PENNYMAC ROLL-UP FACILITY EXECUTION

Exhibit 10.42

 

AMENDMENT NO. 5

TO SECOND AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 5 to Second Amended and Restated Master Repurchase Agreement,
dated as of February 11, 2019 (this “Amendment”), among Credit Suisse First
Boston Mortgage Capital LLC (the “Administrative Agent”), Credit Suisse AG, a
company incorporated in Switzerland, acting through its Cayman Islands Branch (a
“Committed Buyer” and a “Buyer”), Alpine Securitization LTD (a “Buyer”),
PennyMac Holdings, LLC (“PennyMac Holdings”), PennyMac Corp. (“PMC”), PennyMac
Operating Partnership, L.P., in their capacity as sellers (“POP”, together with
PennyMac Holdings and PMC, each a “Seller” and, collectively, the “Sellers”),
PMC REO Financing Trust, an asset subsidiary (the “REO Subsidiary” and together
with the Sellers, the “Seller Parties”) and PennyMac Mortgage Investment Trust
(“PMIT”) and POP, in their capacity as guarantors (each, a “Guarantor” and
collectively, the “Guarantors”).

RECITALS

 

The Administrative Agent, the Buyers, the Seller Parties and the Guarantors are
parties to that certain Second Amended and Restated Master Repurchase Agreement,
dated as of April 28, 2017 (as amended by Amendment No. 1, dated as of June 1,
2017, Amendment No. 2, dated as of December 20, 2017, Amendment No. 3, dated as
of February 1, 2018, and Amendment No. 4, dated as of April 27, 2018, the
“Existing Repurchase Agreement”; and as further amended by this Amendment, the
“Repurchase Agreement”).  The Guarantors are parties to that certain Second
Amended and Restated Guaranty, dated as of April 28, 2017 (as amended, restated,
supplemented or otherwise modified from time to time, the “Guaranty”), by the
Guarantors in favor of Administrative Agent.  Capitalized terms used but not
otherwise defined herein shall have the meanings given to them in the Existing
Repurchase Agreement and Guaranty, as applicable.

The Administrative Agent, the Buyers, the Seller Parties and the Guarantors have
agreed, subject to the terms and conditions of this Amendment, that the Existing
Repurchase Agreement be amended to reflect certain agreed upon revisions to the
terms of the Existing Repurchase Agreement.  As a condition precedent to
amending the Existing Repurchase Agreement, the Administrative Agent has
required the Guarantors to ratify and affirm the Guaranty on the date hereof.

 

Accordingly, the Administrative Agent, the Buyers, the Seller Parties and the
Guarantors hereby agree, in consideration of the mutual promises and mutual
obligations set forth herein, that the Existing Repurchase Agreement is hereby
amended as follows:

SECTION 1.Definitions.  Section 2 of the Existing Repurchase Agreement is hereby
amended by:

1.1adding the following definitions in their proper alphabetical order:

“Agency-Required eNote Legend” means the legend or paragraph required by Fannie
Mae or Freddie Mac, as applicable, to be set forth in the text of an eNote,
which includes the provisions set forth on Exhibit P to the Custodial Agreement,
as may be amended from time to time by Fannie Mae or Freddie Mac, as applicable.

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“Authoritative Copy” means, with respect to an eNote, the unique copy of such
eNote that is within the Control of the Controller.

“Control” means, with respect to an eNote, the “control” of such eNote within
the meaning of UETA and/or, as applicable, E-SIGN, which is established by
reference to the MERS eRegistry and any party designated therein as the
Controller.

“Control Failure” has the meaning assigned to such term in the Custodial
Agreement.

“Controller” means, with respect to an eNote, the party designated in the MERS
eRegistry as the “Controller”, and who in such capacity shall be deemed to be
“in control” or to be the “controller” of such eNote within the meaning of UETA
or E-SIGN, as applicable.

“Credit Limit” means, with respect to each HELOC, the maximum amount permitted
under the terms of the related Credit Line Agreement as identified in the
related Asset Schedule.

“Credit Line Agreement” means, with respect to each HELOC, the related home
equity line of credit agreement, account agreement and promissory note (if any)
executed by the related Mortgagor and any amendment or modification thereof.

“Delegatee” means, with respect to an eNote, the party designated in the MERS
eRegistry as the “Delegatee” or “Delegatee for Transfers”, who in such capacity
is authorized by the Controller to perform certain MERS eRegistry transactions
on behalf of the Controller such as Transfers of Control and Transfers of
Control and Location.

“Draw” means, with respect to each HELOC, an additional borrowing by the
Mortgagor in accordance with the related Credit Line Agreement.

“Electronic Agent” means MERSCORP Holdings, Inc., or its successor in interest
or assigns.

“Electronic Record” means, with respect to an eMortgage Loan, the related eNote
and all other documents comprising the Asset File electronically created and
that are stored in an electronic format, if any.

“Electronic Tracking Agreement” means one (1) or more Electronic Tracking
Agreements with respect to (x) the tracking of changes in the ownership,
mortgage servicers and servicing rights ownership of Purchased Mortgage Loans
held on the MERS System, and (y) the tracking of the Control of eNotes held on
the MERS eRegistry, each in a form acceptable to Administrative Agent, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

“eMortgage Loan” means a Mortgage Loan with respect to which there is an eNote
and as to which some or all of the other documents comprising the related Asset
File may be created electronically and not by traditional paper documentation
with a pen and ink signature.

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“eNote” means, with respect to any eMortgage Loan, the electronically created
and stored Mortgage Note that is a Transferable Record.

“eNote Delivery Requirement” has the meaning assigned to such term in Section
3(h) hereof.

“E-SIGN” means the Electronic Signatures in Global and National Commerce Act, 15
U.S.C. § 7001 et seq.

“eVault” means an electronic repository established and maintained by an eVault
Provider for delivery and storage of eNotes.

“eVault Provider” means Document Systems, Inc. d/b/a DocMagic, or its successor
in interest or assigns, or such other entity agreed upon by Sellers, Custodian
and Administrative Agent.

“Hash Value” means, with respect to an eNote, the unique, tamper-evident digital
signature of such eNote that is stored with MERS.

“HELOC” means a home equity revolving line of credit secured by a first or
second lien on the related Mortgaged Property.

“Location” means, with respect to an eNote, the location of such eNote which is
established by reference to the MERS eRegistry.

“MERS eDelivery” means the transmission system operated by the Electronic Agent
that is used to deliver eNotes, other Electronic Records and data from one MERS
eRegistry member to another using a system-to-system interface and conforming to
the standards of the MERS eRegistry.

“MERS eRegistry” means the electronic registry operated by the Electronic Agent
that acts as the legal system of record that identifies the Controller,
Delegatee and Location of the Authoritative Copy of registered eNotes.

“MERS System” means the mortgage electronic registry system operated by the
Electronic Agent that tracks changes in Mortgage ownership, mortgage servicers
and servicing rights ownership.

“Servicing Agent” means, with respect to an eNote, the field entitled,
“Servicing Agent” in the MERS eRegistry.

“Transfer of Control and Location” means, with respect to an eNote, a MERS
eRegistry transfer transaction used to request a change to the current
Controller and Location of such eNote.

“Transfer of Control” means, with respect to an eNote, a MERS eRegistry transfer
transaction used to request a change to the current Controller of such eNote.

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“Transfer of Location” means, with respect to an eNote, a MERS eRegistry
transfer transaction used to request a change to the current Location of such
eNote.

“Transferable Record” means an Electronic Record under E-SIGN and UETA that (i)
would be a note under the Uniform Commercial Code if the Electronic Record were
in writing, (ii) the issuer of the Electronic Record has expressly agreed is a
“transferable record”, and (iii) for purposes of E-SIGN, relates to a loan
secured by real property.

“UETA” means the Official Text of the Uniform Electronic Transactions Act as
approved by the National Conference of Commissioners on Uniform State Laws at
its Annual Conference on July 29, 1999, in the form adopted in the state where
the Mortgaged Property is located.

1.2deleting the definitions of “Custodial Agreement”, “Mortgage Loan”, “Mortgage
Note”, “Records”, “Second Lien” and “Underlying Electronic Tracking Agreement”
in their entirety and replacing them with the following:

“Custodial Agreement” means the third amended and restated custodial agreement,
dated as of February 11, 2019, among Seller Parties, Administrative Agent,
Buyers and Custodian, as the same may be amended, restated, supplemented or
otherwise modified from time to time.

“Mortgage Loan” means any Agency Mortgage Loan, Non-Agency QM Mortgage Loan,
Non-Agency Non-QM Mortgage Loan, Scratch and Dent Mortgage Loan, Pooled Mortgage
Loan, New Origination Mortgage Loan, Seasoned Mortgage Loan, HELOC or Second
Lien Mortgage Loan which, in each case, is a fixed or floating rate, one to four
family residential mortgage loan evidenced by a promissory note and secured by a
first lien mortgage or, with respect to Second Line Mortgage Loans, a second
lien mortgage.

“Mortgage Note” means the promissory note, Credit Line Agreement or other
evidence of the indebtedness of a Mortgagor secured by a Mortgage.

“Records” means all instruments, agreements and other books, records, and
reports and data generated by other media for the storage of information
maintained by Seller Parties, Servicer, Guarantors, Custodian, Underlying
Repurchase Counterparty, or any other person or entity with respect to a
Purchased Asset or Contributed Asset.  Records shall include the Mortgage Notes,
any Mortgages, any Credit Line Agreements, the Asset Files, the credit files
related to the Purchased Asset, and any other instruments necessary to document
or service a Purchased Mortgage Loan.  For Contributed Assets, Records shall
include the Asset Files and any other instruments necessary to document or
manage a Contributed Asset.

“Second Lien Mortgage Loan” means a Mortgage Loan or a home equity revolving
line of credit (“HELOC”) secured by a second lien on the related Mortgaged
Property.

“Underlying Electronic Tracking Agreement” means one (1) or more Electronic
Tracking Agreements with respect to (x) the tracking of changes in the
ownership, mortgage servicers and servicing rights ownership of Purchased
Mortgage Loans held on the MERS System, and (y) the tracking of the Control of
eNotes held on the MERS eRegistry, each in a form acceptable to Administrative
Agent.

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SECTION 2.Program; Initiation of Transactions.  Section 3 of the Existing
Repurchase Agreement is hereby amended by adding the following new subsection
(h) at the end thereof:

(h)eMortgage Loans.  With respect to any eMortgage Loan, Sellers shall deliver
to Custodian each of Administrative Agent’s and Sellers’ MERS Org IDs, and shall
cause (i) the Authoritative Copy of the related eNote to be delivered to the
eVault via a secure electronic file, (ii) the Controller status of the related
eNote to be transferred to Administrative Agent, (iii) the Location status of
the related eNote to be transferred to Custodian, (iv) the Delegatee status of
the related eNote to be transferred to Custodian, in each case using MERS
eDelivery and the MERS eRegistry and (v) the Servicing Agent status of the
related eNote to remain blank (collectively, the “eNote Delivery Requirements”).

SECTION 3.Covenants.  Section 14 of the Existing Repurchase Agreement is hereby
amended by adding the following new subsection (ll) at the end thereof:

(ll)HELOC Provisions.  With respect to each HELOC, if a Mortgagor requests an
increase in the related Credit Limit, the Seller, shall, in its sole discretion,
either accept or reject the Mortgagor’s request in accordance with Underwriting
Guidelines and notify the Administrative Agent in writing of Seller’s
decision.  If the request for a Credit Limit increase is accepted by the Seller,
the increase will be effected by the Seller through modification of the HELOC
with the Mortgagor.  Seller shall deliver to the Administrative Agent an updated
Asset Schedule reflecting the modification to the HELOC and shall deliver any
modified Mortgage Loan documents to the Custodian.  Notwithstanding anything to
the contrary herein, in no event shall Administrative Agent or Buyers have any
obligation to fund any Draws with respect to any HELOC, which obligations shall
be retained by the Seller.  Notwithstanding the foregoing, after a Seller funds
such Draws, the Seller may request the Administrative Agent to enter additional
Transactions involving the HELOCs, as applicable, to include the aggregate new
Draws in the Purchase Price of the related HELOCs.

SECTION 4.Reports.  Section 17 of the Existing Repurchase Agreement is hereby
amended by (i) deleting adding the “and” at the end of subsection (c)(12); (ii)
deleting the “.” at the end of subsection (c)(13) and replacing it with “; and”;
and (iii) adding the following new subsection (c)(14) at the end thereof:

(14)upon Sellers becoming aware of any Control Failure with respect to a
Purchased Mortgage Loan that is an eMortgage Loan.

SECTION 5.Representations and Warranties.  Schedule 1 to the Existing Repurchase
Agreement is hereby amended by:

5.1deleting paragraphs (c), (g), (i), (j), (k), (n), (r), (s), (x), (z), (aa),
(ff), (ll), (rr) and (hhh) to Part I in their entirety and replacing them with
the following, respectively:

(c)Original Terms Unmodified.  The terms of the Mortgage Note (and the
Proprietary Lease, the Assignment of Proprietary Lease and Stock Power with
respect to each Co-op Loan) and Mortgage have not been impaired, waived, altered
or modified in any respect, from the date of origination; except by a written
instrument which has been

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duly recorded or transmitted for recording, if necessary to protect the
interests of Buyers, and which has been delivered to the Custodian and the terms
of which are reflected in the Custodial Asset Schedule.  The substance of any
such waiver, alteration or modification has been approved by the title insurer,
to the extent required, and its terms are reflected on the Custodial Asset
Schedule.  No Mortgagor in respect of the Mortgage Loan has been released, in
whole or in part, except in connection with an assumption agreement approved by
the title insurer, to the extent required by such policy, and which assumption
agreement is part of the Asset File delivered to the Custodian and the terms of
which are reflected in the Custodial Asset Schedule.

(g)No Satisfaction of Mortgage.  The Mortgage has not been satisfied, canceled,
subordinated or rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part, nor has
any instrument been executed that would affect any such release, cancellation,
subordination or rescission (except with respect to subordination of a second
lien HELOC to the first priority lien or security interest).  No Seller has
waived the performance by the Mortgagor of any action, if the Mortgagor’s
failure to perform such action would cause the Mortgage Loan to be in default,
nor has any Seller waived any default resulting from any action or inaction by
the Mortgagor.

(i)Valid First or Second Lien.  The Mortgage is a valid, subsisting, enforceable
and, with respect to Mortgage Loans other than Second Lien Mortgage Loans,
perfected first priority lien and first priority security interest or, with
respect to Second Lien Mortgage Loans, a second lien or a second priority
security interest, in each case, on the real property included in the Mortgaged
Property, including all buildings on the Mortgaged Property  and all
installations and mechanical, electrical, plumbing, heating and air conditioning
systems located in or annexed to such buildings, and all additions, alterations
and replacements made at any time with respect to the foregoing.  The lien of
the Mortgage is subject only to:

a.the lien of current real property taxes and assessments not yet due and
payable;

b.covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording acceptable to prudent
mortgage lending institutions generally and specifically referred to in lender’s
title insurance policy delivered to the originator of the Mortgage Loan and (a)
referred to or otherwise considered in the appraisal made for the originator of
the Mortgage Loan or (b) which do not adversely affect the Appraised Value of
the Mortgaged Property set forth in such appraisal;

c.other matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be provided
by the Mortgage or the use, enjoyment, value or marketability of the related
Mortgaged Property; and

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d.with respect to Second Lien Mortgage Loans, a first lien.

Any security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a valid,
subsisting and enforceable (a) with respect to Mortgage Loans other than Second
Lien Mortgage Loans, first lien and first priority security interest and (b)
with respect to Second Lien Mortgage Loans, second lien and second priority
interest, in each case, on the property described therein and the applicable
Seller has full right to pledge and assign the same to Administrative
Agent.  The Mortgaged Property was not, as of the date of origination of the
Mortgage Loan, subject to a mortgage, deed of trust, deed to secure debt or
other security instrument creating a lien subordinate to the lien of the
Mortgage.

(j)Validity of Mortgage Documents.  The Mortgage Note and the Mortgage and any
other agreement executed and delivered by a Mortgagor or guarantor, if
applicable, in connection with a Mortgage Loan are genuine, and each is the
legal, valid and binding obligation of the maker thereof enforceable in
accordance with its terms.  All parties to the Mortgage Note, the Mortgage and
any other such related agreement had legal capacity to enter into the Mortgage
Loan and to execute and deliver the Mortgage Note, the Mortgage and any such
agreement, and the Mortgage Note, the Mortgage and any other such related
agreement have been duly and properly executed by such related parties.  No
fraud, error, omission, misrepresentation, negligence or similar occurrence with
respect to a Mortgage Loan has taken place on the part of any Person, including,
without limitation, the Mortgagor, any appraiser, any builder or developer, or
any other party involved in the origination of the Mortgage Loan.  The
applicable Seller has reviewed all of the documents constituting the Asset File
and has made such inquiries as it deems necessary to make and confirm the
accuracy of the representations set forth herein.  To the best of Sellers’
knowledge, except as disclosed to Administrative Agent in writing, all tax
identifications and property descriptions are legally sufficient; and tax
segregation, where required, has been completed.  Such Purchased Mortgage Loan
is a “closed” loan, is fully funded by Seller (except with respect to a HELOC),
and held in Seller’s name.

(k)Full Disbursement of Proceeds.  Except with respect to (i) HELOC, (ii) an FHA
203(k) Loan, or (iii) an eligible, single-close, renovation or
construction-to-permanent Agency Mortgage Loan, there is no further requirement
for future advances under the Mortgage Loan, and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with.  All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage.

(n)Title Insurance.  The Mortgage Loan is covered by either (i) an attorney’s
opinion of title and abstract of title, the form and substance of which is
acceptable to prudent mortgage lending institutions making mortgage loans in the
area wherein the Mortgaged Property is located or (ii) except with respect to
HELOCs covered by a Master Secondary Loan Policy acquired from Old Republic Home
Protection and/or an errors and omissions policy approved by the Buyers in their
sole discretion, an ALTA lender’s title insurance policy or other generally
acceptable form of policy or insurance acceptable to Administrative Agent with
respect to Non-Agency QM Mortgage Loans and Fannie Mae

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or Freddie Mac with respect to Mortgage Loans other than Non-Agency QM Mortgage
Loans and Non-Agency Non-QM Mortgage Loans and Fannie Mae or Freddie Mac with
respect to Mortgage Loans other than Non-Agency QM Mortgage Loans and Non-Agency
Non-QM Mortgage Loans, and each such title insurance policy is issued by a title
insurer acceptable to Administrative Agent with respect to Non-Agency QM
Mortgage Loans and Non-Agency Non-QM Mortgage Loans and Fannie Mae or Freddie
Mac with respect to Mortgage Loans other than Non-Agency QM Mortgage Loans and
Non-Agency Non-QM Mortgage Loans, and qualified to do business in the
jurisdiction where the Mortgaged Property is located, insuring the applicable
Seller, its successors and assigns, as to the first priority lien of the
Mortgage, other than Second Lien Mortgage Loans, and with respect to Second Lien
Mortgage Loans as to the second priority lien of the related Mortgage, as
applicable, in the original principal amount of the Mortgage Loan, with respect
to a Mortgage Loan, or, with respect to a HELOC, the original Credit Limit (or
to the extent a Mortgage Note provides for negative amortization, the maximum
amount of negative amortization in accordance with the Mortgage), subject only
to the exceptions contained in clauses (a), (b) and (c) of paragraph (i) of this
Schedule 1 with respect to Non-Agency QM Mortgage Loans and Fannie Mae or
Freddie Mac with respect to Mortgage Loans other than Non-Agency QM Mortgage
Loans.  The applicable Seller, its successors and assigns, are the sole insureds
of such lender’s title insurance policy, and such lender’s title insurance
policy is valid and remains in full force and effect and will be in force and
effect upon the consummation of the transactions contemplated by this
Agreement.  No claims have been made under such lender’s title insurance policy,
and no prior holder or servicer of the related Mortgage, including any Seller,
has done, by act or omission, anything which would impair the coverage of such
lender’s title insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
Person, and no such unlawful items have been received, retained or realized by a
Seller.

(p)Property Value.  When applicable, Seller has delivered to Administrative
Agent a BPO valuation and valuation date given by a licensed real estate agent
or broker in conformity with customary and usual business practices, which
includes comparable sales and comparable listings and complies with the criteria
set forth in FIRREA for an “appraisal” or an “evaluation”, as applicable, and
such other information in further compliance with this Agreement.  The person
performing any BPO received no benefit from, and such person’s compensation or
flow of business from the Sellers were not affected by, the acquisition of the
Mortgage Loan by the Sellers or any other applicable transferee.

(r)Origination; Payment Terms.  The Mortgage Loan was originated by or in
conjunction with a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 of the National Housing Act, a
savings and loan association, a savings bank, a commercial bank, credit union,
insurance company or similar banking institution which is supervised and
examined by a federal or state authority.  Except with respect to HELOCs,
principal and/or interest payments on the Mortgage Loan commenced no more than
sixty (60) days after funds were disbursed in connection with the Mortgage Loan.
With respect to Mortgage Loans other than Non-Agency QM Mortgage Loans and
Non-Agency Non-QM Mortgage Loans, the Mortgagor contributed

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from their own funds to the purchase price for the Mortgaged Property, as
required by the applicable Agency. With respect to adjustable rate Mortgage
Loans, the Mortgage Interest Rate is adjusted on each Interest Rate Adjustment
Date to equal the Index plus the Gross Margin (rounded up or down to the nearest
0.125%), subject to the Mortgage Interest Rate Cap.  Except with respect to
HELOCs, the Mortgage Note is payable on the first day of each month in equal
monthly installments of principal and/or interest (subject to an “interest only”
period in the case of Interest Only Loans), which installments of interest (a)
with respect to adjustable rate Mortgage Loans are subject to change on the
Interest Rate Adjustment Date due to adjustments to the Mortgage Interest Rate
on each Interest Rate Adjustment Date and (b) with respect to Interest Only
Loans are subject to change on the Interest Only Adjustment Date due to
adjustments to the Mortgage Interest Rate on each Interest Only Adjustment Date,
in both cases with interest calculated and payable in arrears, sufficient to
amortize the Mortgage Loan fully by the stated maturity date, over an original
term of not more than thirty (30) years from commencement of amortization.

(s)Customary Provisions.  The Mortgage Note has a stated maturity.  The Mortgage
contains customary and enforceable provisions such as to render the rights and
remedies of the holder thereof adequate for the realization against the
Mortgaged Property of the benefits of the security provided thereby, including,
(i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale,
and (ii) otherwise by judicial foreclosure.  Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee’s sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage Loan will be able
to deliver good and merchantable title to the Mortgaged Property.  There is no
homestead or other exemption or other right available to the Mortgagor or any
other person, or restriction on any Seller or any other person, including
without limitation, any federal, state or local, law, ordinance, decree,
regulation, guidance, attorney general action, or other pronouncement, whether
temporary or permanent in nature, that would interfere with, restrict or delay,
either (y) the ability of any Seller, Administrative Agent, a Buyer or any
servicer or any successor servicer to sell the related Mortgaged Property at a
trustee’s sale or otherwise, or (z) the ability of any Seller, Administrative
Agent, a Buyer or any servicer or any successor servicer to foreclose on the
related Mortgage.  Except with respect to HELOCs, the Mortgage Note and Mortgage
are on forms acceptable to Administrative Agent with respect to Non-Agency QM
Mortgage Loans and Non-Agency Non-QM Mortgage Loans and Fannie Mae or Freddie
Mac.  If the Mortgage Loan is an eMortgage Loan, the related eNote contains the
Agency-Required eNote Legend.

(x)Due-On-Sale.  Except with respect to Mortgage Loans intended for purchase by
GNMA and as may otherwise be prohibited by applicable law, the Mortgage contains
an enforceable provision for the acceleration of the payment of the unpaid
principal balance of the Mortgage Loan in the event that the Mortgaged Property
is sold or transferred without the prior written consent of the mortgagee
thereunder.

(z)Consolidation of Future Advances.  Any future advances made to the Mortgagor
prior to the Purchase Date have been consolidated with the outstanding principal
amount secured by the Mortgage, and the secured principal amount, as
consolidated, bears a single interest rate and single repayment term.  The lien
of the Mortgage securing the consolidated principal amount is expressly insured
as having first

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lien priority with respect to Mortgage Loans other than Second Lien Mortgage
Loans, or second lien priority with respect to Second Lien Mortgage Loans, in
each case, by a title insurance policy, an endorsement to the policy insuring
the mortgagee’s consolidated interest or by other title evidence acceptable to
Administrative Agent with respect to Non-Agency QM Mortgage Loans and Non-Agency
Non-QM Mortgage Loans and acceptable to Fannie Mae and Freddie Mac with respect
to Mortgage Loans other than Non-Agency QM Mortgage Loans and Non-Agency Non-QM
Mortgage Loans.  The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan.

(dd)Appraisal; Valuation.  With respect to each Agency Mortgage Loan, the
Mortgage File contains either (i) to the extent permitted by the applicable
Agency, a Property Inspection Waiver (as defined in the applicable Agency
guidelines) or any other valuation method permitted by the Agency and acceptable
to the Buyers in their sole discretion, or (ii) an appraisal of the related
Mortgaged Property signed prior to the funding of the Mortgage Loan by a
qualified appraiser, duly appointed by Sellers, who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and the appraisal and appraiser both satisfy the requirements of
Fannie Mae or Freddie Mac and Title XI of the Federal Institutions Reform,
Recovery, and Enforcement Act of 1989 as amended and the regulations promulgated
thereunder (“FIRREA”), all as in effect on the date the Mortgage Loan was
originated.  With respect to each Mortgage Loan that is not an Agency Mortgage
Loan, the Mortgage File contains a property valuation acceptable to the
Administrative Agent and Buyers in their sole discretion.

(ff)Construction or Rehabilitation of Mortgaged Property.  No Mortgage Loan was
made in connection with the construction or rehabilitation of a Mortgaged
Property or facilitating the trade-in or exchange of a Mortgaged Property,
expect with respect to (i) a HELOC, where a Mortgagor may use a Draw for
rehabilitation of the Mortgaged Property, (ii) a FHA 203(k) Loan, or (iii) an
eligible, single-close, renovation or construction-to-permanent Agency Mortgage
Loan.

(ii)Proceeds of Mortgage Loan.  Except with respect to a HELOC, the proceeds of
the Mortgage Loan have not been and shall not be used to satisfy, in whole or in
part, any debt owed or owing by the Mortgagor to any Seller or any Affiliate or
correspondent of any Seller, except in connection with a refinanced Mortgage
Loan.

(ll)Other Encumbrances.  To the best of Sellers’ knowledge, any property subject
to any security interest given in connection with such Purchased Mortgage Loan
is not subject to any other encumbrances other than a stated first mortgage or,
with respect to Second Lien Mortgage Loans, a stated second mortgage, if
applicable and encumbrances which may be allowed under the Underwriting
Guidelines.

(hhh)Qualified Mortgage.  Notwithstanding anything to the contrary set forth in
this Agreement, on and after January 10, 2014 (or such later date as set forth
in the relevant regulations), (i) prior to the origination of each Mortgage
Loan, the originator made a reasonable and good faith determination that the
Mortgagor had a reasonable ability to

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repay the loan according to its terms, in accordance with, at a minimum, the
eight (8) underwriting factors set forth in 12 CFR 1026.43(c) and (ii) each
Mortgage Loan, other than a Non-Agency Non-QM Mortgage Loan, Scratch and Dent
Mortgage Loan, HELOC, a Non-Agency Non-QM Mortgage Loan, is a “Qualified
Mortgage” as defined in 12 CFR 1026.43(e); provided that a modification
subsequent to the date listed above shall not be considered an “origination” of
a Mortgage Loan or a “covered transaction” as long as no new Mortgage Note is
executed and delivered and the interest rate of the related Mortgage Loan is not
increased.

(iii)TRID Compliance.  With respect to each Mortgage Loan (other than a HELOC)
where the Mortgagor’s loan application for the Mortgage Loan was taken on or
after October 3, 2015, such Mortgage Loan was originated in compliance with the
TILA-RESPA Integrated Disclosure Rule.

5.2deleting paragraph (ccc) to Part I in its entirety;

5.3adding the following new paragraphs at the end of Part I:

(jjj)Terms.  With respect to HELOCs, the related Mortgagor may request advances
up to the Credit Limit within the first (1st) ten (10) years following the date
of origination, subject to termination or suspension under the terms of the
Credit Line Agreement.

(kkk)Revolving Term.  Each HELOC provides for an initial period (the “Revolving
Period”) during which the Mortgagor is required to make monthly payments of
interest payable in arrears and requires repayment of the unpaid principal
balance thereof over a period following the Revolving Period (the “Repayment
Period”) which is not in excess of two hundred forty (240) months. As of the
Purchase Date no HELOC was in its Repayment Period.  The Mortgage Interest Rate
on each Mortgage Loan adjusts periodically in accordance with the Credit Line
Agreement.  On each Interest Rate Adjustment Date the related Seller has made
interest rate adjustments on the Mortgage Loan which are in compliance with the
related Mortgage, Mortgage Note and Credit Line Agreement and applicable law.

(lll)Draws In Compliance With Laws.  Each Draw under the HELOC has been
disbursed in accordance with all applicable laws, rules and regulations,
including, without limitation, all state and local licensing requirements.

(mmm)Enforcement of Remedies.  Each Credit Line Agreement permits the holder to
enforce its full remedies, with respect to, among other things, material events
of default by the Mortgagor, and to suspend or terminate the right to make
additional Draws or reduce the Credit Limit if the value of the related
Mortgaged Property declines significantly, the Mortgagor’s financial
circumstances materially change, or certain other events occur as described in
the Credit Line Agreement.

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(nnn)eNotes.  With respect to each eMortgage Loan, the related eNote satisfies
all of the following criteria:

(i)the eNote bears a digital or electronic signature;

(ii)the Hash Value of the eNote indicated in the MERS eRegistry matches the Hash
Value of the eNote as reflected in the eVault;

(iii)there is a single Authoritative Copy of the eNote, as applicable and within
the meaning of Section 9-105 of the UCC, Section 16 of the UETA or Section 7021
of E-SIGN, as applicable, that is held in the eVault;

(iv)the Location status of the eNote on the MERS eRegistry reflects the MERS Org
ID of the Custodian;

(v)the Controller status of the eNote on the MERS eRegistry reflects the MERS
Org ID of Administrative Agent;

(vi)the Delegatee status of the eNote on the MERS eRegistry reflects the MERS
Org ID of Custodian;

(vii)the Servicing Agent status of the eNote on the MERS eRegistry is blank
until being changed to Servicer in connection with a Transfer of Control to a
Take-out Investor;

(viii)There is no Control Failure with respect to such eNote;

(ix)the eNote is a valid and enforceable Transferable Record or comprises
“electronic chattel paper” within the meaning of the UCC;

(x)there is no defect with respect to the eNote that would result in
Administrative Agent having less than full rights, benefits and defenses of
“Control” (within the meaning of the UETA or the UCC, as applicable) of the
Transferable Record; and

(xi)the single Authoritative Copy of the eNote is maintained electronically and
has not been papered-out, nor is there another paper representation of such
eNote.

(ooo)Non-Agency QM Mortgage Loans.  Except with respect to a Non-Agency QM
Mortgage Loan and Non-Agency Non-QM Mortgage Loan, none of the Mortgage Loans
are an “A” quality first lien Mortgage Loan that is not eligible for sale to an
Agency.

5.4deleting paragraphs (p) and (z) to Part 3 in their entirety and replacing
them with the following, respectively:

(p)Property Value.  With respect to a HELOC, Seller has delivered to
Administrative Agent a BPO valuation and valuation date given by a licensed real
estate agent or broker in conformity with customary and usual business
practices, which includes

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comparable sales and comparable listings and complies with the criteria set
forth in FIRREA for an “appraisal” or an “evaluation”, as applicable, and such
other information in further compliance with this Agreement.  The person
performing any BPO received no benefit from, and such person’s compensation or
flow of business from the Sellers were not affected by, the acquisition of the
Mortgage Loan by the Sellers or any other applicable transferee.

(z)TRID Compliance. With respect to each Mortgage Loan (other than a HELOC)
where the Mortgagor’s loan application for the Mortgage Loan was taken on or
after October 3, 2015, such Mortgage Loan was originated in compliance with the
TILA-RESPA Integrated Disclosure Rule.

SECTION 6.Conditions Precedent to Amendment.  This Amendment shall become
effective as of the date hereof (the “Amendment Effective Date”), subject to the
satisfaction of the following conditions precedent:

 

6.1Delivered Documents.  On the Amendment Effective Date, the Administrative
Agent on behalf of Buyers shall have received the following documents, each of
which shall be satisfactory to the Administrative Agent in form and substance:

 

(a)this Amendment, executed and delivered by duly authorized officers of the
Administrative Agent, the Buyers, the Seller Parties and the Guarantors;

(b)Amendment No. 4 to Second Amended and Restated Pricing Side Letter, executed
and delivered by duly authorized officers of the Administrative Agent, the
Buyers, the Seller Parties and the Guarantors;

(c)Third Amended and Restated Custodial Agreement, executed and delivered by
duly authorized officers of the Administrative Agent, the Buyers, the Seller
Parties and Deutsche Bank Trust Company Americas; and

(d)such other documents as the Administrative Agent or counsel to the
Administrative Agent may reasonably request.

 

SECTION 7.Representations and Warranties.  Each Seller Party hereby represents
and warrants to the Administrative Agent and Buyers that it is in compliance
with all the terms and provisions set forth in the Repurchase Agreement on its
part to be observed or performed, and that no Event of Default has occurred or
is continuing, and hereby confirms and reaffirms the representations and
warranties contained in Section 13 of Repurchase Agreement.

 

SECTION 8.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 9.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.

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SECTION 10.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 11.GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE
CHOICE OF LAW PROVISIONS THEREOF.

 

SECTION 12.Reaffirmation of Guaranty.  The Guarantors hereby ratify and affirm
all of the terms, covenants, conditions and obligations of the Guaranty. Each
Guarantor acknowledges and agrees that the term “Obligations” as used in the
Guaranty shall apply to all of the Obligations of the Seller Parties to
Administrative Agent and Buyers under the Repurchase Agreement and related
Program Agreements, as amended hereby.

 

[Remainder of page intentionally left blank]

 

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

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC,
as Administrative Agent

 

By:

 

/s/ Dominic Obaditch

 

 

Name: Dominic Obaditch

 

 

Title:   Vice President

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Committed Buyer and as a Buyer

 

By:

 

/s/ Dominic Obaditch

 

 

Name: Dominic Obaditch

 

 

Title:   Authorized Signatory

 

 

By:

 

/s/ Elie Chau

 

 

Name: Elie Chau

 

 

Title:   Authorized Signatory

ALPINE SECURITIZATION LTD as a Buyer, by Credit Suisse AG, New York Branch as
Attorney-in-Fact

 

 

By:

 

/s/ Elie Chau

 

 

Name: Elie Chau

 

 

Title:   Vice President

 

 

By:

 

/s/ Kenneth Aiani

 

 

Name:  Kenneth Aiani

 

 

Title:   Vice President

 

 

 

Signature Page to Amendment No. 5 to Second Amended and Restated MRA

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PENNYMAC CORP., as a Seller

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

PENNYMAC HOLDINGS, LLC, as a Seller

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

PMC REO FINANCING TRUST, as the REO Subsidiary

By: PennyMac Corp., as Administrator

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

PENNYMAC MORTGAGE INVESTMENT TRUST, as a Guarantor

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

PENNYMAC OPERATING PARTNERSHIP, L.P., as a Seller and as a Guarantor

 

By:  PennyMac GP OP, Inc., its General Partner

 

By:

 

/s/ Pamela Marsh

 

 

Name: Pamela Marsh

 

 

Title: Managing Director, Treasurer

 

Signature Page to Amendment No. 5 to Second Amended and Restated MRA