spread Reserve Account Required Amount: As defined in Section 4.03(c) hereof.
GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
GNMA: Government National Mortgage Association, or any successor thereto.
GNMA Acknowledgment Agreement: The acknowledgment agreement by and among GNMA, or any successor thereto, Seller and MSR XI LLC, in form and substance reasonably acceptable to MSR XI LLC, dated on or before the Sale Date, pursuant to which GNMA, or any successor thereto, consents to the sale of the excess servicing spread and other arrangements specified therein.
GNMA Mortgage Loan: A Mortgage Loan which is owned by GNMA, or any successor thereto.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: As defined in Section 8.06 hereof.
HAMP Loans: As defined in Section 8.06 hereof.
Holder Register: As defined in Section 12.15(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
IRS: The United States Internal Revenue Service.
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Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Future Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) and (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Maximum Retained Refinancing Loan Amount: As defined in Section 3.03 hereof.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: A residential mortgage loan that satisfies the conditions set forth in Section 3.02 and whose Future Excess Servicing Spread is assigned to Purchaser hereunder in satisfaction of Sellers Future Excess Servicing Spread Assignment Obligation.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Loan Identification Date: With respect to a Refinanced Mortgage Loan and its related replacement Mortgage Loan, the 25th day of the second calendar month following the Refinanced Mortgage Loans Refinancing Date.
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Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
New Mortgage Loan: As defined in Section 3.02(a)(i)(1) hereof.
Non-Agency Mortgage Loan: Any Mortgage Loan where the Owner is not an Agency.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: As defined in Section 4.03(c) hereof.
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, including the FHLMC Acknowledgment Agreement, the FNMA Acknowledgment Agreement and GNMA Acknowledgment Agreement, if applicable, pursuant to which an Owner approves or consents to the sale of the Future Excess Servicing Spread from Seller to Purchaser and any other consents, acknowledgements or similar instruments that may be required from an Owner in connection with the transactions contemplated herein.
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Party or Parties: As defined in the preamble hereof.
Permitted Liens: Liens in favor of an Agency required pursuant to the applicable Servicing Agreements.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Future Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: As defined in Section 4.04 hereof.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: As defined in Section 4.01 hereof.
Purchaser: As defined in the preamble hereof.
Purchaser Indemnitees: As defined in Section 11.01(a) hereof.
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
Quarterly Collection Period: As defined in Section 3.03 hereof.
Refinanced Mortgage Loan: A Current Mortgage Loan or a Mortgage Loan that has been refinanced in whole or in part by Seller or an affiliate thereof.
Refinancing Date: The date on which a Current Mortgage Loan or Mortgage Loan is refinanced by Seller or an affiliate thereof.
Refinancing Split Percentage: As defined in Section 3.03 hereof.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
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REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Collection Period: With respect to an Assignment Date, the Collection Period in the third calendar month prior to such Assignment Date, and with respect to a Mortgage Loan Identification Date, the second calendar month prior to such Mortgage Loan Identification Date.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: As defined in Section 4.03(c) hereof.
Replacement Portfolio: As defined in Section 3.04(a) hereof.
Replacement Shortfall: As defined in Section 3.03 hereof.
Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Portfolio: As defined in Section 3.04(a) hereof.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to 100% minus the Future Excess Servicing Spread Percentage.
Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related assignment agreement under the Current Spread Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (c) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Future Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement as updated by the Seller and Purchaser on each Assignment Date and maintained as Exhibit C hereto.
Selection Period: As defined in Section 3.04(b) hereof.
Seller: As defined in the preamble hereof.
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Seller Indemnitees: As defined in Section 11.02 hereof.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans, or with respect to Mortgage Loans owned by the Seller, the credit and collection standards, policies, procedures and practices of Seller relating to residential mortgage loans owned and serviced by Seller.
Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Third Party Assignee: As defined in Section 12.15 hereof.
Third Party Assignment: As defined in Section 12.15 hereof.
Third Party Future Spread Agreement: As defined in Section 12.15 hereof.
Third Party Claim: As defined in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Future Spread Custodial Account: The account specified in the Future Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections, all Sales Proceeds and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all other amounts payable by an Owner to Seller (or Purchaser under an Owner Consent) with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by an Owner to Seller for terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements and (c) all Sales Proceeds received during such Collection Period.
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Transaction Documents: The Future Spread Custodial Account Agreement, the Future Spread Custodial Account Control Agreement, the Future Spread Reserve Account Agreement, the Future Spread Reserve Account Control Agreement, the Current Spread Agreement and this Agreement.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
ARTICLE II
ITEMS TO BE DELIVERED
Section 2.01 Items to be Delivered.
(a) On the Agreement Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
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(i) This Agreement;
(ii) The Current Spread Agreement and all agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Agreement Date, if any;
(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(i) The executed Future Spread Custodial Account Agreement;
(ii) The executed Future Spread Custodial Account Control Agreement;
(iii) The executed Future Spread Reserve Account Agreement;
(iv) The executed Future Spread Reserve Account Control Agreement;
(v) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(vi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Future Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy purposes;
(vii) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Future Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(viii) The duly executed corporate certificate of Seller required by Section 9.07;
(ix) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Seller;
(x) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xi) The duly executed corporate certificate of Purchaser required by Section 10.05;
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(xii) A certificate of good standing of Purchaser dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser;
(xiii) A UCC-1 financing statement relating to the sale of the Future Excess Servicing Spread and relating to the security interest of Purchaser in the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, in form and substance reasonably acceptable to Purchaser; and
(xiv) All agreements, certificates, opinions and instruments required to be delivered under the Current Spread Agreement on the Sale Date.
(c) On or before the Assignment Date with respect to a Mortgage Loan, Seller shall provide Purchaser with executed copies of the related Owner Consents, and any amendments thereto.
(d) On or before the first Assignment Date, the executed Power of Attorney.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Future Excess Servicing Spread and perform its obligations hereunder, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
ARTICLE III
REPLACEMENT OF MORTGAGE LOANS
Section 3.01 Refinancing and Substitution of Mortgage Loans.
Subject to, and upon the terms and conditions of this Agreement, and, more particularly, the conditions of this ARTICLE III, if Seller or any of its affiliates refinances any Current Mortgage Loan or Mortgage Loan, it shall designate a residential mortgage loan as a replacement Mortgage Loan pursuant to this ARTICLE III and assign the Future Excess Servicing Spread with respect to such replacement Mortgage Loan on the applicable Assignment Date to Purchaser as provided in this Agreement (such obligations of Seller, the Future Excess Servicing Spread Assignment Obligation), and the rights of Purchaser to such Future Excess Servicing Spread, the Future Excess Servicing Spread Rights).
Section 3.02 Criteria for Mortgage Loans.
(a) As of the applicable Assignment Date, unless otherwise agreed upon by Seller and Purchaser, either:
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(i) The Mortgage Loan shall satisfy the following criteria:
(1) The proceeds of such Mortgage Loan (the New Mortgage Loan) were use to repay the Refinanced Mortgage Loan in whole or in part;
(2) All consents, if any, required by the applicable Owner to assign the related Future Excess Servicing Spread with respect to the New Mortgage Loan shall have been obtained;
(3) The servicing fee rate for the New Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such New Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such New Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such New Mortgage Loan is owned by GNMA; and
(4) The New Mortgage Loan is secured by the same property as the Refinanced Mortgage Loan; or
(ii) if Seller is unable to satisfy the conditions in Section 3.02(a)(i) after using commercially reasonable efforts, Seller shall use its best efforts to substitute the New Mortgage Loan with a Mortgage Loan satisfying the following criteria:
(1) The servicing fee rate (which results in the Servicing Spread Collections) for the Mortgage Loan is equal to or greater than the servicing fee rate of the New Mortgage Loan; provided however if the servicing fee rate of the New Mortgage Loan is less than the applicable rate set forth in Section 3.02(a)(i)(3), the servicing fee rate on the Mortgage Loan is not less than the lesser of (x) the servicing fee rate of the Refinanced Mortgage Loan and (y) (A) 0.25% per annum if such Mortgage Loan is owned by Fannie Mae or Freddie Mac, (B) 0.35% per annum if such Mortgage Loan is a Non-Agency Mortgage Loan or (C) 0.375% per annum if such Mortgage Loan is owned by GNMA;
(2) The interest accrual rate per annum on the Mortgage Loan is within 12.5 basis points per annum of the interest accrual rate on the New Mortgage Loan;
(3) The final maturity date of the Mortgage Loan is within six months of the final maturity date of the New Mortgage Loan;
(4) The principal balance of the Mortgage Loan is no less than the principal balance of the Refinanced Mortgage Loan;
(5) The remaining credit characteristics of the Mortgage Loan (other than as specified in clauses (1), (2), (3) and (4) above) are substantially the same as the credit characteristics of the New Mortgage Loan;
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(6) The Mortgage Loan is current as of the applicable Assignment Date; and
(7) The Mortgage Loan is not subject to any foreclosure or similar proceeding as of the applicable Assignment Date; is not in process of any modification, workout or other loss mitigation process; and is not involved in litigation.
(b) If a New Mortgage Loan would otherwise meet the criteria set forth in Section 3.02(a)(i) and is still owned by Seller as of the Mortgage Loan Identification Date, in lieu of a substitution pursuant to Section 3.02(a)(ii) above, the Seller may include such New Mortgage Loan as a Mortgage Loan in the Available Portfolio; provided (i) the servicing fee rate (which results in the Servicing Spread Collections) for such Mortgage Loan shall be deemed to be 0.30% per annum and (ii) if at any time such Mortgage Loan fails to otherwise meet the criteria set forth in Section 3.02(a)(i) (e.g. the Mortgage Loan is sold to an Agency and the Seller is unable to obtain an Owner Consent), the Seller shall be required to substitute a loan for such New Mortgage Loan pursuant to Section 3.02(a)(ii) above.
(c) Notwithstanding the provisions of Section 3.02(a)(ii)(4), Seller shall not be in breach of Section 3.01 on any Assignment Date if, after using best efforts to select residential mortgage loans to substitute New Mortgage Loans pursuant to Section 3.02(a)(ii), the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date is equal to or greater than 90% of the aggregate outstanding principal balance of the New Mortgage Loans during the Related Collection Period as measured on the opening of business on their respective Refinancing Date.
Section 3.03 Refinancing Incentives.
For any Assignment Date beginning with the Assignment Date in the sixth calendar month after the Sale Date and subject to Section 4.04 hereof, Sellers Future Excess Servicing Spread Assignment Obligation shall be reduced by the Maximum Retained Refinancing Loan Amount for such Assignment Date. For purposes of this Section 3.03, the following definitions shall apply:
Replacement Shortfall: With respect to any Assignment Date and the Related Collection Period, the aggregate outstanding principal balance of the New Mortgage Loans that were originated by Seller or an affiliate thereof during the Related Collection Period as measured on the opening of business on their respective Refinancing Date, minus the aggregate outstanding principal balance of the residential mortgage loans in the Available Portfolio as of such Assignment Date.
Excess Refinancing Percentage: With respect to any Assignment Date, a percentage equal to the excess, if any, of (a) a fraction, expressed as a percentage, the numerator of which is equal to the aggregate principal balance of New Mortgage Loans that were originated by Seller or an affiliate thereof over the Related Collection Period and the two Collection Periods immediately prior to such Related Collection Period (the Quarterly Collection Period) as measured
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on their respective Refinancing Date, minus the aggregate Replacement Shortfall over such Quarterly Collection Period, and the denominator of which is the aggregate principal balance of all Mortgage Loans that voluntarily prepaid in full over the Quarterly Collection Period (measured as of the date of such prepayment), over (b) 35%.
Refinancing Split Percentage: With respect to any Assignment Date, the Refinancing Split Percentage shown in the column of the table below corresponding to the Excess Refinancing Percentage therein:
Three Month Average Recapture Percentage |
Excess Refinancing Percentage |
Refinancing Split Percentage | ||
35% or Less |
0% | 0% | ||
> 35%, <= 40% |
>0.00% and <=5.00% | 25% | ||
> 40%, <= 45% |
>5.00% and <=10.00% | 30% | ||
> 45%, <= 50% |
>10.00% and <=15.00% | 35% | ||
> 50%, <= 55% |
>15.00% and <=20.00% | 40% | ||
> 55%, <= 60% |
>20.00% and <=25.00% | 45% | ||
Greater than 60% |
>25.00% | 50% |
Maximum Retained Refinancing Loan Amount: With respect to any Assignment Date, an amount, not less than zero, equal to the sum of (a) the product of (i) the Refinancing Split Percentage, if any, applicable to such Assignment Date, (ii) the Excess Refinancing Percentage applicable to such Assignment Date and (iii) the aggregate principal balance of New Mortgage Loans that were refinanced with Seller or an affiliate thereof during the Related Collection Period, plus (b) the Carryover Retained Amount, minus (c) the applicable Replacement Shortfall.
Carryover Retained Amount: With respect to any Assignment Date beginning with the Assignment Date in the seventh calendar month after the Sale Date, the excess, if any, of the Maximum Retained Refinancing Loan Amount for the prior Assignment Date over the aggregate outstanding principal balance of the Mortgage Loans that were retained by Seller pursuant to this Section 3.03 on the prior Assignment Date.
Section 3.04 Selection Procedures.
(a) Not later than the Mortgage Loan Identification Date, Seller shall (i) notify Purchaser of the identity of each Current Mortgage Loan and each Mortgage Loan that became a Refinanced Mortgage Loan during the Related Collection Period, (ii) calculate the Excess Refinancing Percentage, the Refinancing Split Percentage, the Maximum Retained Refinancing Loan Amount and the Carryover Retained Amount for the following Assignment Date, and notify Purchaser of such amounts in writing, (iii) provide Purchaser with a list of potential Mortgage Loans (the Available Portfolio), selected on the basis that the Excess Refinancing Percentage is equal to zero, and (iv) provide Purchaser with a list of residential mortgage loans selected from the Available Portfolio to be designated as Mortgage Loans (the Replacement Portfolio) on the following Assignment Date and a list of residential mortgage loans selected from the Available Portfolio to be excluded from the pool of Mortgage Loans (the Retained Portfolio) on the following Assignment Date in accordance with Section 3.03.
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(b) Purchaser may submit an objection to the proposed Available Portfolio, the proposed Replacement Portfolio or the proposed Retained Portfolio not later than five Business Days following receipt of the notice of the proposed portfolios pursuant to Section 3.04(a). If Purchaser submits an objection, Seller and Buyer shall work together in good faith over the next five Business Days (the Selection Period) to mutually agree on the Replacement Portfolio and the Retained Portfolio. During the Selection Period, Seller may suggest alternative Mortgage Loans that meet the criteria of Section 3.02. If Seller and Purchaser are unable to agree on a Replacement Portfolio and a Retained Portfolio (if applicable) by close of business on the Business Day prior to the Assignment Date, Seller and Purchaser may modify the percentages in the definitions of Future Excess Servicing Spread and Retained Servicing Spread and in the Priority of Payments, as applicable, to reflect the relative values that Seller and Purchaser would have had in the Future Excess Servicing Spread and Retained Servicing Spread but for the inability of Seller and Purchaser to mutually agree on such portfolios.
(c) Unless mutually agreed upon by Seller and Purchaser, the Retained Portfolio and the Replacement Portfolio with respect to any Assignment Date shall satisfy the following criteria:
(i) The aggregate outstanding principal balance of the residential mortgage loans in the Retained Portfolio shall not exceed the Maximum Retained Refinancing Loan Amount;
(ii) The weighted average servicing fee rate for the residential mortgage loans in the Retained Portfolio shall be substantially equal to the weighted average servicing fee rate for the Mortgage Loans in the Replacement Portfolio;
(iii) The weighted average interest accrual rate per annum of the residential mortgage loans in the Retained Portfolio shall be within 12.5 basis points per annum of the weighted average interest rate of the Mortgage Loans in the Replacement Portfolio;
(iv) The weighted average final maturity date of the residential mortgage loans in the Retained Portfolio shall be within six months of the weighted average final maturity date of the Mortgage Loans in the Replacement Portfolio; and
(v) The remaining credit characteristics of the pool of residential mortgage loans in the Retained Portfolio (other than as specified in clauses (ii), (iii) and (iv) above) shall be substantially the same as the credit characteristics of the pool of Mortgage Loans in the Replacement Portfolio.
(d) Exhibit B provides an example of the calculations to be made pursuant to Section 3.04(c)(i).
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Section 3.05 Assignment of Future Excess Servicing Spread.
Subject to the satisfaction of the terms and conditions in this Agreement, on each Assignment Date, Seller shall execute and deliver an Assignment Agreement for the Future Excess Servicing Spread to be assigned on such Assignment Date with respect to the Mortgage Loans included in the applicable Replacement Portfolio; provided, however, that
(a) Purchaser shall be entitled to all Future Excess Servicing Spread and Seller shall be entitled to all Retained Servicing Spread arising with respect to each such Mortgage Loan on and after the Refinancing Date with respect to the related Refinanced Mortgage Loan,
(b) Seller shall deposit all Servicing Spread Collections received with respect to such Mortgage Loans on and after the Refinancing Date with respect to the related Refinanced Mortgage Loans into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date, and
(c) for each Mortgage Loan that was originated on or after the Refinancing Date of the related Refinanced Mortgage Loan, Seller shall deposit all Servicing Spread Collections with respect to amounts prepaid at the time of closing of such Mortgage Loan, if applicable, into the Third Party Controlled Future Spread Custodial Account not later than the Assignment Date.
ARTICLE IV
PAYMENTS AND DISTRIBUTIONS
Section 4.01 Purchase Price.
In full consideration for Purchasers right to receive any Future Excess Servicing Spread assigned to Purchaser, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Purchase Price) that shall be determined by the Parties on the Sale Date in accordance with Section 3.01 of the Current Spread Agreement.
Section 4.02 Payments by Purchaser.
Payment shall be made by Purchaser to Seller by wire transfer of immediately available federal funds, to an account designated by Seller.
Section 4.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments to the Lockbox Account. Payments of all Servicing Spread Collections received on and after the first Assignment Date shall be transferred from the Lockbox Account to the Third Party Controlled Future Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Future Spread Account within two Business Days of receipt thereof.
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(b) Third Party Controlled Future Spread Custodial Account.
(i) The Third Party Controlled Future Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Sales Proceeds and Servicing Agreement termination payments with respect to the Mortgage Loans. The Third Party Controlled Future Spread Custodial Account will be established pursuant to the Future Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Future Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Future Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Future Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Future Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable with respect to the Mortgage Loans directly to the Third Party Controlled Future Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Future Spread Custodial Account shall be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
(iii) If Seller is to receive any Sales Proceeds, Seller shall direct the Person making such payments to deposit such payments into the Third Party Controlled Future Spread Custodial Account.
(iv) If Seller receives any amounts required to be deposited into the Third Party Controlled Future Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Future Spread Custodial Account.
(c) Future Spread Reserve Account. The Future Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Future Spread Reserve Account will be established pursuant to the Future Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Future Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Future Spread Reserve Account strictly in accordance with Section 4.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Future Spread Reserve Account.
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If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Future Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Future Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Future Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Future Spread Custodial Account to the Future Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Future Spread Reserve Account is equal to the Future Spread Reserve Account Required Amount. The Future Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Future Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Future Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Future Spread Reserve Account in excess of the Future Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Future Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 4.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Future Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Future Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Future Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
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(a) first, from amounts in the Third Party Controlled Future Spread Custodial Account attributable to Servicing Agreement termination payments paid by an Owner with respect to any Mortgage Loans, pro rata, (A) the Future Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Excess Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount;
(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 4.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Future Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Future Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 4.04(a)); provided, that (I) prior to the distribution to Purchaser of any Future Excess Servicing Spread pursuant to clause (A), the Future Excess Servicing Spread shall be applied to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the
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distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and second, for deposit to the Future Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Future Spread Reserve Account to equal the Future Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Future Spread Custodial Account.
All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 4.05 Withdrawals from the Future Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Future Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Future Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Future Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Future Spread Reserve Account after the Future Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 4.06 Payment to Seller of Base Servicing Fee.
(a) Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Future Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Future Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
(b) The Base Servicing Fee with respect to a Mortgage Loan shall begin to accrue as of the Collection Period prior to the applicable Assignment Date. In no event shall Base Servicing Fees accrue concurrently on any day for a Refinanced Mortgage Loan and for a Mortgage Loan.
Section 4.07 Correction of Principal Balance Error.
If, subsequent to the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile such amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
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Section 4.08 Intent and Characterization.
(a) Seller and Purchaser intend that the assignments of the Future Excess Servicing Spread pursuant to this Agreement and each Assignment Agreement constitute valid sales of such Future Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien other than Permitted Liens, and that the beneficial interest in and title to such Future Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Future Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the aggregate Purchase Price (as defined in the Current Spread Agreement).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
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Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement and each other Transaction Document to which it is a party has been duly executed and delivered by Seller. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 5.03 Owner Consents.
Prior to an Assignment Date, Seller has obtained all necessary and applicable Owner Consents.
Section 5.04 Title to the Mortgage Servicing Rights.
As of an Assignment Date, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Future Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Future Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever other than Permitted Liens.
Section 5.05 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Future Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Future Excess Servicing Spread.
Section 5.06 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Future Excess Servicing Spread.
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Section 5.07 Seller/Servicer Standing.
As of the applicable Assignment Date, Seller is approved by each applicable Agency as a seller/servicer in good standing with the requisite financial criteria and adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with the applicable Agency eligibility requirements or which would require notification to the applicable Agency. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any of the Agency eligibility requirements, it shall immediately notify the Purchaser that it is no longer an approved seller/servicer of mortgage loans for any Agency which is an Owner of a Mortgage Loan.
Section 5.08 MERS Membership.
Seller is a member in good standing under the MERS system or another similar system reasonable acceptable to the Purchaser.
Section 5.09 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to an Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including without limitation any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for an Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to an Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to an Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
Section 5.10 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Future Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Future Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Future Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 Purchase of Mortgage Servicing Rights.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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Section 5.13 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of each Assignment Date (or as of the date specified below, as applicable), as follows:
Section 6.01 Servicing Agreements; Applicable Laws.
Seller, the originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan Documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.04 Location of Credit Files.
All of the Mortgage Loan Documents are held by Custodians or, if held by Seller, in the locations specified in Exhibit F, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by Seller in Exhibit F.
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Section 6.05 Representations Concerning the Future Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Future Excess Servicing Spread to any other Person (other than Permitted Liens) and immediately prior to the sale of the Future Excess Servicing Spread, Seller was the sole owner of the Future Excess Servicing Spread and had good and marketable title thereto (subject to the rights of the applicable Owner under the Servicing Agreements), free and clear of all Liens (other than Permitted Liens), and no Person, other than Purchaser, has any Lien (other than Permitted Liens) on the Future Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Future Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Future Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 4.08(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Future Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit J attached hereto, the sale and security interests granted hereunder in the Future Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Future Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Future Excess Servicing Spread, and the Future Excess Servicing Spread may be further assigned without any requirement, in each case, subject only to applicable Owner Consents.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Seller as of the Agreement Date, the Sale Date and as of each Assignment Date as follows (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
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Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Future Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
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ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and, with respect to any Mortgage Loans owned by an Agency, such Agency.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller.
(c) With respect to any Servicing Agreement relating to a Non-Agency Mortgage Loan, subject to a nonrecoverability determination made in accordance with the related Servicing Agreement and to the extent the Seller as servicer has an obligation to advance principal and interest on delinquent Mortgage Loans, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
(d) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(e) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards and the requirements of each Agency relating to the Mortgage Loans.
Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser, in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Future Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of its Future Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Future Spread Agreement in accordance with Section 12.15.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of
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the Future Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Future Excess Servicing Spread, the Third Party Controlled Future Spread Custodial Account and the Future Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the applicable Assignment Date with respect to each Mortgage Loan, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Future Excess Servicing Spread.
Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Current Mortgage Loan and each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
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(b) A Summary Activity Report with respect to each of the pool of Current Mortgage Loans and the pool of Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
(ix) aggregate principal balance of Refinanced Mortgage Loans, and (1) for each Refinanced Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Current Mortgage Loan and each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Current Mortgage Loans and Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans and percentages of the aggregate outstanding principal balance of the pool of Current Mortgage Loans and the pool of Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Non-delinquent Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
(5) 90 days or more delinquent,
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(6) Current Mortgage Loans and Mortgage Loans in Foreclosure,
(7) Current Mortgage Loans and Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Current Mortgage Loans and Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Current Mortgage Loans and Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Future Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Future Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Future Spread Reserve Account.
Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
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Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Current Mortgage Loans and Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to an Owner in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with the applicable Owner that may be reasonably material to Purchaser either verbally or in writing, (d) expressly or verbally waive any material default under or breach of any Servicing Agreement by the applicable Owner that may be material to the Purchaser (in Purchasers reasonable determination) or (e) take any other action in connection with any such Servicing Agreement that would impair in any material respect the value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that the applicable Owner will not have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Current Mortgage Loans or Mortgage Loans owned by Seller which do not affect the Future Excess Servicing Spread with respect to such Current Mortgage Loans or Mortgage Loans and are not reasonably material to the Purchaser.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
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Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from the applicable Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and the applicable Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and that Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements (other than with respect to Mortgage Loans owned by Seller) and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, (b) with respect to Mortgage Loans owned by Seller, copies of all material amendments to the Servicing Agreements, and (c) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
Section 8.16 Financing; Pledge of Future Excess Servicing Spread.
Seller shall not pledge, obtain financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Future Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, without limitation, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
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(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit J unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party and each other agreement entered into with an Owner.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Future Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
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Section 8.20 Schedule of Mortgage Loans.
Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of each Assignment Date. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
Section 8.21 True Sale Opinion.
Seller shall cause a written opinion of counsel to be furnished, in form and substance satisfactory to Purchaser, dated the Sale Date with respect to the characterization of the transfer of the Future Excess Servicing Spread by Seller to Purchaser as a true sale. Purchaser may request additional opinions regarding such characterization subsequent to the Sale Date as advised by Purchasers counsel in light of changes in law and other circumstances. To the extent Seller is unable to provide such opinions with respect to any Mortgage Loans, Seller shall substitute such Mortgage Loans with residential mortgage loans have substantially the same credit characteristics.
Section 8.22 Valuation.
As of the Sale Date, Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Future Excess Servicing Spread is fair and reasonable.
Section 8.23 Material Documents.
Seller shall provide Purchaser with executed copies of all material agreements and documents, and any amendments thereto, as of each Assignment Date relating to Sellers acquisition of the related Mortgage Servicing Rights and the servicing of the Mortgage Loans assigned.
Section 8.24 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.25 Defense of Title
The Seller warrants and will defend the right, title and interest of the Purchaser in and to all Future Excess Servicing Spread against all adverse claims and demands subject to Permitted Liens.
Section 8.26 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
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ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date are true and correct in all material respects.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Purchaser shall have received from Seller a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition or in the Mortgage Servicing Rights, the Mortgage Loans, the Related Escrow Accounts or to Sellers relationship with, or authority from, the Agency that in each case will likely materially and adversely affect the consummation of the transactions contemplated hereby or the Future Excess Servicing Spread.
Section 9.05 Consents.
The Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Sale Date, and the Seller shall have commenced servicing the Mortgage Loans under the applicable Servicing Agreement. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
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Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to Purchaser copies of each executed Transaction Document that is to be entered on or prior to the Sale Date in the form and substance acceptable to the Purchaser and each of the items required to be delivered pursuant to Section 2.01 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.01(b)(v), Section 2.01(b)(vi) and Section 2.01(b)(vii).
Section 9.09 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date.
Section 9.10 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
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ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date:
Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Sale Date are true and correct in all material respects.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date shall have been duly complied with and performed in all material respects.
Section 10.03 Corporate Resolution.
Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit E, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Agreement Date have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date.
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ARTICLE XI
INDEMNIFICATION
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Agreement Date which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement;
(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreement termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Future Excess Servicing Spread; and
(v) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i)-(iv) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01(a) but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01(a). Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the
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prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01(a) or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Future Spread Custodial Account or the Future Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a), in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under Section 11.01(a) hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to Section 11.01 of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
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(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Other Rights.
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
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ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Purchaser and Seller shall each pay the expenses incurred by it or its affiliates pursuant to the Current Spread Agreement in connection with the transactions contemplated hereby.
Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees.
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The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date and each applicable Assignment Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
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(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
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Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Future Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Future Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Future Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Future Excess Servicing Spread and each holders interest in the Future Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.15(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Future Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.16 Termination.
If the Current Spread Agreement is terminated on or prior to the Sale Date, this Agreement shall terminate and neither Party shall have any further obligations to the other Party hereunder.
47
Section 12.17 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
48
IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XII LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer | |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
49
EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Future Spread Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XII LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Future Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the applicable Assignment Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Future Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Future Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price.
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
50
Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR MICROFICHE,
CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) |
(c) |
(d) |
(e) |
(g) |
(h) |
(i) (column (g) column (h)) |
(j) ([ ]% of column (i)) | ||||||||
Refinancing |
Loan #
of |
Principal Loan |
Loan # of Loan |
Principal Balance of Mortgage Loan as of the Assignment Date |
Servicing Rate |
Base Servicing |
Net Servicing |
Future Excess |
51
EXHIBIT B
Example of calculations of Maximum Retained Refinancing Loan Amounts
Recaptured Loan Incentive |
Range of Loans Retained as a Percentage of Total Recapture | |||||
3 Month Avg Recapture |
Retained Percentage(1) |
Nationstar | Portfolio | |||
35% or Less |
0% | 0.00% | 100.00% | |||
> 35%, <= 40% |
25% | 0.00% to 1.25% | 100.00% to 98.75% | |||
> 40%, <= 45% |
30% | 1.50% to 3.00% | 98.50% to 97.00% | |||
> 45%, <= 50% |
35% | 3.50% to 5.25% | 96.50% to 94.75% | |||
> 50%, <= 55% |
40% | 6.00% to 8.00% | 94.00% to 92.00% | |||
> 55%, <= 60% |
45% | 9.00% to 11.25% | 91.00% to 88.75% | |||
> 60%, <= 65% |
50% | 12.50% to 15.00% | 87.50% to 85.00% | |||
> 65%, <= 70% |
50% | 15.00% to 17.50% | 85.00% to 82.50% | |||
> 70%, <= 75% |
50% | 17.50% to 20.00% | 82.50% to 80.00% | |||
Greater than 75% |
50% | 20.00% to 32.50% | 80.00% to 67.50% |
1 | Represents the percentage of loans Seller retains above 35% recapture. |
52
EXHIBIT C
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT D
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Future Spread Agreement for Non-Agency Mortgage Loans by and between MSR XII LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and
(iv) (iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of the Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries)is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By:
EXHIBIT E
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XII LLC (the Company), pursuant to Section 10.05 of the Future Spread Agreement for Non-Agency Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) The condition set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
[ ]
By: [ ], as member
By:
EXHIBIT F
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT G
FORM OF SUMMARY REMITTANCE REPORT
[SEPARATELY DELIVERED]
EXHIBIT H
FORM OF DELINQUENCY REPORT
[SEPARATELY DELIVERED]
EXHIBIT I
FORM OF DISBURSEMENT REPORT
[SEPARATELY DELIVERED]
EXHIBIT J
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
Exhibit 10.54
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT
FOR NON-AGENCY MORTGAGE LOANS
by and between
NATIONSTAR MORTGAGE LLC
(Seller)
and
MSR XII LLC
(Purchaser)
Dated and effective as of January 6, 2013
Table of Contents
ARTICLE I DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES |
1 | |||||
Section 1.01 |
Definitions | 1 | ||||
Section 1.02 |
General Interpretive Principles | 13 | ||||
ARTICLE II PROCEDURES; ITEMS TO BE DELIVERED |
14 | |||||
Section 2.01 |
Sale of Current Excess Servicing Spread | 14 | ||||
Section 2.02 |
Grant of Security Interest | 14 | ||||
Section 2.03 |
Items to be Delivered on the Agreement Date | 14 | ||||
Section 2.04 |
Items to be Delivered on the Sale Date | 15 | ||||
Section 2.05 |
Sale Date Transactions | 18 | ||||
ARTICLE III PAYMENTS AND DISTRIBUTIONS |
18 | |||||
Section 3.01 |
Purchase Price | 18 | ||||
Section 3.02 |
Payments by Purchaser | 19 | ||||
Section 3.03 |
Accounts | 20 | ||||
Section 3.04 |
Priority of Payments | 22 | ||||
Section 3.05 |
Withdrawals from the Current Spread Reserve Account | 24 | ||||
Section 3.06 |
Payment to Seller of Base Servicing Fee | 24 | ||||
Section 3.07 |
Intent and Characterization | 24 | ||||
ARTICLE IV [RESERVED] |
25 | |||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER |
25 | |||||
Section 5.01 |
Due Organization and Good Standing | 25 | ||||
Section 5.02 |
Authority and Capacity | 25 | ||||
Section 5.03 |
Title to the Mortgage Servicing Rights; Owner Consents | 26 | ||||
Section 5.04 |
Effective Agreements | 26 | ||||
Section 5.05 |
No Accrued Liabilities | 26 | ||||
Section 5.06 |
Seller/Servicer Standing | 26 | ||||
Section 5.07 |
MERS Membership | 27 | ||||
Section 5.08 |
Owner Set-off Rights | 27 | ||||
Section 5.09 |
Ability to Perform; Solvency | 27 | ||||
Section 5.10 |
Material Documents | 27 | ||||
Section 5.11 |
Obligations with Respect to Origination | 27 | ||||
Section 5.12 |
No Actions | 27 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE LOANS AND SERVICING |
28 | |||||
Section 6.01 |
Servicing Agreements; Applicable Laws | 28 | ||||
Section 6.02 |
Related Escrow Accounts | 28 |
i
Section 6.03 |
Accuracy of Servicing Information | 28 | ||||
Section 6.04 |
No Purchaser Responsibility | 28 | ||||
Section 6.05 |
Location of Credit Files | 28 | ||||
Section 6.06 |
Representations Concerning the Current Excess Servicing Spread | 29 | ||||
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF PURCHASER |
30 | |||||
Section 7.01 |
Due Organization and Good Standing | 30 | ||||
Section 7.02 |
Authority and Capacity | 30 | ||||
Section 7.03 |
Effective Agreements | 30 | ||||
Section 7.04 |
Sophisticated Investor | 31 | ||||
Section 7.05 |
No Actions | 31 | ||||
ARTICLE VIII SELLER COVENANTS |
31 | |||||
Section 8.01 |
Servicing Obligations | 31 | ||||
Section 8.02 |
Cooperation | 32 | ||||
Section 8.03 |
Financing Statements | 32 | ||||
Section 8.04 |
Supplemental Information | 32 | ||||
Section 8.05 |
Access to Information | 33 | ||||
Section 8.06 |
Home Affordable Modification Program | 33 | ||||
Section 8.07 |
Distribution Date Data Tapes and Reports | 33 | ||||
Section 8.08 |
Financial Statements and Officers Certificates | 36 | ||||
Section 8.09 |
Monthly Management Calls | 36 | ||||
Section 8.10 |
Timely Payment of Owner Obligations | 36 | ||||
Section 8.11 |
Servicing Agreements | 36 | ||||
Section 8.12 |
Transfer of Mortgage Servicing Rights | 37 | ||||
Section 8.13 |
Consents to Transaction Documents | 37 | ||||
Section 8.14 |
Accounts | 37 | ||||
Section 8.15 |
Notification of Certain Events | 37 | ||||
Section 8.16 |
Financing; Pledge of Current Excess Servicing Spread | 38 | ||||
Section 8.17 |
Existence, etc | 38 | ||||
Section 8.18 |
Consent to Sub-Servicing | 39 | ||||
Section 8.19 |
Nonpetition Covenant | 39 | ||||
Section 8.20 |
Data Tape; Schedule of Mortgage Loans | 39 | ||||
Section 8.21 |
Insurance | 40 | ||||
Section 8.22 |
Defense of Title | 40 | ||||
Section 8.23 |
Refinancing of Mortgage Loans | 40 | ||||
ARTICLE IX CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER |
40 | |||||
Section 9.01 |
Correctness of Representations and Warranties | 40 | ||||
Section 9.02 |
Compliance with Conditions | 41 | ||||
Section 9.03 |
Corporate Resolution | 41 |
ii
Section 9.04 |
No Material Adverse Change | 41 | ||||
Section 9.05 |
Consents | 41 | ||||
Section 9.06 |
Delivery of Transaction Documents | 42 | ||||
Section 9.07 |
Certificate of Seller | 42 | ||||
Section 9.08 |
Valuation | 42 | ||||
Section 9.09 |
Opinions of Counsel | 42 | ||||
Section 9.10 |
Acquisition of Mortgage Servicing Rights by Seller | 42 | ||||
Section 9.11 |
Good Standing Certificate of Seller | 43 | ||||
Section 9.12 |
No Actions or Proceedings | 43 | ||||
Section 9.13 |
Fees, Costs and Expenses | 43 | ||||
ARTICLE X CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER |
43 | |||||
Section 10.01 |
Correctness of Representations and Warranties | 43 | ||||
Section 10.02 |
Compliance with Conditions | 43 | ||||
Section 10.03 |
Corporate Resolution | 44 | ||||
Section 10.04 |
No Material Adverse Change | 44 | ||||
Section 10.05 |
Certificate of Purchaser | 44 | ||||
Section 10.06 |
Good Standing Certificate of Purchaser | 44 | ||||
ARTICLE XI INDEMNIFICATION; CURE |
44 | |||||
Section 11.01 |
Indemnification by Seller | 44 | ||||
Section 11.02 |
Indemnification by Purchaser | 46 | ||||
Section 11.03 |
Award of Damages | 47 | ||||
Section 11.04 |
Other Rights | 48 | ||||
ARTICLE XII MISCELLANEOUS |
48 | |||||
Section 12.01 |
Costs and Expenses | 48 | ||||
Section 12.02 |
Confidentiality | 49 | ||||
Section 12.03 |
Brokers Fees | 49 | ||||
Section 12.04 |
Relationship of Parties | 50 | ||||
Section 12.05 |
Survival of Representations and Warranties | 50 | ||||
Section 12.06 |
Notices | 50 | ||||
Section 12.07 |
Waivers | 51 | ||||
Section 12.08 |
Entire Agreement; Amendment | 51 | ||||
Section 12.09 |
Binding Effect | 51 | ||||
Section 12.10 |
Headings | 51 | ||||
Section 12.11 |
Applicable Law | 51 | ||||
Section 12.12 |
Incorporation of Exhibits | 52 | ||||
Section 12.13 |
Counterparts | 52 | ||||
Section 12.14 |
Severability of Provisions | 52 | ||||
Section 12.15 |
Public Announcement | 52 | ||||
Section 12.16 |
Assignment | 52 | ||||
Section 12.17 |
Termination | 53 | ||||
Section 12.18 |
Third Party Beneficiaries | 53 |
iii
EXHIBITS
Exhibit A Form of Assignment Agreement |
Exhibit B Schedule of Mortgage Loans |
Exhibit C Sellers Officers Certificate |
Exhibit D Purchasers Officers Certificate |
Exhibit E Location of Credit Files |
Exhibit F Form of Summary Remittance Report |
Exhibit G Form of Delinquency Report |
Exhibit H Form of Disbursement Report |
Exhibit I Seller Jurisdictions and Recording Offices |
Exhibit J Servicing Agreements |
iv
CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR NON-
AGENCY MORTGAGE LOANS
This CURRENT EXCESS SERVICING SPREAD ACQUISITION AGREEMENT FOR NON-AGENCY MORTGAGE LOANS (as amended, restated, or otherwise modified and in effect from time to time, this Agreement), dated as of January 6, 2013 (the Agreement Date), is by and between MSR XII LLC, a Delaware limited liability company (together with its successors and assigns, the Purchaser), and Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) (the Purchaser and the Seller will collectively be referred to as the Parties and each, a Party).
W I T N E S S E T H:
WHEREAS, Seller and Bank of America, National Association (Bank of America) have entered into the Purchase and Sale Agreement, pursuant to which, among other things, Seller will acquire and assume all right, title and interest in mortgage servicing rights to a portfolio of residential mortgage loans owned or securitized by the Owners (as defined herein);
WHEREAS, by acquiring such mortgage servicing rights, Seller is entitled to a servicing spread and other incidental fees with respect to the related residential mortgage loans;
WHEREAS, the servicing spread, together with the Ancillary Income (as defined below), exceeds the compensation that Seller requires to service the related residential mortgage loans;
WHEREAS, Seller desires to sell, and Purchaser desires to purchase, a portion of the servicing spread that exceeds such required compensation amount; and
WHEREAS, Purchaser and Seller desire to set forth the terms and conditions pursuant to which Seller will sell, transfer and assign to Purchaser, all of Sellers right, title and interest in and to a portion of the servicing spread, that exceeds the Sellers required compensation amount, and Purchaser will purchase all right, title and interest in and to such portion of the servicing spread;
NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and upon the terms and subject to the conditions set forth herein, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS; GENERAL INTERPRETIVE PRINCIPLES
Section 1.01 Definitions.
Whenever used herein, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
1
Accepted Servicing Practices: With respect to any Mortgage Loan, those accepted and prudent mortgage servicing practices (including collection procedures) which are in accordance with the servicing practices and procedures as set forth in the applicable Servicing Agreements, and in a manner at least equal in quality to the servicing that Seller provides to mortgage loans which it owns in its own portfolio.
Agency: Any of Fannie Mae, Freddie Mac or Ginnie Mae, or any successor thereto.
Agreement: As defined in the preamble hereof.
Agreement Date: As defined in the preamble hereof.
Ancillary Income: All incidental servicing fees (such as late fees, assignment transfer fees, returned check fees, special services fees, amortization schedule fees, HAMP fees, modification and incentive income and any interest or earnings on funds deposited in an account maintained by the Seller as servicer with respect to the Mortgage Loans, etc.) that are supplemental to the servicing spread payable to the servicer pursuant to the Servicing Agreements.
Applicable Law: With reference to any Person, all laws (including common law), statutes, regulations, ordinances, treaties, judgments, decrees, injunctions, writs and orders of any court, governmental agency or authority and rules, regulations, orders, directives, licenses and permits of any Governmental Authority applicable to such Person or its property or in respect of its operations.
Assignment Agreement: An agreement substantially in the form of Exhibit A to this Agreement or in such other form as mutually agreed upon by the Parties.
Bank: Wells Fargo Bank, National Association, or any successor thereto, or another financial institution mutually agreed upon by the Parties or any successor thereto, each in its capacity as Bank under the Current Spread Custodial Account Control Agreement or the Current Spread Reserve Account Control Agreement, as applicable, or any third party custodian or trustee in similar capacity under any replacement account control agreements.
Bank of America: As defined in the recitals hereof.
Base Purchase Price: The meaning given to such term in Section 3.01.
Base Servicing Fee: With respect to a Collection Period, an amount equal to the sum for each Mortgage Loan of the product of (A) the outstanding principal balance of such Mortgage Loan with respect to the related Measurement Date, (B) the Base Servicing Fee Rate and (C) (i) in the case of the initial Collection Period following the Sale Date or Subsequent Sale Date for such Mortgage Loan, as applicable, a fraction, the numerator of which is the number of days in the period from and including the Sale Date or Subsequent Sale Date, as applicable, to and including the last day of the such Collection Period, and the denominator of which is 360, and (ii) in the case of all other Collection Periods for a Mortgage Loan, 1/12; provided that the Base Servicing Fee with respect to any Mortgage Loan whose Servicing Agreement is terminated during a Collection Period shall be pro-rated to the actual number of days within such Collection Period in which such Mortgage Loan was serviced by Seller.
2
Base Servicing Fee Rate: 0.235% per annum, except that, for the period during which the Interim Servicer is servicer of the Mortgage Loans, the Base Servicing Fee Rate shall be the lesser of (a) 0.235% per annum or (b) the interim servicing fee payable to the Interim Servicer.
Business Day: Any day other than (a) a Saturday or Sunday, (b) a day on which banking institutions in the States of Texas or New York are authorized or obligated by law or by executive order to be closed or (c) such other days as agreed upon by the Parties.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Collateral: The meaning given to such term in Section 2.02.
Collection Period: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
Consolidated Tangible Net Worth: (i) The net worth of Seller and its consolidated subsidiaries, on a combined basis, determined in accordance with GAAP, minus (ii) all intangibles determined in accordance with GAAP (including goodwill, capitalized financing costs and capitalized administration costs but excluding originated and purchased mortgage servicing rights or retained residual securities) and any and all advances to, investments in and receivables held from affiliates; provided, however, that the non-cash effect (gain or loss) of any mark-to-market adjustments made directly to stockholders equity for fluctuation of the value of financial instruments as mandated under the Statement of Financial Accounting Standards No. 133 (or any successor statement) shall be excluded from the calculation of Consolidated Tangible Net Worth.
Control: The meaning specified in Section 8-106 of the UCC.
Credit File: Those documents, which may be originals, copies or electronically imaged, pertaining to each Mortgage Loan, held by or on behalf of Seller in connection with the servicing of the Mortgage Loan, which may include Mortgage Loan Documents and the credit documentation relating to the origination of such Mortgage Loan, and any documents gathered during the Servicing of a Mortgage Loan.
Current Excess Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to a percentage of the Total Servicing Spread, which percentage is equal to the Current Excess Servicing Spread Percentage.
Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans: The current excess servicing spread acquisition agreement for certain Freddie Mac mortgage loans, dated the date hereof, between the Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Fannie Mae mortgage loans, dated the date hereof, between the Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
3
Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans: The current excess servicing spread acquisition agreement for certain Ginnie Mae mortgage loans, dated the date hereof, between the Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The current excess servicing spread acquisition agreement for certain Non-Agency Mortgage Loans, dated the date hereof, between the Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Current Excess Servicing Spread Percentage: 66.67%.
Current Spread Custodial Account Agreement: The applicable deposit account agreement and other related account documentation governing the Third Party Controlled Current Spread Custodial Account.
Current Spread Custodial Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated as of the Sale Date, entered into with respect to the Third Party Controlled Current Spread Custodial Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account: The account specified in the Current Spread Reserve Account Control Agreement and maintained by Wells Fargo Bank, National Association, or any successor thereto, or any other third party custodian or trustee selected by Purchaser.
Current Spread Reserve Account Agreement: The applicable deposit account agreement and other related account documentation governing the Current Spread Reserve Account.
Current Spread Reserve Account Control Agreement: The account control agreement among Seller, Purchaser and Wells Fargo Bank, National Association, or any other institution agreed upon by the Parties, as Bank, dated on or before the Sale Date, entered into with respect to the Current Spread Reserve Account, as amended, restated, supplemented or otherwise modified from time to time.
Current Spread Reserve Account Deposit Event: The meaning given to such term in Section 3.03(c).
Current Spread Reserve Account Required Amount: The meaning given to such term in Section 3.03(c).
Custodian: A custodian of Credit Files or any part thereof as identified by the Seller to the Purchaser in writing on or prior to the Sale Date or the related Subsequent Sale Date, as applicable, as the same may be amended and supplemented from time to time by the Seller by providing a written notice of any such update to the Purchaser.
4
Cut-Off Date: With respect to the Mortgage Loans sold on the Sale Date, the opening of business on the Sale Date. With respect to the Mortgage Loans sold on a Subsequent Sale Date, the opening of business on such Subsequent Sale Date.
Deposit: As defined in Section 3.01 hereof.
Data Tape: The list of all mortgage loans, dated as of the date specified therein, whose Mortgage Servicing Rights will be sold, or that are anticipated to be sold, as applicable, to Seller under the Purchase and Sale Agreement.
Distribution Date: The 10th day of each calendar month, or if such day is not a Business Day, the prior Business Day, beginning in the month following the Sale Date, or such other day as mutually agreed upon by Seller and Purchaser.
Electronic Data File: A computer tape or other electronic medium generated by or on behalf of Seller and delivered or transmitted to or on behalf of Purchaser which provides information relating to the Mortgage Loans.
Eligible Servicing Agreement: Unless otherwise agreed to by the Purchaser, a Servicing Agreement in respect of which the following eligibility requirements have been satisfied:
(a) either (i) the Owner Consents relating to such Servicing Agreement have been obtained or (ii) a final order entered by the bankruptcy court providing that an Owner Consent with respect to such Servicing Agreement is not required has been obtained;
(b) such Servicing Agreement is an Eligible Servicing Agreement (as such term is defined in the Purchase and Sale Agreement);
(c) such Servicing Agreement is in full force and effect, and is in all respects genuine as appearing on its face or as represented in the books and records of Seller, and no event of default, early amortization event, termination event, or other event giving any party thereto (including with notice or lapse of time or both) the right to terminate Seller as servicer thereunder for cause has occurred and is continuing; provided, however, that with respect to any Servicing Agreement and the occurrence of any event set forth in this clause (c) which is based on a breach of a collateral performance test, such Servicing Agreement shall remain an Eligible Servicing Agreement so long as no notice of termination based on such breach has been given or threatened in writing and subject to the restrictions set forth herein;
(d) Seller has not resigned or been terminated as servicer under such Servicing Agreement and has no actual knowledge of any pending or threatened action to terminate Seller, as servicer (whether for cause or without cause); and
(e) the Seller as servicer may not be terminated without cause pursuant to such Servicing Agreement or if the Seller as servicer may be terminated without cause, upon payment of a termination fee.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the UCC.
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Expense Amount: As defined in Section 11.01(b) hereof.
Expense Amount Accountants Letter: As defined in Section 11.01(b) hereof.
Expense Amount Tax Opinion: As defined in Section 11.01(b) hereof.
Expense Escrow Account: As defined in Section 11.01(b) hereof.
Fannie Mae: Federal National Mortgage Association, or any successor thereto.
FHLMC Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XI LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans.
FNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR X LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans.
Freddie Mac: Federal Home Loan Mortgage Corporation, or any successor thereto.
Future Spread Agreements: The Future Spread Agreement for FHLMC Mortgage Loans, the Future Spread Agreement for FNMA Mortgage Loans, the Future Spread Agreement for GNMA Mortgage Loans, the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC and the Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Future Spread Agreement for FHLMC Mortgage Loans: The Future Spread Agreement for FHLMC Mortgage Loans, dated January 6, 2013, by and between Seller and MSR IX LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for FNMA Mortgage Loans: The Future Spread Agreement for FNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR X LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for GNMA Mortgage Loans: The Future Spread Agreement for GNMA Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XI LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and Purchaser, as may be amended, restated, or otherwise modified and in effect from time to time.
Future Spread Agreement for Non-Agency Mortgage Loans for MSR XIII LLC: The Future Spread Agreement for Non-Agency Mortgage Loans, dated January 6, 2013, by and between Seller and MSR XIII LLC, as may be amended, restated, or otherwise modified and in effect from time to time.
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GAAP: Generally accepted accounting principles in the United States of America as in effect from time to time set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board, or in such other statements by such other entity as may be in general use by significant segments of the accounting profession, that are applicable to the circumstances as of the date of determination.
Ginnie Mae: Government National Mortgage Association, or any successor thereto.
GNMA Mortgage Loans: Each of those mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XI LLC pursuant to the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans.
Governmental Authority: With respect to any Person, any nation or government, any state or other political subdivision, agency or instrumentality thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and any court or arbitrator having jurisdiction over such Person, any of its subsidiaries or any of its properties.
Grant: To grant, bargain, sell, warrant, alienate, remise, demise, release, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over or confirm.
HAMP: The meaning given to such term in Section 8.06.
HAMP Loans: The meaning given to such term in Section 8.06.
Holder Register: As defined in Section 12.16(b) hereof.
Indemnity Loan: As defined in Section 11.01(b) hereof.
Indemnity Loan Agreement: As defined in Section 11.01(b) hereof.
Interim Servicer: Bank of America or its successors or assigns acting as interim servicer with respect to the Mortgage Loans pursuant to the interim servicing addendum of the Purchase and Sale Agreement.
IRS: The United States Internal Revenue Service.
Lien: Any mortgage, deed of trust, pledge, hypothecation, collateral assignment, charge, deposit, arrangement, encumbrance, lien (statutory or other), security interest or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever intended to assure payment of any indebtedness or the performance of any other obligation, including any conditional sale or other title retention agreement.
Lockbox Account: An account maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser for the purpose of receiving Servicing Spread Collections.
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Loss or Losses: Any and all direct, actual and out-of-pocket losses (including any loss in the value in the Current Excess Servicing Spread), damages, deficiencies, claims, costs or expenses, including reasonable attorneys fees and disbursements, excluding (i) any amounts attributable to or arising from overhead allocations, general or administrative costs and expenses, or any cost for the time of any Partys employees, (ii) consequential losses or damages consisting of speculative lost profits, lost investment or business opportunity, damage to reputation or operating losses, or (iii) punitive or treble damages; provided, however, that the exclusions set forth in clauses (ii) or (iii) above do not apply if and to the extent any such amounts are actually incurred in payment to a third party or government entity.
Measurement Date: With respect to any Collection Period, the first day of such Collection Period.
MERS: Mortgage Electronic Registration Systems, Inc., or any successor thereto.
MI: Insurance provided by private mortgage insurance companies to make payments on certain Mortgage Loans in the event that the related Mortgagor defaults in its obligation in respect of the Mortgage.
Mortgage: Each of those mortgages, deeds of trust, security deeds or deeds to secure debt creating a first lien on or an interest in real property securing a Mortgage Note and related to a Mortgage Loan.
Mortgage Loan: Each of those mortgage loans listed on the Schedule of Mortgage Loans.
Mortgage Loan Documents: With respect to each Mortgage Loan, the documents and agreements related to such Mortgage Loan required to be held by the applicable Custodian, including, without limitation, the original Mortgage Note, and any other documents or agreements evidencing and/or governing such Mortgage Loan.
Mortgage Note: With respect to any Mortgage Loan, the note or other evidence of indebtedness of the Mortgagor, thereunder, including, if applicable, an allonge and lost note affidavit.
Mortgage Servicing Rights: The rights and responsibilities of Seller with respect to servicing the Mortgage Loans under the Servicing Agreements, including any and all of the following if and to the extent provided therein: (a) all rights to service a Mortgage Loan; (b) all rights to receive servicing fees, Ancillary Income, 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 payments with respect to the Mortgage Loan 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 Credit Files pertaining to the Mortgage Loan or pertaining to the past, present or prospective servicing of the Mortgage Loan; (f) to the extent applicable, 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; and (g) all rights, powers and privileges incident to any of the foregoing.
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Mortgaged Property: The Mortgagors real property, securing repayment of a related Mortgage Note, consisting of an interest in a single parcel of real property, improved by a residential dwelling.
Mortgagor: An obligor under a residential mortgage loan.
Net Servicing Fee: As defined in the Purchase and Sale Agreement.
Non-Agency Mortgage Loans: Each of the mortgage loans for which the current excess servicing spread has been sold and assigned to MSR XII LLC or MSR XIII LLC pursuant to the applicable Sale Agreement.
Nonqualifying Income: Any amount that is treated as gross income for purposes of Section 856 of the Code and which is not Qualifying Income.
Objection Notice: The meaning given to such term in Section 3.03(c).
Opinion of Counsel: One or more written opinions, in form and substance reasonably satisfactory to the recipient, of an attorney at law admitted to practice in any state of the United States or the District of Columbia, which attorney may be counsel for Seller or Purchaser, as the case may be.
Owner: With respect to a Mortgage Loan, the owner thereof.
Owner Consent: All agreements, consents, approvals, confirmations and other items required pursuant to a Servicing Agreement to complete the sale of the Mortgage Servicing Rights (including the Total Excess Spread) to Seller.
Party or Parties: As defined in the preamble hereof.
Person: Any individual, partnership, corporation, limited liability company, limited liability partnership, business entity, joint stock company, trust, business trust, unincorporated organization, association, enterprise, joint venture, government, any department or agency of any government or any other entity of whatever nature.
Power of Attorney: A Power of Attorney delivered by the Seller to the Purchaser authorizing the Purchaser to enforce the right to payment of the Current Excess Servicing Spread under the related Servicing Agreement solely in the event that the Seller fails to enforce such right within 30 days after receiving written notice of such failure from the Purchaser to the Seller.
Priority of Payments: The meaning given to such term in Section 3.04.
Protected REIT: Any entity that (i) has elected to be taxed as a real estate investment trust pursuant to Section 856 et seq. of the Code, (ii) owns a direct or indirect equity interest in Purchaser, and (iii) is treated for purposes of Section 856 of the Code as owning all or a portion of the assets of the Purchaser or as receiving all or a portion of the Purchasers income.
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Purchase and Sale Agreement: The Mortgage Servicing Rights Purchase and Sale Agreement, dated as of January 6, 2013, by and between Nationstar Mortgage LLC, as purchaser, and Bank of America, National Association, as seller, together with all schedules and exhibits thereto, as the same may be amended, supplemented or otherwise modified from time to time.
Purchase Price: The meaning given to such term in Section 3.01.
Purchase Price Percentage: 3.78 multiplied by the excess of (i) the Net Servicing Fee (as such Net Servicing Fees are determined in accordance with Exhibit F to the Purchase and Sale Agreement), expressed as an annualized rate on the unpaid principal balances of the related Mortgage Loans as of the Sale Date or Subsequent Sale Date, as applicable over (ii) the Base Servicing Fee Rate.
Purchased Assets: As defined in the Purchase and Sale Agreement.
Purchaser: As defined in the preamble hereof.
Purchaser Enforcement Expenses: An amount equal to the Current Excess Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Purchaser Indemnitees: The meaning given to such term in Section 11.01(a).
Qualifying Income: Gross income that is described in Section 856(c)(2) or 856(c)(3) of the Code.
REIT Qualification Ruling: As defined in Section 11.01(b) hereof.
REIT Requirements: The requirements imposed on REITs pursuant to Sections 856 through and including 860 of the Code.
Related Escrow Accounts: Mortgage Loan escrow/impound accounts maintained by Seller relating to the Mortgage Servicing Rights, including accounts for buydown funds, real estate taxes and MI, flood and hazard insurance premiums.
Release Document: As defined in Section 11.01(b) hereof.
Remaining Expected Total Servicing Spread: The meaning given to such term in Section 3.03(c).
Repurchase Price: As defined in the Purchase and Sale Agreement.
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Requirement of Law: As to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
Retained Servicing Spread: The rights of Seller, severable from each (and all) of the other rights under the applicable Servicing Agreements, to the Retained Servicing Spread Percentage of the Total Servicing Spread.
Retained Servicing Spread Percentage: 100% minus the Current Excess Servicing Spread Percentage.
Sale Agreements: This Agreement, the Current Excess Servicing Spread Acquisition Agreement for FHLMC Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for FNMA Mortgage Loans, the Current Excess Servicing Spread Acquisition Agreement for GNMA Mortgage Loans and the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC.
Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Sales Proceeds: The proceeds received upon a sale (approved by the Parties) of the Total Servicing Spread (except without giving effect to clause (b) of the definition thereof), in whole or in part, including through a sale in accordance with Section 8.12.
Schedule of Mortgage Loans: The list of Mortgage Loans whose Current Excess Servicing Spread has been assigned to Purchaser pursuant to this Agreement delivered initially accordance with Section 2.04, updated in accordance with Section 3.01 and maintained as Exhibit B hereto.
Seller: As defined in the preamble hereof.
Seller Enforcement Expenses: An amount equal to the Retained Servicing Spread Percentage of the reasonable expenses, including legal costs and expenses, incurred in the enforcement of any rights of Seller material to the value of the Total Servicing Spread under the Purchase and Sale Agreement and related documents, without duplication of any other such expenses paid under any other Sale Agreement, which enforcement has been approved by Purchaser (such approval not to be unreasonably withheld).
Seller Indemnitees: The meaning given to such term in Section 11.02.
Servicing: The responsibilities, with respect to servicing the Mortgage Loans, under the Servicing Agreements.
Servicing Agreements: The servicing agreements, as amended from time to time, and any waivers, consent letters, acknowledgments and other agreements under which Seller or the Interim Servicer is the servicer of the Mortgage Loans relating to the Mortgage Servicing Rights and governing the servicing of the Mortgage Loans.
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Servicing Spread Collections: For each Collection Period, the funds collected on the Mortgage Loans and allocated as the servicing compensation payable to Seller as servicer of the Mortgage Loans with respect to such Collection Period pursuant to the applicable Servicing Agreements, other than Ancillary Income and, for the avoidance of doubt, other than reimbursements received for advances and other out-of-pocket expenditures from an Owner by Seller in accordance with the Servicing Agreements.
Servicing Transfer Date: As defined in the Purchase and Sale Agreement with respect to the Mortgage Loans.
Solvent: With respect to any Person as of any date of determination, (a) the value of the assets of such Person is greater than the total amount of liabilities (including contingent and unliquidated liabilities) of such Person as determined in accordance with GAAP, (b) such Person is able to pay all liabilities of such Person as such liabilities mature and (c) such Person does not have unreasonably small capital. In computing the amount of contingent or unliquidated liabilities at any time, such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
Subsequent Sale Date: As defined in the Purchase and Sale Agreement; provided that all conditions precedent to the execution and delivery of the related Assignment Agreement shall have been satisfied or waived on such date.
Third Party Assignee: The meaning given to such term in Section 12.16.
Third Party Assignment: The meaning given to such term in Section 12.16.
Third Party Current Spread Agreement: The meaning given to such term in Section 12.16.
Third Party Claim: The meaning given to such term in Section 11.01 and Section 11.02, as applicable.
Third Party Controlled Current Spread Custodial Account: The account specified in the Current Spread Custodial Account Control Agreement and maintained by Wells Fargo Bank, National Association or another third party custodian or trustee selected by Purchaser, into which all Servicing Spread Collections and all Servicing Agreement termination payments in respect of the Mortgage Loans shall be deposited.
Total Servicing Spread: For each Collection Period on and after the Sale Date, the sum of the following: (a) the Servicing Spread Collections received during such Collection Period and remaining after payment of the Base Servicing Fee; (b) all Sales Proceeds received during such Collection Period; (c) all Repurchase Prices received during such Collection Period; and (d) all other amounts payable by an Owner to Seller with respect to the Mortgage Servicing Rights for Mortgage Loans, including any termination fees paid by the applicable Owner to Seller for
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terminating Seller as the servicer of any of the Mortgage Loans, but for the avoidance of doubt, excluding all Ancillary Income and reimbursements received for advances and other out-of-pocket expenditures, if any, from the applicable Owner by Seller in accordance with the Servicing Agreements.
Transaction Documents: The Purchase and Sale Agreement (including any order, bill of sale, assignment agreement or other transfer agreement related to the sale of the Mortgage Servicing Rights thereunder), the Owner Consents, the Current Spread Custodial Account Agreement, the Current Spread Custodial Account Control Agreement, the Current Spread Reserve Account Agreement, the Current Spread Reserve Account Control Agreement, the Sale Agreements and the Future Spread Agreements.
UCC: The Uniform Commercial Code as in effect from time to time in the applicable jurisdiction.
Section 1.02 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Agreement have the meanings assigned to them in this Agreement and include the plural as well as the singular, and the use of any gender herein shall be deemed to include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;
(c) References herein to Articles, Sections, Subsections, Paragraphs, and other subdivisions without reference to a document are to designated Articles, Sections, Subsections, Paragraphs and other subdivisions of this Agreement;
(d) A reference to a Subsection without further reference to a Section is a reference to such Subsection as contained in the same Section in which the reference appears, and this rule shall also apply to Paragraphs and other subdivisions;
(e) The words herein, hereof, hereunder and other words of similar import refer to this Agreement as a whole and not to any particular provision; and
(f) The term include or including shall mean without limitation by reason of enumeration.
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ARTICLE II
PROCEDURES; ITEMS TO BE DELIVERED
Section 2.01 Sale of Current Excess Servicing Spread.
Subject to, and upon the terms and conditions of this Agreement, on the Sale Date and on each Subsequent Sale Date occurring within 90 days of the Sale Date, Seller will sell, transfer and assign to Purchaser, and Purchaser will acquire from Seller, all of Sellers right, title and interest in and to the Current Excess Servicing Spread and all proceeds thereof with respect to the related Mortgage Loans.
Section 2.02 Grant of Security Interest.
In order to secure Sellers obligations to deliver the Current Excess Servicing Spread and perform its obligations hereunder and under the Purchase and Sale Agreement, Seller hereby Grants to Purchaser a valid and continuing first priority and perfected Lien on and security interest in all of Sellers right, title and interest in, to and under, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, together with all amounts deposited therein from time to time and all cash and non-cash proceeds thereof, in each case, whether now owned or existing, or hereafter acquired and arising (the Collateral).
Section 2.03 Items to be Delivered on the Agreement Date.
On the Agreement Date, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible as set forth below:
(a) The Sale Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement on the Agreement Date;
(b) The Future Spread Agreements and all agreements, certificates, opinions and instruments required to be delivered under each Future Spread Agreement on the Agreement Date; and
(c) The executed Purchase and Sale Agreement.
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Section 2.04 Items to be Delivered on the Sale Date or Subsequent Sale Date.
(a) On the Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) With respect to each related Mortgage Loan, either (i) an Owner Consent relating to the Servicing Agreement for such Mortgage Loan or (ii) a final order entered by the bankruptcy court providing that such Owner Consent is not required;
(ii) An Assignment Agreement with respect to the Sale Date;
(iii) All agreements, certificates, opinions and instruments required to be delivered under each Sale Agreement and Future Spread Agreement on the Sale Date;
(iv) All agreements, certificates, opinions and instruments required to be delivered under the executed Purchase and Sale Agreement reasonably related to the transactions contemplated hereunder that are required to be delivered on the Sale Date;
(v) The executed Current Spread Custodial Account Agreement;
(vi) The executed Current Spread Custodial Account Control Agreement;
(vii) The executed Current Spread Reserve Account Agreement;
(viii) The executed Current Spread Reserve Account Control Agreement;
(ix) An Opinion of Counsel of Seller reasonably acceptable to Purchaser regarding due authorization, authority, and enforceability
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of the applicable Transaction Documents to which Seller is a party, and regarding no conflicts with other material Seller agreements;
(x) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the characterization of the transfer of the Current Excess Servicing Spread from Seller to Purchaser as a true sale for bankruptcy or receivership purposes, as applicable;
(xi) An Opinion of Counsel of Seller, reasonably acceptable to Purchaser, regarding the perfection of the assignment of Current Excess Servicing Spread to Purchaser and the security interests granted hereunder;
(xii) A certificate of good standing of Seller dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Seller;
(xiii) A secretarys certificate of Seller attaching its organizational documents, board resolutions and incumbency certificates;
(xiv) An officers certificate of Seller that all conditions precedent to the purchase of the Mortgage Servicing Rights under the Purchase and Sale Agreement have been satisfied (or if waived, such waiver has been approved by Purchaser);
(xv) A duly executed corporate certificate of Seller required by Section 9.07 dated as of the Sale Date;
(xvi) A duly executed corporate certificate of Purchaser required by Section 10.05 dated as of the Sale Date;
(xvii) A certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date to be delivered by Purchaser; and
(xviii) A UCC-1 financing statement relating to the security interest of Purchaser in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account, in form and substance reasonably acceptable to Purchaser.
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(b) On the Sale Date, subject to the satisfaction of the terms and conditions herein, Seller shall provide Purchaser with copies of the following:
(i) Any amendments, modifications or restatements of the Purchase and Sale Agreement;
(ii) Each bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller;
(iii) The executed Power of Attorney; and
(iv) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on the Sale Date as of November 30, 2012.
(c) On each Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein, each of Seller and Purchaser shall deliver or cause to be delivered duly executed copies of the following documents to which they are a party or for which they are otherwise responsible:
(i) With respect to each related Mortgage Loan, either (i) an Owner Consent relating to the Servicing Agreement for such Mortgage Loan or (ii) a final order entered by the bankruptcy court providing that such Owner Consent is not required;
(ii) Each bill of sale, assignment agreement or other transfer agreement pursuant to which Bank of America will transfer the Mortgage Servicing Rights to Seller pursuant to the Purchase and Sale Agreement; and
(iii) An Assignment Agreement with respect to such Subsequent Sale Date;
(iv) A preliminary Schedule of Mortgage Loans containing information with respect to the Mortgage Loans anticipated to be included in this Agreement on the Subsequent Sale Date.
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Section 2.05 Sale Date and Subsequent Sale Date Transactions.
On the Sale Date and each Subsequent Sale Date, subject to the satisfaction of the terms and conditions herein:
(a) The Parties shall execute and deliver the Assignment Agreement;
(b) Purchaser shall remit to Seller the Purchase Price; and
(c) Ownership of the Current Excess Servicing Spread shall be transferred to Purchaser.
ARTICLE III
PAYMENTS AND DISTRIBUTIONS
Section 3.01 Purchase Price.
On the first Business Day following the Agreement Date, Purchaser shall pay Seller an amount (the Deposit) equal to the product of (i) $6,943,463 and (ii) Current Excess Servicing Spread Percentage, without any of the adjustments provided in the Purchase and Sale Agreement for such calculation, as an earnest money deposit. MSR XII LLC shall act as Purchaser for the Sale Date and for any Subsequent Sale Dates occurring within 90 days following the Sale Date with respect to purchases of current excess servicing spread relating to any Non-Agency Mortgage Loan pursuant to the Purchase and Sale Agreement. For avoidance of doubt, the purchaser for any Subsequent Sale Date occurring after 90 days following the Sale Date will be MSR XIII LLC and not MSR XII LLC, and any related current excess servicing spread shall be sold pursuant to the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans for MSR XIII LLC and not this Agreement, and MSR XII LLC shall not acquire any interest in such current excess servicing spread.
In full consideration for the purchase of the Current Excess Servicing Spread and the rights under the Future Spread Agreement for Non-Agency Mortgage Loans, and upon the terms and conditions of this Agreement, Purchaser shall pay to Seller an amount (the Base Purchase Price) equal to the product of (x) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-Off Date, (y) the Purchase Price Percentage and (z) the Current Excess Servicing Spread Percentage. The Base Purchase Price shall be allocated by the Parties on the Sale Date to reflect the consideration for the purchase of the Current Excess Servicing Spread hereunder (the Purchase Price) and the consideration for the rights acquired by Purchaser under the Future Spread Agreement for Non-Agency Mortgage Loans.
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The Base Purchase Price shall be payable by the Purchaser to the Seller as follows: (a) the Deposit shall be payable on the first Business Day following the Agreement Date, (b) 50% of the estimated Base Purchase Price net of the portion of the Deposit with respect to the applicable Servicing Agreements shall be payable on the Sale Date or the Subsequent Sale Date, as applicable and (c) the portion of the Base Purchase Price with respect to the Mortgage Servicing Rights transferred on such Servicing Transfer Date that has not been paid to Seller by Purchaser as of such date, including with respect to Mortgage Loans that have prepaid between either (x) the Sale Date or Subsequent Sale Date, as applicable, and the initial applicable Servicing Transfer Date or (y) two Servicing Transfer Dates pertaining to the same Mortgage Servicing Rights, plus interest thereon at the Federal Funds Rate for the period from the Sale Date or Subsequent Sale Date, as applicable, to such Servicing Transfer Date or between such Servicing Transfer Dates, shall be payable on the Servicing Transfer Date.
The Seller shall deliver the Schedule of Mortgage Loans no later ten (10) Business Days after the Sale Date and any Subsequent Sale Date, as applicable. In the event there is an adjustment and reconciliation of the Sellers purchase price pursuant to the terms of Section 3.01(d) of the Purchase and Sale Agreement, the Base Purchase Price shall be subject to a corresponding adjustment and any adjustment amounts (including interest) shall be paid by Purchaser or the Seller, as applicable, to the other party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
In the event the sale of the Current Excess Servicing Spreads related to any Servicing Agreement is delayed to a Subsequent Sale Date with respect to which MSR XII LLC is the Purchaser in accordance with the terms of the Purchase and Sale Agreement and this Agreement, the Base Purchase Price and Purchase Price to be paid hereunder related to the Current Excess Servicing Spreads to be sold on such Subsequent Sale Date shall be paid on such Subsequent Sale Date, in accordance with the preceding provisions of this Section 3.01 as if such Subsequent Sale Date were the Sale Date thereunder, net of the portion of the earnest money deposit set forth in the first paragraph of Section 3.01 with respect to the applicable Servicing Agreements.
Section 3.02 Payments by Purchaser.
(a) Payments shall be made by Purchaser to Seller by wire transfer of immediately available funds to an account designated by Seller.
(b) If, subsequent to the payment of the Purchase Price or the payment of any amounts due hereunder to either party, the outstanding principal balance of any Mortgage Loan is found to be in error, or if for any reason the Purchase Price or such other amounts is found to be in error, the party benefiting from the error shall pay an amount sufficient to correct and reconcile the Purchase Price or such other amounts and shall provide a reconciliation statement and other such documentation to reasonably satisfy the other party concerning the accuracy of such reconciliation. Such amounts shall be paid by the proper party within ten (10) Business Days from receipt of satisfactory written verification of amounts due.
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Section 3.03 Accounts.
(a) Lockbox Account. Seller shall inform the Mortgagors of Mortgage Loans to remit their mortgage payments due on or after the Servicing Transfer Date to the Lockbox Account. All amounts on deposit in the Lockbox Account will be maintained and applied in accordance with the Servicing Agreement. Payments of all Servicing Spread Collections received on and after the Servicing Transfer Date shall be transferred from the Lockbox Account to the Third Party Controlled Current Spread Custodial Account within one Business Day of receipt and identification thereof and in any event, within two Business Days of receipt thereof. If Seller receives any Servicing Spread Collections not remitted to the Lockbox Account, it shall hold such funds in trust for the benefit of the Purchaser and deposit such amounts to the Third Party Controlled Current Spread Account within two Business Days of receipt thereof. Any deferred servicing fees purchased by the Seller with respect to the Mortgage Loans under the Purchase and Sale Agreement shall only be retained by Seller after all Servicing Spread Collections with respect to the applicable Mortgage Loan for the related Collection Period (and any unpaid Servicing Spread Collections from prior Collection Periods) have been remitted to the Third Party Controlled Current Spread Custodial Account.
(b) Third Party Controlled Current Spread Custodial Account.
(i) The Third Party Controlled Current Spread Custodial Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser, for the sole purpose of receiving and disbursing all Servicing Spread Collections, Servicing Agreement termination payments with respect to the Mortgage Loans, Sales Proceeds and Repurchase Prices. The Third Party Controlled Current Spread Custodial Account will be established pursuant to the Current Spread Custodial Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Custodial Account Control Agreement, Seller may direct the disposition of funds in the Third Party Controlled Current Spread Custodial Account strictly in accordance with the Priority of Payments. Upon any material breach of a representation, warranty or covenant by Seller hereunder or during the occurrence and continuance of a Current Spread Reserve Account Deposit Event, Purchaser may elect to exercise Control over the Third Party Controlled Current Spread Custodial Account. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Third Party Controlled Current Spread Custodial Account.
(ii) Seller shall inform each Owner to remit the applicable portion of any Servicing Agreement termination payments payable after the Sale Date or Subsequent Sale Date, as applicable, directly to the Third Party Controlled Current Spread Custodial Account. Any termination payment to be directed to the Third Party Controlled Current Spread Custodial Account shall
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be equal to the pro rata amount by which the Mortgage Loans affected by such termination bear to all mortgage loans of Seller affected by such termination, based upon the method in which such termination payments are calculated in accordance with the applicable Servicing Agreement.
(iii) Seller shall direct each payer of Sales Proceeds to remit such payments directly to the Third Party Controlled Current Spread Custodial Account.
(iv) Seller shall direct Bank of America to remit (i) Servicing Spread Collections received by it prior to the Servicing Transfer Date and (ii) any Repurchase Price under the Purchase and Sale Agreement, directly to the Third Party Controlled Current Spread Custodial Account.
(v) If Seller receives any amounts required to be deposited into the Third Party Controlled Current Spread Custodial Account in error, Seller shall promptly remit such funds to the Third Party Controlled Current Spread Custodial Account.
(c) Current Spread Reserve Account. The Current Spread Reserve Account will be established with Wells Fargo Bank, National Association or with such other third party custodian or trustee selected by Purchaser. The Current Spread Reserve Account will be established pursuant to the Current Spread Reserve Account Control Agreement with respect to which Purchaser is an Entitlement Holder with Control. So long as permitted by the Current Spread Reserve Account Control Agreement, Seller may direct the disposition of funds in the Current Spread Reserve Account strictly in accordance with Section 3.05. Seller agrees to take all actions reasonably necessary, including the filing of appropriate financing statements, to protect Purchasers interest in the Current Spread Reserve Account.
If at any time Sellers Consolidated Tangible Net Worth falls below the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries or if Seller (considered together with its consolidated subsidiaries) defaults in any indebtedness in excess of $10,000,000 (individually or in the aggregate) (each, a Current Spread Reserve Account Deposit Event), Seller shall immediately notify Purchaser in writing that a Current Spread Reserve Account Deposit Event has occurred. On each Distribution Date upon which a Current Spread Reserve Account Deposit Event has occurred and is continuing, Seller shall be required to transfer funds in the Third Party Controlled Current Spread Custodial Account to the Current Spread Reserve Account in accordance with the Priority of Payments until the amount of funds in the Current Spread Reserve Account is equal to the Current Spread Reserve Account Required Amount. The Current Spread Reserve Account Required Amount is equal to 25% of the fair market value as of the date the Current Spread Reserve Account Deposit Event that is then-continuing first occurred of the Total Servicing Spread expected to be paid over the expected remaining life of the Mortgage Loans (the Remaining Expected Total Servicing
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Spread) determined in accordance with the following paragraph. Seller shall immediately notify Purchaser in writing if a Current Spread Reserve Account Deposit Event is no longer continuing. Any funds in the Current Spread Reserve Account in excess of the Current Spread Reserve Account Required Amount shall be released to Seller.
For purposes of determining the fair market value of the Remaining Expected Total Servicing Spread, Purchaser shall submit its claim for determination of the fair market value of the Remaining Expected Total Servicing Spread, together with such back-up information it deems appropriate to justify such fair market value (which value shall be considered the fair market value of the Remaining Expected Total Servicing Spread for purposes of calculating the Current Spread Reserve Account Required Amount until the final determination of such fair market value in accordance with this paragraph). Within five (5) Business Days of Sellers receipt of such determination, Seller shall notify Purchaser in writing of its acceptance or any objection to such determination of such fair market value, and if Seller objects to such determination, such notice shall include its own determination of such fair market value and any back-up information as it deems appropriate to justify such fair market value (an Objection Notice). In the event an Objection Notice is delivered, the parties shall negotiate in good faith a resolution to such objection. In the event that Seller and Purchaser are unable to resolve such objection within five (5) Business Days of the delivery of such Objection Notice, Seller and Purchaser shall appoint a mutually acceptable nationally recognized valuation expert to determine such fair market value of the Remaining Expected Total Servicing Spread. The determination of such valuation expert shall be binding on Seller and Purchaser and the fees of such valuation expert shall be borne by Seller.
Section 3.04 Priority of Payments.
On each Business Day, subject to the terms and conditions of the Current Spread Custodial Account Control Agreement, Seller (or, after the delivery of an access termination notice pursuant to the Current Spread Custodial Account Control Agreement, Purchaser) shall direct the Bank to apply the monies in the Third Party Controlled Current Spread Custodial Account in the following order of priority (the Priority of Payments), in every case, after giving effect to each prior item in the Priority of Payments on such Distribution Date:
(a) first, from amounts in the Third Party Controlled Current Spread Custodial Account attributable to Servicing Agreement termination payments made by an Owner with respect to any Mortgage Loans, pro rata, (A) the Current Excess Servicing Spread Percentage of such termination payments to Purchaser, and (B) the Retained Servicing Spread Percentage of such termination payments to Seller; provided, that (I) prior to the distribution to Purchaser of any termination payments pursuant to clause (A), such termination payments shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable, to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any termination payments pursuant to clause (B), such termination payments shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount;
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(b) second, on any Business Day from and including the first Business Day of a calendar month to but excluding the Distribution Date in such calendar month, at the option of Seller, the Base Servicing Fee payable with respect to a prior Collection Period for the Mortgage Loans to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Current Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (b);
(c) third, on each Distribution Date, to the extent not previously paid to Seller in accordance with Section 3.04(b), any accrued and unpaid Base Servicing Fee to Seller; provided however, that, to the extent that (i) the Seller is not permitted or is otherwise unable to advance servicing fees relating to the Total Servicing Spread with respect to the Mortgage Loans serviced under the related Servicing Agreement, (ii) the related Servicing Agreement does not permit payment of servicing fees from general collections, and (iii) the related Servicing Agreement does not allocate liquidation proceeds to servicing fees first, payments from monies in the Third Party Controlled Current Spread Custodial Account relating to the affected Mortgage Loans shall be made pursuant to clause (d) below prior to this clause (c);
(d) fourth, on each Distribution Date, pro rata, (A) to Purchaser, any Current Excess Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); and (B) to Seller, any Retained Servicing Spread for the prior Collection Period (other than the portion thereof consisting of termination payments paid pursuant to Section 3.04(a)); provided, that (I) prior to the distribution to Purchaser of any Current Excess Servicing Spread pursuant to clause (A), the Current Excess Servicing Spread shall be applied first, to the payment to Seller of any Purchaser Enforcement Expenses then due and payable and then, to the payment of any indemnity payments then due and payable to a Seller Indemnitee pursuant to Section 11.02, and (II) prior to the distribution to Seller of any Retained Servicing Spread pursuant to clause (B), the Retained Servicing Spread shall be applied first, to the payment of any Seller Enforcement Expenses then due and payable, second, to the payment of any indemnity payments then due and payable to a Purchaser Indemnitee pursuant to Section 11.01 and third, for deposit to the Current Spread Reserve Account to the extent necessary to cause the amount of funds on deposit in the Current Spread Reserve Account to equal the Current Spread Reserve Account Required Amount; and
(e) fifth, on each Distribution Date, to Seller, any other amounts remaining on deposit in the Third Party Controlled Current Spread Custodial Account.
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All payments to Purchaser or Seller shall be made by wire transfer of immediately available federal funds to an account designated by Purchaser or Seller, as applicable.
Section 3.05 Withdrawals from the Current Spread Reserve Account.
On any Business Day, at the instruction of Purchaser, Seller shall direct the Bank to apply funds in the Current Spread Reserve Account, if any, to the payment of indemnity payments payable to a Purchaser Indemnitee pursuant to Section 11.01. If on any Business Day a Current Spread Reserve Account Deposit Event is not then continuing and all outstanding indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller may direct the Bank to distribute any remaining funds in the Current Spread Reserve Account to, or as directed by, Seller. If there are any funds remaining in the Current Spread Reserve Account after the Current Excess Servicing Spread and all indemnity payments payable to Purchaser Indemnitees have been paid in full, Seller shall direct the Bank to distribute such remaining funds to, or as directed by, Seller.
Section 3.06 Payment to Seller of Base Servicing Fee.
Seller shall be entitled to payment of the Base Servicing Fee only to the extent funds are available therefor in the Third Party Controlled Current Spread Custodial Account in accordance with the Priority of Payments. Under no circumstances shall Purchaser be liable to Seller for payment of the Base Servicing Fee. In the event servicing of the Mortgage Loans is transferred to sub-servicers for any reason, the servicing fees and expenses of such sub-servicers shall be paid by Seller and in no event will the amount of Servicing Spread Collections or termination payments otherwise allocable to the Current Excess Servicing Spread be reduced due to the payment of sub-servicing fees and expenses.
Section 3.07 Intent and Characterization.
(a) Seller and Purchaser intend that the sale of the Current Excess Servicing Spread pursuant to this Agreement constitutes a valid sale of such Current Excess Servicing Spread from Seller to Purchaser, conveying good title thereto free and clear of any Lien, and that the beneficial interest in and title to the Current Excess Servicing Spread not be part of Sellers estate in the event of the bankruptcy of Seller. Seller and Purchaser intend and agree to treat the transfer and assignment of the Current Excess Servicing Spread as an absolute sale for tax purposes, and as an absolute and complete conveyance of title for property law purposes. Except for financial accounting purposes, neither party intends the transactions contemplated hereby to be characterized as a loan from Purchaser to Seller.
(b) In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount equal to the Purchase Price.
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ARTICLE IV
[RESERVED]
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser as of the Agreement Date, the Sale Date and as of each Subsequent Sale Date (or as of the date specified below, as applicable):
Section 5.01 Due Organization and Good Standing.
Seller is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller is qualified to transact business in each jurisdiction in which such qualification is deemed necessary to service the Mortgage Loans. Seller has, in full force and effect (without notice of possible suspension, revocation or impairment), all required permits, approvals, licenses, and registrations to conduct all activities in all states in which its activities with respect to the Mortgage Loans or the Mortgage Servicing Rights require it to be licensed, registered or approved in order to service the Mortgage Loans and own the Mortgage Servicing Rights, unless the failure to obtain such permits, approvals, licenses and registrations would not reasonably be expected to have a material adverse effect on Sellers ability to perform its obligations under this Agreement or the other Transaction Documents to which it is a party.
Section 5.02 Authority and Capacity.
Seller has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which Seller is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary corporate action. This Agreement constitutes, and each other applicable Transaction Document to which Seller is a party constitutes or will constitute, a valid and legally binding agreement of Seller enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Seller of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
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Section 5.03 Title to the Mortgage Servicing Rights; Owner Consents
(a) As of the Sale Date or Subsequent Sale Date, as applicable, Seller will be the lawful owner of the Mortgage Servicing Rights, will be responsible for the maintenance of the Related Escrow Accounts, and will have the sole right and authority to transfer the Current Excess Servicing Spread as contemplated hereby. The transfer, assignment and delivery of the Current Excess Servicing Spread shall be free and clear of any and all claims, charges, defenses, offsets, Liens and encumbrances of any kind or nature whatsoever.
(b) As of the Sale Date or Subsequent Sale Date, as applicable, Seller has obtained all Owner Consents or, with respect to any Servicing Agreement relating to the Mortgage Loans for which an Owner Consent has not been obtained, a final order entered by the bankruptcy court providing that such Owner Consent is not required.
Section 5.04 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document that has been executed by Seller, compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby did not, and will not, violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound or which affects the Current Excess Servicing Spread, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it or to the Current Excess Servicing Spread.
Section 5.05 No Accrued Liabilities.
There are no accrued liabilities of Seller with respect to the Mortgage Loans or the Mortgage Servicing Rights or circumstances under which such accrued liabilities will arise against Purchaser as purchaser of the Current Excess Servicing Spread.
Section 5.06 Seller/Servicer Standing.
Seller is qualified to act as servicer under, and meets all eligibility criteria required by, each applicable Servicing Agreement, and has adequate resources to complete the transactions contemplated hereby on the conditions stated herein. No event has occurred, including but not limited to a change in insurance coverage, which would make the Seller unable to comply with any such requirements or which would require notification to the applicable Owner. Furthermore, if at any time prior to the termination of this Agreement, the Seller is unable to comply with any eligibility requirements under any Servicing Agreement, it shall immediately notify the Purchaser.
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Section 5.07 MERS Membership.
Seller is a member in good standing under the MERS system.
Section 5.08 Owner Set-off Rights.
Seller has no actual notice, including any notice received from an Owner, or any reason to believe, that, other than in the normal course of Sellers business, any circumstances exist that would result in Seller being liable to an Owner for any amount due by reason of: (i) any breach of servicing obligations or breach of mortgage selling warranty to such Owner under servicing agreements relating to Sellers entire servicing portfolio for such Owner (including any unmet mortgage repurchase obligation), (ii) any unperformed obligation with respect to mortgage loans that Seller is servicing for such Owner under the regular servicing option or other mortgages subject to recourse agreements, (iii) any loss or damage to such Owner by reason of any inability to transfer to a purchaser of the servicing rights Sellers selling and servicing representations, warranties and obligations, or (iv) any other unmet obligations to such Owner under a servicing contract relating to Sellers entire servicing portfolio with such Owner.
Section 5.09 Ability to Perform; Solvency.
Seller 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. Seller is Solvent and the sale of the Current Excess Servicing Spread will not cause Seller to become insolvent. The sale of the Current Excess Servicing Spread is not undertaken to hinder, delay or defraud any of the creditors of Seller. The consideration received by Seller upon the sale of the Current Excess Servicing Spread constitutes fair consideration and reasonably equivalent value therefor.
Section 5.10 Material Documents.
Seller has provided Purchaser with executed copies of all material agreements and documents, and any amendments thereto, relating to Sellers acquisition of the Mortgage Servicing Rights and the servicing of the Mortgage Loans.
Section 5.11 Obligations with Respect to Origination.
Seller shall remain liable for all obligations with respect to the origination of each Mortgage Loan and, if applicable, for all obligations with respect to the sale of such Mortgage Loan to the applicable Owner.
Section 5.12 No Actions.
There have not been commenced or, to the best of Sellers knowledge, threatened any action, suit or proceeding which will likely materially and adversely affect the consummation of the transactions contemplated by any Transaction Document.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES AS TO MORTGAGE
LOANS AND SERVICING
As further inducement to Purchaser to enter into this Agreement, Seller represents and warrants to Purchaser, as of the Agreement Date, the Sale Date and each Subsequent Sale Date (or as of the date specified below, as applicable):
Section 6.01 Servicing Agreements; Applicable Laws.
The originator of the Mortgage Loan and each prior owner of the Mortgage Servicing Rights has each performed its obligations in all material respects in accordance with the terms of the related Mortgage Note, Mortgage, Servicing Agreements and Applicable Law.
Section 6.02 Related Escrow Accounts.
All Related Escrow Accounts are being, and have been, maintained in accordance with Applicable Law and in accordance with the Servicing Agreements and the terms of the related Mortgages and other Mortgage Loan documents; and, except as to payments which are past due under Mortgage Notes, all balances required by the Mortgages or other Mortgage Loan Documents to be paid to Seller for the account of the Mortgagors are on deposit in the appropriate Related Escrow Account.
Section 6.03 Accuracy of Servicing Information.
The information in the Data Tape dated as of November 30, 2012 is true and correct in all material respects as of the date specified therein; provided that if there is no date specified in the Data Tape, as of November 30, 2012.
Section 6.04 No Purchaser Responsibility.
Purchaser shall have no responsibility, liability or other obligation whatsoever under any Servicing Agreement or with respect to any Mortgage Loan, or to make any advance thereunder, or to pay any servicing fees.
Section 6.05 Location of Credit Files.
All of the Mortgage Loan Documents are or upon delivery by Bank of America will be held by Custodians, or if held by the Seller, in the locations specified in Exhibit E, unless temporarily removed for enforcement purposes in the normal course of servicing. Seller will notify Purchaser in writing of any changes in locations of the Mortgage Loan Documents held by the Seller in Exhibit E.
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Section 6.06 Representations Concerning the Current Excess Servicing Spread.
(a) Seller has not assigned, pledged, conveyed, or encumbered the Current Excess Servicing Spread to any other Person and immediately prior to the sale of the Current Excess Servicing Spread on the Sale Date or Subsequent Sale Date, as applicable, Seller was the sole owner of the Current Excess Servicing Spread and had good and marketable title thereto, free and clear of all Liens, and no Person, other than Purchaser, has any Lien on the Current Excess Servicing Spread. No security agreement, financing statement, equivalent security or lien instrument or continuation statement covering all or any part of the Current Excess Servicing Spread which has been signed by Seller or which Seller has authorized any other Person to sign or file or record, is on file or of record with any public office, except such as may have been terminated or filed by or on behalf of Purchaser.
(b) The sale and grant of a security interest by Seller to Purchaser of and on the Current Excess Servicing Spread does not and will not violate any Requirement of Law, the effect of which violation is to render void or voidable such assignment.
(c) As contemplated under Section 3.07(b), upon the filing of financing statements on Form UCC-1 naming Purchaser as Secured Party and Seller as Debtor, and describing the Current Excess Servicing Spread, in the jurisdictions and recording offices listed on Exhibit I attached hereto, the sale and security interests granted hereunder in the Current Excess Servicing Spread will constitute perfected first priority security interests under the UCC in all right, title and interest of Purchaser in, to and under the Current Excess Servicing Spread.
(d) Purchaser has and will continue to have the full right, power and authority to pledge the Current Excess Servicing Spread, and the Current Excess Servicing Spread may be further assigned without any requirement.
(e) Each Servicing Agreement constitutes an Eligible Servicing Agreement.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser represents and warrants to Purchaser as of the Agreement Date, the Sale Date and each Subsequent Sale Date (or as of the date specified below, as applicable):
Section 7.01 Due Organization and Good Standing.
Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser is qualified to transact business in each jurisdiction in which such qualification is deemed necessary.
Section 7.02 Authority and Capacity.
Purchaser has all requisite limited liability company power, authority and capacity to enter into this Agreement and each other Transaction Document to which it is a party and to perform the obligations required of it hereunder and thereunder. The execution and delivery of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated hereby and thereby have each been duly and validly authorized by all necessary limited liability company action. This Agreement constitutes, and each other applicable Transaction Document to which Purchaser is a party constitutes or will constitute, a valid and legally binding agreement of Purchaser enforceable in accordance with its terms, and no offset, counterclaim or defense exists to the full performance by Purchaser of this Agreement or such other Transaction Document, except as the same may be limited by bankruptcy, insolvency, reorganization and similar laws affecting the enforcement of creditors rights generally and by general equity principles.
Section 7.03 Effective Agreements.
The execution, delivery and performance of this Agreement and each other Transaction Document to which it is a party by Purchaser, its compliance with the terms hereof and thereof and the consummation of the transactions contemplated hereby and thereby will not violate, conflict with, result in a breach of, constitute a default under, be prohibited by or require any additional approval under its certificate of formation or limited liability company agreement, any instrument or agreement to which it is a party or by which it is bound, or any state or federal law, rule or regulation or any judicial or administrative decree, order, ruling or regulation applicable to it, in each case which violation, conflict, breach or requirement would reasonably be expected to have a material adverse effect on Purchasers ability to perform its obligations under this Agreement and any other Transaction Document to which it is a party.
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Section 7.04 Sophisticated Investor.
Purchaser is a sophisticated investor and its decision to acquire the Current Excess Servicing Spread is based upon Purchasers own independent experience, knowledge, due diligence and evaluation of this transaction. Purchaser has relied solely on such experience, knowledge, due diligence and evaluation and has not relied on any oral or written information provided by Seller other than the representations and warranties made by Seller herein.
Section 7.05 No Actions
There shall not have been commenced or, to the best of Purchasers knowledge, threatened any action, suit or proceeding against the Purchaser that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
ARTICLE VIII
SELLER COVENANTS
Seller covenants and agrees as follows:
Section 8.01 Servicing Obligations.
(a) Seller shall (or, prior to the Servicing Transfer Date, shall cause the Interim Servicer to,) pay, perform and discharge all liabilities and obligations relating to the Servicing, including all liabilities and obligations under the Mortgage Loan Documents, Applicable Law and the Servicing Agreements; and shall pay, perform and discharge all the rights, obligations and duties with respect to the Related Escrow Accounts as required by the Servicing Agreements, the Mortgage Loan Documents, all Applicable Law and in accordance with the Purchase and Sale Agreement.
(b) Under no circumstances shall Purchaser be responsible for the Servicing acts and omissions of Seller or any other servicer or any originator of the Mortgage Loans, or for any servicing related obligations or liabilities of any servicer in the Servicing Agreements or of any Person under the Mortgage Loan Documents, or for any other obligations or liabilities of Seller or Bank of America.
(c) Any deferred servicing fees purchased by the Seller with respect to the Mortgage Loans under the Purchase and Sale Agreement shall only be retained by Seller after all Servicing Spread Collections with respect to the applicable Mortgage Loan for the related Collection Period (and any unpaid Servicing Spread Collections from prior Collection Periods) have been remitted to the Third Party Controlled Current Spread Custodial Account.
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(d) Subject to a nonrecoverability determination made pursuant to the related Servicing Agreement, the Seller shall advance the full amount of principal and interest on delinquent Mortgage Loans for each Collection Period, including the related servicing fee.
(e) Upon termination of any Servicing Agreement, Seller shall remain liable to Purchaser and the applicable Owner for all liabilities and obligations incurred by the servicer or its designee while Seller or its designee was acting as the servicer thereunder.
(f) Seller shall conduct quality control reviews of its servicing operations in accordance with industry standards.
Section 8.02 Cooperation; Further Assurances.
Seller shall cooperate with and assist Purchaser, as reasonably requested, in carrying out the purposes of this Agreement. Seller will cooperate and assist Purchaser, as reasonably requested and at the reasonable expense of Purchaser (except as otherwise provided in Section 12.01), in obtaining consents from any Owner as may be required or advisable to assign, transfer, deliver, hypothecate, pledge, subdivide, finance or otherwise deal with the Current Excess Servicing Spread. If Seller is terminated under any Servicing Agreement, Seller shall cooperate fully and at its own expense in transferring such Servicing. If Purchaser assigns all or any portion of the Current Excess Servicing Spread or its other rights under this Agreement to a Third Party Assignee, Seller will cooperate and assist any Third Party Assignee in drafting and entering into a Third Party Current Spread Agreement in accordance with Section 12.16.
Section 8.03 Financing Statements.
Seller hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdictions and with any filing offices as Purchaser may determine, in its sole discretion, are necessary or advisable to perfect the sale of the Current Excess Servicing Spread and the security interests granted to Purchaser in connection herewith. Seller agrees to execute financing statements in form reasonably acceptable to Purchaser and Seller at the request of Purchaser in order to reflect Purchasers interest in the Current Excess Servicing Spread, the Third Party Controlled Current Spread Custodial Account and the Current Spread Reserve Account.
Section 8.04 Supplemental Information.
From time to time after the Sale Date or the Subsequent Sale Date, as applicable, Seller promptly shall furnish Purchaser such incidental information, which is reasonably available to Seller, supplemental to the information contained in the documents and schedules delivered pursuant to this Agreement, as may reasonably be requested to monitor performance of the Mortgage Loans and the payment of the Current Excess Servicing Spread.
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Section 8.05 Access to Information.
From time to time, at such times as are reasonably convenient to Seller, Purchaser or its designees may conduct audits or visit and inspect (a) any of the Mortgage Loans or places where the Credit Files are located, to examine the Credit Files, internal controls and procedures maintained by Seller and its agents, and take copies and extracts therefrom, and to discuss Sellers affairs with its officers, employees and, upon notice to Seller, independent accountants. Seller hereby authorizes such officers, employees and independent accountants to discuss with Purchaser the affairs of Seller and (b) the Sellers servicing facilities for the purpose of satisfying the Purchaser that Seller, has the ability to service the Mortgage Loans related to Mortgage Servicing Rights in accordance with the standards set forth in the applicable Servicing Agreement. Any audit provided for herein will be conducted in accordance with Sellers rules respecting safety and security on its premises, in accordance with applicable privacy and confidentiality laws and without materially disrupting operations.
Section 8.06 Home Affordable Modification Program.
With respect to any Mortgage Loans that have been modified or that are or will be in a modification trial period as part of the U.S. Department of the Treasurys Home Affordable Modification Program (HAMP) (such Mortgage Loans, the HAMP Loans), Seller represents and warrants that it will continue to service such HAMP Loan in accordance with the HAMP terms and will ensure the timely compliance and filing of any appropriate HAMP documentation with the applicable regulator.
Section 8.07 Distribution Date Data Tapes and Reports.
Seller shall deliver the following to Purchaser two Business Days prior to each Distribution Date:
(a) An Electronic Data File in form and substance acceptable to Purchaser containing, for each Mortgage Loan, principal, interest and Servicing Spread Collections, and delinquency status (i.e. 30, 60, 90, FCL, REO) as of the last day of the prior Collection Period;
(b) A Summary Activity Report with respect to the Mortgage Loans with respect to the prior Collection Period containing:
(i) aggregate beginning principal balance as of the first and last date of the Collection Period,
(ii) aggregate regular principal collected,
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(iii) aggregate noncash principal,
(iv) aggregate interest collected,
(v) aggregate liquidation principal,
(vi) aggregate curtailments,
(vii) liquidations,
(viii) short sales,
(ix) (1) for each Mortgage Loan, the principal balance, the applicable servicing spread, the final maturity date, the mortgage interest rate, the loan-to-value ratio and the FICO score, and (2) for each Mortgage Loan that was refinanced by a lender other than Seller or an affiliate thereof, to the extent such information is known to Seller in the ordinary course of business and the collection and delivery of such information does not impose any additional and undue burden on Seller, the name of such lender and the mortgage interest rate of the newly originated residential mortgage loan;
(c) A Delinquency Report with respect to the Mortgage Loans containing:
(i) The aggregate outstanding principal balance of the Mortgage Loans and percentages of the aggregate outstanding principal balance of the Mortgage Loans in each of the following categories as of the last day of the prior Collection Period:
(1) Current Mortgage Loans,
(2) 0-29 days delinquent,
(3) 30-59 days delinquent,
(4) 60-89 days delinquent,
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(5) 90 days or more delinquent,
(6) Mortgage Loans in Foreclosure,
(7) Mortgage Loans with respect to which the related Mortgaged Properties have become real estate owned properties, and
(8) Mortgage Loans in which the Mortgagor is in bankruptcy;
(ii) For each of the above categories, a roll report showing the migration of Mortgage Loans in such category from the last day of the second prior Collection Period;
(d) A Disbursement Report for such Distribution Date containing:
(i) The Servicing Spread Collections for the prior Collection Period,
(ii) The Base Servicing Fee paid to Seller,
(iii) The amount of the Current Excess Servicing Spread paid to Purchaser,
(iv) The amount of funds, if any, transferred to the Current Spread Reserve Account,
(v) The amount of Purchaser Indemnitees, if any, paid from each of the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account, and
(vi) The amount of funds paid to Seller from the Current Spread Reserve Account.
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Section 8.08 Financial Statements and Officers Certificates.
(a) If Sellers financial statements are not filed with the U.S. Securities and Exchange Commission and are not publicly available, Seller shall deliver to Purchaser copies of Sellers most recent audited quarterly financial statements within 45 days of the end of each of Sellers fiscal quarters and its most recent audited annual financial statements within 90 days of the end of each of Sellers fiscal years.
(b) Within 45 days of the end of each of Sellers fiscal quarters, Seller shall deliver to Purchaser a certificate from a duly authorized officer of Seller certifying (i) whether or not Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries (and shall provide a calculation of its determination of its Consolidated Tangible Net Worth) and (ii) whether or not Seller (considered together with its consolidated subsidiaries) is in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 8.09 Monthly Management Calls.
Within five Business Days after each Distribution Date, Seller shall make its management team and other appropriate officers and employees available to Purchaser to discuss by telephone the performance of the Mortgage Loans and the performance of the parties under the Transaction Documents.
Section 8.10 Timely Payment of Owner Obligations.
Seller shall pay all of its obligations to the Owners in a timely manner so as to avoid exercise of any right of set-off by any Owner against Seller.
Section 8.11 Servicing Agreements.
After the Serving Transfer Date, Seller will service the Mortgage Loans in accordance with Accepted Servicing Practices and will perform its obligations in all material respects in accordance with the Servicing Agreements and Applicable Law. In particular, after the Servicing Transfer Date, Seller shall comply with any advancing obligation under the Servicing Agreements. Without the express written consent of Purchaser (which consent may be withheld in its absolute discretion), Seller shall not (a) cancel, terminate or amend any Mortgage Servicing Rights, (b) expressly provide any required consent to any termination, amendment or modification of any Servicing Agreements either verbally or in writing, (c) expressly provide any required consent to any termination, amendment or modification of any other servicing agreements or enter into any other agreement or arrangement with any Owner that may be reasonably material to Purchaser either verbally or in writing or (d) take any other action in connection with any such Servicing Agreement that would impair in any material respect the
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value of the interests or rights of the Purchaser hereunder. Seller shall conduct its business and perform its obligations under the Servicing Agreements in a manner such that no Owner will have cause to terminate any Servicing Agreement. Notwithstanding the foregoing, in no event will the prohibitions contained in this Section 8.11 apply to any amendments or modifications of the Servicing Agreements applicable to Mortgage Loans owned by Seller which do not affect the Current Excess Servicing Spread with respect to such Mortgage Loans and are not reasonably material to the Purchaser.
The Seller shall monitor the obligations of the Interim Servicer to service and administer the Mortgage Loans in accordance with the terms of the Servicing Agreement.
Section 8.12 Transfer of Mortgage Servicing Rights.
If Seller intends to assign, transfer or sell any of its Mortgage Servicing Rights to a replacement servicer, to the extent permitted by applicable law, (a) Seller shall consult with Purchaser and Purchaser shall participate in the assignment, transfer and sale of such Mortgage Servicing Rights, and (b) Seller shall obtain the written consent of Purchaser, granted by the Purchaser in its sole discretion, prior to any assignment, transfer or sale thereof.
Section 8.13 Consents to Transaction Documents.
Seller shall not terminate, amend, amend and restate, modify or waive any conditions or provisions of any Transaction Document without the express written consent of Purchaser, which consent shall not be unreasonably withheld, delayed or conditioned.
Section 8.14 Accounts.
Seller shall inform the Mortgagors of Mortgage Loans at its own expense to remit their mortgage payments to the Lockbox Account, and any change in such instructions shall only be permitted with the express written consent of Purchaser.
Section 8.15 Notification of Certain Events.
Seller shall promptly notify Purchaser of any event which, with the passage of time, could reasonably be expected to result in a termination of any servicing agreement between Seller and any Owner. Seller shall provide Purchaser with copies of any notices from any Owner of any breach, potential breach, default or potential default by Seller under any servicing agreement between Seller and such Owner, and with copies of any notices from any Owner of any termination, potential termination or threatened termination of any servicing agreement entered into between Seller and such Owner. Seller shall promptly forward copies of any material notices received from any Owner or from any Governmental Authority with respect to the Mortgage Loans. Seller shall provide Purchaser with (a) copies of all amendments to the Transaction Documents, the Servicing Agreements and the agreements relating to Sellers acquisition of the Mortgage Servicing Rights, and (b) copies of any other agreements Seller enters into with any Owner that may be reasonably material to Purchaser, in each case, promptly after execution thereof.
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Section 8.16 Financing; Pledge of Current Excess Servicing Spread.
Seller shall not pledge, obtain Seller financing for, or otherwise permit any Lien of any creditor of Seller to exist on, any portion of the Servicing Spread Collections without the prior written consent of Purchaser. Sellers financial statements shall contain footnotes indicating that the Current Excess Servicing Spread has been sold, and Seller does not maintain any ownership interest therein.
Section 8.17 Existence, etc.
Seller shall:
(a) preserve and maintain its legal existence, good standing and all of its material licenses required to service the Mortgage Loans;
(b) comply with the requirements of all Applicable Laws, rules, regulations and orders of Governmental Authorities (including, truth in lending and real estate settlement procedures) if failure to comply with such requirements could be reasonably likely (either individually or in the aggregate) to have a material adverse effect on its ability to perform its obligations hereunder or under any other Transaction Document;
(c) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, and maintain adequate accounts and reserves for all taxes (including income taxes), all depreciation, depletion, obsolescence and amortization of its properties, all contingencies, and all other reserves;
(d) not move its chief executive office or chief operating office from the addresses referred to in Exhibit I unless it shall have provided Purchaser not less than thirty (30) days prior written notice of such change;
(e) pay and discharge all material taxes, assessments and governmental charges or levies imposed on it or its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained. Seller and its subsidiaries shall file on a timely basis all federal, and material state and local tax and information returns, reports and any other information statements or schedules required to be filed by or in respect of it;
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(f) keep in full force and effect the provisions of its charter documents, by-laws, operating agreements or similar organizational documents in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Documents;
(g) keep in full force and effect all agreements and instruments by which it or any of its properties may be bound and all applicable decrees, orders and judgments, in each case to the extent reasonably necessary to perform its obligations hereunder or under any other Transaction Document; and
(h) comply with its obligations under the Transaction Documents to which it is a party.
Section 8.18 Consent to Sub-Servicing.
Subject to the rights of the Owners, and except as contemplated under the Purchase and Sale Agreement with respect to transition services hereunder, Seller will not permit any Person other than Seller to service or sub-service the Mortgage Loans without the prior written consent of Purchaser, in each case other than (i) the Interim Servicer (prior to the Servicing Transfer Date) and (ii) third-party vendors customarily employed by servicers in the ordinary course of business in accordance with prudent mortgage servicing practices.
Section 8.19 Nonpetition Covenant.
Seller shall not, prior to the date that is one year and one day after the payment in full of the Current Excess Servicing Spread, petition or otherwise invoke the process of any court or governmental authority for the purpose of commencing or sustaining a case against Purchaser under any insolvency law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of Purchaser.
Section 8.20 Data Tape; Schedule of Mortgage Loans.
The information in the Data Tape delivered to Purchaser on the Sale Date or the Subsequent Sale Date, as applicable, will be true and correct in all material respects as of the date specified. Seller shall maintain the Schedule of Mortgage Loans, which shall be updated as of the Sale Date or the Subsequent Sale Date, as applicable. The information in the Schedule of Mortgage Loans pertaining to the Mortgage Loans and the Mortgage Servicing Rights will be true and correct in all material respects as of the date specified.
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Section 8.21 Insurance.
The Seller shall maintain (a) general liability insurance, (b) errors and omission insurance or blanket bond coverage and (c) fidelity bond insurance, in each case, from reputable companies with coverage in amounts customarily maintained by such similarly situated entities in the same jurisdiction and industry as the Seller.
Section 8.22 Defense of Title.
The Seller warrants and will defend the right, title and interest of the Purchaser in and to the Current Excess Servicing Spread against all adverse claims and demands.
Section 8.23 Refinancing of Mortgage Loans.
Each agreement or arrangement that Seller enters into to purchase Mortgage Servicing Rights shall be entered into on an arms length contractual basis in the ordinary course of business and shall have market terms applicable for the type of Mortgage Servicing Rights to be acquired thereby. Seller shall not enter into any agreement or arrangement with a third party intended to encourage the refinancing of any Mortgage Loan by any Person other than Seller.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement and under the Assignment Agreement are subject to the satisfaction of the following conditions as of the Sale Date or as of each Subsequent Sale Date, as applicable:
Section 9.01 Correctness of Representations and Warranties.
The representations and warranties made by Seller in this Agreement and each other Transaction Document to which Seller is a party to be made on or prior to the Sale Date or the Subsequent Sale Date, as applicable, are true and correct in all material respects; provided however, that, if the representations and warranties made in Sections 5.03(b) and 6.06(e) hereof with respect to any Servicing Agreement are not true and correct in all material respects on the Sale Date or the Subsequent Sale Date, as applicable, unless otherwise agreed in writing by Purchaser, (a) the Current Excess Servicing Spread for the Mortgage Loans relating to the affected Servicing Agreements shall not be sold to Purchaser and (b) such Servicing Agreements shall be removed from the definition of Servicing Agreements. In the event that the representations and warranties made in Sections 5.03(b) and 6.03(e) hereof are not true and correct in all material respects on the Sale Date or the Subsequent Sale Date, as applicable, with
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respect to a Servicing Agreement (a) unless the Purchaser elects to waive the failure of such representations and warranties with respect to any such Servicing Agreement and purchase the related Current Excess Servicing Spread, Seller shall have no further obligations to Purchaser with respect to such Servicing Agreement or the related Mortgage Loans and (b) the failure of such representations and warranties to be true and correct in all material respects on the Sale Date or the Subsequent Sale Date, as applicable, with respect to a Servicing Agreement or any number of Servicing Agreements shall not be considered a failure of the condition precedent contained in this Section 9.01 for the consummation of the transactions contemplated hereby with respect to those Servicing Agreements that do satisfy this condition.
Section 9.02 Compliance with Conditions.
All of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document required to be complied with and performed by Seller and Bank of America on or prior to the Sale Date or the Subsequent Sale Date, as applicable, shall have been duly complied with and performed in all material respects.
Section 9.03 Corporate Resolution.
Receipt by the Purchaser of a certified copy of the Sellers corporate resolution approving the execution and delivery of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, together with such other certificates of incumbency and other evidences of corporate authority as Purchaser or its counsel may reasonably request.
Section 9.04 No Material Adverse Change.
From the Agreement Date, there shall not have been any change to Sellers financial or operating condition, or in the Mortgage Servicing Rights, the Mortgage Loans or the Related Escrow Accounts that in each case will likely have a material adverse effect the consummation of the transactions contemplated hereby or the Current Excess Servicing Spread.
Section 9.05 Consents.
Seller shall have obtained all consents, approvals or other requirements of third parties required for the consummation of the transactions contemplated by the Transaction Documents that are to be obtained on or prior to the Sale Date or the Subsequent Sale Date, as applicable. No consents are required for the sale of the Current Excess Servicing Spread from Seller to Purchaser. All actions of all Governmental Authorities required to consummate the transactions contemplated by the Transaction Documents and the documents related thereto shall have been obtained or made.
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Section 9.06 Delivery of Transaction Documents.
Seller shall have delivered to the Purchaser copies of each executed Transaction Document that is to be entered into on or prior to such date and each of the items required to be delivered pursuant to Section 2.04 hereof.
Section 9.07 Certificate of Seller.
Seller shall have provided Purchaser a certificate, substantially in the form attached hereto as Exhibit C, signed by an authorized officer of Seller dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Sellers representations and warranties made in this Agreement and each other Transaction Document to which Seller is a party is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement and each other Transaction Document to which Seller is a party that are required to be complied with and performed by Seller at or prior to the Sale Date or the Subsequent Sale Date, as applicable, have been duly complied with and performed in all material respects; (c) the conditions set forth in Section 9.04 and Section 9.05 have been satisfied; and (d) as of the Sale Date or the Subsequent Sale Date, as applicable, Seller has a Consolidated Tangible Net Worth of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date hereof by Seller, Nationstar Mortgage Holdings Inc. or any of Sellers consolidated subsidiaries, and the Seller (considered together with the Sellers consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
Section 9.08 Valuation.
Purchaser shall have received an opinion reasonably satisfactory to Purchaser that the Base Servicing Fee of the Mortgage Loans and the Purchase Price of the Current Excess Servicing Spread is fair and reasonable.
Section 9.09 Opinions of Counsel.
Sellers counsel shall have delivered the Opinions of Counsel required pursuant to Section 2.04(a)(ix), Section 2.04(a)(x) and Section 2.04(a)(xi).
Section 9.10 Acquisition of Mortgage Servicing Rights by Seller.
Seller shall have acquired the Mortgage Servicing Rights and the other Purchased Assets from Bank of America pursuant to the Purchase and Sale Agreement as of the Sale Date or the Subsequent Sale Date, as applicable.
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Section 9.11 Good Standing Certificate of Seller.
Seller shall have provided Purchaser a certificate of good standing of Seller, dated as of a date within five (5) Business Days prior to the Sale Date or the Subsequent Sale Date, as applicable.
Section 9.12 No Actions or Proceedings.
No action, suit, proceeding or investigation by or before any Governmental Authority shall have been instituted to restrain or prohibit the consummation of, or to invalidate, any of the transactions contemplated by this Agreement and the documents related hereto in any material respect.
Section 9.13 Fees, Costs and Expenses.
The fees, costs and expenses payable by the Seller on or prior to the Sale Date or the Subsequent Sale Date, as applicable pursuant to Section 12.01 hereof and any other Transaction Document shall have been paid.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the satisfaction of the following conditions as of the Sale Date or the Subsequent Sale Date, as applicable:
Section 10.01 Correctness of Representations and Warranties.
The representations and warranties made by Purchaser in this Agreement to be made on or prior to the Agreement Date, Sale Date or the Subsequent Sale Date, as applicable, are true and correct in all material respects as of the date thereof.
Section 10.02 Compliance with Conditions.
All of the terms, conditions, covenants and obligations of this Agreement required to be complied with and performed by Purchaser on or prior to the Sale Date or the Subsequent Sale Date, as applicable, shall have been duly complied with and performed in all material respects as of the date thereof.
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Section 10.03 Corporate Resolution.
As of the date hereof, Seller shall have received from Purchaser a certified copy of its corporate resolution approving the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, together with such other certificates of incumbency and other evidences of corporate authority as Seller or its counsel may reasonably request.
Section 10.04 No Material Adverse Change.
Since the Agreement Date, there shall not have been any change to Purchasers financial condition that will likely materially and adversely affect the consummation of the transactions contemplated hereby.
Section 10.05 Certificate of Purchaser.
Purchaser shall have provided Seller a certificate, substantially in the form attached hereto as Exhibit D, signed by an authorized officer of Purchaser dated as of such date, applicable to the transactions contemplated by this Agreement, to the effect that: (a) each of Purchasers representations and warranties made in this Agreement is true and correct in all material respects as of such date; (b) all of the terms, covenants, conditions and obligations of this Agreement required to be complied with and performed by Purchaser at or prior to the Sale Date or the Subsequent Sale Date, as applicable, have been duly complied with and performed in all material respects; and (c) the condition set forth in Section 10.04 has been satisfied.
Section 10.06 Good Standing Certificate of Purchaser.
Purchaser shall have provided Seller a certificate of good standing of Purchaser, dated as of a date within five (5) Business Days prior to the Sale Date or the Subsequent Sale Date, as applicable.
ARTICLE XI
INDEMNIFICATION; CURE
Section 11.01 Indemnification by Seller.
(a) Seller shall indemnify, defend and hold Purchaser, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Purchaser Indemnitees) harmless from and shall reimburse the applicable Purchaser Indemnitee for any Losses suffered or incurred by any Purchaser Indemnitee after the Sale Date or the Subsequent Sale Date, as applicable, which result from:
(i) Any material breach of a representation or warranty by Seller, or non-fulfillment of any covenant or obligation of Seller, contained in this Agreement or the Assignment Agreement;
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(ii) Any servicing act or omission of any prior servicer relating to any Mortgage Loan and any act or omission of any party related to the origination of any Mortgage Loan;
(iii) Any act, error or omission of Seller in servicing any of the Mortgage Loans, including improper action or failure to act when required to do so;
(iv) Any exercise of any rights of setoff or other netting arrangements by any Owner against Seller that results in a decrease in Servicing Agreements termination payments due to Seller with respect to the Mortgage Loans from such Owner or in a shortfall of funds to pay the Current Excess Servicing Spread;
(v) Any breach by Seller of the Purchase and Sale Agreement; and
(vi) Litigation, proceedings, governmental investigations, orders, injunctions or decrees resulting from any of the items described in Section 11.01(a)(i) (v) above;
provided, however, that the applicable Purchaser Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Seller, which such failure of mitigation shall not relieve Seller of its indemnification obligations in this Section 11.01 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Purchaser Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Seller as part of its indemnification obligations in this Section 11.01. Purchaser shall notify Seller promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Seller shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Purchaser Indemnitee, but may not enter into any settlement without the prior written consent of the applicable Purchaser Indemnitee, which shall not be unreasonably withheld. A Purchaser Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself at its own expense but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Seller, which consent shall not be unreasonably withheld. Any exercise of such rights by a Purchaser Indemnitee shall not relieve Seller of its obligations and liabilities under this Section 11.01 or any other provision of this Agreement. With respect to any Third Party Claim subject to
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indemnification under this Agreement, the applicable Purchaser Indemnitee shall be required to cooperate in good faith with Seller to ensure the proper and adequate defense of such Third-Party Claim. For the avoidance of doubt, Sellers obligations for Purchaser Indemnitees shall not be limited to funds available in the Third Party Controlled Current Spread Custodial Account or the Current Spread Reserve Account.
(b) REIT Requirements. Notwithstanding anything in Section 11.01(a) above, in the event that counsel or independent accountants for the Protected REIT determine that there exists a material risk that any amounts due to Purchaser under ARTICLE XI hereof would be treated as Nonqualifying Income upon the payment of such amounts to Purchaser, the amount paid to Purchaser pursuant to this Agreement in any tax year shall not exceed the maximum amount that can be paid to Purchaser in such year without causing the Protected REIT to fail to meet the REIT Requirements for such year, determined as if the payment of such amount were Nonqualifying Income as determined by such counsel or independent accountants to the Protected REIT. If the amount payable for any tax year under the preceding sentence is less than the amount which Seller would otherwise be obligated to pay to Purchaser pursuant to ARTICLE XI of this Agreement (the Expense Amount), then: (1) Seller shall place the Expense Amount into an escrow account (the Expense Escrow Account) using an escrow agent and agreement reasonably acceptable to Purchaser and shall not release any portion thereof to Purchaser, and Purchaser shall not be entitled to any such amount, unless and until Purchaser delivers to Seller, at the sole option of the Protected REIT, (i) an opinion (an Expense Amount Tax Opinion) of the Protected REITs tax counsel to the effect that such amount, if and to the extent paid, would not constitute Nonqualifying Income, (ii) a letter (an Expense Amount Accountants Letter) from the Protected REITs independent accountants indicating the maximum amount that can be paid at that time to Purchaser without causing the Protected REIT to fail to meet the REIT Requirements for any relevant taxable year, or (iii) a private letter ruling issued by the IRS to the Protected REIT indicating that the receipt of any Expense Amount hereunder will not cause the Protected REIT to fail to satisfy the REIT Requirements (a REIT Qualification Ruling and, collectively with an Expense Amount Tax Opinion and an Expense Amount Accountants Letter, a Release Document); and (2) pending the delivery of a Release Document by Purchaser to Seller, Purchaser shall have the right, but not the obligation, to borrow the Expense Amount from the Escrow Account pursuant to a loan agreement (an Indemnity Loan Agreement) reasonably acceptable to Purchaser that (i) requires Seller to lend Purchaser immediately available cash proceeds in an amount equal to the Expense Amount (an Indemnity Loan), and (ii) provides for (A) a commercially reasonable interest rate and commercially reasonable covenants, taking into account the credit standing and profile of Purchaser or any guarantor of Purchaser, including the Protected REIT, at the time of such Loan, and (B) a 15 year maturity with no periodic amortization.
Section 11.02 Indemnification by Purchaser.
Purchaser shall indemnify, defend and hold Seller, its affiliates and its and their respective directors, managers, officers, employees, agents, representatives and advisors (the Seller Indemnitees) harmless from and shall reimburse the applicable Seller Indemnitee for any Losses suffered or incurred by any Seller Indemnitee which result from:
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(a) Any material breach of a representation or warranty by Purchaser, or non-fulfillment of any covenant or obligation of Purchaser contained in this Agreement; and
(b) Litigation, proceedings, governmental investigations, orders, injunctions or decrees, the basis for which occurred after the Agreement Date, resulting from any of the items described in Section 11.02(a) above;
provided, however, that the applicable Seller Indemnitee has taken all commercially reasonable and appropriate actions to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses as reasonably requested by Purchaser, which such failure of mitigation shall not relieve Purchaser of its indemnification obligations in this Section 11.02 but may affect the amount of such obligation; and further provided, that any Losses incurred by the Seller Indemnitee pursuant to any attempt to mitigate any such losses, damages, deficiencies, claims, causes of action or expenses shall be reimbursed by Purchaser as part of its indemnification obligations in this Section 11.02. Seller shall notify Purchaser promptly after receiving written notice of the assertion of any litigation, proceedings, governmental investigations, orders, injunctions, decrees or any third party claims subject to indemnification under this Agreement (each, a Third Party Claim). Upon receipt of such notice of a Third Party Claim, Purchaser shall have the right to assume the defense of such Third Party Claim using counsel of its choice reasonably satisfactory to the applicable Seller Indemnitee, but may not enter into any settlement without the prior written consent of Purchaser, which shall not be unreasonably withheld. A Seller Indemnitee shall have the right to select separate counsel and to otherwise separately defend itself but shall not consent to the entry of a judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of Purchaser, which consent shall not be unreasonably withheld. Any exercise of such rights by a Seller Indemnitee shall not relieve Purchaser of its obligations and liabilities under this Section 11.02 or any other provision of this Agreement. With respect to any Third Party Claim subject to indemnification under this Agreement, the applicable Seller Indemnitee shall be required to cooperate in good faith with Purchaser to ensure the proper and adequate defense of such Third-Party Claim.
Section 11.03 Award of Damages.
(a)
(i) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach had an adverse impact on the value of the Total Servicing Spread, the Current Excess Servicing Spread Percentage of that award shall be distributed to
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Purchaser or its designee and the remainder of that award shall be distributed to Seller or its designee
(ii) In the event that an award of damages or other payment is received by a Party or a designee of a Party as a result of a claim, judgment, settlement or arbitration (including payment pursuant to a guaranty of Bank of America by any other Person) of a legal dispute that occurs either on or after the execution of the Purchase and Sale Agreement in connection with the enforcement of the Purchase and Sale Agreement in the event of a breach by Bank of America of any representations and warranties or covenants where such breach did not have an adverse impact on the value of the Total Servicing Spread, the entirety of the award shall be distributed to Seller or its designee.
(b) In the event that a Party or designee of a Party receives an award pursuant to Sections 11.03(a)(i) or (ii) and some or all of that amount is to be distributed to the other Party or a designee of the other Party pursuant to Sections 11.03(a)(i) or (ii), the Party or the Partys designee in possession of the applicable amount shall promptly notify the other Party or the other Partys designee as to the awards existence and request that the other Party or other Partys designee, as applicable, designate an account to which the amount shall be remitted. Once the necessary account information has been provided by the appropriate Party or designee of a Party, the applicable amount shall be remitted by wire transfer of immediately available federal funds to the account so designated.
(c) Two Business Days prior to each Distribution Date, the Seller shall, provide Purchaser with a monthly report of all claims and legal disputes made or pending with Bank of America during the prior month, including the amounts of any claims made or resolved during such month.
Section 11.04 Other Rights
The Seller hereby acknowledges that, in addition to its rights under this Agreement, the Purchaser is entitled to exercise its rights under the related Owner Consent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Costs and Expenses.
Except as otherwise provided herein, Purchaser and Seller shall share the expenses incurred by Seller and Purchaser or their respective affiliates in connection with the transactions contemplated hereby, with the expense allocation percentage to be mutually agreed upon by the Parties.
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Section 12.02 Confidentiality.
Each Party understands that in connection with this transaction, it has been furnished and will be furnished Non-Public Personal Information and/or Personally Identifiable Financial Information (as those terms are defined in Sections 573.3(n) and (o) of the Office of Thrift Supervision Regulations on Privacy of Consumer Information published at 12 C.F.R. Chapter V implementing Title V of the Gramm-Leach-Bliley Act), and other information regarding the policies and plans of the other Party and its affiliates that is and has been designated as confidential and proprietary, and each Party agrees that it will maintain the confidentiality of such information and will not disclose it to others (except for its affiliates and its and their respective directors, managers, officers, employees, financing sources, agents, representatives and advisors), or use it except in connection with the proposed acquisition contemplated by this Agreement, without the prior written consent of the Party furnishing such information. Information which is generally known in the industry concerning a Party or among such Partys creditors generally or which has been disclosed to the other Party by third parties who have a right to do so shall not be deemed confidential or proprietary information for these purposes. If Purchaser, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Purchaser agrees to provide Seller with prompt notice of such request(s) so that Seller may seek an appropriate protective order and/or waive Purchasers compliance with the terms of this Section 12.02. If Seller, any of its affiliates or any officer, director, employee or agent of any of the foregoing is at any time requested or required to disclose any information supplied to it in connection with the transactions contemplated hereby, Seller agrees to provide Purchaser with prompt notice of such request(s) so that Purchaser may seek an appropriate protective order and/or waive Sellers compliance with the terms of this Section 12.02. Notwithstanding the terms of this Section 12.02, if, in the absence of a protective order or the receipt of a waiver hereunder, Purchaser or Seller is nonetheless, in the opinion of its counsel, compelled to disclose information concerning the other Party to any tribunal or else stand liable for contempt or suffer other censure or penalty, Purchaser or Seller may disclose such information to such tribunal without liability hereunder. If the proposed acquisition is not consummated, each Party agrees to promptly return to the other, promptly upon request, all confidential materials, and all copies thereof, which have been furnished to it in connection with the transactions contemplated hereby. For the avoidance of doubt, either Party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of this Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.03 Brokers Fees.
Each party hereto represents and warrants to the other that it has made no agreement to pay any finders, agents, brokers or originators fee arising out of or in connection with the subject matter of this Agreement. In the event Purchaser has entered or enters into an agreement
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to pay any finders, agents, brokers, advisors or originators fee arising out of or in connection with the subject matter of this Agreement, Purchaser shall be solely responsible for all such fees. The parties hereto shall indemnify and hold each other harmless from and against any such obligation or liability and any expense incurred in investigating or defending (including reasonable attorneys fees) any claim based upon the other partys actions in connection with such obligation.
Section 12.04 Relationship of Parties.
The Parties intend that the transactions contemplated in the Transaction Documents constitute arms-length transactions among third parties. Nothing contained in the Transaction Documents will establish any fiduciary, partnership, joint venture or similar relationship between or among the Parties except to the extent otherwise expressly stated therein.
Section 12.05 Survival of Representations and Warranties.
Each party hereto covenants and agrees that the representations and warranties in this Agreement, and in any document delivered or to be delivered pursuant hereto, shall survive the Agreement Date.
Section 12.06 Notices.
All notices, requests, demands and other communications which are required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given if personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid or by prepaid overnight delivery service:
(a) If to Purchaser, to:
Fortress Investment Group LLC
1345 Avenue of the Americas
New York, NY 10105
Attn: Brian Sigman
Chief Financial Officer
(212) 479-5343
(b) If to Seller, to:
Nationstar Mortgage LLC
350 Highland Drive
Lewisville, Texas 75067
Attn: Amar Patel
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or to such other address as Purchaser or Seller shall have specified in writing to the other.
Section 12.07 Waivers.
Either Purchaser or Seller may, by written notice to the other:
(a) Extend the time for the performance of any of the obligations or other transactions of the other; and
(b) Waive compliance with or performance of any of the terms, conditions, covenants or obligations required to be complied with or performed by the other hereunder.
The waiver by Purchaser or Seller of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 12.08 Entire Agreement; Amendment.
This Agreement and the related Transaction Documents constitute the entire agreement between the parties with respect to the transactions contemplated hereby and supersede all prior agreements with respect thereto. This Agreement may be amended only in a written instrument signed by both Seller and Purchaser.
Section 12.09 Binding Effect.
This Agreement shall inure to the benefit of and be binding upon the Parties and their successors and assigns. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the Parties and their successors and assigns, any rights, obligations, remedies or liabilities.
Section 12.10 Headings.
Headings on the Articles and Sections in this Agreement are for reference purposes only and shall not be deemed to have any substantive effect.
Section 12.11 Applicable Law.
This Agreement shall be construed in accordance with the laws of the State of New York and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with the laws of the State of New York, except to the extent preempted by Federal law. This Agreement shall constitute a security agreement under the laws of the State of New
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York. In addition to any other rights available under this Agreement or otherwise available at law or in equity but subject to the terms hereof, Purchaser shall have all rights and remedies of a secured party with respect to the Collateral under the laws of the State of New York and under any other applicable law to enforce the assignments and security interests contained herein and, in addition, shall have the right, subject to compliance with any mandatory requirements of applicable law and the terms of this Agreement, to sell or apply any rights and other interests with respect to the Collateral assigned or pledged hereby in accordance with the terms hereof at public and private sale in accordance with the terms of this Agreement. The parties agree to waive trial by jury in the event of any dispute under this Agreement.
Section 12.12 Incorporation of Exhibits.
The Exhibits attached hereto shall be incorporated herein and shall be understood to be a part hereof as though included in the body of this Agreement.
Section 12.13 Counterparts.
This Agreement may be executed in counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute one and the same agreement.
Section 12.14 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement or of the rights of the parties hereto.
Section 12.15 Public Announcement.
No public release or statement concerning the subject matter of this Agreement shall be made by either party without the express written consent and approval of the other party, except as required by law or stock exchange rule, and provided that on and after the Agreement Date, either party may provide its shareholders and creditors with a general description of this Agreement and any related transactions, and, subject to the provisions of Section 12.02, information obtained from the reports provided by Seller pursuant to Section 8.07.
Section 12.16 Assignment.
(a) Seller may not assign, transfer, sell or subcontract all or any part of this Agreement, any interest herein, or any of the Sellers interest in the Servicing Spread Collections, other than the interest in the Total Servicing Spread sold hereby, without the prior
52
written consent of Purchaser, provided that any successor to Seller must assume Sellers obligations under this Agreement. Purchaser shall have the unrestricted right to further assign, transfer, deliver, hypothecate, pledge, subdivide or otherwise deal with its rights under this Agreement on whatever terms Purchaser shall determine without the consent of Seller; including the right to assign all or any portion of the Current Excess Servicing Spread and to assign the related rights under this Agreement. If Purchaser assigns any rights under this Agreement to a third party (a Third Party Assignment), such third party (a Third Party Assignee) shall enter into a new agreement (a Third Party Current Spread Agreement) with Seller or Sellers assignee that provides such Third Party Assignee with the same rights with respect to the Current Excess Servicing Spread that Purchaser would have had under this Agreement if the Third Party Assignment had not occurred.
(b) Seller shall maintain a register on which it enters the name and address of each holder of the Current Excess Servicing Spread and each holders interest in the Current Excess Servicing Spread (the Holder Register) for each transaction described in Section 12.16(a). The entries in the Holder Register shall be conclusive absent manifest error, and Seller shall treat each Person whose name is recorded in the Holder Register as an owner of the Current Excess Servicing Spread for all purposes of this Agreement notwithstanding any notice to the contrary.
Section 12.17 Termination.
If the Purchase and Sale Agreement is terminated, this Agreement shall be terminated concurrently therewith, without any further action of either Party. In the event this agreement is terminated as set forth in the prior sentence or in Section 8.13, neither Party shall have any further obligations to the other Party hereunder except as expressly set forth herein. If all conditions to Purchasers or Sellers obligations to close set forth in Article IX and Article X, respectively, are not satisfied on the Sale Date or the Subsequent Sale Date, as applicable, Purchaser or Seller, as applicable based on the condition or conditions not satisfied, may terminate this agreement by written notice to the other party, and neither party shall have any further obligations to the other party hereunder, except as expressly set forth herein.
Section 12.18 Third Party Beneficiaries.
This Agreement does not and is not intended to confer any rights or remedies upon any person or entity other than Purchaser and Seller, except as provided in Section 11.01 and in Section 11.02, provided that Purchaser and Seller reserve the right to modify any term of, or terminate, this Agreement, without the consent of any Purchaser Indemnitee or Seller Indemnitee.
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IN WITNESS WHEREOF, each of the undersigned parties to this Agreement has caused this Agreement to be duly executed in its corporate name by one of its duly authorized officers, all as of the date first above written.
MSR XII LLC Purchaser | ||
By: | /s/ Brian Sigman | |
Name: | Brian Sigman | |
Title: | Chief Financial Officer | |
NATIONSTAR MORTGAGE LLC Seller | ||
By: | /s/ Amar Patel | |
Name: | Amar Patel | |
Title: | Executive Vice President |
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EXHIBIT A
FORM OF ASSIGNMENT AGREEMENT FOR MORTGAGE LOANS
Subject to, and upon the terms and conditions of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans, dated as of January 6, 2013 (the Agreement), by and between Nationstar Mortgage LLC, a Delaware limited liability company (together with its successors and assigns, the Seller) and MSR XII LLC, a Delaware limited liability company (together with its successors assigns, the Purchaser), as may be amended, restated, or otherwise modified and in effect from time to time, Seller hereby assigns, transfers and delivers to Purchaser all of Sellers right, title and interest in and to Current Excess Servicing Spread for each of the Mortgage Loans set forth in Annex A attached hereto and all proceeds thereof, and agrees that as of the Sale Date, the applicable Mortgage Loan shall be deemed to be a Mortgage Loan for all purposes of the Agreement. Capitalized terms used in this Assignment Agreement have the meanings given to such terms in, or incorporated by reference into, the Agreement.
In the event (but only in the event) that the conveyance of the Current Excess Servicing Spread is characterized by a court or governmental authority as security for a loan rather than a sale, Seller will be deemed to have granted to Purchaser, and Seller hereby grants to Purchaser, a security interest in all of its right, title and interest in, to and under the Current Excess Servicing Spread and all proceeds thereof as security for a loan in an amount of the Purchase Price..
All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by Seller on or prior to the date hereof have been duly complied with and performed in all material respects.
NATIONSTAR MORTGAGE LLC Seller | ||
By: | ||
Name: | ||
Title: |
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Annex A
[ATTACH ANNEX A, WHICH MAY BE ON COMPUTER TAPE, COMPACT DISK, OR
MICROFICHE, CONTAINING THE INFORMATION SET FORTH BELOW]
(a) |
(b) | (c) | (d) | (e) | (f) (column (d) column (e)) |
(g) ([ ]% of column (f)) | ||||||
Sale Date |
Loan # of Mortgage Loan |
Principal Balance of Mortgage Loan as of the Sale Date |
Servicing Spread Rate |
Base Servicing Fee Rate |
Net Servicing Spread Rate |
Current Excess Servicing Spread |
EXHIBIT B
SCHEDULE OF MORTGAGE LOANS
[SEPARATELY DELIVERED]
EXHIBIT C
SELLERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , a [Vice President] of Nationstar Mortgage LLC (the Company), pursuant to Section 9.07 of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans by and between MSR XII LLC and the Company, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof;
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects;
(iii) The conditions set forth in Sections 9.04 and 9.05 of the Agreement have been satisfied; and
(iv) As of the date hereof, the Company has a Consolidated Tangible Net Worth (as defined in the Agreement) of at least the sum of (x) $250,000,000 and (y) 50% of the proceeds from any issuance of equity on or after the date of the Agreement by the Company, Nationstar Mortgage Holdings Inc. or any of Companys consolidated subsidiaries, and the Company (considered together with its consolidated subsidiaries) is not in default in any indebtedness in excess of $10,000,000 (individually or in the aggregate).
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ]
By: |
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EXHIBIT D
PURCHASERS OFFICERS CERTIFICATE
(To be supplied on the Sale Date)
I, , [POSITION] of [ ], the sole member of MSR XII LLC (the Company), pursuant to Section 10.05 of the Current Excess Servicing Spread Acquisition Agreement for Non-Agency Mortgage Loans by and between the Company and Nationstar Mortgage LLC, dated as of January 6, 2013 (the Agreement), hereby certify on behalf of the Company that:
(i) Each of the Companys representations and warranties made in the Agreement is true and correct in all material respects as of the date hereof; and
(ii) All of the terms, covenants, conditions and obligations of the Agreement required to be complied with and performed by the Company at or prior to the date hereof have been duly complied with and performed in all material respects; and
(iii) All conditions set forth in Section 10.04 have been satisfied.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of [ ].
MSR XII LLC | ||
By: [ ], as member | ||
By: | ||
EXHIBIT E
LOCATION OF CREDIT FILES
350 Highland Drive
Lewisville, Texas 75067
EXHIBIT F
FORM OF SUMMARY REMITTANCE REPORT
[DELIVERED SEPARATELY]
EXHIBIT G
FORM OF DELINQUENCY REPORT
[DELIVERED SEPARATELY]
EXHIBIT H
FORM OF DISBURSEMENT REPORT
[DELIVERED SEPARATELY]
EXHIBIT I
SELLER JURISDICTIONS AND RECORDING OFFICES
Chief Executive Office:
350 Highland Drive
Lewisville, Texas 75067
Recording Office:
Secretary of State, State of Delaware
EXHIBIT J
SERVICING AGREEMENTS
[DELIVERED SEPARATELY]
(a) | All notices, demands, consents, requests and other communications required or permitted to be given or made hereunder in writing shall be mailed (first class, return receipt requested and postage prepaid) or delivered in person or by overnight delivery service or by facsimile, addressed to the respective parties hereto at their respective addresses set forth below or, as to any such party, at such other address as may be designated by it in a notice to the other: |
If to Seller: | The address set forth in the Transactions Terms Letter |
If to Buyer: | Bank of America, N.A. |
(b) | All notices, demands, consents, requests and other communications required or permitted to be given or made hereunder which are not required to be in writing may also be provided electronically either (i) as an electronic mail sent and addressed to the respective parties hereto at their respective electronic mail addresses set forth below, or as to any such party, at such |
If to Seller: | The email address(es) specified in the Transactions Terms Letter, if any. |
If to Buyer: | Eileen.Albus@baml.com and |
BANK OF AMERICA, N.A., as Buyer By: /s/ Rayanthi De Mel_________________ Name: Rayanthi De Mel Title: Assistant Vice President | NATIONSTAR MORTGAGE LLC, as Seller By: /s/ Larry Brown_____________________ Name: Larry Brown Title: Vice President |
Re: | Transactions Terms Letter for Amended and Restated Master Repurchase Agreement |
Effective Date: | January 30, 2013. |
Expiration Date: | Expiring on January 14, 2014. |
Aggregate Transaction Limit: | $750,000,000, consisting of the sum of the Committed Amount and the Uncommitted Amount; which amount may be increased from time to time at Buyer's sole discretion as provided in the definition of Uncommitted Amount. In the event Buyer agrees to a Temporary Increase pursuant to Section 2.10, the Aggregate Transaction Limit shall equal the Temporary Aggregate Transaction Limit until such time as the Temporary Increase terminates. |
Committed Amount: | $750,000,000. |
Uncommitted Amount: | $0 or such greater amount agreed to by Buyer in its sole discretion from time to time. |
Financial Covenants: | Seller shall satisfy and maintain the following financial covenants at all times during the term of the Agreement (unless expressly stated otherwise below): |
(a) | Minimum Tangible Net Worth: The sum of (i) $350,000,000 plus (ii) (A) the product of (x) two (2) and (y) the aggregate amount of proceeds received by Seller in connection with an issuance of equity interests in Seller from and after January 1, 2013 divided by (B) three (3). |
(b) | Minimum Liquidity: Liquidity of at least $45,000,000. |
(c) | Maximum ratio of Total Liabilities to Tangible Net Worth: 9:1. |
(d) | Operating Income: Seller shall show positive pre-tax Operating Income, on a rolling six-month basis. |
Other Covenants: | Seller shall maintain the following other covenants: |
(a) | Commitment Basis. Seller shall lock all loans on a best effort commitment basis or a loan level mandatory commitment basis prior to entering into a Transaction for such mortgage loan. In the event that Seller shall have entered into a Purchase Commitment on or prior to the Purchase Date in respect of Eligible Mortgage Loans, Seller shall deliver a true and complete copy of such Purchase Commitment to Buyer on the related Purchase Date for such Eligible Mortgage Loans. For any Transaction in which the underlying Purchased Mortgage Loans are not subject to a Purchase Commitment on the related Purchase Date, Seller shall promptly deliver to Buyer a true and complete copy of any Purchase Commitment executed after such Purchase Date. |
(b) | Additional Mortgage Financing Facilities. Notwithstanding anything to the contrary in Section 10.1 of the Agreement, Seller shall not, without prior written notification to Buyer, enter into any mortgage financing facility (including, without limitation, any warehouse, repurchase, purchase or off-balance sheet facility). |
(c) | Cross-collateralization. Seller's payment and performance of its obligations under the Agreement shall be cross-collateralized with any and all deposits of money or property or any other indebtedness at any time held or owing to Buyer or any of its Affiliates to or for the credit of the account of Seller and its Affiliates under any agreement(s) between Seller and/or its Affiliates, on the one hand, and Buyer and/or its Affiliates, on the other hand, irrespective of whether or not Buyer and/or its Affiliates shall have made any demand thereunder and whether or not said obligations shall have matured. |
(d) | Payment of Dividends. If a Potential Default or an Event of Default has occurred and is occurring or will occur as a result of such payments, Seller shall not pay any dividends or distributions with respect to any capital stock or other equity interests in Seller, whether now or hereafter outstanding, or make any other distribution in respect thereof, either directly or indirectly, whether in cash or property or in obligations of Seller. |
Facility Fee: | [***], which is equal to the result of (i) the product of (a) [***], (b) the Committed Amount and (c) 350, divided by (ii) 360. The Facility Fee shall be deemed due, earned and payable in full on the Effective Date, in accordance with Section 5.1 of the Agreement; provided, that such Facility Fee is hereby reduced by an amount equal to [***], which amount was remitted by Seller to Buyer prior to the Effective Date. Upon early termination of the Agreement |
Unused Facility Fees: | For any given calendar quarter and on the Expiration Date, Seller shall pay in arrears to Buyer an amount equal to the product of (i) [***] and (ii) the unused portion of the Aggregate Transaction Limit, annualized), in accordance with Section 5.1 of the Agreement; provided, that Sellers shall only be required to pay an Unused Facility Fee for such period if, the Average Quarterly Utilization during such quarter is less than 50%. |
Average Quarterly Utilization: | Following the end of each calendar quarter and on the Expiration Date, Buyer shall determine the Used Amount during the preceding Calculation Period. The Average Quarterly Utilization shall be calculated by dividing (i) the Used Amount, by (ii) the Aggregate Transaction Limit. |
Used Amount: | The average Aggregate Outstanding Purchase Price of all Transactions, calculated on a daily basis during the preceding Calculation Period. |
Account Balance: | $ -0- |
Eligible Mortgage Loans: | A Mortgage Loan shall be an Eligible Mortgage Loan only if (i) it is a first lien, fixed or adjustable rate Mortgage Loan on a single family residential property that is either (x) an Agency Eligible Mortgage Loan that is also (1) a Conventional Conforming Mortgage Loan or (2) a Jumbo Mortgage Loan, (y) a Government Mortgage Loan, or (z) a Jumbo Mortgage Loan that is not an Agency Eligible Mortgage Loan, or as otherwise permitted on Schedule 1, (ii) it was originated in compliance with and remains in compliance with, or was otherwise acquired in compliance with the Agency Guides (unless it is a Jumbo Mortgage Loan that is not an Agency Eligible Mortgage Loan), Buyer's Correspondent Guidelines (if applicable) and Seller's underwriting guidelines approved by Buyer in its sole reasonable discretion and (iii) it meets each of the following criteria: |
(a) | each of the applicable representations and warranties in Section 8.1(r) and 8.1(v) and Exhibit L of the Agreement are true and correct; |
(b) | the Purchase Date for such Mortgage Loan is not more than thirty (30) days past the origination date for such Mortgage Loan; |
(c) | such Mortgage Loan is not thirty (30) or more days contractually delinquent (as determined by using the MBA method of delinquency) nor has it been thirty (30) or more days contractually delinquent since the origination date for such Mortgage Loan; |
(d) | such Mortgage Loan is not subject to a Transaction for longer than the Maximum Dwell Time; |
(e) | no rescission notice and/or notice of right to cancel shall have been improperly delivered to the Mortgagor, and the related rescission period related shall have expired; |
(f) | such Mortgage Loan was originated with full documentation; |
(g) | such Mortgage Loan must have an unpaid principal balance of at least $50,000; |
(h) | such Mortgage Loan is not secured by Mortgaged Property located in the Commonwealth of Puerto Rico; |
(i) | such Mortgage Loan shall neither be a HELOC Mortgage Loan nor a reverse mortgage loan; |
(j) | such Mortgage Loan's FICO Score is not less than 620 (except as otherwise permitted in Schedule 1); |
(k) | such Mortgage Loan has not been previously rejected for purchase by any investor at any time, except as permitted on Schedule 1; |
(l) | such Mortgage Loan has not been repurchased by Seller from any Person to whom such Mortgage Loan was previously sold (including transfers in connection with securitizations); |
(m) | the Mortgagor in respect of such Mortgage Loan is not a partnership, corporation or other non-natural person (other than an inter-vivos trust which conforms to the Agency Guides); |
(n) | if such Mortgage Loan is a Jumbo Mortgage Loan, the original principal balance of such Mortgage Loan was not greater than $1,500,000; and |
(o) | if such Mortgage Loan is a Jumbo Mortgage Loan that is not an Agency Eligible Mortgage Loan, the related Mortgagor's FICO Score at the time of origination is 700 or above, with maximum loan-to-value ratio of 80% and maximum debt-to-income ratio of 45 %. |
Securitization: | Unless otherwise agreed to by Buyer, all Mortgage Loans must be settled with cash directly from an Approved Investor. |
Eligible Certified Mortgage Loan: | A Certified Mortgage Loan shall be an Eligible Certified Mortgage Loan only if it meets each of the following criteria: |
(a) | such Mortgage Loan is an Eligible Mortgage Loan; |
(b) | Custodian has delivered to Buyer a Certified Mortgage Loan Trust Receipt with respect to such Mortgage Loan; |
(c) | if such Mortgage Loan is a Pooled Mortgage Loan, within two (2) Business Days of the related Pooling Date, Seller shall have delivered to Buyer a duly executed Trade Assignment together with a true and complete copy of the Purchase Commitment with respect to the related Mortgage-Backed Security; and |
(d) | the Takeout Price set forth in the related Purchase Commitment for the related Mortgage-Backed Security or the Portfolio Mortgage Loans, as applicable, is for an amount that is not less than the outstanding Repurchase Price for the Pool or such Portfolio Mortgage Loans, respectively. |
Eligible Security: | A Mortgage-Backed Security shall be an Eligible Security only if it meets each of the following criteria: |
(a) | each of the applicable representations and warranties set forth on Exhibit L of the Agreement are true and correct; |
(b) | it is issued on the Settlement Date in Strict Compliance with the applicable Agency Guides; |
(c) | a CUSIP has been issued and provided to Buyer in compliance with Section 7.2(c) of the Agreement; |
(d) | it is backed solely by Eligible Certified Mortgage Loans that (x) are (i) Agency Eligible Mortgage Loans that are also Conventional Conforming Mortgage Loans or (ii) Government Mortgage Loans, and (y) were subject to Transactions immediately prior to the issuance of such Mortgage-Backed Security; |
(e) | it is delivered in a manner sufficient to cause Buyer to have a perfected, first priority security interest in, and to be the “entitlement holder” (as defined in Section 8-102(a)(7) of the Uniform Commercial Code of, such Mortgage-Backed Security; and |
(f) | the related Trade Assignment is enforceable and in effect. |
Type: | With respect to each Eligible Asset, the descriptions set forth on Schedule 1 under the heading “Type.” |
Type Purchase Price Percentage: | With respect to each Eligible Asset, the percentages set forth on Schedule 1 under the heading “Type Purchase Price Percentage.” |
Type Sublimit: | With respect to each Eligible Asset, the percentages set forth on Schedule 1 under the heading “Type Sublimit.” |
Type Margin: | With respect to each Eligible Asset, the percentages set forth on Schedule 1 under the heading “Type Margin.” |
Maximum Dwell Time: | With respect to each Eligible Asset, the number of days set forth on Schedule 1 under the heading “Maximum Dwell Time.” |
Reporting Requirements: | Financial Reports & Officer's Certificate: Seller shall deliver to Buyer, as soon as possible but in no event more than forty-five (45) days after the end of each calendar month, financial statements of Seller, including statements of income and changes in shareholders' equity (or its equivalent) for such month and the related balance sheet as at the end of such period, all in reasonable detail acceptable to Buyer and certified by the chief financial officer of Seller, subject, however, to year-end audit adjustments. Together with such financial statements, Seller shall deliver an officer's certificate substantially in a form to be provided by Buyer, which shall include funding and production volume reports for the previous month and evidence of compliance with all financial covenants. |
(a) | Loans Originated - Current Defaults and Claims Reported - United States (from FHA Connection): |
▪ | Output option: all loans |
▪ | Performance period: current period |
▪ | All insured single family loans with a beginning amortization within the last two years |
(b) | HUD Pipeline/Uninsured Query: |
▪ | Date range: use default |
▪ | Sort by: originating ID in ascending order |
(c) | Late Endorsement Query: |
▪ | Loan status: Active, claimed |
▪ | Date range: last two year period |
Key Personnel: | Individuals that directly report to Executive Management. |
Policies and Procedures: | The terms and conditions of this Transactions Terms Letter and the Agreement shall be subject to Buyer's guidelines, policies and procedures, as may be changed from time to time. Buyer may communicate changes to its guidelines, policies and procedures to Seller via Buyer's website, email or in writing. |
Governing Law: | This Transactions Terms Letter and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the laws of the State of New York, without regard to principles of conflicts of laws (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law). |
Severability: | This Transactions Terms Letter, together with the other Principal Agreements, and all other documents executed pursuant to the terms hereof and thereof, constitute the entire agreement between the parties with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications with respect to the subject matter hereof, all of which such communications are merged herein. All Transactions hereunder constitute a single business and contractual relationship and each Transaction has been entered into in consideration of the other Transactions. |
Counterparts: | This Transactions Terms Letter may be executed simultaneously in any number of counterparts. Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument. The parties agree that this Transactions Terms Letter and any notices hereunder may be transmitted between them by email and/or by facsimile. The parties intend that faxed signatures and electronically imaged signatures such as .pdf files shall constitute original signatures and are binding on all parties. The original documents shall be promptly delivered, if requested. |
Type | Type Sublimit* | Type Margin | Type Purchase Price Percentage | Maximum Dwell Time** | Transaction Requirements |
Type A: Agency Eligible Mortgage Loans that are also Conventional Conforming Mortgage Loans (1st mortgages only), including Jumbo Mortgage Loans that are Agency Eligible Mortgage Loans | [***] | [***] | [***] | 45 calendar days | None |
Type B: Government Mortgage Loans (1st mortgages only) | [***] | [***] | [***] | 45 calendar days | None |
Type C: Jumbo Mortgage Loans that are not Agency Eligible Mortgage Loans (1st mortgages only, maximum original loan amounts up to $1,500,000) | [***] | [***] | [***] | 45 calendar days | Rate lock and prior approval |
Type D: Government Mortgage Loans (1st mortgages only) that are: (i) secured by manufactured homes and originated in compliance with Title II under FHA 203(b); or (ii) have FICO scores between 550 and 619 These loans will be identified in the Asset Data Record as “Conf Balance Expanded” | [***] | [***] | [***] | 45 calendar days | None |
Type E: Texas Cash-Out Refinance Mortgage Loans - Type A and Type B Mortgage Loans These loans will be identified in the Asset Data Record as “Expanded/Alt-A” | [***] | [***] | [***] | 45 calendar days | None |
Type F: HARP Mortgage Loans (1st mortgages only) These loans will be identified in the Asset Data Record as “Specialty ARM” | [***] | [***] | [***] | 45 calendar days | None |
Noncompliant Asset - Type A, B, C, D, E and F Mortgage Loans that have been (i) subject to one or more Transactions hereunder for a period greater than 45 days but not greater than 60 days, or (ii) rejected by the applicable Approved Investor | [***] | The initial Type Margin | [***] cumulative reduction in Type Purchase Price Percentage for Mortgage Loans rejected by an Approved Investor; subject to further review and reduction in Type Purchase Price Percentage at Buyer's discretion |
[***] reduction in Type Purchase Price Percentage for an additional dwell time of 1-15 days |
Wet Mortgage Loans - Type A, B, C, D, E and F Mortgage Loans, excluding loans originated under a correspondent program | [***], increasing to [***] for the first and last five (5) Business Days of each month | The initial Type Margin | The initial Type Purchase Price Percentage | 7 Business Days from origination | |
Eligible Certified Mortgage Loans that are Portfolio Mortgage Loans - Type A and Type B Mortgage Loans | [***] | [***] | [***] | 60 calendar days from the date on which the Mortgage Loan first became subject to a Transaction whether or not it was an Eligible Certified Mortgage Loan at the time | None |
Eligible Certified Mortgage Loans that are Pooled Mortgage Loans - Type A, Type B and Type D Mortgage Loans | [***] | [***] | [***] | 60 calendar days from the date on which the Mortgage Loan first became subject to a Transaction whether or not it was an Eligible Certified Mortgage Loan at the time | None |
3. | COMPENSATION. |
• | $350,000 cash award payable within 30 days of date of hire |
• | $75,000 to be paid within 30 days of the anniversary of your date of hire in 2013 and 2014. Should the Executive be terminated without Cause or by the Executive for Good Reason, any unpaid components of the sign-on bonus will be paid to the Executive within 30 days of the effective date of the Separation Agreement. |
1. | Purpose. |
(a) | Amount of Bonus Pool. The annual bonus pool from which a bonus (a “Bonus”) may be paid to a Participant pursuant to the terms of the Plan shall be equal to five percent (5%) of the Company's “Operating Cash Flow,” as defined in and determined in accordance with the terms set forth in Exhibit B attached hereto, which Exhibit B may be amended from time to time (the “Bonus Pool”). |
(b) | Allocation of Bonus Pool Among Participants. For each fiscal year during which the Plan is in effect, the Committee shall (i) determine, in its sole discretion, but following consultation with the Chief Executive Officer of the Company, the percentage of the Bonus Pool to be allocated to each Participant (the “Annual Allocation”), provided that, in no event may the Annual Allocation for a Participant be less than seventy-five percent (75%) of the Annual Allocation for that Participant in the immediately preceding fiscal year, and (ii) provide written notice to the Chief Executive Officer of the Company of such Annual Allocation. Upon receipt of such written notice from the Committee, the Chief Executive Officer of the Company shall (1) provide written notice to each Participant of that Participant's Annual Allocation and (2) provide a copy of such written notices to the Committee. |
(c) | Eligibility to Receive Bonus Payment. Except to the extent otherwise provided in a Participant's employment agreement with the Company, a Participant shall only be eligible to receive the payment of a Bonus pursuant to the terms of the Plan if, as of the last day of the fiscal year to which such Bonus relates, the Participant (i) is employed by the Company or its subsidiaries and (ii) has not notified the Company of his or her intent to resign employment with the Company and its subsidiaries. |
(d) | Bonus Payment. A Bonus, if any, shall be paid to a Participant, in cash, as soon as practicable after the Company's financial results for the fiscal year have been determined; provided, however, that in no event shall such payment be made earlier than January 1st or later than March 15th of the year following the year to which it relates. |
(e) | Termination of Employment of a Participant. Subject to Section 4(c) hereof, in the event that a Participant terminates employment with the Company for any reason, the Participant shall no longer be entitled to participate in the Plan and the Committee shall, in its sole discretion, (i) apportion all (or a portion) of the terminated Participant's Annual Allocation among the remaining Participants, (ii) add a new Participant (or Participants) to the Plan and apportion all (or a portion) of the terminated Participant's Annual Allocation to the new Participant (or Participants) or (iii) implement any combination of the foregoing. |
5. | Amendment and Termination. |
(a) | No Right to Continued Employment or Payment of a Bonus. The right of a Participant to receive a Bonus under the Plan shall not be deemed a right to continued employment by the Company or its subsidiaries and does not otherwise restrict the Participant's right or the right of the Company to terminate the Participant's employment at any time, with or without notice and with or without cause. No Participant has any claim to be awarded a Bonus, and there is no obligation for uniformity of treatment of Participants. The terms and conditions of each Bonus and the Committee's determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not the Participants are similarly situated). |
(b) | Unfunded Status of Awards. Bonus payments shall be made from the general funds of the Company and no special or separate fund shall be established or other segregation of assets made to assure the payment of such bonuses. |
(c) | Nontransferability. No Participant shall have the power or right to transfer (other than by will or the laws of descent and distribution), alienate or otherwise encumber his or her interest under the Plan. |
(d) | Beneficiary. A Participant may file with the Company a written designation of a beneficiary on a form as may be prescribed by the Company and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, the executor or administrator of the Participant's estate will be deemed to be the Participant's beneficiary. |
(e) | Withholding Taxes. The Company shall withhold all applicable federal, state and local taxes from the payment of any Bonus made pursuant to the Plan, in accordance with applicable laws and regulations. |
(f) | Governing Law. The Plan shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its principles of conflict of laws. |
(g) | Effective Date. The effective date of the Plan is January 1, 2012. |
PARTICIPANT | POSITION |
(Participant's Full Name) | (Job Title) |
Maximum Bonus Opportunity is ___% of your December 31, 2012 annual base salary. Target Bonus reflects performance at the “Meets Expectations” level and is generally expressed as 60% of the Maximum Bonus Opportunity. |
Score | Overall Rating | Percent of Opportunity |
5 | 4.50 - 5.00 = Outstanding | 100% |
4 | 4.00 - 4.49 = Exceeds Expectations | 80% |
3 | 3.50 - 3.99 = Meets Expectations | 60% |
2 | 3.00 - 3.49 = Acceptable | 40% |
1 | 2.75 - 2.99 = Marginal | 20% |
— | < 2.75 = Needs Improvement | —% |
EVALUATION OF KEY PERFORMANCE OBJECTIVES | |
Rate each Key Performance Objective in the “Rating” column. | |
Provide specific examples of performance in the “Results” column | |
Maximum Bonus Opportunity: ____% of Base Salary Target Bonus is generally expressed as 60% of the Max Bonus Opportunity | |
Key Performance Objectives | Measurements List your metric(s) for each objective. Describe how / when you will measure your results. | Results | Weight (enter as decimal) | Rating | Weighted Rating | ||
A. | 5 = 4 = 3 = 2 = | — | |||||
B. | 5 = 4 = 3 = 2 = | — | |||||
C. | 5 = 4 = 3 = 2 = | — | |||||
D. | 5 = 4 = 3 = 2 = | — | |||||
E. | 5 = 4 = 3 = 2 = | — | |||||
Overall Weight (must total 1.00) | — | Weighted Score | — |
PARTICIPANT | POSITION |
(Participant's Full Name) | (Job Title) |
Maximum Bonus Opportunity is ___% of your December 31, 2012 annual base salary. Target Bonus reflects performance at the “Meets Expectations” level and is generally expressed as 60% of the Maximum Bonus Opportunity. |
Score | Overall Rating | Percent of Opportunity |
5 | 4.50 - 5.00 = Outstanding | 100% |
4 | 4.00 - 4.49 = Exceeds Expectations | 80% |
3 | 3.50 - 3.99 = Meets Expectations | 60% |
2 | 3.00 - 3.49 = Acceptable | 40% |
1 | 2.75 - 2.99 = Marginal | 20% |
— | < 2.75 = Needs Improvement | —% |
Key Performance Objectives | Measurements List your metric(s) for each objective. Describe how / when you will measure your results. | Results | Weight (enter as decimal) | Rating | Weighted Rating | ||
A. | 5 = 4 = 3 = 2 = | — | |||||
B. | 5 = 4 = 3 = 2 = | — | |||||
C. | 5 = 4 = 3 = 2 = | — | |||||
D. | 5 = 4 = 3 = 2 = | — | |||||
E. | 5 = 4 = 3 = 2 = | — | |||||
Overall Weight (must total 1.00) | — | Weighted Score | — |
Subsidiaries | Jurisdiction of Organization | |
Nationstar Sub1 LLC | Delaware | |
Nationstar Mortgage LLC | Delaware | |
1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2012 of Nationstar Mortgage Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | March 15, 2013 | /s/ Jay Bray | ||
Jay Bray | ||||
Title: | Chief Executive Officer |
1. | I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2012 of Nationstar Mortgage Holdings Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
c. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | March 15, 2013 | /s/ David C. Hisey | ||
David C. Hisey | ||||
Title | Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 15, 2013 | ||
By: | /s/ Jay Bray | ||
Jay Bray | |||
Title: | Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | March 15, 2013 | ||
By: | /s/ David C. Hisey | ||
David C. Hisey | |||
Title: | Chief Financial Officer |
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