Exhibit 10.9

 

AMENDMENT NO. 1

TO AMENDED AND RESTATED COMMERCIAL MORTGAGE SERVICING OVERSIGHT AGREEMENT

 

This Amendment No. 1 to the Amended and Restated Commercial Mortgage Servicing
Oversight Agreement dated and effective as of June 1, 2016 (this “Amendment”) is
made as of September 27, 2017 by and among PENNYMAC CORP., as Owner, PENNYMAC
HOLDINGS, LLC, as Owner, and PENNYMAC LOAN SERVICES, LLC, as PLS or Oversight
Servicer.

RECITALS

WHEREAS, the Owner and the Oversight Servicer previously entered into an Amended
and Restated Commercial Mortgage Servicing Oversight Agreement, dated as of June
1, 2016 (the “Existing Oversight Agreement”);

 

WHEREAS, Owner is entering into that certain Mortgage Selling and Servicing
Contract, Addendum to Mortgage Selling And Servicing Contract, Reserve
Agreement, and Master Loss Sharing Agreement, each effective as of August 1,
2017, (collectively, together with the Fannie Mae Guide, the “Lender Contract”)
with Fannie Mae, a corporation duly organized under the Federal National
Mortgage Association Charter Act, as amended, 12 U.S.C. §1716 et seq., and duly
organized and existing under the laws of the United States of America (“Fannie
Mae”);

 

WHEREAS, Owner has previously entered a Servicing Agreement dated July 13, 2015
with Midland Loan Services, a Division of PNC Bank, National Association
(“Midland”) and PLS, under which Owner engaged Midland to act as the Master
Servicer of Mortgage Loans that the Owner acquires from time to time and as the
Special Servicer with respect to certain Mortgage Loans, and engaged PLS to act
as Special Servicer for certain other Mortgage Loans;

 

WHEREAS, Owner has entered a Subservicing Agreement dated July 31, 2017 with
Midland, under which Owner engaged Midland to act as the Subservicer of Fannie
Mortgage Loans (as defined below) that the Owner acquires from time to time;

 

WHEREAS, Owner has requested that PLS oversee the servicing activities of
Midland on behalf of Owner with respect to Midland subservicing the Fannie
Mortgage Loans; and,

 

WHEREAS, the parties desire to provide the terms and conditions of PLS’
oversight of the subservicing performed by Midland with respect to Fannie
Mortgage Loans. Capitalized terms used but not otherwise defined herein shall
have the meanings given to them in the Existing Oversight Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree that the Existing Oversight Agreement
be amended to reflect certain agreed upon revisions as follows:

SECTION 1.Definitions.  Section 1.01 of the Existing Oversight Agreement is
hereby amended as follows:

 

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1.1New Definitions: Section 1.01 of the Existing Oversight Agreement is hereby
amended by adding the following definitions in the appropriate alphabetical
order:

“Collateral Account” means the account maintained with U.S. Bank National
Association in accordance with the Reserve Agreement, the Fannie Mae Guide, and
the Lender Contract.

“Fannie Mae”: The Federal National Mortgage Association or any successor
thereto.

“Fannie Mae Guide” means the Fannie Mae Multifamily Selling and Servicing Guide,
including any exhibits, appendices or other referenced forms, as such Guide is
amended, modified, supplemented, restated or superseded from time to time. The
Fannie Mae Multifamily Selling and Servicing Guide currently contains only Part
I: the Glossary, Part II: Lender Contractual Relationship, and Part III, New
Underwriting, consisting of three (3) Subparts: Part IIIA: Base Underwriting
Requirements, Part IIIB: Underwriting for Special Asset Classes, and Part IIIC:
Underwriting for Special Product Features or Executions, Part IV: Mortgage Loan
Commitment, Delivery, and Purchase Procedures, and Part V: Servicing and Asset
Management. Additional Parts will be published by Fannie Mae from time to time.
For the purposes of this First Amendment, provisions in the Guide applicable to
DUS loans shall apply to the Fannie Mortgage Loans, unless otherwise provided
herein.

“Fannie Mortgage Loan”: means a “Small Mortgage Loan” as defined in the Fannie
Mae Guide or a Mortgage Loan providing financing for the acquisition or
refinance of conventional multifamily housing on a Mortgaged Property with five
to fifty units and eligible for delivery to Fannie Mae under the terms of the
Fannie Mae Guide and the Lender Contract.

“Lender Contract” has the meaning specified in the Fannie Mae Guide, including
those agreements referred to in Recital B of this Agreement.

1.2Replacement Definitions.  Section 1.01 of the Existing Oversight Agreement is
hereby amended by replacing each of the following definitions in its entirety as
follows:

“Accepted Servicing Practices”: Servicing Mortgage Loans (a) in accordance with
(i) applicable federal, state, and local laws, regulations, and ordinances, and
investor requirements including, with respect to Fannie Mortgage Loans, the
Fannie Mae Guide and with respect to Freddie Mac SBL Loans, the Guide, (ii) the
terms and provisions of the Mortgage Loan Documents, (iii) the express terms
hereof, and (iv) the customary and usual standards of practice of prudent
institutional commercial mortgage loan servicers, and (b) to the extent
consistent with the foregoing requirements, in the same manner in which the
Master Servicer or the applicable Special Servicer services commercial mortgage
loans for itself, its Affiliates, or other third party portfolios of mortgage
loans similar to the Mortgage Loans.

“Midland Servicing Agreement” means collectively (i) the Servicing Agreement
dated July 13, 2015 among Owner, Midland and PLS, and (ii) the Subservicing
Agreement dated July 31, 2017 between Midland and Owners, each as amended,
restated or modified from time to time.

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“Mortgage Loan”: Each of the MSS Mortgage Loans, PMSS Mortgage Loans, and Fannie
Mortgage Loans identified on any Mortgage Loan Schedule under the Midland
Servicing Agreement.

 

SECTION 2.Additional Fannie Mae Services.  A new Section 3.01(cc) of the
Existing Oversight Agreement is added in the appropriate alphabetical order:

 

(cc) to the extent not addressed in 3.01(z), performing any other post-purchase
reporting tasks required by the Fannie Mae Guide, preparing and executing
remittance and reporting respecting Fannie Mae Loan repurchases in compliance
with the Fannie Mae Guide, preparing and executing remittances due for Fannie
Mae Loan Defaulted Mortgages, assisting in maintaining the appropriate balance
in the Collateral Account in compliance with the Delegated Underwriting and
Servicing Reserve Agreement, the Fannie Mae Guide, and the Lender Contract, and
other mutually agreed services for the Fannie Mortgage Loans, all of the above
subject to Oversight Servicer’s completion of the training required by Fannie
Mae and in coordination with Master Servicer.

SECTION 3.Authority of the Oversight Servicer.  A new Section 3.04 is added to
the Existing Oversight Agreement as follows:

 

Section 3.04. Authority of the Oversight Servicer.  With respect to the Fannie
Mortgage Loans, the Oversight Servicer expressly acknowledges that:

(a)Fannie Mae owns each Fannie Mortgage Loan that is the subject of this
Agreement;

(b)Fannie Mae has the right to terminate the Owner’s right to service any Fannie
Mortgage Loan at any time and to remove from the Owner, Midland and Oversight
Servicer the files and records related to that Mortgage Loan;

(c)all rights of Oversight Servicer to any compensation, including any portion
of the Servicing Fee from each Mortgage Loan, are unsecured and totally
subordinate to the rights of Fannie Mae at all times, and are immediately
terminated without notice upon the termination of the Owner’s right to service
the Mortgage Loan;

(d)this Agreement creates no right of Oversight Servicer to originate, sell, or
service Mortgage Loans on behalf of Fannie Mae, and Oversight Servicer is
prohibited from indicating implicitly or explicitly that Oversight Servicer is
authorized to perform services for Fannie Mae;

(e)this Agreement creates no right of the Oversight Servicer to use Fannie Mae’s
name, logo, or other intellectual property restricted under Section 514 of the
Fannie Mae Guide;

(f)in case of inconsistencies between this Agreement and the Fannie Mae Guide or
Lender Contract, the Fannie Mae Guide and Lender Contract must control;

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(g)Fannie Mae is a third party beneficiary of this Agreement;

(h)Fannie Mae shall have the right to enforce the contract against Oversight
Servicer directly; provided however, that, under most circumstances, Fannie Mae
will not interact directly with Oversight Servicer unless Fannie Mae requests
otherwise in writing;

(i)Fannie Mae expects to request direct contact with Oversight Servicer for
routine questions regarding submissions, as well as to provide a forum for
Oversight Servicer to resolve any ongoing questions it has of Fannie Mae; and,

(j)Fannie Mae is not required to pay any compensation to Oversight Servicer
under this Agreement or otherwise.

SECTION 4.Conditions Precedent.  This Amendment shall become effective as of the
date hereof (the “Amendment Effective Date”), subject to the satisfaction of the
following conditions precedent:

4.1Delivered Documents.  On the Amendment Effective Date, each party shall have
received the following documents, each of which shall be satisfactory to such
party in form and substance:

(a)this Amendment, executed and delivered by the duly authorized officers of the
parties hereto; and

(b)such other documents as such party or counsel to such party may reasonably
request.

SECTION 5.Representations and Warranties.  Each party represents that it is in
compliance in all material respects with all the terms and provisions set forth
in the Existing Repurchase Agreement on its part to be observed or performed.

SECTION 6.Limited Effect.  Except as expressly amended and modified by this
Amendment, the Existing Repurchase Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.

SECTION 7.Severability. Each provision and agreement herein shall be treated as
separate and independent from any other provision or agreement herein and shall
be enforceable notwithstanding the unenforceability of any such other provision
or agreement.

SECTION 8.Counterparts.  This Amendment may be executed by each of the parties
hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of a signature page of this
Amendment in Portable Document Format (PDF) or by facsimile shall be effective
as delivery of a manually executed original counterpart of this Amendment.

SECTION 9.GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE

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STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF
OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and
delivered by their duly authorized officers or trustees as of the date first
written above.

PENNYMAC HOLDINGS, LLC, as an Owner

 

By:

 

/s/ Andrew S. Chang

 

 

Name:

Andrew S. Chang

 

 

Title:

Senior Managing Director and

 

 

 

Chief Financial Officer

PENNYMAC CORP., as an Owner

 

By:

 

/s/ Andrew S. Chang

 

 

Name:

Andrew S. Chang

 

 

Title:

Senior Managing Director and

 

 

 

Chief Financial Officer

 

PENNYMAC LOAN SERVICES, LLC, as Oversight Servicer

 

By:

 

/s/ Andrew S. Chang

 

 

Name:

Andrew S. Chang

 

 

Title:

Senior Managing Director and

 

 

 

Chief Financial Officer