We’ve made an important change to our Broker and Emerging Banker Agreements as it relates to Forbearance. See below to read the full updates to both our Mortgage Loan Purchase Agreement and Broker Agreement.
We will begin enforcement of the fee recapture provision beginning with loans funded on May 11, 2020.
Broker Agreement – MEMO on Forbearance
We would like to remind you that the Broker Agreement (“Agreement”) you signed contains provides in Section 1, that REMN Wholesale (“REMN”) shall determine its eligibility criteria and submission procedures based on factors such as type of loans, loan limits, loan-to-value ratios, etc. These eligibility criteria and submission procedures are subject to change from time to time.
It is REMN’s position that a Loan in which the Borrower requests a forbearance within fifteen (15) days of the funding date is an ineligible Loan. In the event that a price above par (lender paid compensation) is paid by REMN to the Company on a Loan and on such Loan the Borrower requests a forbearance within fifteen (15) days of the funding date, REMN may demand, in its discretion, and Company shall, within ten (10) days of any such demand by REMN, refund to REMN the entire lender paid compensation paid by REMN to the Company.
Emerging Banker – MEMO on Forbearance
We would like to remind you that the Mortgage Loan Purchase Agreement (“MLPA”) you signed contains Representations, Warranties and Covenants of Individual Mortgage Loans (Sec 3.3). Within that section is paragraph (hh) listed below for your convenience. It is REMN Wholesale’s (“REMN” or “Purchaser”) position that a borrower forbearance request within 15 days following the Purchase Date by REMN impacts the loan marketability. Such a request will trigger a Repurchase as set forth in Section 4.1 of the MLPA.
In such circumstance, REMN is providing an option to the Seller as an alternative to loan repurchase. The Seller shall have the option to refund to Purchaser the premium paid in excess of par received from Purchaser with respect to that Mortgage Loan. Note that the refund will be calculated by taking the premium paid in excess of par, less any lender credit applied toward borrower closing costs.
Marketability of Mortgage Loan.
There are no circumstances or conditions with respect to the Mortgage, the Mortgaged Property, the Mortgagor, or the Mortgagor’s credit standing that can be reasonably expected to cause Agency investors or private institutional investors to regard such Mortgage Loan as an unacceptable investment, cause such Mortgage Loan to become Delinquent, or adversely affect the value or marketability of such Mortgage Loan, as determined by Purchaser.
If you have any questions regarding this memo, please contact your Account Executive.
