Mortgage Selling and Servicing Contract

Instructions to the Lender

The Mortgage Selling and Servicing Contract (“Contract”) establishes the Lender’s
(defined below on Page 1 of the Contract) contractual relationship with Fannie Mae, and
sets forth the terms and conditions for the Lender to sell mortgages to Fannie Mae, and
service such mortgages on Fannie Mae’s behalf. Upon approval of the Lender’s
application, Fannie Mae will insert any additional types of approval granted in Section
XVI.B on page 21 of the Contract, and a fully executed Contract will be available via
DocuSign.

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Once the terms and conditions of the Contract have been read and understood by the Lender,
the Lender should complete the "signature page" on page 22, as follows:

• The Contract should be signed by an authorized officer of the Lender. Such

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officer should also be listed as a principal of the Lender on the Authorization for
Verification of Credit and Business References (Form 1001).
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Mortgage Selling and Servicing Contract

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 Contents

Contract
Mortgage
Selling and I General Information 1
Servicing
Contract II Eligibility Requirements for Lenders 2

III Sale of Mortgages and Participation Interests 3

IV Sale of Mortgages and Participation Interests – 4

Lender's Warranties

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V Servicing Mortgages 8

VI Assignment, Consideration and Continuance 10

VII Assigning Mortgage Servicing 11

VIII Breaches of Contract 11

ra IX Termination of Contract 14

X Continuance of Responsibilities or Liabilities 17

XI Participation Interests - Special Provisions 18

XII Notice 20

XIII Prior Agreements 21

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XIV Severability and Enforcement 21

XV Captions 21

XVI Scope of Contract 21

XVII Signatures and Date 22

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 General Information

Contract
Mortgage This contract for selling and servicing mortgages ("Contract") is between the Mortgage
Selling and Lender ("Lender") that signs this document and the Federal National Mortgage Association
Servicing ("Fannie Mae", "we", "our", "us"), a corporation organized and existing under the laws of the
Contract
United States.

I General Information
This section contains important basic information about this Contract, which we are
permitted to enter into under authority of Title III of the National Housing Act (12 U.S.C.
1716, et. seq.), which is also known as the Federal National Mortgage Association Charter
Act.

A. The purpose of this Contractis:

Purpose of • to establish the Lender as an approved seller of mortgages and participation interests to
Contract

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us;

• to provide the terms and conditions of the sales;

• to establish the Lender as an approved servicer of mortgages we have purchased or in

which we have purchased a participation interest; and

B.
ra • to provide the terms and conditions of servicing.

In consideration of the purpose of this Contract and of all the provisions and mutual promises
Consideration contained in it, the Lender and Fannie Mae agree to all that this Contract contains.
C.
We issue Fannie Mae's Guides to Lenders (our "Guides") and furnish them to the Lender.
Our Guides
These Guides are:
• Selling;
• Servicing; and
• Multifamily.
D
Whenever there is a reference to the Guides in this Contract, it means the Guides as they exist
now and as they may be amended or supplemented in writing. We may amend or supplement
them, at our sole discretion, by furnishing amendments or supplementary matter to the Lender.

The term "Guides" also includes anything that, in whole or in part, supersedes or is
substituted for the Guides.

D. Anywhere the words that appear below are used in this Contract, the following definitions
Important apply:
Definitions
1. “Mortgage” – A loan, evidenced by a note, bond or other instrument of indebtedness. The
loan is secured by a mortgage, deed of trust, deed to secure debt or other instrument of
security that applies to property. "Mortgage" includes such instruments of indebtedness and
security, together with:
• the evidence of title;
• the chattel mortgage or security agreement and financing statement; and
• all other documents, instruments and papers pertaining to the loan.

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 Eligibility Requirements
for Lenders

Contract
2. “FHA/VA Mortgage” - A mortgage insured or guaranteed in whole or in part
by the Federal Housing Administration or Veterans Administration.

3. “Conventional Mortgage” - A mortgage other than an FHA/VA mortgage, which

Fannie Mae is authorized to purchase under the Federal National Mortgage Association
Charter Act.

4. “Property” or “Mortgaged Property” - The property that is now subject to a

mortgage, or was subject to such mortgage, where the mortgage has been foreclosed
or possession or title to the property has been taken by Fannie Mae or on our behalf.

5. “Participation Interest” or “Participation Interest in Mortgages” - An undivided

interest in mortgages, specified in the applicable participation certificate that is evidence
of such interest. A "participation interest" or "participation interest in mortgages" consists
of a specified percentage of the principal (and a like percentage of all rights and benefits

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of the mortgagee or equivalent party under such mortgage) together with a specified
yield on it.

II Eligibility Requirements for Lenders

For us to purchase mortgages or participation interests from a Lender, the Lender must

A.
ra meet the eligibility requirements specified in this section.
These are the general requirements the Lender must meet to be eligible to sell us
General mortgages or participation interests or service mortgages for us:
Requirements
1. Meet Fannie Mae Standards. The Lender must have as two of its principal business
purposes:

• making mortgages of the type that we will purchase entirely or purchase a

participation interest in under this Contract; and
• servicing such mortgages.
D
In addition, the Lender, in our judgment, must have at all times the capacity to originate
and sell to us mortgages and participation interests that meet our purchase standards and
the standards generally imposed by private institutional mortgage investors, and must at
all times have the capacity to service such mortgages for us under those standards.
2. Have Qualified Staff and Adequate Facilities. The Lender must, at all times, have
employees who are well trained and qualified to perform the functions requiredof the
Lender under this Contract.
In addition, the Lender must maintain facilities that are adequate to perform its functions
under this Contract.

3. Maintain Fidelity Bonds and Errors and Omissions Coverage. The Lender must
maintain, at its own expense, a fidelity bond and errors and omissions insurance, as
required by our Guides

4. Report Basic Changes. The Lender must notify us promptly in writing of

any changes that occur in its principal purpose, activities, staffing or facilities.

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 Sale of Mortgages and
Participation Interests

Contract
B. When we approve a lender, one of the major considerations is the information such
Ownership and lender has provided about the eligibility, qualifications and financial status of the lender
Status of Lender
and its owners.

Consequently, the Lender must give us immediate notice of a change in its status
or ownership, including any:
• sale or transfer of a majority interest in it;
• merger;
• consolidation; or
• change in legal structure.

C. In order to remain an approved lender under this Contract, the Lender must meet our
Finances

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current net worth requirements. These requirements are contained in our Guides.

The required net worth must be maintained in the form of assets acceptable to us.

The Lender must give us a copy of its annual financial statements and any other related
information that we may require.

D. The Lender agrees to permit our employees or designated representatives to examine or

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Access to
Lender’s Records
audit records or accounts relating to mortgages or participation interests sold or serviced
under this Contract. All records relative to the Lender's continued eligibility to sell or
service mortgages or participation interests under this Contract may also be examined or
audited. Any examination or audit made on our behalf will be conducted during regular
business hours unless the Lender agrees otherwise.

III Sale of Mortgages and Participation Interests

This section contains the basic rules governing our purchase of mortgages and
participation interests.
A.
D
What Governs Purchases of mortgages and participation interests will be governed by:
Purchases
• our written commitment to purchase;

• our Guides, including all amendments in effect on the day we make our written
commitment; and

• this Contract.

B. The mortgages or participation interests that we purchase must meet the

What We requirements found in our Guides on the day we make our written commitment.
Purchase

C.
Lender’s Obligation If our Guides require, the Lender will promptly purchase our common stock each time it
to Purchase delivers a mortgage or participation interest to us. The amount of stock to be purchased
Fannie Mae Stock and the procedures for buying it are also found in our Guides.
D.
Fannie Mae has The fact that we have signed this Contract does not mean that we must make a
no Obligation commitment to purchase any mortgage or participation interest from the Lender .
to Purchase
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 Sale of Mortgages and
Participation Interests-
Lender’s Warranties

Contract
IV Sale of Mortgages and Participation Interests – Lender’s Warranties
The Lender makes certain warranties to us.

These warranties:
• apply to each mortgage sold to us in its entirety;
• apply to each mortgage in which a participation interest is sold to us;
• are made as of the date transfer is made to us;
• continue after the purchase of the mortgage or participation interest;
• continue after payment by us of the purchase price to the Lender; and
• are for our benefit as well as the benefit of our successors and assigns.

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Warranties may be waived, but only by us in writing.

A. Following are the specific warranties made by the Lender.

Specific
Warranties 1. Mortgage Meets Requirements. The mortgage conforms to all the applicable
requirements in our Guides and this Contract.
ra 2. Lender Authorized to do Business. The Lender and any other party that held the
mortgage were, at all times during which the holder held the mortgage, authorized to
transact business in the jurisdiction where the property is located.

However, if the Lender or any other party that held the mortgage was not authorized to
do business in the jurisdiction where the property is located, then the warranty is made
that none of the following activities of the Lender or other parties constituted doing
business in that jurisdiction:
• lending the mortgage funds;
• acquiring the mortgage;
•
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holding the mortgage; or
• transferring the mortgage in whole or to the extent of a participation interest.

3. Lender Has Full Right to Sell and Assign. The Lender is the sole owner and holder
of the mortgage and has full right and authority to sell and assign it, or a participation
interest in it, to us. In addition, the Lender's right to sell or assign is not subject to any
other party's interest or to an agreement with any other party.

4. Lender's Lien on Property. The mortgage, whether represented by the Lender as the
first lien or as the second lien, is a valid and subsisting lien on the property described in it.

If the mortgage is represented by the Lender as the first lien, the property is free and clear
of all encumbrances and liens having priority over it except for liens for real estate taxes,
and liens for special assessments, that are not yet due and payable.

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 Sale of Mortgages and
Participation Interests -
Lender’s Warranties

Contract
If the mortgage is represented by the Lender as the second lien, the property is free and
clear of all encumbrances and liens having priority over it except for one properly
recorded first mortgage lien, and real estate taxes and liens of special assessments, not yet
due and payable.

Any security agreement, chattel mortgage or equivalent document that is related to the
mortgage and that is held by the Lender or delivered to us, is a valid and subsisting lien
on the property described in such document, of the same priority as the mortgage.

The Lender has full right and authority to sell or assign each lien to us or to an extent that
is proportionate to our participationinterest.

5. Documents are Valid and Enforceable. The mortgage and any security agreements,
chattel mortgages, or equivalent documents relating to it have been properly signed,are

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valid, and their terms may be enforced by us, our successors and assigns, subject only to
bankruptcy laws, Soldiers' and Sailors' Relief Acts, laws relating to administering
decedents' estate, and general principles of equity.

6. Property not Subject to Liens. The Property is free and clear of all mechanics' liens,
materialmen's liens or similar types of liens. There are no rights outstanding that could
result in any of such liens being imposed on the property.
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This warranty is not made if the Lender furnishes us with title insurance that gives us
substantially the same protection as this warranty.

7. Title Insurance. There is a mortgage title insurance policy, or other title evidence
acceptable to us, on the property. The title insurance policy is on a current ALTA form
(or other generally acceptable form) issued by a generally acceptable insurance company.

The title insurance insures (or the other title evidence protects) us or the Lender and its
successors and assigns, as holding a lien of the priority warranted in "4. Lender's Lien on
Property."
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8. Modification or Subordination of Mortgage. The Lender has not done any of the
following:

• materially modified the mortgage;

• satisfied or cancelled the mortgage in whole or in part;

• subordinated the mortgage in whole or in part, unless it is represented to us as

a second mortgage;

• released the property in whole or in part from the mortgage lien; or

• signed any release, cancellation, modification or satisfaction of the mortgage.

This warranty is not made if any of the things just mentioned have been done but have
been expressly brought to our attention in a letter before we make payment to the Lender.
The letter must be acknowledged by us in writing.

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 Sale of Mortgages and
Participation Interests -
Lender’s Warranties

Contract
9. Mortgage in Good Standing. There are no defaults under the mortgage, and all of the
following that have become due and payable have been paid or an escrow of funds
sufficient to pay them has been established:
• taxes;
• government assessments;
• insurance premiums;
• water, sewer and municipal charges;
• leasehold payments; or
• ground rents.

10. Advances. The Lender has not made or knowingly received from others, any
direct or indirect advance of funds in connection with the loan transaction on behalf of

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the borrower except as provided in our Guides. This warranty does not cover payment
of interest from the earlier of:

• the date of the mortgage note;

• the date on which the mortgage proceeds were disbursed to the borrower; or
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• the date one month before the first installment of principal and interest on the
mortgage is due.

11. Property Conforms to Zoning Laws. The Lender has no knowledge that any
improvement to the property is in violation of any applicable zoning law or
regulation.

12. Property Intact. The property is not damaged by fire, wind or other causeof loss.
There are no proceedings pending for the partial or total condemnation of the
property.
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13. Improvements. Any improvements that are included in the appraised value of the
property are totally within the property's boundaries and building restriction lines. No
improvements on adjoining property encroach on the mortgaged property unless FHA
or VA regulations or our Guides permit such an encroachment.

14. Mortgage not Usurious. The mortgage is not usurious and either meets or is exempt
from any usury laws or regulations.

15. Compliance with Consumer Protection Laws. The Lender has complied with any
applicable federal or state laws, regulations or other requirements on consumer credit,
equal credit opportunity and truth-in-lending.

16. Property is Insured. A casualty insurance policy on the property is in effect. It is

written by a generally acceptable insurance company and provides fire and extended
coverages for an amount at least equal to the amount required by our Guides.

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 Sale of Mortgages and
Participation Interests-
Lender’s Warranties

Contract
A flood insurance policy is in effect on the property if any part of it is in an area listed
in the Federal Register by the Federal Emergency Management Agency as an area
with special flood hazards, and if insurance is available. The flood insurance is written
by a generally acceptable insurance company, meets current guidelines of the Federal
Insurance Administration, and is for an amount at least equal to the amount required by
our Guides.

The Lender will make sure the required insurance is maintained as long as it services
the mortgage. Any policy mentioned in this warranty contains a standard mortgage
clause that names us or the Lender and its successors and assigns as mortgagee.

17. Mortgage is Acceptable Investment. The Lender knows of nothing involving the
mortgage, the property, the mortgagor or the mortgagor's credit standing that can
reasonably be expected to:

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• cause private institutional investors to regard the mortgage as an
unacceptable investment;
• cause the mortgage to become delinquent; or
• adversely affect the mortgage’s value or marketability.
ra 18. Mortgage Insurance or Guaranty in Force. If the Lender represents that the
mortgage is insured or guaranteed under the National Housing Act as amended, or
under the Servicemen's Readjustment Act of 1944 as amended, or by a contract with a
mortgage insurance company, the insurance or guaranty is in full force. In addition, the
Lender has complied with all applicable provisions and related regulations of the Act,
or the insurance contract, that covers the mortgage.

19. Adjustable Mortgages. If the mortgage provides that the interest rate or the
principal balance of the mortgage may be adjusted, all of the terms of the mortgage may
be enforced by us, our successors and assigns.

These adjustments will not affect the priority of the lien warranted in "4. Lender's Lien
D
On Property."

20. Participation Information is Correct. All the information and statements in any
participation certificate that the Lender delivers to us are complete, correct and true.

B. We may require the Lender to repurchase a mortgage or participation interest sold to us

Consequences of if any warranty made by the Lender about the mortgage or participation interest is
Untrue Warranties untrue (whether the warranty is in this Contract or was made at our specific request).
- Repurchase
We may require repurchase whether or not the Lender had actual knowledge of
the untruth. We may also enforce any other available remedy.

The Lender must pay us the repurchase price within 30 days of our demand. The
repurchase price, as provided in our Guides, will not be adjusted because the Lender
paid us fees or charges or subscribed to our capital stock.

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 Servicing Mortgages

Contract
C. While untrue warranties about a particular mortgage or participation interest may be the
Consequences basis for requiring repurchase of the particular mortgage or participation interest, there
of Untrue Warranties can be additional consequences. They may also give rise to responsibilities of the
- Termination Lender under "D. Indemnification for Breach of Warranty; Holding us Harmless." In
of Contract addition, untrue warranties can, under certain circumstances, be treated as abreach of
contract that could result in the withdrawal of our approval of a Lender and the
termination of this Contract (details are contained in Sections VIIIand IX).

D. If there is a breach of warranty under this Contract, the Lender, at our request, will
Indemnification indemnify us and hold us harmless against any related losses, damages, judgments or
for Breach of legal expenses.
Warranty;
Holding Us Harmless

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V Servicing Mortgages
This section contains the basic rules governing the servicing of mortgages that we
purchase, or in which we purchase a participation interest.

A. The servicing duties of the Lenderare:

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Servicing Duties
of the Lender 1. Scope of Duties. The Lender will diligently perform all duties that are necessary or
incident to the servicing of:

• all mortgages it is servicing for us on the date this Contract takes effect;and

• all other mortgages that the Lender is required to service by the terms of this
Contract or any other existing or future agreement between us and the Lender.
2. Mortgages to be Serviced. Any mortgage we have purchased from the Lender, or
in which we have purchased a participation interest from the Lender, will be serviced
by the Lender for us according to the terms of this Contract, unless:
D
• the mortgage is not within any category of those that are required by our Guide to
be serviced; or
• we give the Lender written notification or consent that a mortgage to be purchased
by us will not be serviced by the Lender.
3. Service According to Guides. Any mortgage serviced under this Contract, which
we own or in which we have purchased a participation interest, must be serviced by
the Lender according to the provisions in our Guides that are in effect on the date of
this Contract or as amended in the future. This is true regardless of when:
• the mortgage was originated;
• the mortgage or a participation interest in it was transferred to us; or
• the Lender began servicing the mortgage.
The Lender will also follow other reasonable instructions we give it and must strictly
follow accepted industry standards when servicing a mortgage for us.

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 Servicing Mortgages

Contract

4. Service at Lender’s own Expense. The cost of servicing will be the Lender’s
unless our Guides expressly provide otherwise.
5. Special Responsibilities in Foreclosures. Among the other duties that maybe
assigned to the Lender through our special instructions or under the terms of our Guides
is the responsibility to manage and appropriately dispose of property when a mortgage it
is servicing for us has been foreclosed, or possession or title has been taken by us or on
our behalf.
The Lender must manage and dispose of the property according to the terms of the
mortgage and our Guides.
6. Service Until Need Ends. The Lender must service each mortgage
continuously from the date its servicing duties begin until:

• the mortgage’s principal and interest have been paid in full;

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• the mortgage has been liquidated and the mortgaged property properly disposed
of (if the Lender is required to do these things); or

• the Lender’s servicing duties are terminated according to Section IX of this

Contract.

B.
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Compensation
The Lender's compensation for servicing mortgages, including the management and
disposal of properties, under this Contract is specified in our Guides.

We may change the Lender's compensation by modifying our Guides at anytime.

However, such a change will not affect mortgages that we have purchased or committed
to purchase before the date of the change.

C. All mortgage records reasonably required to document or properly service any mortgage
Ownership we own in its entirety are our property at all times. This is true whether or not the Lender
of Records developed or originated them.
D
The following are considered mortgage records:
• all mortgage documents;
• tax receipts;
• insurance policies;
• insurance premium receipts;
• ledger sheets;
• payment records;
• insurance claim files and correspondence;
• foreclosure files and correspondence;
• current and historical data files; and
• all other papers and records.

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 Assignment, Consideration
and Continuance

Contract
1. Lender as Custodian. The mortgage records belong to us. The Lender can have
possession of the mortgage records only with our approval, and the Lender is acting
as our custodian. This is true whether the Lender receives the mortgage records from
an outside source or prepares them itself.

2. Delivery. When we ask for any mortgage records in writing, the Lender will deliver
them to us or someone we choose. The Lender must also send us a list that identifies
each mortgage, and must give us other information we request to identify the mortgages
delivered.

We will not be required to sign or deliver any trust receipts before the Lender delivers the
mortgage records we have requested.

If we ask the Lender in writing for reproductions of any mortgage records the Lender

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microfilmed or condensed, the Lender will reproduce them promptly at no cost to us
or the party to whom we want them delivered.

3. Joint Ownership. If we own a participation interest in a mortgage, the other owners

and we own the mortgage records jointly. For these mortgages, the Lender possesses the
mortgage records as a custodian for the joint owners.
ra If we ask for copies of the mortgage records and servicing information about any such
mortgages, the Lender will furnish them. Or, if we need any mortgage records for legal
evidence or other purposes, the Lender will release them to us for a reasonable time.

D. The Lender will indemnify us and hold us harmless against all losses, damages,
Agreement to judgments or legal expenses that result from its failure in any way to perform its services
Indemnify and and duties in connection with servicing mortgages or managing or disposing of property
Hold Harmless
according to this Contract or our Guides.

If any private entity or governmental agency sues us, makes a claim against us or starts a
proceeding against us based on the Lender's acts or omissions in servicing mortgages or
managing or disposing of property, the Lender's obligation to indemnify and hold us
D
harmless must be met regardless of whether the suit, claim or proceeding has merit or
not.
The Lender's obligation does not apply, however, if during a suit, claim or proceeding,
we give the Lender express written instructions and as a result of the Lender following
them we suffer losses, damages, judgments or legal expenses.

E. If our Guides require, the Lender will continuously own our common stock in connection
Ownership of with all mortgages it services under this Contract. The amount of stock to be owned will
Our Stock be established by our Guides as they were in existence on the date the Lender started
servicing the applicable mortgages.

VI Assignment, Consideration and Continuance

This section describes our requirements covering assignment of, consideration for
and continuance of this Contract.

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 Assigning Mortgage
Servicing

Contract
A. Because the relationships created by this Contract are personal, the Lender may not,
Assignment without our prior written approval, assign:

• this Contract under any circumstances, either voluntarily or involuntarily, by

operation of law, or otherwise; or

• its responsibility for servicing individual mortgages we own or in which we have

a participation interest.

(See Section VII of this Contract for required procedures governing assignments
of servicing.)

B. The Lender acknowledges that it has paid us no monetary consideration for making it an
Limited Value approved mortgage seller or servicer, except an application fee to reimburse us for the

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of Contract expenses of reviewing its application.
to Lender
The Lender also agrees that, except for the purchase of mortgages, the purchase of
participation interests, the servicing of mortgages, or any fee for the termination of this
Contract, this Contract has no value to the Lender.

C. The Lender's right to continue selling and servicing mortgages under this Contract
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Requirements
for Continuance
depends on, among other things, its continuing to meet the eligibility requirements in
Section II of this Contract.

VII Assigning Mortgage Servicing

The Lender may not assign its responsibility for servicing all or any part of the mortgages
that it is servicing for us without first obtaining our written consent.

Any Lender to which servicing is assigned must:

• be acceptable to us; and
D
• sign a Mortgage Selling and Servicing Contract with us.

We may require that the Lender and transferee lender sign documents and take
other reasonable steps to perfect the assignment.

VIII Breaches of Contract

The Lender's taking certain actions, or failing to take certain actions, can be treated by
us as a breach of contract. A breach of contract can lead to a termination of this
Contract. Termination is provided for in detail in Section IX. Breaches of this Contract
include the following:
A.
Specific
Breaches of 1. Harm, Damage, Loss or Untrue Warranties. It is a breach if any act or omission of
Contract the Lender in connection with the origination and sale to us of any mortgage or
participation interest causes us harm, damage or loss. It is also a breach if the Lender
sells us any mortgage or participation interest knowing that any of the mortgage
warranties are untrue (these warranties are listed in Section IV A).

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 Breaches of Contract

Contract

2. Failure to Comply with this Contract or Our Guides. It is a breach if the Lender does
not comply with this Contract or our Guides through any act or omission, including,
without limitation, the following:

• failure to establish and maintain accounts for our funds or mortgagors’ funds as
required by our Guides;

• use of our or mortgagors’ funds in any manner other than that permitted by our
Guides, including the Lender’s failure to deposit all mortgage funds if, when, and to
the extent required by our Guides;

• failure to remit all funds due to us within the time periods required by our Guides;

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• failure to make or ensure, according to the provisions of each mortgage orof
applicable laws or regulations, proper and timely payment of all:

− taxes;

− assessments;
ra −

−
leasehold payments;

ground rents;

− insurance premiums (including premiums of casualty, liability and mortgage

insurance and other forms of required insurance);

− required interest on escrow funds; and

− other required payments with respect to any mortgage (including

mortgaged property) serviced;
D
unless the Lender is relieved of these responsibilities by the express provisions of our
Guides, or by our written instructions that relate to a particular mortgage or property;

• failure to renew or ensure renewal of any required insurance policy on any

mortgage (including mortgaged property) serviced under this Contract;

• failure to maintain adequate and accurate accounting records and mortgage servicing
records for the mortgages, or to maintain proper identification of the applicable loan
files and mortgage records that prove our outstanding participation interests;

• failure to submit adequate and accurate accounting and mortgage servicing reports
within the time required by our Guides; or

• failure to take prompt and diligent action under applicable law or regulation to collect
past due sums on mortgages, or to take any other diligent action described in our
Guides that we reasonably require for mortgages in default.

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Contract

3. Failure to Properly Foreclose or Liquidate. Where a mortgage is in default and the

Lender is required or has decided to foreclose or liquidate it, it is a breach if the Lender
fails to take prompt and diligent action consistent with applicable law or regulations to
foreclose on or otherwise appropriately liquidate such mortgage and to perform all
incident actions. It is a breach whether or not the failure results from the acts or
omissions of an attorney, trustee or other person or entity the Lender chooses to effect
foreclosure or liquidation.

4. Failure to Properly Manage, Dispose of, or Effect Proper Conveyance of Title. It

is a breach if any mortgage serviced under this Contract has been foreclosed or the
possession or title to the property has been taken by us or on our behalf, or on behalf of
other owners of a participation interest in the mortgage, and the Lender:

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• fails to properly manage, dispose of or effect proper conveyance of title to the
mortgaged property; or

• fails to do the above in accordance with this Contract, our Guides, and any pertinent
laws, regulations, or mortgage insurance policies or contracts.

5. Lender's Financial Ability Impaired. It is a breach if there is a change in the

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Lender's financial status that, in our opinion, materially and adversely affects the
Lender's ability to satisfactorily service mortgages.

Changes of this type include:

• the Lender’s insolvency;
• adjudication of the Lender as a bankrupt;
• appointment of a receiver for the Lender; or
• the Lender’s execution of a general assignment for the benefit of its creditors.

If any such change does take place:

D
• no interest in this Contract will be considered an asset or liability of the Lender or of
its successors or assigns; and

• no interest in this Contract will pass by operation of law without our consent.

6. Failure to Obtain our Prior Written Consent. It is a breach if the Lender fails to
obtain our prior written consent for:
• a sale of the majority interest in the Lender; or
• a change in its corporate status or structure.

7. Failure to Comply with this Contract or Our Guides. It is a breach if the Lender
fails at any time to meet our standards for eligible mortgage sellers or servicers so that, in
our opinion, the Lender’s ability to comply with this Contract or our Guides is adversely
affected.

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 Termination of Contract

Contract
8. Court Findings Against Lender or Principal Officers. It is a breach if:

• a court of competent jurisdiction finds that the Lender or any of its principal officers
has committed an act of civil fraud; or

• the Lender or any of its principal officers is convicted of any criminal act related to
the Lender’s lending or mortgage selling or servicing activities or that, in our opinion,
adversely affects the Lender’s reputation or our reputation or interests.

B. If there is a breach of this Contract by the Lender, we will have the right to take any
Actions to reasonable action to have any breach corrected by the Lender before we exercise any
Correct a right we have to terminate this Contract in whole or in part; however, we are not required
Breach to try to have a breach corrected before termination.

Any forbearance by us in exercising our right to terminate this Contract in whole or in

ft
part will not be a waiver of any present or future right we have under this Contract to so
terminate it.

IX Termination of Contract
The reason why this Contract may be terminated and the ways in which this may be done
ra are outlined in this section. When this Contract is terminated, the entire relationship
between the Lender and us ends (with certain exceptions that are explained in this
section).

A. The provisions of this Contract covering the sale of mortgages or participation interests
Termination by under this Contract may be terminated by the Lender or by us, with or without cause, by
Either Party of giving notice to the other party. Notice of termination may be given at any time but must
Mortgage conform to Section XII of this Contract.
Selling
Arrangements Termination is effective immediately upon notice of termination, unless the notice
specifies later termination.
D
Termination will not affect any outstanding commitments we have made to purchase
mortgages or participation interests from the Lender. However, if the Lender has
breached this Contract, we may declare any or all outstanding commitments void.

B. The Lender may terminate the provisions of this Contract covering the servicing of
Termination mortgages we entirely own by giving us notice at any time. Notice must conform to
by Lender of Section XII of this Contract.
Mortgage
Servicing
Termination is effective the last day of the third calendar month after the calendar month
Arrangements for
Wholly-Owned in which notice is given.
Mortgages
If the Lender terminates this Contract in whole or in part, we will not pay the Lender a
termination fee.

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 Termination of Contract

Contract
C.
We may terminate the provisions of this Contract covering the servicing under this
Termination
by Us of Contract of any or all mortgages that we entirely own. This may be done by following the
Servicing procedures outlined below.
Arrangements for
Wholly-Owned 1. Termination without Cause. We may terminate servicing for any reason, by giving
Mortgages the Lender notice of the termination. If we do so, the provisions of this Contract covering
the servicing of the affected mortgages will automatically terminate on the thirtieth day
following the day our notice is given. Whenever we do this (and the termination is not
because of any breach by the Lender as described in Section IX C 2) we will pay the
Lender, for each mortgage on which servicing is terminated, a lump-sum termination fee
as provided in a. below. However, whenever we terminate solely in order to transfer the
servicing to another Lender, and there has been no sale of our interest in the affected
mortgages, the provisions of b. below will apply.

a. Termination Fee. The termination fee will be an amount equal to twice the Lender's

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annualized servicing compensation, at the rate of compensation that is in effect for the
mortgage as of the date of the termination, applied against the unpaid principal balance of
the mortgage as of such date.

For purposes of determining the termination fee:

• the Lender's servicing compensation consists of the servicing fee at the Applicable
ra Servicing Rate plus any previously agreed upon excess yield that the Lender is
permitted to retain on the applicable mortgage; and

• "Applicable Servicing Rate" means the rate of the servicing fee for the servicing of
the mortgage, expressed as an annualized fractional percentage.

(Refer to appropriate sections of our Guides for more detailed information regarding the
computation of termination fees.)

b. Termination to Effect Transfer. Whenever we terminate servicing solely in order to

transfer servicing of the mortgages to another Lender, and there has been no saleof our
D
interest in the mortgages, we will give the Lender notice of the required transfer. Within
the 90-day period immediately following the date our notice is given, the Lender may
arrange for the sale of the servicing to another Fannie Mae-approved lender in good
standing that, in our judgment, will properly service the mortgages to be transferred.
Within that 90-day period, the Lender will give notice of any proposed sale to us,
together with all related information. The sale of servicing is conditioned upon our
approval, which will not be unreasonably withheld. Any resulting transfer of servicing
will be completed not later than 60 days after our approval of the transfer; and

• the Lender will be entitled to the proceeds of the sale of servicing, and will bear all
costs and expenses related to the sale and transfer of servicing;

• the Lender will not pay us a transfer fee;

• we will not pay the Lender a termination fee;

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 Termination of Contract

Contract

• we may require the purchaser of the servicing to assume any or all warranties that
were made to us in connection with the sale to us of the affected mortgages; and

• the purchaser of the servicing will succeed to the Lender's obligations, rights and
servicing compensation, under the provisions of this Contract covering the servicing
of the affected mortgages. For all of the affected mortgages that we purchased under
a net-yield contract, the servicing compensation will include the specified minimum
servicing fee, plus the Lender's share of that portion of the yield which exceeds the
stated net yield, as provided under the commitment contract.

(Refer to appropriate sections of our Guides for more detailed information regarding the

ft
computation of the Lender's servicingcompensation.)

If at the end of the 90-day period following our notice, the Lender has not arranged to sell
and transfer the servicing of the affected mortgages to another lender acceptable to us and
given us the required notice, the provisions of this Contract covering the servicingof the
mortgages will automatically terminate on the fifteenth day following the end of the 90-
day period, and we will transfer the servicing to a lender of our choice. In such a case, we
will pay the Lender, for each mortgage on which servicing is terminated, a termination
ra
fee computed as provided under a. above. We will deduct from the termination fee paid to
the Lender a transfer fee that is the greater of $500.00 or 1/100 of 1% of the aggregate
unpaid principal balance of all of the affected mortgages on which servicing is
transferred.

c. General Criteria for Termination Fees. Notwithstanding anything to the contrary in

this Contract, we may change the amount of termination fee that we pay, or other
provisions of this Section IX C 1, from time to time, by changing the appropriate
provisions of our Guides. However, such a change will not affect mortgages that we have
purchased or that we have committed to purchase before the date of the change.
D
Our written tender of the termination fee to the Lender, or its successors or assigns, is
complete compensation for each mortgage serviced by the Lender on which servicing is
terminated. Any sums we owe the Lender for servicing prior to the termination date are
not included in the termination fee. When we pay a termination fee, the Lender will not
be entitled to the proceeds for any sale of the servicing involved.

2. Termination with Cause. We may terminate if the Lender breaches any agreement in
this Contract, including, without limitation, any of those breaches listed in Section VIII
A. This may be done by giving the Lender notice of termination. Notwithstanding
anything in this Contract to the contrary, if we terminate for breach, we may make it
effective immediately, and we will not pay the Lender a termination fee or proceeds
from any sale of the servicing involved. Furthermore, we will not pay a servicing
termination fee if a mortgage is repurchased by the Lender because a warranty is untrue.

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 Continuance of
Responsibilities or Liabilities

Contract
D. If the Lender breaches any agreement in this Contract, including, without limitation, any
Termination breach listed in Section VIII A, we may terminate the provisions of this Contract
by Us of
covering the servicing of any or all mortgages in which we own a participation interest.
Servicing
Arrangements This may be done by giving notice of termination. Such termination maybe effective
for Mortgages immediately, and we will not pay the Lender a termination fee.
in Which We
Have a 1. Transfer of Lender's Powers. Upon termination, we will automatically succeed to
Participation all the Lender's rights in and responsibilities for servicing of the affected mortgages. We
Interest
will also have the option to exercise all the Lender's powers relating to these mortgages,
and to designate any person or firm to exercise those powers. However, exercise of the
Lender's powers must be consistent with the Lender's and our respective participation
interests.

The mortgage instruments for these mortgages and all related mortgage records will be
delivered to us or a party we designate. The Lender will also deliver necessary

ft
assignments, transfers and documents of authority.

2. Transfer of Servicing. If we terminate the Lender's servicing of any such

mortgages, we are authorized to transfer the servicing of the mortgages to new
servicers and pay the new servicers a fee. The fee will apply to the total outstanding
principal balance on each mortgage, including our participation interest in each
mortgage as well as the participation interest of the Lender and of any other owner.
ra 3. Liability for Fees. The Lender and all additional owners of a participation interest
will be liable for their respective shares of the servicing fee we pay. They will also be
liable for their respective shares of advances that, in our sole discretion, are required.
Advances may be required for insurance, taxes, maintenance, improvements or other
necessary outlays.

If the Lender or other owners fail to promptly provide their share of funds for advances,
or for any other necessary expenses, during any period, we may supply the funds. The
fact that we do this does not release the Lender or other owners from their liability. We
may deduct any amount we advance the next time we owe money to the Lender or
other owners.
D
E. The exercise of a right of termination under any provision of this Contract will not
Rights of impair any further right of termination under another provision.
Termination
Not Impaired

X Continuance of Responsibilities or Liabilities

Responsibilities or liabilities of the Lender that exist before the termination of this
Contract will continue to exist after termination unless we expressly release the Lender
from any of them in writing. This is true whether this Contract was terminated by the
Lender or by us.

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 Participation Interests -
Special Provisions

Contract
XI Participation Interests – SpecialProvisions
This section contains special provisions that govern participation interests.
A. Listed below are the consequences of the sale of a participation interest.
After the
Sale of a
Participation 1. Transfer of Undivided Interest. When the Lender sells and conveys to us a
Interest participation interest in one or more mortgages, this is a transfer of an undivided interest in
each mortgage.

The sale and conveyance of the participation interest will have the same force and effect as:

• a separate assignment of each mortgage executed and delivered to us by the Lender;

and

ft
• a promissory note separately endorsed or transferred to us.

2. Assurance of our Legal Rights. If federal or state laws or regulations now, or later,
provide that the purchase of a participation interest is an extension of credit, the Lender will
take whatever additional steps we may require to assure our legal rights as a purchaser of
participation interests.
ra Such steps may include:

• placing legends on promissory notes;

• endorsing promissory notes in blank and delivering them to us; and

• executing mortgage assignments in a form acceptable to us and delivering them to us.

3. No Partnership or Joint Venture. Neither the simultaneous ownership of interests in

one or more mortgages nor any provision of this Contract will mean that a partnership or
D
joint venture exists between the Lender and us.

B. The Lender will make the following payments to us, according to our Guides, for
Payments to Us mortgages in which both the Lender and we own an interest:

1. Ratable Sharing of Principal. The Lender will ratably share with us all mortgage
principal payments.

2. Participation Share of Interest. The Lender will pay us our participation share of
interest payments up to:

• an amount sufficient for us to earn our yield on each mortgage; plus

• any amounts due us pursuant to this section

C.
Enforcement of As required by our Guides, the Lender will enforce the due-on-sale provisions and call
Due-On-Sale and options in the mortgages it services for us.
Call Options
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 Participation Interests -
Special Provisions

Contract
D. The Lender will have the option to repurchase our interest in a mortgage if:
Repurchase
Option • the Lender is required by our Guides to enforce a due-on-sale clause of a mortgage in
which the Lender and we own an interest; or

• we elect to exercise a call option provision of such a mortgage.

If the Lender wishes to repurchase our interest in such a mortgage, it may do so by:

• giving us notice of its intention to repurchase; and

• paying us an amount calculated according to the provisions of our Guides.

E.
Note Rate Increase, The note rate of a mortgage is stated in the participation certificate or attached loan
Foreclosure schedule.

ft
Expenses and
Prepayment Charges 1. Note Rate Increase. If, for any reason, there is an increase of the note rate of a
mortgage in which we hold a participation interest, the Lender will pay us, according to
our Guides, a percentage of the increase equal to the percentage represented by our
participation interest in the mortgage. This amount will be in addition to our yield on the
mortgage.
ra 2. Foreclosure Expenses. The Lender will ratably share with us any reasonable
foreclosure and related expenses in connection with a mortgage in which we own
a participation interest.

3. Prepayment Charges. The Lender will ratably share with us any prepayment
charges collected for mortgages in which we own a participation interest.

F. The Lender will not make any optional or voluntary advances to the borrower under
Advances an open-end mortgage in which we own a participation interest.

G. Participation interests may be assigned either by the Lender or us, as follows:

D
Assignment
or Sale of 1. By Us. Without the Lender’s consent we may assign:
Participation
Interests • our participation interest in any mortgage; and
• all rights in the mortgage we own under this Contract or under any other instruments.

2. By Lender to Transferee. The Lender may sell or transfer all or part of any
participation interest that it owns in any mortgage under this Contract unless expressly
prohibited from doing so by our Guides.

This sale or transfer of participation interests is subject to the conditions below, as well as
to our Guides as they are in effect on the date of our commitment to purchase.

For every sale or transfer, the Lender must obtain and furnish us with a properly executed
instrument by which the transferee:

• agrees to be bound by the terms of this Contract; and

• acknowledges our rights and interests under this Contract with respect to the
mortgage.
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 Notice

Contract
Our rights and interests that must be acknowledged include, without limitation, the right
to assess a servicing fee against the owner of each participation interest if we:

• assume the servicing of the mortgage; or

• transfer the servicing to a new servicer under Section IX D of this Contract.

The sale or transfer of a participation interest does not relieve the Lender of any
responsibility or liability under this Contract. For example, the Lender continues to be
liable for any fees and other amounts charged under Section IX D 3 of this Contract
against the participation interest that is transferred. We may collect these amounts from
the Lender or from the transferee.

3. By Lender to Bank. The Lender may be a member of, or be required to maintain

reserves with, a Federal Home Loan Bank or Federal Reserve Bank. If so, and the Lender
transfers its participation interests in any mortgage under this Contract to such a bank to

ft
secure one or more advances, then the bank will not be deemed to have assumed the
mortgage warranties found in Section IV A.

Also, such a transfer to the bank will not relieve the Lender of any responsibility or
liability under this Contract.

XII Notice
ra Whenever notice is required under this Contract, it must be given as described in this
section.

A. Any notice of termination given under this Contract must be:

Notice of
Termination • in writing;

• delivered in person or sent by registered or certified mail, with a return receipt

requested; and

• addressed to the party to which notice is being given.

D
Delivery and notice is given when we or the Lender mail or register the notice with any
post office.

B. Our Guides, including any amendments or supplements, and any other notices, demands
Our Guides or requests under this Contract or applicable law will be:
and Other
Documents
• in writing;
• delivered in person or mailed from any post office, substation, or letter box;
• enclosed in a postage prepaid envelope; and
• addressed to the Lender.

C. For purposes of notice, the following rules apply:

Address
1. Our address is the address of our regional office given in this Contract.

2. The Lender’s address is that of its principal place of business given in this Contract.

Any change of address must be given in writing.

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 Prior Agreements

Contract
XIII Prior Agreements

This Contract supersedes any prior agreements between the Lender and us that govern
selling or servicing of mortgages and participation interests to which this Contract
relates.

However, this section will not release the Lender from any responsibility or liability
under any prior agreements and understandings.

XIV Severability and Enforcement

If any provision of this Contract conflicts with applicable law, the other provisions of this
Contract that can be carried out without the conflicting provision will not be affected.

ft
All rights and remedies under this Contract 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 our
benefit and that of our successors and assigns

XV Captions
ra This Contract’s captions and headings are for convenience only and are not part of this
Contract.

XVI Scope of Contract

The following provisions apply, whether or not they are contrary to other provisions in
this Contract.

A. We reserve the right to restrict the Lender's sale or servicing of mortgages orof
Restriction participation interests to the type that the Lender and its employees have the
D
of Lender experience and ability to originate, sell or service.
B. This Contract covers only the sale of mortgages and participation interests and the
Types of
Mortgages servicing of mortgages, within the following categories:
Covered

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 Signatures and Date

Contract
XVII Signatures and Date
By executing this Contract, the Lender and Fannie Mae agree to all of this Contract's terms
and provisions. Both the Lender and Fannie Mae have signed and dated this Contract below.

This Contract takes effect on the date of execution by Fannie Mae.

Lender:

(Address)

By:

ft
ra (Authorized Signature)

(Type Name and Title)

Date:

Federal National Mortgage Association (“FannieMae”)

(Address)
D
By:
(Authorized Signature)

(Type Name and Title)

Date:

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