Exhibit 10.8

AMENDMENT NO. 3

TO SECOND AMENDED AND RESTATED

FLOW SERVICING AGREEMENT

Amendment No. 3 to Second Amended and Restated Flow Servicing Agreement, dated
as of December 11, 2014 (the “Amendment”), by and between PennyMac Loan
Services, LLC, a Delaware limited liability company (the “Servicer”), and
PennyMac Operating Partnership, L.P., Delaware limited partnership (the
“Company”).

RECITALS

WHEREAS, the Servicer and the Company are parties to that certain Second Amended
and Restated Flow Servicing Agreement, dated as of March 1, 2013 (the “Existing
Servicing Agreement” and, as amended by this Amendment, the “Servicing
Agreement”). Capitalized terms used but not otherwise defined herein shall have
the meanings given to them in the Existing Servicing Agreement.

WHEREAS, the Servicer and the Company have agreed, subject to the terms and
conditions of this Amendment, that the Existing Servicing Agreement be amended
to reflect certain agreed upon revisions to the terms of the Existing Servicing
Agreement.

NOW, THEREFORE, in consideration of the mutual premises and mutual obligations
set forth herein, the Servicer and the Company hereby agree that the Existing
Servicing Agreement is hereby amended as follows:

SECTION 1. Definitions. Section 1.01 of the Existing Servicing Agreement is
hereby amended by adding the following definitions in the proper alphabetical
order:

Commission: The Securities and Exchange Commission and any successor thereto.

Regulation AB: Subpart 22.1100-Asset Backed Securities (Regulation AB), 17
C.F.R. §§ 229.1100-22.1123, as amended, and subject to such clarification and
interpretation as have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg.
1,506, 1,631 (Jan. 7, 2005)) or by the staff of the Commission, or as may be
provided by the Commission or its staff from time to time as of an applicable
date of determination.

Servicing Criteria – The “servicing criteria” set forth in Item 1122(d) of
Regulation AB, as set forth on Exhibit 11 hereto.

 

1

--------------------------------------------------------------------------------

SECTION 2. Records, Information and Compliance Documents. Section 6.03 of the
Existing Servicing Agreement is hereby amended by deleting it in its entirety
and replacing it with the following language:

Section 6.03 Annual Independent Public Accountants’ Servicing Report.

So long as any Mortgage Loans are being serviced hereunder, or were serviced
hereunder during the prior calendar year, the Servicer shall, at its own
expense, deliver to the Owner, on or before March 28th of each year (but in no
event later than the next to the last Business Day of such month), either (A) a
report of a registered public accounting firm stating that (i) it has obtained a
letter of representation regarding certain matters from the management of the
Servicer which includes an assertion that the Servicer has complied with certain
minimum residential mortgage loan servicing standards, identified in the Uniform
Single Attestation Program for Mortgage Bankers established by the Mortgage
Bankers Association of America, with respect to the servicing of residential
mortgage loans during the most recently completed fiscal year and (ii) on the
basis of an examination conducted by such firm in accordance with standards
established by the American Institute of Certified Public Accountants, such
representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate, or (B) both (i) an
assessment of compliance by the Servicer with the applicable Servicing Criteria
during the immediately preceding calendar year (in lieu of the annual statement
of compliance in Section 6.02 which shall not be required if Servicer provides
the assessment of compliance as set forth in this Section 6.03(B), and (ii) a
report by a registered public accounting firm that attests to and reports on the
assessment of compliance provided in the clause (B)(i) above, which attestation
shall be in accordance with Rule 1-02(a)(3) and Rule 2-02(g) of Regulation S-X
under the Securities Act and the Securities Exchange Act. In rendering any
report to be provided hereunder such firm may rely, as to matters relating to
the direct servicing of residential mortgage loans by Subservicers, upon
comparable reports of firms of independent certified public accountants rendered
on the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Subservicers.

SECTION 3. Exhibits. A new Exhibit 11 shall be added to the Existing Servicing
Agreement in the form attached hereto as Exhibit A.

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

4.1 Delivered Documents. On or prior to 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 duly authorized officers of the
Servicer and the Company; and

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

 

2

--------------------------------------------------------------------------------

4.2 Representations and Warranties. On or prior to the Amendment Effective Date,
each party shall be in compliance in all material respects with all the terms
and provisions set forth in the Existing Servicing Agreement on its part to be
observed or performed.

SECTION 5. Limited Effect. Except as expressly amended and modified by this
Amendment, the Existing Servicing Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.

SECTION 6. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

SECTION 7. Counterparts. This Amendment may be executed in one or more
counterparts and by different parties hereto on separate counterparts, each of
which, when so executed, shall constitute one and the same agreement.

SECTION 8. Conflicts. The parties hereto agree that in the event there is any
conflict between the terms of this Amendment, and the terms of the Existing
Servicing Agreement, the provisions of this Amendment shall control.

[SIGNATURE PAGE FOLLOWS]

 

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year first
above written.

 

The Servicer:     PENNYMAC LOAN SERVICES, LLC     By:  

/s/ Anne D. McCallion

      Name:  Anne D. McCallion       Title:    Chief Financial Officer The
Company:     PENNYMAC OPERATING PARTNERSHIP, L.P.     By:   PennyMac GP OP,
Inc.,           its General Partner     By:  

/s/ Andrew S. Chang

      Name:  Andrew S. Chang       Title:    Chief Business Development Officer

 

4

--------------------------------------------------------------------------------

Exhibit A

--------------------------------------------------------------------------------

EXHIBIT 11

SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE

The assessment of compliance to be delivered under the Agreement shall address,
at a minimum, the criteria identified as below as “Applicable Servicing
Criteria,” as identified by a mark in the column titled “Applicable Servicing
Criteria.”

 

Servicing Criteria

   Applicable
Servicing Criteria

Reference

  

Criteria

          General Servicing Considerations      1122(d)(1)(i)    Policies and
procedures are instituted to monitor any performance or other triggers and
events of default in accordance with the transaction agreements.    X
1122(d)(1)(ii)    If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the third party’s
performance and compliance with such servicing activities.    X 1122(d)(1)(iii)
   Any requirements in the transaction agreements to maintain a back-up servicer
for the mortgage loans are maintained.    1122(d)(1)(iv)    A fidelity bond and
errors and omissions policy is in effect on the party participating in the
servicing function throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the transaction
agreements.    X    Cash Collection and Administration    1122(d)(2)(i)   
Payments on mortgage loans are deposited into the appropriate custodial bank
accounts and related bank clearing accounts no more than two business days
following receipt, or such other number of days specified in the transaction
agreements.    X 1122(d)(2)(ii)    Disbursements made via wire transfer on
behalf of an obligor or to an investor are made only by authorized personnel.   
X 1122(d)(2)(iii)    Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the transaction
agreements.    X 1122(d)(2)(iv)    The related accounts for the transaction,
such as cash reserve accounts or accounts established as a form of over
collateralization, are separately maintained (e.g., with respect to commingling
of cash) as set forth in the transaction agreements.    X 1122(d)(2)(v)    Each
custodial account is maintained at a federally insured depository institution as
set forth in the transaction agreements. For purposes of this criterion,
“federally insured depository institution” with respect to a foreign financial
institution means a foreign financial institution that meets the requirements of
Rule 13k-1(b)(1) of the Securities Exchange Act.    X 1122(d)(2)(vi)    Unissued
checks are safeguarded so as to prevent unauthorized access.    X
1122(d)(2)(vii)    Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank statement cutoff
date, or such other number of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.    X    Investor Remittances and Reporting    1122(d)(3)(i)   
Reports to investors, including those to be filed with the Commission, are
maintained in accordance with the transaction agreements and applicable
Commission requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors’ or the
trustee’s records as to the total unpaid principal balance and number of
mortgage loans serviced by the Regulation AB Servicer.    X

--------------------------------------------------------------------------------

Servicing Criteria

   Applicable
Servicing Criteria

Reference

  

Criteria

     1122(d)(3)(ii)    Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other terms set forth in
the transaction agreements.    X 1122(d)(3)(iii)    Disbursements made to an
investor are posted within two business days to the Regulation AB Servicer’s
investor records, or such other number of days specified in the transaction
agreements.    X 1122(d)(3)(iv)    Amounts remitted to investors per the
investor reports agree with cancelled checks, or other form of payment, or
custodial bank statements.    X    Pool Asset Administration    1122(d)(4)(i)   
Collateral or security on mortgage loans is maintained as required by the
transaction agreements or related mortgage loan documents.    X 1122(d)(4)(ii)
   Mortgage loan and related documents are safeguarded as required by the
transaction agreements    X 1122(d)(4)(iii)    Any additions, removals or
substitutions to the asset pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction agreements.    X
1122(d)(4)(iv)    Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to the Regulation
AB Servicer’s obligor records maintained no more than two business days after
receipt, or such other number of days specified in the transaction agreements,
and allocated to principal, interest or other items (e.g., escrow) in accordance
with the related mortgage loan documents.    X 1122(d)(4)(v)    The Regulation
AB Servicer’s records regarding the mortgage loans agree with the Regulation AB
Servicer’s records with respect to an obligor’s unpaid principal balance.    X
1122(d)(4)(vi)    Changes with respect to the terms or status of an obligor’s
mortgage loans (e.g., loan modifications or re-agings) are made, reviewed and
approved by authorized personnel in accordance with the transaction agreements
and related pool asset documents.    X 1122(d)(4)(vii)    Loss mitigation or
recovery actions (e.g., forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as applicable) are initiated,
conducted and concluded in accordance with the timeframes or other requirements
established by the transaction agreements.    X 1122(d)(4)(viii)    Records
documenting collection efforts are maintained during the period a mortgage loan
is delinquent in accordance with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity’s activities in monitoring
delinquent mortgage loans including, for example, phone calls, letters and
payment rescheduling plans in cases where delinquency is deemed temporary (e.g.,
illness or unemployment).    X 1122(d)(4)(ix)    Adjustments to interest rates
or rates of return for mortgage loans with variable rates are computed based on
the related mortgage loan documents.    X 1122(d)(4)(x)    Regarding any funds
held in trust for an obligor (such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor’s mortgage loan documents, on at least
an annual basis, or such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in accordance with
applicable mortgage loan documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of full repayment of the related
mortgage loans, or such other number of days specified in the transaction
agreements.    X 1122(d)(4)(xi)    Payments made on behalf of an obligor (such
as tax or insurance payments) are made on or before the related penalty or
expiration dates, as indicated on the appropriate bills or notices for such
payments, provided that such support has been received by the servicer at least
30 calendar days prior to these dates, or such other number of days specified in
the transaction agreements.    X 1122(d)(4)(xii)    Any late payment penalties
in connection with any payment to be made on behalf of an obligor are paid from
the servicer’s funds and not charged to the obligor, unless the late payment was
due to the obligor’s error or omission.    X 1122(d)(4)(xiii)    Disbursements
made on behalf of an obligor are posted within two business days to the
obligor’s records maintained by the servicer, or such other number of days
specified in the transaction agreements.    X 1122(d)(4)(xiv)    Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded in accordance
with the transaction agreements.    X 1122(d)(4)(xv)    Any external enhancement
or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the transaction agreements.