Attachment B_Sample Agreement.pdf

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020

Oregon Housing and Community Services

MORTGAGE LENDING PROGRAM

ORIGINATION AGREEMENT

MORTGAGE LOAN PURCHASE CONTRACT

Homeownership Division

February 1, 2023

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020

Table of Contents

Table of Contents

Article II: GENERAL INFORMATION

Section 2.01 Headings, Titles and Captions

Section 2.02 Important Definitions

Section 2.03 Program Documents & Guidelines

Section 2.04 Notices and Program Announcements

Section 2.05 Printed Copies

Section 2.06 Electronic Signatures

Article III: AGREEMENT

Section 3.01 Prior Agreements

Section 3.02 Purpose

Section 3.03 Governing Laws and Venue

Section 3.04 Independent Contractor

Section 3.05 Department Representations and Warranties

Section 3.07 Contract Binding

Section 3.08 Assignment

Section 3.09 Execution in Counterparts

Section 3.10 Term

Section 3.11 Severability

Section 3.12 Further Assurances and Corrective Instruments

Section 3.13 Discretion of the Department

Section 3.14 Interpretation, Waiver or Amendment

Section 3.15 Audits

Article IV: LENDER REQUIREMENTS

Section 4.01 Lender General Requirements

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Section 4.02 Indemnification

Section 4.03 Lender Not to Resign

Section 4.04 Lender Finances

Section 4.05 Pending Legal Action

Section 4.06 Merger

Section 4.07 Fidelity Bonds and Errors and Omissions Coverage

Section 4.08 Limited Value of Contract to Lender

Section 4.09 Consumer Complaint Tracking

Section 4.10 Payment of Costs and Expenses

Section 4.11 Regulatory Supervision

Section 4.12 Web Access Confidentiality & Unauthorized Access

Section 4.13 Renewal/Recertification

Article V: PURCHASE AND SALE OF MORTGAGES

Section 5.01 Commitment to Buy and Sell

Section 5.02 Program Document Compliance

Section 5.03 Document, Determine and Certify Eligibility

Section 5.04 Notify the Department and Forward Information

Section 5.05 Dispersal of Funds and Submission for Purchase

Section 5.06 Interest Charges

Section 5.07 Mortgage Insurance and Mortgage Loan Guarantees

Section 5.08 Title Insurance

Section 5.09 Mortgage Reservations

Section 5.10 Terms

Section 5.11 Fees and Closing Costs

Section 5.12 Hazard/Flood Insurance

Section 5.13 Submission & Purchase

Section 5.14 Informing Borrowers

Section 5.15 Property Representations and Warranties

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020

The Lender represents and warrants as follows with respect to each Mortgage as of the date of the purchase of such Mortgage from the Lender:

Section 5.16 Right to Reject Mortgages

Article VI: BREACHES

Section 6.01 Specific Breaches of Contract

Section 6.02 Actions to Correct a Breach

Article VII: REPURCHASES

Section 7.01 Duty to Repurchase Mortgages

Section 7.02 Repurchased Mortgages

Article VIII: TERMS SPECIFIC TO THE ORIGINATION OF BOND AND FLEX LENDING MORTGAGES

Article IX: TERMINATION

Section 9.01 Termination by Either Party

Section 9.02 Immediate Termination

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OREGON HOUSING AND COMMUNITY SERVICES (OHCS)

MORTGAGE LENDING PROGRAM

ORIGINATION AGREEMENT

MORTGAGE LOAN PURCHASE CONTRACT

This MORTGAGE LENDING PROGRAM ORIGINATION AGREEMENT & MORTGAGE LOAN PURCHASE CONTRACT AGREEMENT #[XXXX] for participating in Oregon Housing and Community Services Mortgage Lending Program (the “Agreement”) is made, between the Lender (the “Lender”) that signs this document and the State of Oregon, acting through its Housing and Community Services Department (the “Department”) on this ____ day in the month of _______________, 202__.

Article I: RECITALS AND SIGNATURES

WHEREAS, from time to time the Department will provide funds under its Mortgage Lending Program (the “Program”) for the purchase of Mortgages (as defined below) from Lenders;

WHEREAS, Lender represents that the Seller/Servicer ID’s and Mortgagee ID’s, as applicable, listed on the submitted application are true and correct and that Lender is in good standing with each entity and that approval with each entity is and will be kept current; and

WHEREAS, Lender desires to originate and sell Mortgages to the Department; and

WHEREAS, Lender agrees any changes to the Company Liaison for the Department must be submitted in writing to the Department’s Single Point of Contact; and

WHEREAS, Lender acknowledges and agrees that the Department will communicate any and all changes to the Program Documents to the Lender’s Company Liaison for the Department listed in the Lender Application; and

WHEREAS, Lender acknowledges and agrees that it is and will be bound by any changes in the Program Documents distributed to the Company Liaison for the Department or posted on the Department’s website, as may be updated from time to time.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Department and Lender agree to enter into this Agreement and to fully cooperate with one another to implement, fulfill, and monitor the obligations described herein.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020

Lender

By (signature): ___________________________________________________________________

Name: ___________________________________________________________________

Title: ___________________________________________________________________

Lender Notice Address

Lender: ___________________________________________________________________

Attn: ___________________________________________________________________

Address:_ ___________________________________________________________________

City/State/Zip: ___________________________________________________________________

Phone: ___________________________________________________________________

Email: ___________________________________________________________________

Department (OHCS)

By (signature): ___________________________________________________________________

Name: ___________________________________________________________________

Title: ___________________________________________________________________

Department (OHCS) Notice Address

OHCS

Attn: _____________________________________

725 Summer St NE

Suite B

Salem, OR 97301-1266

Phone: 503-986-2000

Email: XXXX.XXXX@oregon.gov

Article II: GENERAL INFORMATION This Article II contains important basic information about the Agreement, which the Department is permitted to enter into under ORS chapters 456 and 458, OAR chapter 813, divisions 5 and 6, as mailto:XXXX.XXXX@oregon.gov

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020 well as other applicable statutes and rules.

Section 2.01 Headings, Titles and Captions

The recitals set forth in Article I of this Agreement are incorporated into and made part of this Agreement. The headings, titles and captions in this Agreement are for convenience only and are not part of the Agreement.

Section 2.02 Important Definitions

“Bond” means a debt instrument used for the financing of Mortgages for the purchase of owner-occupied homes.

“Borrower” means Mortgage applicant.

“Company Liaison” means the Lender’s single point of contact for communications from the Department, as designated in the Lender Application or changed by the Lender with notice to the Department, from time to time

“Conventional Mortgage” mean a Mortgage that meets either Fannie Mae or Freddie Mac guidelines.

“Fannie Mae” or “FNMA” means Federal National Mortgage Association.

“FHA” means HUD’s Federal Housing Authority.

“Freddie Mac” or “FHLMC” means Federal National Home Loan Mortgage Corp.

“Ginnie Mae” or “GNMA” means Government National Mortgage Association which includes HUD’s FHA, PIH(Public and Indian Housing - Section 184), USDA-RD and VA), “GSE” means Government Sponsored Entity, which includes FNMA, FHLMC, and GNMA .

“HUD” means the U.S. Department of Housing and Urban Development.

“Lender” means a licensed Mortgage lender that is an approved lender under this Program.

“Lender Application” means a Lender’s application to become an approved Lender under this Program.

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“Mortgage(s)” means a debt instrument, secured by specified real property.

“Mortgage Application” means an application for a Mortgage.

“Mortgage File” means the Mortgage documents and documentation customarily generated in Origination in accordance with the Program Documents.

“Mortgage Insurance” means an insurance policy that protects the Lender if the Borrower defaults.

”Mortgage Reservation” means the reservation of funds and locking in of the interest rate for a Mortgage.

“Mortgagee” means an entity approved by FHA to sell and service FHA Mortgages.

“Mortgagee ID” means the unique ID number given to FHA approved Mortgagees.

“Mortgagor” is someone obligated under a Mortgage.

”Origination” means the process of creating a Mortgage from application to closing.

“PIH” means the Office of Public and Indian Housing.

“PMI Insurer” means a private Mortgage insurance provider who writes insurance policies protecting lenders and investors against losses on Mortgages.

“Program Announcements” means the announcements in relation to the Program and subsequent related products, documents and forms.

“Program Documents” means this Agreement, Program Manual, Servicer’s Seller Guide and the Purchase Documents, as may be amended and supplemented from time to time.

“Program Manual” means the manual provided by the Department, which will provide the framework and guidelines of the Program and subsequent related products, documents and forms.

“Purchase Documents” means the documents and agreements between the Servicer and each Lender regarding the sale of Mortgage.

“Purchase Date” means the date on which ownership in real property subject to a Mortgage has been transferred.

“Purchase Money Mortgages” means mortgages that are used in the purchase of real estate.

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“Related Mortgage(s)” refers to first and second position liens secured by the same property.

“Real Estate” means real property which is interest in land and accompanying structures as applicable.

“Second Lien Mortgage” means a Mortgage made and acquired pursuant to the Program Manual that is in second lien position.

“Section 184” means PIH’s Section 184 Indian Home Loan Guarantee Program.

“Seller/Servicer” means an entity approved by Fannie Mae or Freddie Mac to sell and service Fannie Mae and Freddie Mac Mortgages.

“Seller/Servicer ID” means the unique ID number given to Fannie Mae or Freddie Mac Seller/Servicers.

“Servicer” means the designated Mortgage servicer.

“Servicer’s Seller Guide” means the manual provided by the Servicer.

“Services” means the Origination of Mortgages for sale to the Department and all associated duties as outlined in the Program Documents.

“Single Point of Contact” means the individual designated as the Department’s contact from time to time.

"Trustee” means the financial institutional with the fiduciary duty to enforce the terms of a mortgage-backed security or bond indenture.

“USDA”, “USDA-RD” or “RD” means the United States Department of Agriculture’s Department of Rural Development.

“VA” means United States Department of Veteran’s Affairs.

Section 2.03 Program Documents & Guidelines

The Department provides Program Documents for the Program.

Whenever there is a reference to the “Program Documents” in this Agreement, it means this Agreement, Program Manual, Servicer’s Seller Guide and the Purchase Documents, as such documents may be amended and supplemented from time to time. In the event of a conflict between the terms of

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020 the Purchase Documents and the other Program Documents, the terms of the Purchase Documents shall control.

In addition to the requirements of the Program Documents, the Lender will follow all the requirements of the GSEs: and any PMI Insurer or guarantor as applicable under their respective programs as may be amended and supplemented from time to time.

Section 2.04 Notices and Program Announcements

Notices pursuant to this Agreement including Program Announcements, shall be given as follows:

A. Notices from the Department: Any changes to the Program Documents issued by the Department may be delivered electronically to the e-mail address of the Company Liaison furnished by Lender in the Mortgage Application, as it may be modified from time to time by notice to the Department.

Other notices or communications to be given under the Program Documents shall be given either by e-mail, delivering the same in writing by hand or by mailing first class with the United States Postal Service to Lender as specified in Article I of this Agreement “Recitals and Signatures”, or to such other e-mail address, street address or fax number as is provided in a written notice in accordance with the applicable Program Document.

B. Notices to the Department: Any notices to the Department from Lender may be delivered electronically to the Single Point of Contact designated on the Lender Application, as it may be modified from time to time by notice to the Lender. Notices or communications to be given shall be given either by e-mail, delivering the same in writing by hand, or by mailing first class with the United States Postal Service to the Single Point of Contact. Lender may not send nonpublic personal information to the Department via e-mail unless it is encrypted using a system acceptable to the Department.

Section 2.05 Printed Copies

If Lender maintains printed copies of the Program Documents, it shall keep them current by inserting all replacement pages. Lender shall at all times ensure that each of its employees or agents acting on its behalf with respect to Mortgages has access to the most current edition of the Program Documents, Program Guide, Agreement and any other documents as applicable as amended or supplemented.

Section 2.06 Electronic Signatures

To the extent permitted by applicable law, the electronic signature of a party to this Agreement, whether digital or encrypted, shall be as valid as an original signature of such party and shall be effective to bind such party to this Agreement with the same force and effect as manual signatures.

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For purposes hereof, “electronic signature” means any electronic sound, symbol, or process attached to or logically associated with a record executed and adopted by a party with the intent to sign such record, including facsimile or email electronic signatures.

Article III: AGREEMENT

Section 3.01 Prior Agreements

This Agreement supersedes any prior agreements, written or oral, between the Lender and Department that relate to selling of Mortgages to which this Agreement relates.

Section 3.02 Purpose

The purpose of this Agreement is:

i. to establish the Lender as an approved seller of Mortgages to the Department, or its designee;

ii. to provide the terms and conditions of the sales.

This Agreement sets forth the provisions governing the Department’s Flex Lending Program and Oregon Bond Residential Loan Program. Addendum A to this Agreement contains certain provisions applicable to the Flex Lending Program and Addendum B to this Agreement contains certain provisions applicable to the Bond Residential Loan Program. Under the Flex Lending Program Mortgages are purchased from the Lender by the Servicer, while under the Bond Residential Loan Program, Mortgages are purchased from the Lender by the Department. Accordingly, throughout this Agreement, references are made to the purchase of Mortgages by the Department, its designee or the Servicer, as applicable, depending on whether the purchase is made in connection with the Flex Lending Program or the Bond Residential Program.

Section 3.03 Governing Laws and Venue

This Agreement is governed by and to be construed and enforced in accordance with the laws of the State of Oregon, notwithstanding its conflict-of-law principles. Any judicial proceeding arising out of or related to this Agreement (“Claim”) will be brought and conducted solely and exclusively within the Circuit Court of Marion County for the State of Oregon; provided, however, if a Claim must be brought in a federal forum, then it must be brought and conducted solely and exclusively within the United States District Court for the District of Oregon. Lender hereby consents to the jurisdiction of such courts and waives any objection to venue in such courts.

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In no event shall this section be construed as a waiver by the State of Oregon of any form of defense or immunity, whether sovereign immunity, governmental immunity, immunity based on the eleventh amendment to the Constitution of the United States or otherwise, to or from any Claim or consent to the jurisdiction of any court.

Section 3.04 Independent Contractor

The parties agree and acknowledge their relationship is that of independent contracting parties and the Lender is not an officer, employee, or agent of the State of Oregon as those terms are used in ORS

30.265 or otherwise.

Section 3.05 Department Representations and Warranties

The Department represents and warrants to the Lender that:

A. Department Authorized to do Business: The Department is a governmental entity validly existing under the laws of the state of Oregon. The Department has full power and authority to consummate all transactions, execute all documents, and issue all instruments contemplated by this Agreement and the Program Documents.

B. Legal Contract: The execution and delivery of this Agreement and other Program Documents by the Department and the performance of and compliance with the terms of this Agreement and the other Program Documents by the Department will not violate any laws in any respect that could have any material adverse effect whatsoever upon the validity, performance, or enforceability of any of the terms of this Agreement or such Program Documents.

C. Department Obligations: This Agreement and all documents and instruments contemplated hereby that are executed and delivered by the Department will constitute valid, legal, and binding obligations of the Department, enforceable in accordance with their terms, except as the enforcement thereof may be limited by applicable debtor relief laws and principles of equity. The Department’s obligation to pay any amounts and otherwise perform its duties under this Agreement is conditioned upon the Department receiving funding, appropriations, limitations, allotments, or other expenditure authority sufficient to allow the Department, in the exercise of its reasonable administrative discretion, to meet its obligations under this Agreement. Nothing in this Agreement may be construed as permitting any violation of Article XI, section 7 of the Oregon Constitution or any other law limiting the activities, liabilities or monetary obligations of the Department.

Section 3.07 Contract Binding

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Lender represents and warrants to the Department that this Agreement, and all documents and instruments contemplated hereby, which are executed and delivered by the Lender, will constitute valid, legal and binding obligations of the Lender, enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by applicable debtor relief laws and principles of equity.

Section 3.08 Assignment

Because the relationships created by this Agreement are personal, the Lender may not, under any circumstances, without the prior written approval of the Department, assign, pledge, transfer or encumber any of its rights, or delegate any of its duties, under this Agreement either voluntarily or involuntarily, by operation of law, or otherwise. No consent by the Department to any assignment, pledge, transfer, or encumbrance shall be deemed to release the Lender from any of its obligations under this Agreement unless otherwise expressly provided in prior written consent by the Department. Nothing herein shall confer any right upon any person other than the Servicer, the Department or the Department’s Designee and the Lender.

Section 3.09 Execution in Counterparts

This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 3.10 Term

This Agreement shall be in full force and effect from the date hereof and shall continue in effect for a term of 10 years, subject (i) to Lender’s annual payment of all fees required under the Program Documents or otherwise required by the Department, and (ii) Lender’s annual submission of such documents as requested by the Department to confirm Lender’s continued qualifications to participate in the Program. In addition, the obligations of Lender under this Agreement shall continue in effect, so long as any of the Bonds used to finance the purchase of Mortgages hereunder are outstanding or any Mortgages purchased hereunder remain outstanding, whichever is longer, or until such time as terminated pursuant to Article IX hereof.

Section 3.11 Severability

If any term, covenant, condition or provision of this Agreement is determined, at any time or to any extent, by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each term, covenant, condition and provision of this

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Agreement shall be valid and enforceable to the fullest extent permitted by law.

All rights and remedies under this Agreement are distinct and cumulative not only as to each other but as to any rights or remedies afforded by law or equity. They may be exercised together, separately or successively. These rights and remedies are for the benefit of the Department and the Lender and that of their respective successors and assigns.

Section 3.12 Further Assurances and Corrective Instruments

To the extent permitted by law, the Department and the Lender agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance hereof.

Section 3.13 Discretion of the Department

With respect to any disputes between the Department and the Lender which arise concerning the terms and provisions hereof, the meaning thereof, or decisions to be made thereunder, the judgment of the Department shall govern.

Section 3.14 Interpretation, Waiver or Amendment

The staff of the Department may be available for guidance; however, any interpretation, waiver or amendment of any provision of this Agreement shall not be binding upon the Department unless such interpretation or waiver was made or granted in writing and signed by both an authorized representative of the Department and the Lender.

No waiver of any term or condition of this Agreement by the Department shall be deemed to be a continuing waiver or waiver of any other term or condition of this Agreement. Inaction or failure by any party to this Agreement to demand strict performance hereunder shall not be deemed a waiver.

Notwithstanding the foregoing, the Program Documents may be amended and supplemented by the Department from time to time and shall become effective and binding upon Lender upon notice to Lender without the execution of a separate, written amendment to this Agreement.

Section 3.15 Audits

The Department may audit the Lender periodically to test for compliance with the requirements set forth in the Program Documents. All records relative to the Lender’s continued eligibility to sell Mortgages under this Agreement may also be examined or audited. Any examination or audit made on behalf of the Department will be conducted during regular business hours unless the Lender

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020 agrees otherwise. In addition, the Lender shall deliver to the Department any documents requested by the Department and which in the Department’s opinion are necessary to its purchase of a Mortgage.

The Department shall provide reasonable notice to the Lender of the beginning date of any audit and may request that specific files, records and materials be made available to the Department.

The Lender agrees to permit the Trustee, the Servicer, Ginnie Mae, Fannie Mae, Freddie Mac, the Department and their respective employees, examiners, supervisory agents or designated representatives access to examine or audit records or accounts relating to Mortgages sold under this Agreement. Audits may be conducted at the offices of the Lender, or may request the Lender to deliver files, records or other appropriate material for the audit. Lender shall provide working space for the audit and deliver such records, files and materials by the date(s) specified.

The audit scope may include, but not be limited to, such areas as: (a) compliance with the Department requirements and Federal and State laws and regulations, (b) underwriting quality, (c) compliance with the requirements of the GSEs, and any PMI Insurer or guarantor as applicable under their respective programs, (d) document retention, and (e) cash control, escrow accounting and remittance compliance.

Lender agrees to take corrective actions to cure any deficiencies or violations of the applicable requirements that are found through the audits. When timely and adequate corrections are not (or cannot) be completed to the satisfaction of the Department, Lender will be deemed to be in Default and the Department may pursue any and all remedies outlined in Program Documents.

Article IV: LENDER REQUIREMENTS Lender must meet the eligibility requirements specified in this Article. In exchange for its eligibility to make Mortgages and sell Mortgages for the Department’s programs and sell those Mortgages to the Department or the Department’s designee, Lender shall have the following duties and obligations with respect to its on-going participation in the Program:

Section 4.01 Lender General Requirements

A. Lender represents and warrants as of the Origination of each Mortgage by Lender that Lender is, as applicable:

i. an FHA-approved mortgagee, with delegated underwriting authority preferred, in good standing;

ii. an eligible lender in good standing for VA Guaranteed Mortgages;

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iii. an eligible lender in good standing for HUD Guaranteed Mortgages;

iv. an eligible lender in good standing for USDA-RD Guaranteed Mortgages;

v. an eligible lender in good standing for Section 184-guaranteed Mortgages;

vi. an approved Fannie Mae seller; or

vii. an approved Freddie Mac seller.

Lender shall only originate Mortgages of the type described in the preceding clauses if the representation is true with respect to such clause (e.g., the Lender shall not originate VA Guaranteed Mortgages unless the Lender is an eligible lender in good standing for VA Guaranteed Mortgages).

B. Authority and Capacity: The Lender represents and warrants that the Lender is a corporation or state-chartered credit union duly organized and existing under the laws of the state in which it was incorporated or chartered, or is duly chartered or incorporated under federal law, is duly authorized to transact business in the State of Oregon, has obtained all licenses, approvals and permits under state and federal law necessary to perform its obligations contemplated by this Agreement, and customarily provides service or otherwise aids in financing Mortgages located in the State of Oregon.

The Lender further represents and warrants that the Lender has the power to execute and deliver this Agreement, to accept the terms hereof, to enter into the transactions contemplated hereby, and the acceptance and performance hereof has been duly authorized by all necessary corporate and other action. At the date hereof and the date of the actual execution hereof, the Lender does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every obligation required of it under this Agreement.

C. No Conflicts: Lender represents and warrants that neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof, will conflict with or result in any breach or violation of any of the terms, conditions or provisions of any applicable laws, including regulations, or any agreement or instrument to which the Lender is now a party or by which it is bound, or constitute a default under any of the foregoing.

D. No Violation: Lender represents and warrants that the execution and delivery of the Program Documents by the Lender in the manner contemplated therein and the performance and compliance with the terms thereof by it will not violate its certificate of incorporation (or similar document) or bylaws, or any laws the violation of which could have a material adverse effect upon the validity, performance or enforceability of any of the terms of the Program Documents applicable to the Lender, and will not constitute a material default (or an event which, with notice or lapse of time, or both, would constitute a material default) under, or result in the breach of, any material contract, agreement or other instrument to which the Lender is a party or which may be applicable to it or any of its assets.

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E. No Consent Required: Lender represents and warrants that the execution and delivery of the Program Documents by the Lender in the manner contemplated therein and the performance and compliance with the terms thereof by it do not require the consent or approval of any governmental authority, or if such consent or approval is required, it has been obtained.

F. Qualified Staff and Adequate Facilities: The Lender must, at all times, have employees who are well trained, licensed, if applicable, and qualified to perform the functions required of the Lender under this Agreement. In addition, the Lender must maintain facilities that are adequate to perform its functions under this Agreement.

G. Report Basic Changes: The Lender must notify the Department promptly in writing of any changes that occur in its principal purpose, activities, staffing or facilities.

H. Cooperation: Lender, the Department and Servicer to Cooperate. From time to time, the Lender will submit to Department and to the Servicer, any reasonably requested information relating to the Mortgages, and will do every act and thing which may be necessary or required to perform its duties under this Agreement or any of the Program Documents. Additionally, as appropriate for the servicing or foreclosure of any Mortgages, the Department, the Lender and the Servicer hereby agree to take such actions as required by the Program Documents, the Ginnie Mae Guide, FHA, VA, USDA Rural Development or Section 184 PIH, or by the Fannie Mae Selling and Servicing Guide, the Freddie Mac Selling and Servicing Guide or the PMI Insurer, as applicable.

I. Not Ineligible: Lender represents and warrants as of the Origination of each Mortgage by Lender that Lender is not included on an exclusionary list, including those of HUD, Fannie Mae, FHA, Freddie Mac, PIH, USDA, VA or any other exclusionary list kept by private institutional mortgage investors. Lender will promptly notify the Department in writing if at any time Lender is placed on such an exclusionary list.

J. Local Offices: At all times during the term of this Agreement, as stated in Section 3.10, the Lender shall maintain one or more offices within 50 miles of Oregon, open to the public, fully staffed with experienced personnel who make Purchase Money Mortgages for owner-occupied homes located in Oregon. The staff originating and processing Mortgages under the Program must be located in Oregon or within 50 miles of Oregon’s border.

K. Loan Production: The Lender shall have during the twelve-month period preceding the effective date of this Agreement, , made and sold to an institutional mortgage investor (which may include the Department) not less than 25 purchase money Mortgages for owner-occupied homes located in the State.

L. Targeted Areas: The Lender shall use reasonable efforts to encourage Mortgage Origination in Targeted Areas and cooperate with the Department to make known to the public and real estate community the favorable loan terms offered by the Department for financing in Targeted Areas.

M. Loan Production to the Department: The Lender shall sell to the Department not less than the number of first lien position Mortgages in any consecutive twelve-month period as required in the

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Oregon Housing and Community Services | 725 Summer St. NE Suite B, Salem, OR 97301-1266 | (503) 986-2000 | FAX (503) 986-2020

Program Manual ; and

N. Quality Control: The Lender shall have performed a post-closing review of those items required in the Lender’s approved Fannie Mae, Freddie Mac and/or FHA quality control plans, as applicable, for not less than 10% of the Mortgages delivered for sale to the Department, or its designee each calendar year; provided, however, if Lender is a newly-qualified lender, Lender shall additionally perform a post-closing review of the first five Mortgages delivered for sale to the Department, or its designee.

Section 4.02 Indemnification

LENDER SHALL DEFEND AND INDEMNIFY THE DEPARTMENT, DEPARTMENT DESIGNEES AND THE

SERVICER AND HOLD THEM AND THEIR OFFICERS, EMPLOYEES AND AGENTS HARMLESS FROM

ANY AND ALL LOSSES, PENALTIES, FINES, FORFEITURES, REASONABLE ATTORNEY’S FEES,

DAMAGES OR EXPENSES (COLLECTIVELY, “CLAIMS”) THAT THEY RESPECTIVELY SUSTAIN OR

INCUR AS A RESULT OF ANY VIOLATION OF LAW BY THE LENDER OR ANY FAILURE ON THE PART OF THE LENDER TO PERFORM ITS SERVICES, DUTIES AND OBLIGATIONS UNDER THE TERMS AND

PROVISIONS OF THIS AGREEMENT, INCLUDING ANY BREACH OF LENDER’S REPRESENTATIONS,

WARRANTIES, COVENANTS OR PROVISIONS CONTAINED IN THIS AGREEMENT,

NOTWITHSTANDING KNOWLEDGE, OR ANY ACT OR FAILURE TO ACT BY THE DEPARTMENT AND

DEPARTMENT DESIGNEES, AND THE SERVICER, OTHER THAN AN ACT OR FAILURE TO ACT ON THE

PART OF THE DEPARTMENT AND DEPARTMENT DESIGNEES, AND THE SERVICER WHICH

PREVENTS THE LENDER FROM PERFORMING SUCH SERVICES, DUTIES AND OBLIGATIONS.

NEITHER LENDER NOR ANY ATTORNEY ENGAGED BY LENDER MAY DEFEND ANY CLAIM IN THE

NAME OF THE STATE OF OREGON (INCLUDING ANY AGENCY OF THE STATE OF OREGON), NOR

PURPORT TO ACT AS LEGAL REPRESENTATIVE FOR THE STATE OF OREGON, WITHOUT FIRST

RECEIVING FROM THE OREGON ATTORNEY GENERAL, IN A FORM AND MANNER DETERMINED

APPROPRIATE BY THE OREGON ATTORNEY GENERAL, AUTHORITY TO ACT AS LEGAL COUNSEL FOR

THE STATE OF OREGON, NOR MAY LENDER SETTLE ANY CLAIM ON BEHALF OF THE STATE OF

OREGON WITHOUT THE APPROVAL OF THE OREGON ATTORNEY GENERAL.

Section 4.03 Lender Not to Resign

Lender shall not resign from the obligations and duties hereby imposed on it except upon determination that its duties hereunder are no longer permissible under applicable law or regulation.

Any such determination permitting the resignation of Lender shall be evidenced by an opinion of counsel satisfactory to the Department to such effect delivered to Department. No such resignation shall become effective until another Lender, the Servicer, or a successor servicer shall have assumed the Lender’s responsibilities and obligations in accordance with Section 4.06 hereof.

Section 4.04 Lender Finances

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In order to remain an approved Lender under this Agreement, the Lender must meet the net worth requirements and other financial requirements contained in the Program Documents, as they may be revised from time to time. The required net worth and sufficient liquidity must be maintained in the form of assets acceptable to the Department. The Lender must provide the Department a copy of its annual financial statements and any other related information that the Department may require.

Section 4.05 Pending Legal Action

Lender represents and warrants there is no litigation pending, or, to the Lender’s knowledge, threatened, affecting the right of any of the present members of the board of directors or officers of the Lender to their respective offices or their jurisdiction or authority over the affairs of the Lender, nor in any way questioning the execution or validity of this Agreement; there are no other legal or governmental proceedings other than ordinary routine litigation incidental to the business conducted by the Lender pending or (to the best of the Lender’s knowledge) threatened or contemplated by which the Lender may be bound or to which any property of the Lender is or may be subject, which, if determined adversely to the Lender, would individually or in the aggregate have a material adverse effect on the ability of the Lender to perform its obligations hereunder or on the financial position or results of the operations of the Lender or result in money damages arising out of an alleged error or omissions claim.

Section 4.06 Merger

The Lender will notify the Department of a merger or consolidation of the Lender or any transfer of a controlling ownership interest of the Lender, and the Department shall have the right to review the qualifications of the resulting entity to process Program loans and have the right to approve or disapprove that entity if it is not already an approved lender, which approval will not be unreasonably withheld. The Lender and the Department agree that all of the covenants and agreements herein contained shall extend to and be obligatory upon all successors of the respective parties.

Section 4.07 Fidelity Bonds and Errors and Omissions Coverage

Lender shall at all times during the term of this Agreement (as stated in Section 3.10) and at its expense maintain in effect a fidelity bond (or surety bond) and mortgage errors and omissions insurance covering all agents, officers, employees and other personnel of the Lender.

A. Minimum Coverage: Coverage shall be equal to or greater than the minimum coverage required by, or acceptable to the applicable GSEs. . The terms of such coverage shall provide for deductibles that do not exceed the maximum deductible amounts permitted by the applicable GSEs.

B. Department Named as Insured: The Lender shall provide a Certificate of Insurance listing

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Department as a named insured on the above referenced coverage. No less than annually, and upon request, the coverage, deductibles and underwriters of the Lender’s fidelity bond (or surety bond) and mortgage errors and omissions insurance policy shall be reported by the Lender to the Department or evidence of such coverage shall be delivered to the Department.

C. Insurer Cancellation Notification: Lender shall obtain its insurer’s written agreement to promptly notify Department in writing if a fidelity bond (or surety bond) or mortgage errors and omissions policy is cancelled for any reason.

D. Lender Cancellation Notification: In addition and notwithstanding the foregoing, Lender shall promptly notify Department of any insurer’s cancellation of a fidelity bond (or surety bond) or mortgage errors and omissions policy or its refusal to renew a fidelity bond (or surety bond) or mortgage errors and omissions policy at the expiration of a premium period.

E. Conditional Renewals: Lender shall also notify Department of any more restrictive terms required by any insurer as a condition for renewal.

F. Lender Notification: Lender shall promptly notify Department of all cases of embezzlement, fraud, criminal or dishonest acts by any agent, officer, employee, or other personnel of Lender whether or not Department funds are involved. Lender shall promptly notify Department of any claims made against its fidelity or surety bonds or any mortgage errors and omissions policy.

Section 4.08 Limited Value of Contract to Lender

Lender acknowledges that it has paid no monetary consideration for making it an approved Mortgage seller or servicer.

Lender also agrees that, except for the purchase of Mortgages and the servicing of Mortgages, this Agreement has no value to the Lender.

Section 4.09 Consumer Complaint Tracking

Lender shall be responsible for reviewing and reporting all consumer complaints received in accordance with applicable regulatory requirements, including those set forth by the Dodd-Frank Act and the Consumer Financial Protection Bureau. Lender is responsible for responding to all consumer complaints as required by law and must maintain a tracking mechanism for all consumer complaints received, regardless of validity, which provides data on the type of consumer complaints received and the final resolution of the consumer complaints. Lender shall provide to the Department its consumer complaint tracking policy and procedures.

Section 4.10 Payment of Costs and Expenses

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Lender shall pay all costs of preparing and furnishing to the Department all documents and information required by this Agreement and any and all other expenses incurred in connection with the transactions contemplated by this Agreement, including, without limitation, recording, filing and photocopying fees and attorney’s fees. This section shall not preclude Lender from charging Borrowers the fees described in Section 5.11 hereof.

Section 4.11 Regulatory Supervision

At all times during the term of this Agreement (as stated in Section 3.10), Lender shall be properly licensed and shall comply:

A. with all statutes, laws, rules and regulations applicable to its activities under this Agreement;

B. with all rules or regulations of Lender’s supervisory agency or other regulatory body that has jurisdiction over the Lender;

C. with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 and all other applicable registration requirements governing lending and Mortgage related activities, including but not limited to those of the Consumer Financial Protection Bureau;

D. with respect to each FHA Insured Mortgage, with the National Housing Act of 1934, as amended, with all rules and regulations issued thereunder and with all applicable administrative publications;

E. with respect to each VA Guaranteed Mortgage, with the Servicemen’s Readjustment Act, as amended, with all rules and regulations issued thereunder and with all administrative publications;

F. with respect to each FHA Insured or VA Guaranteed Mortgage, as determined as of the date of each purchase hereunder, with all the requirements of, and the “Representations and Warranties of Lender” set forth in, the Ginnie Mae Guide;

G. with respect to each Conventional Mortgage, as determined as of the date of each purchase hereunder, with all the requirements of the Fannie Mae Selling and Servicing Guide, or Freddie Mac Selling and Servicing Guide, as applicable; and

H. with respect to Conventional Mortgages, with all applicable provisions of the Financial Institutes Reform, Recovery and Enforcement Act of 1989 (“FIRREA”) relating to appraisals.

Section 4.12 Web Access Confidentiality & Unauthorized Access

The Lender is responsible for maintaining the confidentiality of the non-public personal information (NPI) accessed by the Lender or its employees through the websites of the Department and its designees. Authorized use of the Lender’s passwords and log-in information is the responsibility of

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Lender. Lender covenants that it will only provide access to authorized employees trained to protect NPI and will ensure that its employees will only use NPI accessed through the Department’s website and the websites of its designees for authorized purposes. The Lender agrees to cooperate with the Department to terminate access to the Department’s website and the websites of its designees of Lender’s former employees or those employees whose access privileges are revoked. The Department reserves the right to suspend, revoke or terminate access of Lender’s current or former employees for unauthorized or improper use of these websites, or for any other reason in the sole discretion of the Department.

LENDER COVENANTS TO INDEMNIFY, DEFEND, AND HOLD HARMLESS THE DEPARTMENT FOR ANY

LIABILITY OR EXPENSE (COLLECTIVELY, “CLAIMS”) ARISING FROM USE OR MISUSE OF THE

DEPARTMENT’S WEBSITE OR THE WEBSITE OF ANY OF THE DEPARTMENT’S DESIGNEES BY

LENDER OR LENDER’S EMPLOYEES, UNAUTHORIZED ACCESS TO ANY SUCH WEBSITE BY LENDER

OR LENDER’S EMPLOYEES, OR THE FAILURE OF LENDER TO TERMINATE ACCESS PRIVILEGES WITH

RESPECT TO SUCH WEBSITES. NEITHER LENDER NOR ANY ATTORNEY ENGAGED BY LENDER MAY

DEFEND ANY CLAIM IN THE NAME OF THE STATE OF OREGON (INCLUDING ANY AGENCY OF THE

STATE OF OREGON), NOR PURPORT TO ACT AS LEGAL REPRESENTATIVE FOR THE STATE OF

OREGON, WITHOUT FIRST RECEIVING FROM THE OREGON ATTORNEY GENERAL, IN A FORM AND

MANNER DETERMINED APPROPRIATE BY THE OREGON ATTORNEY GENERAL, AUTHORITY TO ACT

AS LEGAL COUNSEL FOR THE STATE OF OREGON, NOR MAY LENDER SETTLE ANY CLAIM ON

BEHALF OF THE STATE OF OREGON WITHOUT THE APPROVAL OF THE OREGON ATTORNEY

GENERAL.

Lender covenants to immediately notify the Department of any unauthorized use of the Department’s website or the website of any of the Department’s designees or any other breach of security relating to the Department website or the website of any of the Department’s designees known to Lender.

Section 4.13 Renewal/Recertification

The Department requires the Lender to submit and comply with annual or other periodic re-certification requirements as they may be established by the Department from time to time and as described in the Program Documents. Lender hereby agrees that its failure to comply with those re-certification requirements shall be cause for immediate termination of this Agreement at the option of the Department.

Article V: PURCHASE AND SALE OF MORTGAGES This Article sets forth requirements governing the Lender’s sale of Mortgages to the Department or the Department’s designee.

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Section 5.01 Commitment to Buy and Sell

Lender represents and warrants that the representations and information set forth in the Purchase Documents, statements, reports and other documents to be provided to the Servicer and Department in connection with the purchase of each Mortgage will be true and accurate and contain no untrue statement of a material fact or omit to state a material fact necessary to make the information, in such certificate, statement, report and other documents not misleading, and may be relied upon by the Servicer and Department.

Section 5.02 Program Document Compliance

Lender will comply with all requirements of the Program Documents as they are amended from time to time; provided, however, that any amendment to the Program Documents shall not affect any Mortgage that has previously received a fully-executed Approval/Loan Purchase Commitment.

Section 5.03 Document, Determine and Certify Eligibility

Lender will obtain all documents and information required for the Origination, close and sale of the Mortgage to the Department or the Department’s designee in accordance with the Program Documents.

Lender will review, examine and evaluate each Borrower’s(s) eligibility for the Program, conduct such investigation as is necessary to ensure and…