Exhibit 10.1

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

 

 

  )      

UNITED STATES OF AMERICA,

et al.,

  )      

Plaintiffs,

  )      

v.

  )         )
     Civil Action No.                                

BANK OF AMERICA CORP. et al. ,

  )         )      

Defendants.

  )         )         )         )         )         )         )         )      
  )      

 

  )      

CONSENT JUDGMENT

WHEREAS, Plaintiffs, the United States of America and the States of Alabama,
Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida,
Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine,
Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada,
New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota,
Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas,
Utah, Vermont, Washington, West Virginia, Wisconsin, Wyoming, the Commonwealths
of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of
Columbia filed their complaint on March 12, 2012, alleging that Residential
Capital, LLC, Ally Financial, Inc., and GMAC Mortgage, LLC (collectively,
“Defendant”) violated, among other laws, the Unfair and Deceptive Acts and
Practices laws of the Plaintiff States, the False Claims Act, the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989, the Service members
Civil Relief Act, and the Bankruptcy Code and Federal Rules of Bankruptcy
Procedure;

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WHEREAS, the parties have agreed to resolve their claims without the need for
litigation;

WHEREAS, Defendant, by its attorneys, has consented to entry of this Consent
Judgment without trial or adjudication of any issue of fact or law and to waive
any appeal if the Consent Judgment is entered as submitted by the parties;

WHEREAS, Defendant, by entering into this Consent Judgment, does not admit the
allegations of the Complaint other than those facts deemed necessary to the
jurisdiction of this Court;

WHEREAS, the intention of the United States and the States in effecting this
settlement is to remediate harms allegedly resulting from the alleged unlawful
conduct of the Defendant;

AND WHEREAS, Defendant has agreed to waive service of the complaint and summons
and hereby acknowledges the same;

NOW THEREFORE, without trial or adjudication of issue of fact or law, without
this Consent Judgment constituting evidence against Defendant, and upon consent
of Defendant, the Court finds that there is good and sufficient cause to enter
this Consent Judgment, and that it is therefore ORDERED, ADJUDGED, AND DECREED:

I. JURISDICTION

1. This Court has jurisdiction over the subject matter of this action pursuant
to 28 U.S.C. §§ 1331, 1345, 1355(a), and 1367, and under 31 U.S.C. § 3732(a) and
(b), and over Defendant. The Complaint states a claim upon which relief may be
granted against Defendant. Venue is appropriate in this District pursuant to 28
U.S.C. § 1391(b)(2) and 31 U.S.C. § 3732(a).

 

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II. SERVICING STANDARDS

2. Defendant shall comply with the Servicing Standards, attached hereto as
Exhibit A, in accordance with their terms and Section A of Exhibit E, attached
hereto.

III. FINANCIAL TERMS

3. Payment Settlement Amounts. Defendant shall pay into an interest bearing
escrow account to be established for this purpose the sum of $109,628,425, which
sum shall be added to funds being paid by other institutions resolving claims in
this litigation (which sum shall be known as the “Direct Payment Settlement
Amount”) and which sum shall be distributed in the manner and for the purposes
specified in Exhibit B. Defendant’s payment shall be made by electronic funds
transfer no later than seven days after the Effective Date of this Consent
Judgment, pursuant to written instructions to be provided by the United States
Department of Justice. After Defendant has made the required payment, Defendant
shall no longer have any property right, title, interest or other legal claim in
any funds held in escrow. The interest bearing escrow account established by
this Paragraph 3 is intended to be a Qualified Settlement Fund within the
meaning of Treasury Regulation Section 1.468B-1 of the U.S. Internal Revenue
Code of 1986, as amended. The Monitoring Committee established in Paragraph 8
shall, in its sole discretion, appoint an escrow agent (“Escrow Agent”) who
shall hold and distribute funds as provided herein. All costs and expenses of
the Escrow Agent, including taxes, if any, shall be paid from the funds under
its control, including any interest earned on the funds.

4. Payments to Foreclosed Borrowers. In accordance with written instructions
from the State members of the Monitoring Committee, for the purposes set forth
in Exhibit C, the Escrow Agent shall transfer from the escrow account to the
Administrator appointed under

 

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Exhibit C $1,489,813,925.00 (the “Borrower Payment Amount”) to enable the
Administrator to provide cash payments to borrowers whose homes were finally
sold or taken in foreclosure between and including January 1, 2008 and
December 31, 2011; who submit claims for harm allegedly arising from the Covered
Conduct (as that term is defined in Exhibit G hereto); and who otherwise meet
criteria set forth by the State members of the Monitoring Committee. The
Borrower Payment Amount and any other funds provided to the Administrator for
these purposes shall be administered in accordance with the terms set forth in
Exhibit C.

5. Consumer Relief. Defendant shall provide $185,000,000 of relief to consumers
who meet the eligibility criteria in the forms and amounts described in
Paragraphs 1-8 of Exhibit D, and $15,000,000 of refinancing relief to consumers
who meet the eligibility criteria in the forms and amounts described in
Paragraph 9 of Exhibit D, to remediate harms allegedly caused by the alleged
unlawful conduct of Defendant. Defendant shall receive credit towards such
obligation as described in Exhibit D.

IV. ENFORCEMENT

6. The Servicing Standards and Consumer Relief Requirements, attached as
Exhibits A and D, are incorporated herein as the judgment of this Court and
shall be enforced in accordance with the authorities provided in the Enforcement
Terms, attached hereto as Exhibit E.

7. The Parties agree that Joseph A. Smith, Jr. shall be the Monitor and shall
have the authorities and perform the duties described in the Enforcement Terms,
attached hereto as Exhibit E.

8. Within fifteen (15) days of the Effective Date of this Consent Judgment, the
participating state and federal agencies shall designate an Administration and
Monitoring Committee (the “Monitoring Committee”) as described in the
Enforcement Terms. The

 

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Monitoring Committee shall serve as the representative of the participating
state and federal agencies in the administration of all aspects of this and all
similar Consent Judgments and the monitoring of compliance with it by the
Defendant.

V. RELEASES

9. The United States and Defendant have agreed, in consideration for the terms
provided herein, for the release of certain claims, and remedies, as provided in
the Federal Release, attached hereto as Exhibit F. The United States and
Defendant have also agreed that certain claims, and remedies are not released,
as provided in Paragraph 11 of Exhibit F. The releases contained in Exhibit F
shall become effective upon payment of the Direct Payment Settlement Amount by
Defendant.

10. The State Parties and Defendant have agreed, in consideration for the terms
provided herein, for the release of certain claims, and remedies, as provided in
the State Release, attached hereto as Exhibit G. The State Parties and Defendant
have also agreed that certain claims, and remedies are not released, as provided
in Part IV of Exhibit G. The releases contained in Exhibit G shall become
effective upon payment of the Direct Payment Settlement Amount by Defendant.

VI. SERVICEMEMBERS CIVIL RELIEF ACT

11. The United States and Defendant have agreed to resolve certain claims
arising under the Servicemembers Civil Relief Act (“SCRA”) in accordance with
the terms provided in Exhibit H. Any obligations undertaken pursuant to the
terms provided in Exhibit H, including any obligation to provide monetary
compensation to servicemembers, are in addition to the obligations undertaken
pursuant to the other terms of this Consent Judgment. Only a payment to an
individual for a wrongful foreclosure pursuant to the terms of Exhibit H shall
be reduced by the amount of any payment from the Borrower Payment Amount.

 

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VII. OTHER TERMS

12. The United States and any State Party may withdraw from the Consent Judgment
and declare it null and void with respect to that party if the Defendant does
not make the Consumer Relief Payments (as that term is defined in Exhibit F
(Federal Release)) required under this Consent Judgment and fails to cure such
non-payment within thirty days of written notice by the party.

13. This Court retains jurisdiction for the duration of this Consent Judgment to
enforce its terms. The parties may jointly seek to modify the terms of this
Consent Judgment, subject to the approval of this Court. This Consent Judgment
may be modified only by order of this Court.

14. The Effective Date of this Consent Judgment shall be the date on which the
Consent Judgment has been entered by the Court and has become final and
non-appealable. An order entering the Consent Judgment shall be deemed final and
non-appealable for this purpose if there is no party with a right to appeal the
order on the day it is entered.

15. This Consent Judgment shall remain in full force and effect for three and
one-half years from the date it is entered (“the Term”), at which time the
Defendants’ obligations under the Consent Judgment shall expire, except that,
pursuant to Exhibit E, Defendants shall submit a final Quarterly Report for the
last quarter or portion thereof falling within the Term and cooperate with the
Monitor’s review of said report, which shall be concluded no later than six
months after the end of the Term. Defendant shall have no further obligations
under this Consent Judgment six months after the expiration of the Term, but the
Court shall retain jurisdiction for purposes of enforcing or remedying any
outstanding violations that are identified in the final Monitor Report and that
have occurred but not been cured during the Term.

 

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16. Except as otherwise agreed in Exhibit B, each party to this litigation will
bear its own costs and attorneys’ fees associated with this litigation.

17. Nothing in this Consent Judgment shall relieve Defendant of its obligation
to comply with applicable state and federal law.

18. The parties further agree to the additional terms contained in Exhibit I
hereto.

19. The sum and substance of the parties’ agreement and of this Consent Judgment
are reflected herein and in the Exhibits attached hereto. In the event of a
conflict between the terms of the Exhibits and paragraphs 1-18 of this summary
document, the terms of the Exhibits shall govern.

SO ORDERED this              day of                             , 2012

 

  UNITED STATES DISTRICT JUDGE

 

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    For the United States:    

/s/ Tony West

   

TONY WEST

   

Acting Associate Attorney General

   

U.S. Department of Justice

   

950 Pennsylvania Ave., N.W.

   

Washington, DC 20530

   

Tel.: 202-514-9500

   

Fax: 202-514-0238

For the Department of the Treasury:

    For the Department of Housing and Urban Development;

/s/ George W. Madison

    /s/ Helen R. Kanovsky

GEORGE W. MADISON

    HELEN R. KANOVSKY

General Counsel

    General Counsel

U.S. Department of the Treasury

    U.S. Department of Housing and Urban

1500 Pennsylvania Avenue, NW

    Development

Washington, D.C, 20220

    451 7th Street, S.W.

Tel.: 202-622-0283

    Washington, DC 20410

Fax: 202-622-2882

    Tel.: 202-402-5023     Fax: 202-708-3389

For the Federal Trade Commission

    For the Consumer Financial Protection Bureau

(as to Exhibit F only):

    (as to Exhibit F only):

/s/ Amanda Basta

    /s/ Lucy Morris

AMANDA BASTA

    LUCY MORRIS

Attorney

    Deputy Enforcement Director

Federal Trade Commission

    Consumer Financial Protection Bureau

600 Pennsylvania Ave., NW

    1500 Pennsylvania Avenue, NW

Washington, DC 20058

    (Attn: 1801 L Street)

Tel: 202-326-2340

    Washington, DC 20220

Fax: 202-326-2558

    Tel: 202-435-7154

 

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For the State of Alabama:

    For the Alabama State Banking Department:

/s/ Luther Strange

    /s/ John D. Harrison

LUTHER STRANGE

    JOHN D. HARRISON

Attorney General

    Superintendent of Banks

State of Alabama

    Alabama State Banking Department

501 Washington Avenue

    401 Adams Avenue, Suite 680

Montgomery, AL 36130

    P.O. Box 4600

Tel.: 334-242-7335

    Montgomery, AL 36103-4600

Fax: 334-242-2433

    Tel.: 334-242-3452     Fax: 334-242-3500

 

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For the State of Alaska:

    For the Alaska Division of Banking and Securities:

/s/ Cynthia C. Drinkwater

    /s/ Lorie L. Hovanec

CYNTHIA C. DRINKWATER

    LORIE L. HOVANEC

Assistant Attorney General

    Director

Alaska Attorney General’s Office

    Alaska Division of Banking and Securities

1031 W. 4th Avenue, Ste. 200

    Department of Commerce, Community and

Anchorage, AK 99501

    Economic Development

Tel.: 907-269-5200

    550 W. 7th Ave., Ste 1940

Fax: 907-264-8554

    Anchorage, AK 99501     Tel.: 907-269-8140     Fax: 907-465-1231

 

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For the State of Arizona:

    For the Arizona Department of Financial Institutions:

/s/ Thomas C. Horne

    /s/ Lauren W. Kingry

THOMAS C. HORNE

    LAUREN W. KINGRY

Arizona Attorney General

    Superintendent

by Carolyn R. Matthews

    Arizona Department of Financial

Assistant Attorney General

    Institutions

1275 W. Washington

    2910 N. 44th Street, suite #310

Phoenix, AZ 85007

    Phoenix, AZ 85018

Tel.: 602-542-7731

    Tel.: 602-771-2772

Fax: 602-542-4377

    Fax: 602-381-1225

 

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For the State of Arkansas     By:  

/s/ James B. DePriest

      /s/ A. Heath Abshure James B. DePriest, Ark. Bar No. 80038

Deputy Attorney General

Office of the Attorney General

323 Center Street, Suite 200

Little Rock, Arkansas 72201

     

A. Heath Abshure

Securities Commissioner

201 East Markham, Suite 300

Little Rock, AR 72201

Tel: 501-324-9260

Fax: 501-324-9268

 

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For the State of California:     For the California Department of Corporations:
/s/ Michael A. Troncoso       /s/ Jan Lynn Owen

MICHAEL A. TRONCOSO

Senior Counsel to the Attorney General

455 Golden Gate Avenue, Ste. 14500

San Francisco, CA 94102-7007

Tel.: 415-703-1008

Fax: 415-703-1016

     

JAN LYNN OWEN

Commissioner

1515 K Street, Suite 200

Sacramento, CA 95814-4052

Tel.: 916-445-7205

Fax: 916-322-1559

 

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For the State of Colorado, ex. rel. John W. Suthers,

Attorney General, and On behalf of the Administrator

of the Colorado Uniform Consumer Credit Code, Laura E. Udis:

 

/s/ Andrew P. Mccallin

ANDREW P. MCCALLIN

First Assistant Attorney General

Consumer Protection Section

Colorado Attorney General’s Office

1525 Sherman Street—7th Floor

Denver, Colorado 80203

Tel.: 303- 866-5134

Fax: 303- 866-4916

 

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For the State of Connecticut and the

Connecticut Department of Banking:

     

For the Connecticut

Department of Banking:

/s/ Matthew J. Budzik       /s/ Howard F. Pitkin MATTHEW J. BUDZIK       HOWARD
F. PITKIN

JOSEPH J. CHAMBERS

     

Banking Commissioner

Assistant Attorneys General

     

Connecticut Department of Banking

Office of the Connecticut Attorney General

     

260 Constitution Plaza

55 Elm Street, P.O. Box 120

     

Hartford, CT 06103-1800

Hartford, CT 06141-0120

     

Tel: 860-240-8100

Tel: 860-808-5270

     

Fax: 860-240-8178

Fax: 860-808-5385

     

 

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For the State of Delaware:     For the Office of the State Bank Commissioner:
/s/ Ian R. McConnel       /s/ Robert A. Glen

IAN R. McCONNEL

Deputy Attorney General

Delaware Department of Justice

Attorney General’s office

820 N. French Street

Wilmington, DE 19801

Tel.: 302-577-8533

Fax.: 302-577-8426

     

ROBERT A. GLEN

State Bank Commissioner

Suite 210

555 East Lookerman Street

Dover, DE 19901

Tel.: 302-739-4235

Fax.: 302-739-3906

 

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For the District of Columbia and the District of Columbia Department of
Insurance, Securities and Banking:

IRVIN B. NATHAN

Attorney General for the District of Columbia

ELLEN A. EFROS

Deputy Attorney General

Public Interest Division

 

/s/ Bennett Rushkoff

BENNETT RUSHKOFF (Bar#386925)

Chief, Public Advocacy Section

Office of the Attorney General

441 Fourth Street, N.W., Suite 600-S

Washington, DC 20001

(202) 727-5173 phone

(202) 730-1469 fax bennett.rushkoff@dc. gov

 

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For the State of Florida:     For the Florida Office of Financial Regulations:
/s/ Pamela Jo Bondi    

/s/ Tom Grady

Pamela Jo Bondi

   

Tom Grady

Attorney General

   

Commissioner

The Capitol PL-01

   

Florida Office of Financial Regulations

Tallahassee, FL 32399-1050

   

200 E. Gaines Street

Tel:   850-245-0140

   

The Fletcher Building, Suite 118

Fax:  850-413-0632

   

Tallahassee, FL 32399-0370

   

Tel.:  850-410-9601

Patricia A. Conners

   

Fax:  850-410-9914

Associate Deputy Attorney General

       

/s/ Victoria A. Butler

   

Victoria A. Butler

   

Assistant Attorney General

   

Bureau Chief, Economic Crimes Division

   

3507 E. Frontage Road

   

Suite 325

   

Tampa, FL 33607

   

Tel:   813-287-7950

   

Fax:  813-281-5515

   

 

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For the State of Georgia and the

Georgia Department of Banking and Finance:

/s/ Jeffrey W. Stump

JEFFREY W. STUMP

Assistant Attorney General

Georgia Department of Law

40 Capitol Square, S.W.

Atlanta, Georgia 30334

Tel.: 404-656-3337

Fax: 404-656-0677

 

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For the State of Hawaii and the

State of Hawaii Commissioner of Financial Institutions:

/s/ David M. Louie

DAVID M. LOUIE

Attorney General, State of Hawaii

Department of the Attorney General

425 Queen Street

Honolulu, Hawaii 96813

Tel: 808-586-1500

Fax: 808-586-1239

 

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For the State of Idaho

LAWRENCE WASDEN, Attorney

General:

   

For the Idaho Department of

Finance:

/s/ Brett T. Delange    

/s/ Gavin M. Gee

BRETT T. DELANGE    

GAVIN M. GEE

Deputy Attorney General    

Director of Finance

Office of the Idaho Attorney    

Idaho Department of Finance

General    

800 Park Blvd., Suite 200

700 W. Jefferson St.

   

P.O.Box 83720

P.O. Box 83720

   

Boise, ID 83720-0031

Boise, ID 83720-0010    

Tel.:  208-332-8000

Tel.:  208-334-2400    

Fax:  208-332-8097

Fax:  208-854-8071    

 

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For the State of Illinois:

   

For the Illinois Department of

Financial and Professional

Regulation:

/s/ Deborah Hagan    

/s/ Brent E. Adams

DEBORAH HAGAN

   

BRENT E. ADAMS

Chief, Consumer Protection

   

Secretary

Division

   

Illinois Department of Financial and

Illinois Attorney General’s Office

   

Professional Regulation

500 South Second Street

   

100 W. Randolph St., 9th Floor

Springfield, IL 62706

   

Chicago, IL 60601

Tel.: 217-782-9021

   

Tel.: 312-814-2837

Fax: 217-782-1097

   

Fax: 312-814-2238

 

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For the State of Indiana:

   

For the Indiana Department of

Financial Institutions:

/s/ Abigail Lawlis Kuzma     /s/ David H. Mills ABIGAIL LAWLIS KUZMA     DAVID
H. MILLS Director and Chief Counsel     Director Consumer Protection Division  
  Indiana Department of Financial Indiana Office of Attorney     Institutions
General     30 South Meridian Street 302 West Washington St.     Suite 300 IGCS
5th Fl.     Indianapolis, Indiana 46204 Indianapolis, Indiana 46204     Tel.:
317-233-9460 Tel.: 317-234-6843     Fax: 317-232-7655

Fax: 317-233-4393

   

 

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For the State of Iowa:     For the Iowa Division of Banking: /s/ Thomas J.
Miller     /s/ James M. Schipper

THOMAS J. MILLER

   

JAMES M. SCHIPPER

Attorney General

   

Superintendent of Banking

1305 E. Walnut St.

   

Iowa Division of Banking

Des Moines, IA 50319

   

200 E. Grand Ave., Ste. 300

Tel: 515-281-5164

   

Des Moines, IA 50309-1827

Fax: 515- 281-4209

   

Tel: 515- 242-0350

   

Fax: 515-281-4862

 

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For the State of Kansas:    

For the Kansas Office of the State

Bank Commissioner:

/s/ Meghan E. Stoppel     /s/ Edwin G. Splichal MEGHAN E. STOPPEL     EDWIN G.
SPLICHAL Assistant Attorney General     Commissioner Office of the Kansas
Attorney     Kansas Office of the State Bank General     Commissioner 120 SW
10th Avenue, 2nd Floor     700 SW Jackson, Suite 300 Topeka, KS 66612    
Topeka, KS 66603-3796 Tel: 785-296-3751     Tel.: 785-296-2266 Fax: 785-291-3699
    Fax: 785-296-0168

 

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For the Office of the Attorney

General of Kentucky:

   

For the Kentucky Department of

Financial Institutions:

/s/ Jack Conway     /s/ Charles A. Vice JACK CONWAY     CHARLES A. VICE Attorney
General     Commissioner Commonwealth of Kentucky     Kentucky Department of
Financial State Capitol, Suite 118     Institutions 700 Capital Avenue     1025
Capital Center Drive Frankfort, Kentucky 40601-3449     Suite 200 Tel.:
502-696-5300     Frankfort, KY 40601 Fax: 502-564-2894     Tel.: 502-573-3390  
  Fax: 502-573-8787

 

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     For the Louisiana Office of        Financial Institutions:  

For the State of Louisiana:

      

 

      

JAMES D. “BUDDY”

     /s/ Darin Domingue  

CALDWELL

     DARIN DOMINGUE  

Attorney General

     Deputy Chief Examiner        Louisiana Office of Financial       
Institutions        8660 United Plaza Blvd ~ Floor        Baton Rouge, LA 70809
       Tel.: 225-922-2596        Fax: 225-925-4548  

 

/s/ Sanettria Glasper    

SANETTRIA GLASPER

     

PLEASANT

     

Louisiana State Bar # 25396

     

Assistant Attorney General

     

Director of Public Protection

     

Division

     

1885 North Third Street, 4th Floor

     

Baton Rouge, LA 70802

     

Tel: 225-326-6452

     

Fax: 225-326-6498

     

 

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For the State of Maine and the

Maine Bureaus of Consumer Credit

Protection and Financial Institutions:

 

/s/ William J. Schneider

    

WILLIAM J. SCHNEIDER

    

Attorney General

    

Burton Cross Office Building, 6th Floor

    

111 Sewall Street

    

Augusta, Maine 04330

    

Tel.: 207-626-8800

    

Fax: 207-624-7730

    

 

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For the State of Maryland:

     For the Office of the Commissioner      of Financial Regulation:

/s/ Katherine Winfree

     /s/ Mark Kaufman

KATHERINE WINFREE

     MARK KAUFMAN

Chief Deputy Attorney General

     Commissioner of Financial

Office of the Attorney General of Maryland

     Regulation      Maryland Department of Labor,

200 Saint Paul Place

     Licensing and Regulation

Baltimore, MD 21202

     500 North Calvert Street

Tel: 410-576-6311

     Suite 402

Fax: 410-576-7036

     Baltimore, MD 21202

Bar Number 306662

     Tel.: 410-230-6100      Fax: 410-333-0475

 

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For The Commonwealth Of

     For the Massachusetts Division of

Massachusetts:

     Banks:

MARTHA COAKLEY

    

Attorney General

    

/s/ Amber Anderson Villa

     /s/ David J. Cotney

AMBER ANDERSON VILLA

     DAVID J. COTNEY

Mass. BBO #647566

     Commissioner

Assistant Attorney General

     Massachusetts Division of Banks

Public Protection and Advocacy Bureau

     1000 Washington St., 10th Floor

Consumer Protection Division

     Boston, MA 02118

One Ashburton Place

     Tel: 617-956-1510

Boston, MA 02108

     Fax: 617-956-1599

Tel: 617-727-2200

    

 

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For the State of Michigan:

 

/s/ Bill Schuette

  

BILL SCHUETTE

  

Attorney General

  

D.J. Pascoe

  

Assistant Attorney General

  

525 W. Ottawa Street

  

PO Box 30755

  

Lansing, MI 48909

  

Tel.: 517-373-1160

  

Fax: 517-335-3755

  

 

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For the Michigan Office of Financial and Insurance Regulation;

 

/s/ R. Kevin Clinton

  

R. Kevin Clinton

  

Commissioner

  

State of Michigan Office of Financial and Insurance Regulation

  

611 W. Ottawa Street,PO Box 30220

  

Lansing, MI 48909-7720

  

Tel.: 517-335-3167

  

Fax: 517-335-0908

  

For the Minnesota Department of Commerce:

 

/s/ Mike Rothman

  

Mike Rothman

  

Commissioner

  

Minnesota Department of Commerce

  

85 7th Place East, Suite 500

  

St. Paul, MN 55101

  

Tel.: 651-296-6025

  

Fax: 651-296-8591

  

For the Mississippi Department of Banking & Consumer Finance

 

/s/ Theresa L. Brady

  

Theresa L. Brady

  

Commissioner

  

Mississippi Department of Banking & Consumer Finance

  

901 Woolfork Building, Suite A

  

501 North West Street

  

Jackson, MS 39201

  

Tel.: 601-359-1031

  

Fax: 601-359-3557

  

 

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For the State of Minnesota:   

For the Minnesota Department of

Commerce:

  

Lori Swanson

  

Attorney General, State of

  

Minnesota

  

 

/s/ Nathan Brennaman

  

/s/ Mike Rothman

NATHAN BRENNAMAN

   MIKE ROTHMAN

Deputy Attorney General

   Commissioner

Minnesota Attorney General’s

   Minnesota Department of

Office

   Commerce

445 Minnesota Street, Suite 1200

   85 7th Place East, Suite 500

St. Paul, MN 55101-2130

   St. Paul, MN 55101

Tel.: 651-757-1415

   Tel.: 651-296-6025

Fax: 651-296-7438

   Fax: 651-297-1959

 

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For the State of Mississippi:

  

For the Mississippi Department of

Banking & Consumer Finance:

/s/ Bridgette W. Wiggins

  

/s/ Theresa L. Brady

BRIDGETTE W. WIGGINS

   THERESA L. BRADY

Special Assistant Attorney General

   Commissioner

Mississippi Attorney General’s

   Mississippi Department of Banking

Office

   & Consumer Finance

Post Office Box 22947

   901 Woolfolk Building, Suite A

Jackson, MS 39225-2947

   501 North West Street

Tel.: 601-359-4279

   Jackson, MS 39201

Fax: 601-359-4231

   Tel.: 601-359-1031    Fax: 601-359-3557

 

34

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For the State of Missouri:

  

For the Missouri Division of

Finance:

CHRIS KOSTER

Attorney General

  

/s/ Douglas M. Ommen

  

/s/ Richard Weaver

DOUGLAS M. OMMEN

   RICHARD WEAVER

Chief Counsel

   Commissioner

Consumer Protection Division

   Missouri Division of Finance

PO Box 899

   301 West High Street, Room 630

Jefferson City, MO 65102

   Jefferson City, MO 65101

Tel.: 573-751-7007

   Tel.: 573-751-2545

Fax: 573-751-2041

   Fax: 573-751-9192

 

35

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For the State of Montana:

  

For the Montana Division of

Banking and Financial Institutions:

/s/ Steve Bullock

  

/s/ Melanie S. Griggs

STEVE BULLOCK

   MELANIE S. GRIGGS

Attorney General

   Commissioner

JAMES P. MOLLOY

   Division of Banking and Financial

Assistant Attorney General

   Insitutitons

Montana Department of Justice

   301 South Park Ave, Suite 316

215 N. Sanders

   Helena, MT 59620

Helena MT 59624

   Tel.: 406-841-2920

Tel.: 406-444-2026

   Fax: 406-841-2930

Fax: 406-444-3549

  

 

36

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For the State of Nebraska:    For the Nebraska Department of    Banking and
Finance: JON BRUNING, Attorney General   

/s/ Abigail m. Stempson

  

/s/ John Munn

ABIGAIL M. STEMPSON    JOHN MUNN Assistant Attorney General    Director Office
of the Attorney General    Nebraska Department of Banking 2115 State Capitol   
and Finance Lincoln, NE 68509-8920    1230 “O” Street, Suite 400 Tel.:
402-471-2811    PO Box 95006 Fax: 402-471-4725    Lincoln, NE 68509    Tel.:
402-471-2171    Fax: 402-471-3062

 

37

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For the State of Nevada:

   For the Nevada Division of    Mortgage Lending

CATHERINE CORTEZ MASTO

  

Attorney General

  

/s/ C. Wayne Howle

  

/s/ James Westrin

C. WAYNE HOWLE

   JAMES WESTRIN

Solicitor General

   Commissioner, Division of

Nevada State Bar #3443

   Mortgage Lending

100 North Carson Street

   Nevada Department of

Carson City, Nevada 89701

   Business & Industry

Tel: 775-684-1232

   7220 Bermuda Road, Suite A

Fax: 775-684-1108

   Las Vegas, NV 89119    Tel.: 702-486-0780    Fax.: 708-486-0785

 

38

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For the State of NEW HAMPSHIRE:    For the NEW HAMPSHIRE BANKING COMMISSIONER

/s/ Michael A. Delaney

  

/s/ Ronald Wilbur

MICHAEL A. DELANEY    RONALD WILBUR Attorney General    Banking Commissioner
N.H. Department of Justice    New Hampshire Banking Department 33 Capitol Street
   53 Regional Drive, Suite 200 Concord, New Hampshire 03301    Concord, New
Hampshire 03101 Tel.: 603 271-3658    Tel.: 603 271-3561 Fax: 603 271-2110   
Fax: 603 271-1090

 

39

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For the State of New Jersey:     For the New Jersey Department of Banking &
Insurance:

JEFFREY S. CHIESA

     

ATTORNEY GENERAL OF NEW JERSEY

      By:   /s/ Lorraine K. Rak     By:   /s/ Kenneth E. Kobylowski   LORRAINE
K. RAK       KENNETH E. KOBYLOWSKI   Deputy Attorney General       Acting
Commissioner   Chief, Consumer Fraud Prosecution Section       New Jersey
Department of Banking & Insurance   Division of Law       Office of Consumer
Finance, Division of Banking   124 Halsey Street – 5th Floor       20 West State
Street – 5th Floor   P.O. Box 45029       P.O. Box 040   Newark, New Jersey
07101       Trenton, New Jersey 08625-0040   Tel.: 973-877-1280       Tel.:
609-633-7667   Fax: 973-648-4887       Fax: 609-292-3144

 

40

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For the State of New Mexico:    

For the New Mexico Financial

Institutions Division:

/s/ Gary K. King     /s/ Cynthia Richards GARY K. KING, Attorney General    
CYNTHIA RICHARDS KAREN J. MEYERS, Assistant     Director Attorney General    
New Mexico Financial Office of New Mexico     Institutions Division

Attorney General

    2550 Cerrillos Road, 3rd Floor PO Drawer 1508     Santa Fe, NM 87505 Santa
Fe, NM 87504-1508     Tel: 505-476-4560 Tel: 505-222-9100     Fax: 505-476-4670
Fax: 505-222-9033    

 

41

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For the State of New York:

/s/ Jeffrey K. Powell

JEFFREY K. POWELL

Deputy Bureau Chief

Bureau of Consumer Frauds & Protection

Office of the New York State

Attorney General

120 Broadway

New York, NY 10271

Tel.: 212-416-8309

Fax: 212-416-6003

 

42

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For the Attorney General of

North Carolina

and the North Carolina

Commissioner of Banks:

ROY COOPER

Attorney General

/s/ Philip A. Lehman

PHILIP A. LEHMAN

Assistant Attorney General

N.C. Department of Justice

P. O. Box 629

Raleigh, NC 27602

Tel.: 919-716-6000

Fax: 919-716-6019

Email: plehman@ncdoj.gov

 

43

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For the State of North Dakota      

For the North Dakota Department

of Financial Institutions

WAYNE STENEHJEM

Attorney General

    /s/ Parrell D. Grossman     /s/ Robert J. Entringer PARRELL D. GROSSMAN    
ROBERT J. ENTRINGER (ID No. 04684)     Commissioner Assistant Attorney General  
  ND Department of Financial Director, Consumer Protection and     Institutions
Antitrust Division     2000 Schafer Street, Suite G Office of Attorney General  
  Bismarck, ND 58501-1204 Gateway Professional Center     Tel: 701-328-9933 1050
E Interstate Ave, Ste 200     Fax: 701-328-0290 Bismarck, ND 58503-5574     Tel:
701-328-5570     Fax: 701-328-5568    

 

44

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For the Ohio Attorney General

MIKE DEWINE:

     

For the Ohio Department of

Commerce, Division of Financial

Institutions:

/s/ Matthew J. Lampke     /s/ Jennifer S. M. Croskey MATTHEW J. LAMPKE    
JENNIFER S. M. CROSKEY JEFFREY R. LOESER     Assistant Attorney General SUSAN A.
CHOE     Ohio Attorney General, Executive Assistant Attorneys General    
Agencies Ohio Attorney General     30 E. Broad St., 26th Floor 30 E. Broad St.,
14th Floor     Columbus, OH 43215 Columbus, OH 43215     Tel: 614-466-2980 Tel.:
614-466-1305     Fax: 614-728-9470 Fax: 614-466-8898    

 

45

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For the State of Oregon,

Attorney General JOHN R. KROGER:

   

For Department of Consumer and

Business Services, PATRICK

ALLEN, Director:

/s/ Simon Whang

    /s/ David C. Tatman, SIMON WHANG     DAVID C. TATMAN, Assistant Attorney
General     Administrator Oregon Department of Justice     Division of Finance
and Financial Fraud/Consumer Protection     Corporate Securities 1515 SW 5th
Avenue, Ste. 410     350 Winter Street NE, Rm. 410 Portland, OR 97201     Salem,
OR 97301-3881 Tel.: 971-673-1880     Tel.: 503-378-4140 Fax: 971-673-1902    
Fax: 503-947-7862

 

46

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For the Commonwealth of Pennsylvania

Office of Attorney General:

     

For the Commonwealth of Pennsylvania

Department of Banking:

/s/ Linda L. Kelly     /s/ Glenn E. Moyer LINDA L. KELLY     GLENN E. MOYER
Attorney General     Secretary of Banking Commonwealth of Pennsylvania    
Commonwealth of Pennsylvania Office of Attorney General     Department of
Banking 16th Floor, Strawberry Square     17 N. Second st., Suite 1300
Harrisburt, PA 17120     Harrisburg, PA 17101 Tel.: 717.787.3391     Tel.:
717-783-7151 Fax.: 717.783.1107     Fax.: 717-214-0808

 

47

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For the Rhode Island Department of Attorney General:

 

/s/ Gerald Coyne      

Gerald Coyne

Rhode Island Department of Attorney General

Deputy Attorney General

150 South Main Street

Providence, RI 02903

Tel:  

401-274-4400 Extension 2257

Fax:  

401-222-1302

For the Rhode Island Department of Business Regulation:

 

/s/ Paul McGrgeevy Paul McGreevy Director Rhode Island Department of Business
Regulation Division of Banking 1511 Pontiac Avenue, Bldg. 68-2 Cranston, RI
02920 Tel.:   401-462-9553 Fax:   401-462-9532

 

48

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For the State of South Carolina:

   

For the South Carolina Department of

     

Consumer Affairs and South Carolina Bo

     

of Financial Institutions:

/s/ Alan Wilson      

   

/s/ Carri Grube Lybarker      

ALAN WILSON

   

CARRI GRUBE LYBARKER

Attorney General

   

Administrator

JOHN W. MCINTOSH

   

Chief Deputy Attorney General

   

SC Department of Consumer Affairs

     

2221 Devine Street, Suite 200

     

PO Box 5757

C. HAVIRD JONES, JR.

   

Columbia, SC 29250

Assistant Deputy Attorney General

    Tel.:  

803-734-4233

      Fax:  

803-734-4229

MARY FRANCES JOWERS

     

Assistant Attorney General

     

South Carolina Attorney General’s

     

Office

     

1000 Assembly Street, Room 519

     

Columbia, SC 29201

      Tel.:  

803-734-3970

      Fax:  

803-734-3677

     

 

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For the State of South Dakota:     For the South Dakota Division of     Banking:
/s/ Marty J. Jackley              /s/ Bret Afdahl          MARTY J. JACKLEY    
BRET AFDAHL Attorney General     Director 1302 E. Highway 14, Suite 1     South
Dakota Division of Banking Pierre, SD 57501     217 1/2 West Missouri Ave. Tel.:
605-773-3215     Pierre, SD 57501 Fax: 605-773-4106     Tel.: 605-773-3421    
Fax: 866-326-7504

 

50

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For the State of Tennessee:     For the Tennessee Department of Financial    
Institutions: /s/ Robert E. Cooper           /s/ Greg Gonzales       ROBERT E.
COOPER, JR.     GREG GONZALES Attorney General and Reporter     Commissioner
Office of the Tennessee Attorney General     Tennessee Department of Financial
Institutions 425 Fifth Avenue North     414 Union Street Nashville, TN
37243-3400     Suite 1000 Tel.: 615-741-3491     Nashville, TN 37219 Fax:
615-741-2009     Tel.: 615-741-5603     Fax: 615-741-2883

 

51

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For the State of Texas: /s/ JAMES A. DAROSS       JAMES A. DAROSS State Bar
No. 05391500 Assistant Attorney General Consumer Protection Division

401 E. Franklin Avenue, Suite 530

El Paso, Texas 79901 (915) 834-5800 FAX (915) 542-1546

 

For the Texas Office of Consumer Credit Commissioner: /s/ LESLIE L.
PETTIJOHN       LESLIE L. PETTIJOHN Commissioner Texas Office of Consumer Credit
Commissioner 2601 N Lamar Blvd Austin, TX 78705-4207 Tel.: 512-936-7600 Fax:
512-936-7610

 

For the Texas Department of Savings and Mortgage Lending: /s/ DOUGLAS B.
FOSTER       DOUGLAS B. FOSTER Commissioner Texas Department of Savings and
Mortgage Lending 2601 N Lamar Blvd, Suite 201 Austin, TX 78644 Tel.:
512-475-1350 Fax: 512-475-1360

 

52

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For the State of Utah:     For the Utah Department of     Financial
Institutions: /s/ Mark L. Shurtleff           /s/ G. Edward Leary       MARK L.
SHURTLEFF     G. EDWARD LEARY Utah Attorney General     Commissioner 350 North
State Street, #230     Utah Department of Financial Salt Lake City, UT
84114-2320     Institutions Tel.: 801-538-1191     PO Box 146800 Fax:
801-538-1121     Salt Lake City, UT 84114-6800     Tel: 801-538-8761     Fax:
801-538-8894

 

53

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For the Slate of Vermont /s/ Elliot Burg       Elliot Burg Assistant Attorney
General Office of the Attorney General 109 State Street Montpelier, VT 05609
Tel.: 802-828-2153 Fax.: 802-828-2154

For the Vermont Department of Banking, Insurance, Securities and Health Care
Administration:

 

/s/ Stephen W. Kimbell       Stephen W. Kimbell Commissioner Vermont Department
of Banking. Insurance. Securities and Health Care Administration 89 Main Street
Montpelier, VT 05620 Tel.: 802-828-2380 Fax: 802-828-1477

 

54

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For The Commonwealth of Virginia,     For the Virginia Bureau of ex rel. KENNETH
T. CUCCINELLI, II,     Financial Institutions: Attorney General:     /s/ David
B. Irvin           /s/ E. Joseph Face       DAVID B. IRVIN (VSB #23927)     E.
JOSEPH FACE, JR. Senior Assistant Attorney General     Commissioner MARK S.
KUBIAK (VSB #73119)     Virginia Bureau of Financial Assistant Attorney General
    Institutions Office of Virginia Attorney General     1300 East Main Street
900 East Main Street     Richmond, Virginia 23219 Richmond, Virginia 23219    
Tel.: 804-371-9659 Tel.: 804-786-4047     Fax: 804-371-0163 Fax: 804-786-0122  
 

 

55

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For the State of Washington:     For the Washington State     Department of
Financial     Institutions: /s/ Robert M.Mckenna           /s/ Scott
Jarvis       ROBERT M.MCKENNA     SCOTT JARVIS WSBA# 18327     Director Attorney
General     Department of Financial 1125 Washington Street SE     Institutions
Olympia, WA 98504-0100     State of Washington Tel: 360-753-6200     PO Box
41200     Olympia, WA 98504-1200     Tel: 877-746-4334 /s/ David W.huey        
  DAVID W.HUEY     WSBA #31380     Assistant Attorney General     Consumer
Protection Division     Washington Attorney     General’s Office     1250
Pacific Avenue,     Suite 105 PO Box 2317     Tacoma, WA 98402-4411     Tel:
(253) 593-5243    

 

56

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For the State of West Virginia:     For the West Virginia Division of Banking:
/s/ Jill L. Miles           /s/ Sara M. Cline       JILL L. MILES     SARA M.
CLINE Deputy Attorney General     Commissioner of Banking State Capitol, Room
26E     One Players Club, Suite 300 Charleston, WV 25305-0220     Charleston, WV
25311 Tel.: 304-558-2021     Tel.: 304-558-2294 Fax: 304-558-0140     Fax:
304-558-0442

 

57

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For the State of Wisconsin:     For the Wisconsin Department of     Financial
Institutions: J.B. VAN HOLLEN     Attorney General     /s/ Holly C.
Pomraning           /s/ Peter Bildsten       HOLLY C. POMRANING     PETER
BILDSTEN Assistant Attorney General     Secretary Wisconsin Department of
Justice     Wisconsin Department of Financial Post Office Box 7857    
Institutions Madison, Wisconsin 53707-7857     345 W. Washington Ave 5th Floor
Tel: 608-266-5410     PO Box 8861 Fax: 608-267-8906     Madison, WI 53708-8861  
  Tel.: 608-267-1710     Fax: 608-261-4334

 

58

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For the State of Wyoming:     For the Wyoming Division of Banking: /s/ Gregory
A. Phillips           /s/ Albert L. Forkner       GREGORY A. PHILLIPS     ALBERT
L. FORKNER Wyoming Attorney General     Acting Commissioner Wyoming Attorney
General’s Office     Wyoming Division of Banking 123 State Capitol Bldg    
Herschler Building, 3rd Floor East 200 W. 24th     122 West 25th Cheyenne, WY
82002     Cheyenne, WY 82002 Tel: 307-777-7847     Tel.: 307-777-6998 Fax:
307-777-3435     Fax.: 307-777-3555

 

59

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For Ally Financial, Inc.:    

For Residential Capital, LLC and GMAC

Mortgage, LLC:

/s/ William B. Solomon           /s/ Tammy Hamzehpour       William B. Solomon,
Jr.     Tammy Hamzehpour Group Vice President and General Counsel     General
Counsel 200 Renaissance Center     1100 Virginia Drive Mail Code 482-B09-B11    
Fort Washington, Pennsylvania 19034 Detroit, Michigan, 48265    

 

60

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EXHIBIT A

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Settlement Term Sheet

The provisions outlined below are intended to apply to loans secured by
owner-occupied properties that serve as the primary residence of the borrower
unless otherwise noted herein.

 

I. FORECLOSURE AND BANKRUPTCY INFORMATION AND DOCUMENTATION.

Unless otherwise specified, these provisions shall apply to bankruptcy and
foreclosures in all jurisdictions regardless of whether the jurisdiction has a
judicial, non-judicial or quasi-judicial process for foreclosures and regardless
of whether a statement is submitted during the foreclosure or bankruptcy process
in the form of an affidavit, sworn statement or declarations under penalty of
perjury (to the extent stated to be based on personal knowledge)
(“Declaration”).

 

  A. Standards for Documents Used in Foreclosure and Bankruptcy Proceedings.

 

  1. Servicer shall ensure that factual assertions made in pleadings (complaint,
counterclaim, cross-claim, answer or similar pleadings), bankruptcy proofs of
claim (including any facts provided by Servicer or based on information provided
by the Servicer that are included in any attachment and submitted to establish
the truth of such facts) (“POC”), Declarations, affidavits, and sworn statements
filed by or on behalf of Servicer in judicial foreclosures or bankruptcy
proceedings and notices of default, notices of sale and similar notices
submitted by or on behalf of Servicer in non-judicial foreclosures are accurate
and complete and are supported by competent and reliable evidence. Before a loan
is referred to non-judicial foreclosure, Servicer shall ensure that it has
reviewed competent and reliable evidence to substantiate the borrower’s default
and the right to foreclose, including the borrower’s loan status and loan
information.

 

  2. Servicer shall ensure that affidavits, sworn statements, and Declarations
are based on personal knowledge, which may be based on the affiant’s review of
Servicer’s books and records, in accordance with the evidentiary requirements of
applicable state or federal law.

 

  3.

Servicer shall ensure that affidavits, sworn statements and Declarations
executed by Servicer’s affiants are based on the affiant’s review and personal
knowledge of the accuracy and completeness of the assertions in the affidavit,
sworn statement or Declaration, set out facts that Servicer reasonably believes
would be admissible in evidence, and show that the affiant is competent to
testify on the matters stated. Affiants shall confirm that they have reviewed
competent and reliable evidence to substantiate the

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

  borrower’s default and the right to foreclose, including the borrower’s loan
status and required loan ownership information. If an affiant relies on a review
of business records for the basis of its affidavit, the referenced business
record shall be attached if required by applicable state or federal law or court
rule. This provision does not apply to affidavits, sworn statements and
Declarations signed by counsel based solely on counsel’s personal knowledge
(such as affidavits of counsel relating to service of process, extensions of
time, or fee petitions) that are not based on a review of Servicer’s books and
records. Separate affidavits, sworn statements or Declarations shall be used
when one affiant does not have requisite personal knowledge of all required
information.

 

  4. Servicer shall have standards for qualifications, training and supervision
of employees. Servicer shall train and supervise employees who regularly prepare
or execute affidavits, sworn statements or Declarations. Each such employee
shall sign a certification that he or she has received the training. Servicer
shall oversee the training completion to ensure each required employee properly
and timely completes such training. Servicer shall maintain written records
confirming that each such employee has completed the training and the subjects
covered by the training.

 

  5. Servicer shall review and approve standardized forms of affidavits,
standardized forms of sworn statements, and standardized forms of Declarations
prepared by or signed by an employee or officer of Servicer, or executed by a
third party using a power of attorney on behalf of Servicer, to ensure
compliance with applicable law, rules, court procedure, and the terms of this
Agreement (“the Agreement”).

 

  6. Affidavits, sworn statements and Declarations shall accurately identify the
name of the affiant, the entity of which the affiant is an employee, and the
affiant’s title.

 

  7. Affidavits, sworn statements and Declarations, including their
notarization, shall fully comply with all applicable state law requirements.

 

  8. Affidavits, sworn statements and Declarations shall not contain information
that is false or unsubstantiated. This requirement shall not preclude
Declarations based on information and belief where so stated.

 

  9. Servicer shall assess and ensure that it has an adequate number of
employees and that employees have reasonable time to prepare, verify, and
execute pleadings, POCs, motions for relief from stay (“MRS”), affidavits, sworn
statements and Declarations.

 

A-2

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  10. Servicer shall not pay volume-based or other incentives to employees or
third-party providers or trustees that encourage undue haste or lack of due
diligence over quality.

 

  11. Affiants shall be individuals, not entities, and affidavits, sworn
statements and Declarations shall be signed by hand signature of the affiant
(except for permitted electronic filings). For such documents, except for
permitted electronic filings, signature stamps and any other means of electronic
or mechanical signature are prohibited.

 

  12. At the time of execution, all information required by a form affidavit,
sworn statement or Declaration shall be complete.

 

  13. Affiants shall date their signatures on affidavits, sworn statements or
Declarations.

 

  14. Servicer shall maintain records that identify all notarizations of
Servicer documents executed by each notary employed by Servicer.

 

  15. Servicer shall not file a POC in a bankruptcy proceeding which, when
filed, contained materially inaccurate information. In cases in which such a POC
may have been filed, Servicer shall not rely on such POC and shall (a) in active
cases, at Servicer’s expense, take appropriate action, consistent with state and
federal law and court procedure, to substitute such POC with an amended POC as
promptly as reasonably practicable (and, in any event, not more than 30 days)
after acquiring actual knowledge of such material inaccuracy and provide
appropriate written notice to the borrower or borrower’s counsel; and (b) in
other cases, at Servicer’s expense, take appropriate action after acquiring
actual knowledge of such material inaccuracy.

 

  16. Servicer shall not rely on an affidavit of indebtedness or similar
affidavit, sworn statement or Declaration filed in a pending pre-judgment
judicial foreclosure or bankruptcy proceeding which (a) was required to be based
on the affiant’s review and personal knowledge of its accuracy but was not,
(b) was not, when so required, properly notarized, or (c) contained materially
inaccurate information in order to obtain a judgment of foreclosure, order of
sale, relief from the automatic stay or other relief in bankruptcy. In pending
cases in which such affidavits, sworn statements or Declarations may have been
filed, Servicer shall, at Servicer’s expense, take appropriate action,
consistent with state and federal law and court procedure, to substitute such
affidavits with new affidavits and provide appropriate written notice to the
borrower or borrower’s counsel.

 

A-3

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  17. In pending post-judgment, pre-sale cases in judicial foreclosure
proceedings in which an affidavit or sworn statement was filed which was
required to be based on the affiant’s review and personal knowledge of its
accuracy but may not have been, or that may not have, when so required, been
properly notarized, and such affidavit or sworn statement has not been re-filed,
Servicer, unless prohibited by state or local law or court rule, will provide
written notice to borrower at borrower’s address of record or borrower’s counsel
prior to proceeding with a foreclosure sale or eviction proceeding.

 

  18. In all states, Servicer shall send borrowers a statement setting forth
facts supporting Servicer’s or holder’s right to foreclose and containing the
information required in paragraphs I.B.6 (items available upon borrower
request), I.B.10 (account statement), I.C.2 and I.C.3 (ownership statement), and
IV.B.13 (loss mitigation statement) herein. Servicer shall send this statement
to the borrower in one or more communications no later than 14 days prior to
referral to foreclosure attorney or foreclosure trustee. Servicer shall provide
the Monitoring Committee with copies of proposed form statements for review
before implementation.

 

  B. Requirements for Accuracy and Verification of Borrower’s Account
Information.

 

  1. Servicer shall maintain procedures to ensure accuracy and timely updating
of borrower’s account information, including posting of payments and imposition
of fees. Servicer shall also maintain adequate documentation of borrower account
information, which may be in either electronic or paper format.

 

  2. For any loan on which interest is calculated based on a daily accrual or
daily interest method and as to which any obligor is not a debtor in a
bankruptcy proceeding without reaffirmation, Servicer shall promptly accept and
apply all borrower payments, including cure payments (where authorized by law or
contract), trial modification payments, as well as non-conforming payments,
unless such application conflicts with contract provisions or prevailing law.
Servicer shall ensure that properly identified payments shall be posted no more
than two business days after receipt at the address specified by Servicer and
credited as of the date received to borrower’s account. Each monthly payment
shall be applied in the order specified in the loan documents.

 

  3.

For any loan on which interest is not calculated based on a daily accrual or
daily interest method and as to which any obligor is not a debtor in a
bankruptcy proceeding without reaffirmation, Servicer shall promptly accept and
apply all borrower conforming

 

A-4

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  payments, including cure payments (where authorized by law or contract),
unless such application conflicts with contract provisions or prevailing law.
Servicer shall continue to accept trial modification payments consistent with
existing payment application practices. Servicer shall ensure that properly
identified payments shall be posted no more than two business days after receipt
at the address specified by Servicer. Each monthly payment shall be applied in
the order specified in the loan documents.

 

  a. Servicer shall accept and apply at least two non-conforming payments from
the borrower, in accordance with this subparagraph, when the payment, whether on
its own or when combined with a payment made by another source, comes within
$50.00 of the scheduled payment, including principal and interest and, where
applicable, taxes and insurance.

 

  b. Except for payments described in paragraph I.B.3.a, Servicer may post
partial payments to a suspense or unapplied funds account, provided that
Servicer (1) discloses to the borrower the existence of and any activity in the
suspense or unapplied funds account; (2) credits the borrower’s account with a
full payment as of the date that the funds in the suspense or unapplied funds
account are sufficient to cover such full payment; and (3) applies payments as
required by the terms of the loan documents. Servicer shall not take funds from
suspense or unapplied funds accounts to pay fees until all unpaid contractual
interest, principal, and escrow amounts are paid and brought current or other
final disposition of the loan.

 

  4. Notwithstanding the provisions above, Servicer shall not be required to
accept payments which are insufficient to pay the full balance due after the
borrower has been provided written notice that the contract has been declared in
default and the remaining payments due under the contract have been accelerated.

 

  5. Servicer shall provide to borrowers (other than borrowers in bankruptcy or
borrowers who have been referred to or are going through foreclosure) adequate
information on monthly billing or other account statements to show in clear and
conspicuous language:

 

  a. total amount due;

 

  b. allocation of payments, including a notation if any payment has been posted
to a “suspense or unapplied funds account”;

 

A-5

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

  c. unpaid principal;

 

  d. fees and charges for the relevant time period;

 

  e. current escrow balance; and

 

  f. reasons for any payment changes, including an interest rate or escrow
account adjustment, no later than 21 days before the new amount is due (except
in the case of loans as to which interest accrues daily or the rate changes more
frequently than once every 30 days);

Statements as described above are not required to be delivered with respect to
any fixed rate residential mortgage loan as to which the borrower is provided a
coupon book.

 

  6. In the statements described in paragraphs I.A.18 and III.B.1.a, Servicer
shall notify borrowers that they may receive, upon written request:

 

  a. A copy of the borrower’s payment history since the borrower was last less
than 60 days past due;

 

  b. A copy of the borrower’s note;

 

  c. If Servicer has commenced foreclosure or filed a POC, copies of any
assignments of mortgage or deed of trust required to demonstrate the right to
foreclose on the borrower’s note under applicable state law; and

 

  d. The name of the investor that holds the borrower’s loan.

 

  7. Servicer shall adopt enhanced billing dispute procedures, including for
disputes regarding fees. These procedures will include:

 

  a. Establishing readily available methods for customers to lodge complaints
and pose questions, such as by providing toll-free numbers and accepting
disputes by email;

 

  b. Assessing and ensuring adequate and competent staff to answer and respond
to consumer disputes promptly;

 

  c. Establishing a process for dispute escalation;

 

  d. Tracking the resolution of complaints; and

 

  e. Providing a toll-free number on monthly billing statements.

 

  8. Servicer shall take appropriate action to promptly remediate any
inaccuracies in borrowers’ account information, including:

 

  a. Correcting the account information;

 

  b. Providing cash refunds or account credits; and

 

  c. Correcting inaccurate reports to consumer credit reporting agencies.

 

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  9. Servicer’s systems to record account information shall be periodically
independently reviewed for accuracy and completeness by an independent reviewer.

 

  10. As indicated in paragraph I.A.18, Servicer shall send the borrower an
itemized plain language account summary setting forth each of the following
items, to the extent applicable:

 

  a. The total amount needed to reinstate or bring the account current, and the
amount of the principal obligation under the mortgage;

 

  b. The date through which the borrower’s obligation is paid;

 

  c. The date of the last full payment;

 

  d. The current interest rate in effect for the loan (if the rate is effective
for at least 30 days);

 

  e. The date on which the interest rate may next reset or adjust (unless the
rate changes more frequently than once every 30 days);

 

  f. The amount of any prepayment fee to be charged, if any;

 

  g. A description of any late payment fees;

 

  h. A telephone number or electronic mail address that may be used by the
obligor to obtain information regarding the mortgage; and

 

  i. The names, addresses, telephone numbers, and Internet addresses of one or
more counseling agencies or programs approved by HUD
(http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm).

 

  11. In active chapter 13 cases, Servicer shall ensure that:

 

  a. prompt and proper application of payments is made on account of
(a) pre-petition arrearage amounts and (b) post- petition payment amounts and
posting thereof as of the successful consummation of the effective confirmed
plan;

 

  b. the debtor is treated as being current so long as the debtor is making
payments in accordance with the terms of the then- effective confirmed plan and
any later effective payment change notices; and

 

  c.

as of the date of dismissal of a debtor’s bankruptcy case, entry of an order
granting Servicer relief from the stay, or entry of an order granting the debtor
a discharge, there is a reconciliation of payments received with respect to the

 

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  debtor’s obligations during the case and appropriately update the Servicer’s
systems of record. In connection with such reconciliation, Servicer shall
reflect the waiver of any fee, expense or charge pursuant to paragraphs
III.B.l.c.i or III.B.1.d.

 

  C. Documentation of Note, Holder Status and Chain of Assignment.

 

  1. Servicer shall implement processes to ensure that Servicer or the
foreclosing entity has a documented enforceable interest in the promissory note
and mortgage (or deed of trust) under applicable state law, or is otherwise a
proper party to the foreclosure action.

 

  2. Servicer shall include a statement in a pleading, affidavit of indebtedness
or similar affidavits in court foreclosure proceedings setting forth the basis
for asserting that the foreclosing party has the right to foreclose.

 

  3. Servicer shall set forth the information establishing the party’s right to
foreclose as set forth in I.C.2 in a communication to be sent to the borrower as
indicated in I.A.18.

 

  4. If the original note is lost or otherwise unavailable, Servicer shall
comply with applicable law in an attempt to establish ownership of the note and
the right to enforcement. Servicer shall ensure good faith efforts to obtain or
locate a note lost while in the possession of Servicer or Servicer’s agent and
shall ensure that Servicer and Servicer’s agents who are expected to have
possession of notes or assignments of mortgage on behalf of Servicer adopt
procedures that are designed to provide assurance that the Servicer or
Servicer’s agent would locate a note or assignment of mortgage if it is in the
possession or control of the Servicer or Servicer’s agent, as the case may be.
In the event that Servicer prepares or causes to be prepared a lost note or lost
assignment affidavit with respect to an original note or assignment lost while
in Servicer’s control, Servicer shall use good faith efforts to obtain or locate
the note or assignment in accordance with its procedures. In the affidavit,
sworn statement or other filing documenting the lost note or assignment,
Servicer shall recite that Servicer has made a good faith effort in accordance
with its procedures for locating the lost note or assignment.

 

  5. Servicer shall not intentionally destroy or dispose of original notes that
are still in force.

 

  6. Servicer shall ensure that mortgage assignments executed by or on behalf of
Servicer are executed with appropriate legal authority, accurately reflective of
the completed transaction and properly acknowledged.

 

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  D. Bankruptcy Documents.

 

  1. Proofs of Claim (“POC”). Servicer shall ensure that POCs filed on behalf of
Servicer are documented in accordance with the United States Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure, and any applicable local rule or
order (“bankruptcy law”). Unless not permitted by statute or rule, Servicer
shall ensure that each POC is documented by attaching:

 

  a. The original or a duplicate of the note, including all indorsements; a copy
of any mortgage or deed of trust securing the notes (including, if applicable,
evidence of recordation in the applicable land records); and copies of any
assignments of mortgage or deed of trust required to demonstrate the right to
foreclose on the borrower’s note under applicable state law (collectively, “Loan
Documents”). If the note has been lost or destroyed, a lost note affidavit shall
be submitted.

 

  b. If, in addition to its principal amount, a claim includes interest, fees,
expenses, or other charges incurred before the petition was filed, an itemized
statement of the interest, fees, expenses, or charges shall be filed with the
proof of claim (including any expenses or charges based on an escrow analysis as
of the date of filing) at least in the detail specified in the current draft of
Official Form B 10 (effective December 2011) (“Official Form B 10”) Attachment
A.

 

  c. A statement of the amount necessary to cure any default as of the date of
the petition shall be filed with the proof of claim.

 

  d. If a security interest is claimed in property that is the debtor’s
principal residence, the attachment prescribed by the appropriate Official Form
shall be filed with the proof of claim.

 

  e. Servicer shall include a statement in a POC setting forth the basis for
asserting that the applicable party has the right to foreclose.

 

  f. The POC shall be signed (either by hand or by appropriate electronic
signature) by the responsible person under penalty of perjury after reasonable
investigation, stating that the information set forth in the POC is true and
correct to the best of such responsible person’s knowledge, information, and
reasonable belief, and clearly identify the responsible person’s employer and
position or title with the employer.

 

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  2. Motions for Relief from Stay (“MRS”). Unless not permitted by bankruptcy
law, Servicer shall ensure that each MRS in a chapter 13 proceeding is
documented by attaching:

 

  a. To the extent not previously submitted with a POC, a copy of the Loan
Documents; if such documents were previously submitted with a POC, a statement
to that effect. If the promissory note has been lost or destroyed, a lost note
affidavit shall be submitted;

 

  b. To the extent not previously submitted with a POC, Servicer shall include a
statement in an MRS setting forth the basis for asserting that the applicable
party has the right to foreclose.

 

  c. An affidavit, sworn statement or Declaration made by Servicer or based on
information provided by Servicer (“MRS affidavit” (which term includes, without
limitation, any facts provided by Servicer that are included in any attachment
and submitted to establish the truth of such facts) setting forth:

 

  i. whether there has been a default in paying pre- petition arrearage or
post-petition amounts (an “MRS delinquency”);

 

  ii. if there has been such a default, (a) the unpaid principal balance, (b) a
description of any default with respect to the pre-petition arrearage, (c) a
description of any default with respect to the post- petition amount (including,
if applicable, any escrow shortage), (d) the amount of the pre-petition
arrearage (if applicable), (e) the post-petition payment amount , (f) for the
period since the date of the first post-petition or pre-petition default that is
continuing and has not been cured, the date and amount of each payment made
(including escrow payments) and the application of each such payment, and
(g) the amount, date and description of each fee or charge applied to such
pre-petition amount or post-petition amount since the later of the date of the
petition or the preceding statement pursuant to paragraph III.B.1.a; and

 

  iii. all amounts claimed, including a statement of the amount necessary to
cure any default on or about the date of the MRS.

 

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  d. All other attachments prescribed by statute, rule, or law.

 

  e. Servicer shall ensure that any MRS discloses the terms of any trial period
or permanent loan modification plan pending at the time of filing of a MRS or
whether the debtor is being evaluated for a loss mitigation option.

 

  E. Quality Assurance Systems Review.

 

  1. Servicer shall conduct regular reviews, not less than quarterly, of a
statistically valid sample of affidavits, sworn statements, Declarations filed
by or on behalf of Servicer in judicial foreclosures or bankruptcy proceedings
and notices of default, notices of sale and similar notices submitted in
non-judicial foreclosures to ensure that the documents are accurate and comply
with prevailing law and this Agreement.

 

  a. The reviews shall also verify the accuracy of the statements in affidavits,
sworn statements, Declarations and documents used to foreclose in non-judicial
foreclosures, the account summary described in paragraph I.B.10, the ownership
statement described in paragraph I.C.2, and the loss mitigation statement
described in paragraph IV.B.13 by reviewing the underlying information. Servicer
shall take appropriate remedial steps if deficiencies are identified, including
appropriate remediation in individual cases.

 

  b. The reviews shall also verify the accuracy of the statements in affidavits,
sworn statements and Declarations submitted in bankruptcy proceedings. Servicer
shall take appropriate remedial steps if deficiencies are identified, including
appropriate remediation in individual cases.

 

  2. The quality assurance steps set forth above shall be conducted by Servicer
employees who are separate and independent of employees who prepare foreclosure
or bankruptcy affidavits, sworn statements, or other foreclosure or bankruptcy
documents.

 

  3. Servicer shall conduct regular pre-filing reviews of a statistically valid
sample of POCs to ensure that the POCs are accurate and comply with prevailing
law and this Agreement. The reviews shall also verify the accuracy of the
statements in POCs. Servicer shall take appropriate remedial steps if
deficiencies are identified, including appropriate remediation in individual
cases. The pre-filing review shall be conducted by Servicer employees who are
separate and independent of the persons who prepared the applicable POCs.

 

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  4. Servicer shall regularly review and assess the adequacy of its internal
controls and procedures with respect to its obligations under this Agreement,
and implement appropriate procedures to address deficiencies.

 

II. THIRD-PARTY PROVIDER OVERSIGHT.

 

  A. Oversight Duties Applicable to All Third-Party Providers.

Servicer shall adopt policies and processes to oversee and manage foreclosure
firms, law firms, foreclosure trustees, subservicers and other agents,
independent contractors, entities and third parties (including subsidiaries and
affiliates) retained by or on behalf of Servicer that provide foreclosure,
bankruptcy or mortgage servicing activities (including loss mitigation)
(collectively, such activities are “Servicing Activities” and such providers are
“Third-Party Providers”), including:

 

  1. Servicer shall perform appropriate due diligence of Third-Party Providers’
qualifications, expertise, capacity, reputation, complaints, information
security, document custody practices, business continuity, and financial
viability.

 

  2. Servicer shall amend agreements, engagement letters, or oversight policies,
or enter into new agreements or engagement letters, with Third-Party Providers
to require them to comply with Servicer’s applicable policies and procedures
(which will incorporate any applicable aspects of this Agreement) and applicable
state and federal laws and rules.

 

  3. Servicer shall ensure that agreements, contracts or oversight policies
provide for adequate oversight, including measures to enforce Third-Party
Provider contractual obligations, and to ensure timely action with respect to
Third-Party Provider performance failures.

 

  4. Servicer shall ensure that foreclosure and bankruptcy counsel and
foreclosure trustees have appropriate access to information from Servicer’s
books and records necessary to perform their duties in preparing pleadings and
other documents submitted in foreclosure and bankruptcy proceedings.

 

  5. Servicer shall ensure that all information provided by or on behalf of
Servicer to Third-Party Providers in connection with providing Servicing
Activities is accurate and complete.

 

  6. Servicer shall conduct periodic reviews of Third-Party Providers. These
reviews shall include:

 

  a. A review of a sample of the foreclosure and bankruptcy documents prepared
by the Third-Party Provider, to provide for compliance with applicable state and
federal law and this Agreement in connection with the preparation of the
documents, and the accuracy of the facts contained therein;

 

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  b. A review of the fees and costs assessed by the Third-Party Provider to
provide that only fees and costs that are lawful, reasonable and actually
incurred are charged to borrowers and that no portion of any fees or charges
incurred by any Third-Party Provider for technology usage, connectivity, or
electronic invoice submission is charged as a cost to the borrower;

 

  c. A review of the Third-Party Provider’s processes to provide for compliance
with the Servicer’s policies and procedures concerning Servicing Activities;

 

  d. A review of the security of original loan documents maintained by the
Third-Party Provider;

 

  e. A requirement that the Third-Party Provider disclose to the Servicer any
imposition of sanctions or professional disciplinary action taken against them
for misconduct related to performance of Servicing Activities; and

 

  f. An assessment of whether bankruptcy attorneys comply with the best practice
of determining whether a borrower has made a payment curing any MRS delinquency
within two business days of the scheduled hearing date of the related MRS.

The quality assurance steps set forth above shall be conducted by Servicer
employees who are separate and independent of employees who prepare foreclosure
or bankruptcy affidavits, sworn documents, Declarations or other foreclosure or
bankruptcy documents.

 

  7. Servicer shall take appropriate remedial steps if problems are identified
through this review or otherwise, including, when appropriate, terminating its
relationship with the Third-Party Provider.

 

  8. Servicer shall adopt processes for reviewing and appropriately addressing
customer complaints it receives about Third-Party Provider services.

 

  9. Servicer shall regularly review and assess the adequacy of its internal
controls and procedures with respect to its obligations under this Section, and
take appropriate remedial steps if deficiencies are identified, including
appropriate remediation in individual cases.

 

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  B. Additional Oversight of Activities by Third-Party Providers.

 

  1. Servicer shall require a certification process for law firms (and
recertification of existing law firm providers) that provide residential
mortgage foreclosure and bankruptcy services for Servicer, on a periodic basis,
as qualified to serve as a Third-Party Provider to Servicer, including that
attorneys have the experience and competence necessary to perform the services
requested.

 

  2. Servicer shall ensure that attorneys are licensed to practice in the
relevant jurisdiction, have the experience and competence necessary to perform
the services requested, and that their services comply with applicable rules,
regulations and applicable law (including state law prohibitions on fee
splitting).

 

  3. Servicer shall ensure that foreclosure and bankruptcy counsel and
foreclosure trustees have an appropriate Servicer contact to assist in legal
proceedings and to facilitate loss mitigation questions on behalf of the
borrower.

 

  4. Servicer shall adopt policies requiring Third-Party Providers to maintain
records that identify all notarizations of Servicer documents executed by each
notary employed by the Third-Party Provider.

 

III. BANKRUPTCY.

 

  A. General.

 

  1. The provisions, conditions and obligations imposed herein are intended to
be interpreted in accordance with applicable federal, state and local laws,
rules and regulations. Nothing herein shall require a Servicer to do anything
inconsistent with applicable state or federal law, including the applicable
bankruptcy law or a court order in a bankruptcy case.

 

  2. Servicer shall ensure that employees who are regularly engaged in servicing
mortgage loans as to which the borrower or mortgagor is in bankruptcy receive
training specifically addressing bankruptcy issues.

 

  B. Chapter 13 Cases.

 

  1. In any chapter 13 case, Servicer shall ensure that:

 

  a.

So long as the debtor is in a chapter 13 case, within 180 days after the date on
which the fees, expenses, or charges are incurred, file and serve on the debtor,
debtor’s counsel, and the trustee a notice in a form consistent with Official
Form B10 (Supplement 2) itemizing fees, expenses, or charges (1) that were
incurred in connection with the claim

 

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  after the bankruptcy case was filed, (2) that the holder asserts are
recoverable against the debtor or against the debtor’s principal residence, and
(3) that the holder intends to collect from the debtor.

 

  b. Servicer replies within time periods established under bankruptcy law to
any notice that the debtor has completed all payments under the plan or
otherwise paid in full the amount required to cure any pre-petition default.

 

  c. If the Servicer fails to provide information as required by paragraph
III.B.1.a with respect to a fee, expense or charge within 180 days of the
incurrence of such fee, expense, or charge, then,

 

  i. Except for independent charges (“Independent charge”) paid by the Servicer
that is either (A) specifically authorized by the borrower or (B) consists of
amounts advanced by Servicer in respect of taxes, homeowners association fees,
liens or insurance, such fee, expense or charge shall be deemed waived and may
not be collected from the borrower.

 

  ii. In the case of an Independent charge, the court may, after notice and
hearing, take either or both of the following actions:

 

  (a) preclude the holder from presenting the omitted information, in any form,
as evidence in any contested matter or adversary proceeding in the case, unless
the court determines that the failure was substantially justified or is
harmless; or

 

  (b) award other appropriate relief, including reasonable expenses and
attorney’s fees caused by the failure.

 

  d. If the Servicer fails to provide information as required by paragraphs
III.B. 1.a or III.B.1.b and bankruptcy law with respect to a fee, expense or
charge (other than an Independent Charge) incurred more than 45 days before the
date of the reply referred to in paragraph III.B.1.b, then such fee, expense or
charge shall be deemed waived and may not be collected from the borrower.

 

  e.

Servicer shall file and serve on the debtor, debtor’s counsel, and the trustee a
notice in a form consistent with the current draft of Official Form B10
(Supplement 1) (effective

 

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  December 2011) of any change in the payment amount, including any change that
results from an interest rate or escrow account adjustment, no later than 21
days before a payment in the new amount is due. Servicer shall waive and not
collect any late charge or other fees imposed solely as a result of the failure
of the borrower timely to make a payment attributable to the failure of Servicer
to give such notice timely.

 

IV. LOSS MITIGATION.

These requirements are intended to apply to both government-sponsored and
proprietary loss mitigation programs and shall apply to subservicers performing
loss mitigation services on Servicer’s behalf.

 

  A. Loss Mitigation Requirements.

 

  1. Servicer shall be required to notify potentially eligible borrowers of
currently available loss mitigation options prior to foreclosure referral. Upon
the timely receipt of a complete loan modification application, Servicer shall
evaluate borrowers for all available loan modification options for which they
are eligible prior to referring a borrower to foreclosure and shall facilitate
the submission and review of loss mitigation applications. The foregoing
notwithstanding, Servicer shall have no obligation to solicit borrowers who are
in bankruptcy.

 

  2. Servicer shall offer and facilitate loan modifications for borrowers rather
than initiate foreclosure when such loan modifications for which they are
eligible are net present value (NPV) positive and meet other investor,
guarantor, insurer and program requirements.

 

  3. Servicer shall allow borrowers enrolled in a trial period plan under prior
HAMP guidelines (where borrowers were not pre-qualified) and who made all
required trial period payments, but were later denied a permanent modification,
the opportunity to reapply for a HAMP or proprietary loan modification using
current financial information.

 

  4. Servicer shall promptly send a final modification agreement to borrowers
who have enrolled in a trial period plan under current HAMP guidelines (or fully
underwritten proprietary modification programs with a trial payment period) and
who have made the required number of timely trial period payments, where the
modification is underwritten prior to the trial period and has received any
necessary investor, guarantor or insurer approvals. The borrower shall then be
converted by Servicer to a permanent modification upon execution of the final
modification documents, consistent with applicable program guidelines, absent
evidence of fraud.

 

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  B. Dual Track Restricted.

 

  1. If a borrower has not already been referred to foreclosure, Servicer shall
not refer an eligible borrower’s account to foreclosure while the borrower’s
complete application for any loan modification program is pending if Servicer
received (a) a complete loan modification application no later than day 120 of
delinquency, or (b) a substantially complete loan modification application
(missing only any required documentation of hardship) no later than day 120 of
delinquency and Servicer receives any required hardship documentation no later
than day 130 of delinquency. Servicer shall not make a referral to foreclosure
of an eligible borrower who so provided an application until:

 

  a. Servicer determines (after the automatic review in paragraph IV.G.1) that
the borrower is not eligible for a loan modification, or

 

  b. If borrower does not accept an offered foreclosure prevention alternative
within 14 days of the evaluation notice, the earlier of (i) such 14 days, and
(ii) borrower’s decline of the foreclosure prevention offer.

 

  2. If borrower accepts the loan modification resulting from Servicer’s
evaluation of the complete loan modification application referred to in
paragraph IV.B.1 (verbally, in writing (including e-mail responses) or by
submitting the first trial modification payment) within 14 days of Servicer’s
offer of a loan modification, then the Servicer shall delay referral to
foreclosure until (a) if the Servicer fails timely to receive the first trial
period payment, the last day for timely receiving the first trial period
payment, and (b) if the Servicer timely receives the first trial period payment,
after the borrower breaches the trial plan.

 

  3. If the loan modification requested by a borrower as described in paragraph
IV.B.1 is denied, except when otherwise required by federal or state law or
investor directives, if borrower is entitled to an appeal under paragraph
IV.G.3, Servicer will not proceed to a foreclosure sale until the later of (if
applicable):

 

  a. expiration of the 30-day appeal period; and

 

  b.

if the borrower appeals the denial, until the later of (if applicable) (i) if
Servicer denies borrower’s appeal, 15 days after the letter denying the appeal,
(ii) if the Servicer sends borrower a letter granting his or her appeal and
offering a loan modification, 14 days after the date of such offer, (iii)

 

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  if the borrower timely accepts the loan modification offer (verbally, in
writing (including e-mail responses), or by making the first trial period
payment), after the Servicer fails timely to receive the first trial period
payment, and (iv) if the Servicer timely receives the first trial period
payment, after the borrower breaches the trial plan.

 

  4. If, after an eligible borrower has been referred to foreclosure, the
Servicer receives a complete application from the borrower within 30 days after
the Post Referral to Foreclosure Solicitation Letter, then while such loan
modification application is pending, Servicer shall not move for foreclosure
judgment or order of sale (or, if a motion has already been filed, shall take
reasonable steps to avoid a ruling on such motion), or seek a foreclosure sale.
If Servicer offers the borrower a loan modification, Servicer shall not move for
judgment or order of sale, (or, if a motion has already been filed, shall take
reasonable steps to avoid a ruling on such motion), or seek a foreclosure sale
until the earlier of (a) 14 days after the date of the related offer of a loan
modification, and (b) the date the borrower declines the loan modification
offer. If the borrower accepts the loan modification offer (verbally, in writing
(including e-mail responses) or by submitting the first trial modification
payment) within 14 days after the date of the related offer of loan
modification, Servicer shall continue this delay until the later of (if
applicable) (A) the failure by the Servicer timely to receive the first trial
period payment, and (B) if the Servicer timely receives the first trial period
payment, after the borrower breaches the trial plan.

 

  5. If the loan modification requested by a borrower described in paragraph
IV.B.4 is denied, then, except when otherwise required by federal or state law
or investor directives, if borrower is entitled to an appeal under paragraph
IV.G.3, Servicer will not proceed to a foreclosure sale until the later of (if
applicable):

 

  a. expiration of the 30-day appeal period; and

 

  b. if the borrower appeals the denial, until the later of (if applicable)
(i) if Servicer denies borrower’s appeal, 15 days after the letter denying the
appeal, (ii) if the Servicer sends borrower a letter granting his or her appeal
and offering a loan modification, 14 days after the date of such offer, (iii) if
the borrower timely accepts the loan modification offer (verbally, in writing
(including e-mail responses), or by making the first trial period payment),
after the failure of the Servicer timely to receive the first trial period
payment, and (iv) if the Servicer timely receives the first trial period
payment, after the borrower breaches the trial plan.

 

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  6. If, after an eligible borrower has been referred to foreclosure, Servicer
receives a complete loan modification application more than 30 days after the
Post Referral to Foreclosure Solicitation Letter, but more than 37 days before a
foreclosure sale is scheduled, then while such loan modification application is
pending, Servicer shall not proceed with the foreclosure sale. If Servicer
offers a loan modification, then Servicer shall delay the foreclosure sale until
the earlier of (i) 14 days after the date of the related offer of loan
modification, and (ii) the date the borrower declines the loan modification
offer. If the borrower accepts the loan modification offer (verbally, in writing
(including e-mail responses) or by submitting the first trial modification
payment) within 14 days, Servicer shall delay the foreclosure sale until the
later of (if applicable) (A) the failure by the Servicer timely to receive the
first trial period payment, and (B) if the Servicer timely receives the first
trial period payment, after the borrower breaches the trial plan.

 

  7. If the loan modification requested by a borrower described in paragraph
IV.B.6 is denied and it is reasonable to believe that more than 90 days remains
until a scheduled foreclosure date or the first date on which a sale could
reasonably be expected to be scheduled and occur, then, except when otherwise
required by federal or state law or investor directives, if borrower is entitled
to an appeal under paragraph IV.G.3.a, Servicer will not proceed to a
foreclosure sale until the later of (if applicable):

 

  a. expiration of the 30-day appeal period; and

 

  b. if the borrower appeals the denial, until the later of (if applicable)
(i) if Servicer denies borrower’s appeal, 15 days after the letter denying the
appeal, (ii) if the Servicer sends borrower a letter granting his or her appeal
and offering a loan modification, 14 days after the date of such offer, (iii) if
the borrower timely accepts the loan modification offer (verbally, in writing
(including e-mail responses), or by making the first trial period payment),
after the Servicer fails timely to receive the first trial period payment, and
(iv) if the Servicer timely receives the first trial period payment, after the
borrower breaches the trial plan.

 

  8.

If, after an eligible borrower has been referred to foreclosure, Servicer
receives a complete loan modification application more than 30 days after the
Post Referral to Foreclosure Solicitation Letter, but within 37 to 15 days
before a foreclosure sale is scheduled, then Servicer shall conduct an expedited
review of the

 

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  borrower and, if the borrower is extended a loan modification offer, Servicer
shall postpone any foreclosure sale until the earlier of (a) 14 days after the
date of the related evaluation notice, and (b) the date the borrower declines
the loan modification offer. If the borrower timely accepts the loan
modification offer (either in writing or by submitting the first trial
modification payment), Servicer shall delay the foreclosure sale until the later
of (if applicable) (A) the failure by the Servicer timely to receive the first
trial period payment, and (B) if the Servicer timely receives the first trial
period payment, after the borrower breaches the trial plan.

 

  9. If, after an eligible borrower has been referred to foreclosure, the
Servicer receives a complete loan modification application more than 30 days
after the Post Referral to Foreclosure Solicitation Letter and less than 15 days
before a scheduled foreclosure sale, Servicer must notify the borrower before
the foreclosure sale date as to Servicer’s determination (if its review was
completed) or inability to complete its review of the loan modification
application. If Servicer makes a loan modification offer to the borrower, then
Servicer shall postpone any sale until the earlier of (a) 14 days after the date
of the related evaluation notice, and (b) the date the borrower declines the
loan modification offer. If the borrower timely accepts a loan modification
offer (either in writing or by submitting the first trial modification payment),
Servicer shall delay the foreclosure sale until the later of (if applicable)
(A) the failure by the Servicer timely to receive the first trial period
payment, and (B) if the Servicer timely receives the first trial period payment,
after the borrower breaches the trial plan.

 

  10. For purposes of this section IV.B, Servicer shall not be responsible for
failing to obtain a delay in a ruling on a judgment or failing to delay a
foreclosure sale if Servicer made a request for such delay, pursuant to any
state or local law, court rule or customary practice, and such request was not
approved.

 

  11. Servicer shall not move to judgment or order of sale or proceed with a
foreclosure sale under any of the following circumstances:

 

  a. The borrower is in compliance with the terms of a trial loan modification,
forbearance, or repayment plan; or

 

  b. A short sale or deed-in-lieu of foreclosure has been approved by all
parties (including, for example, first lien investor, junior lien holder and
mortgage insurer, as applicable), and proof of funds or financing has been
provided to Servicer.

 

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  12. If a foreclosure or trustee’s sale is continued (rather than cancelled) to
provide time to evaluate loss mitigation options, Servicer shall promptly notify
borrower in writing of the new date of sale (without delaying any related
foreclosure sale).

 

  13. As indicated in paragraph I.A.18, Servicer shall send a statement to the
borrower outlining loss mitigation efforts undertaken with respect to the
borrower prior to foreclosure referral. If no loss mitigation efforts were
offered or undertaken, Servicer shall state whether it contacted or attempted to
contact the borrower and, if applicable, why the borrower was ineligible for a
loan modification or other loss mitigation options.

 

  14. Servicer shall ensure timely and accurate communication of or access to
relevant loss mitigation status and changes in status to its foreclosure
attorneys, bankruptcy attorneys and foreclosure trustees and, where applicable,
to court-mandated mediators.

 

  C. Single Point of Contact.

 

  1. Servicer shall establish an easily accessible and reliable single point of
contact (“SPOC”) for each potentially-eligible first lien mortgage borrower so
that the borrower has access to an employee of Servicer to obtain information
throughout the loss mitigation, loan modification and foreclosure processes.

 

  2. Servicer shall initially identify the SPOC to the borrower promptly after a
potentially-eligible borrower requests loss mitigation assistance. Servicer
shall provide one or more direct means of communication with the SPOC on loss
mitigation-related correspondence with the borrower. Servicer shall promptly
provide updated contact information to the borrower if the designated SPOC is
reassigned, no longer employed by Servicer, or otherwise not able to act as the
primary point of contact.

 

  a. Servicer shall ensure that debtors in bankruptcy are assigned to a SPOC
specially trained in bankruptcy issues.

 

  3. The SPOC shall have primary responsibility for:

 

  a. Communicating the options available to the borrower, the actions the
borrower must take to be considered for these options and the status of
Servicer’s evaluation of the borrower for these options;

 

  b. Coordinating receipt of all documents associated with loan modification or
loss mitigation activities;

 

  c. Being knowledgeable about the borrower’s situation and current status in
the delinquency/imminent default resolution process; and

 

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  d. Ensuring that a borrower who is not eligible for MHA programs is considered
for proprietary or other investor loss mitigation options.

 

  4. The SPOC shall, at a minimum, provide the following services to borrowers:

 

  a. Contact borrower and introduce himself/herself as the borrower’s SPOC;

 

  b. Explain programs for which the borrower is eligible;

 

  c. Explain the requirements of the programs for which the borrower is
eligible;

 

  d. Explain program documentation requirements;

 

  e. Provide basic information about the status of borrower’s account, including
pending loan modification applications, other loss mitigation alternatives, and
foreclosure activity;

 

  f. Notify borrower of missing documents and provide an address or electronic
means for submission of documents by borrower in order to complete the loan
modification application;

 

  g. Communicate Servicer’s decision regarding loan modification applications
and other loss mitigation alternatives to borrower in writing;

 

  h. Assist the borrower in pursuing alternative non-foreclosure options upon
denial of a loan modification;

 

  i. If a loan modification is approved, call borrower to explain the program;

 

  j. Provide information regarding credit counseling where necessary;

 

  k. Help to clear for borrower any internal processing requirements; and

 

  l. Have access to individuals with the ability to stop foreclosure proceedings
when necessary to comply with the MHA Program or this Agreement.

 

  5. The SPOC shall remain assigned to borrower’s account and available to
borrower until such time as Servicer determines in good faith that all loss
mitigation options have been exhausted, borrower’s account becomes current or,
in the case of a borrower in bankruptcy, the borrower has exhausted all loss
mitigation options for which the borrower is potentially eligible and has
applied.

 

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  6. Servicer shall ensure that a SPOC can refer and transfer a borrower to an
appropriate supervisor upon request of the borrower.

 

  7. Servicer shall ensure that relevant records relating to borrower’s account
are promptly available to the borrower’s SPOC, so that the SPOC can timely,
adequately and accurately inform the borrower of the current status of loss
mitigation, loan modification, and foreclosure activities.

 

  8. Servicer shall designate one or more management level employees to be the
primary contact for the Attorneys General, state financial regulators, the
Executive Office of U.S. Trustee, each regional office of the U.S. Trustee, and
federal regulators for communication regarding complaints and inquiries from
individual borrowers who are in default and/or have applied for loan
modifications. Servicer shall provide a written acknowledgment to all such
inquiries within 10 business days. Servicer shall provide a substantive written
response to all such inquiries within 30 days. Servicer shall provide relevant
loan information to borrower and to Attorneys General, state financial
regulators, federal regulators, the Executive Office of the U.S. Trustee, and
each U.S. Trustee upon written request and if properly authorized. A written
complaint filed by a borrower and forwarded by a state attorney general or
financial regulatory agency to Servicer shall be deemed to have proper
authorization.

 

  9. Servicer shall establish and make available to Chapter 13 trustees a
toll-free number staffed by persons trained in bankruptcy to respond to
inquiries from Chapter 13 trustees.

 

  D. Loss Mitigation Communications with Borrowers.

 

  1.

Servicer shall commence outreach efforts to communicate loss mitigation options
for first lien mortgage loans to all potentially eligible delinquent borrowers
(other than those in bankruptcy) beginning on timelines that are in accordance
with HAMP borrower solicitation guidelines set forth in the MHA Handbook version
3.2, Chapter II, Section 2.2, regardless of whether the borrower is eligible for
a HAMP modification. Servicer shall provide borrowers with notices that include
contact information for national or state foreclosure assistance hotlines and
state housing counseling resources, as appropriate. The use by Servicer of
nothing more than prerecorded automatic messages in loss mitigation
communications with borrowers shall not be sufficient in those instances in
which it fails to result in contact between the borrower and one of Servicer’s
loss mitigation specialists. Servicer shall conduct affirmative outreach efforts
to inform delinquent second lien borrowers (other than those in bankruptcy)

 

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  about the availability of payment reduction options. The foregoing
notwithstanding, Servicer shall have no obligation to solicit borrowers who are
in bankruptcy.

 

  2. Servicer shall disclose and provide accurate information to borrowers
relating to the qualification process and eligibility factors for loss
mitigation programs.

 

  3. Servicer shall communicate, at the written request of the borrower, with
the borrower’s authorized representatives, including housing counselors.
Servicer shall communicate with representatives from state attorneys general and
financial regulatory agencies acting upon a written complaint filed by the
borrower and forwarded by the state attorney general or financial regulatory
agency to Servicer. When responding to the borrower regarding such complaint,
Servicer shall include the applicable state attorney general on all
correspondence with the borrower regarding such complaint.

 

  4. Servicer shall cease all collection efforts while the borrower (i) is
making timely payments under a trial loan modification or (ii) has submitted a
complete loan modification application, and a modification decision is pending.
Notwithstanding the above, Servicer reserves the right to contact a borrower to
gather required loss mitigation documentation or to assist a borrower with
performance under a trial loan modification plan.

 

  5. Servicer shall consider partnering with third parties, including national
chain retailers, and shall consider the use of select bank branches affiliated
with Servicer, to set up programs to allow borrowers to copy, fax, scan,
transmit by overnight delivery, or mail or email documents to Servicer free of
charge.

 

  6. Within five business days after referral to foreclosure, the Servicer
(including any attorney (or trustee) conducting foreclosure proceedings at the
direction of the Servicer) shall send a written communication (“Post Referral to
Foreclosure Solicitation Letter”) to the borrower that includes clear language
that:

 

  a. The Servicer may have sent to the borrower one or more borrower
solicitation communications;

 

  b. The borrower can still be evaluated for alternatives to foreclosure even if
he or she had previously shown no interest;

 

  c. The borrower should contact the Servicer to obtain a loss mitigation
application package;

 

  d. The borrower must submit a loan modification application to the Servicer to
request consideration for available foreclosure prevention alternatives;

 

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  e. Provides the Servicer’s contact information for submitting a complete loan
modification application, including the Servicer’s toll-free number; and

 

  f. Unless the form of letter is otherwise specified by investor directive or
state law or the borrower is not eligible for an appeal under paragraph
IV.G.3.a, states that if the borrower is contemplating or has pending an appeal
of an earlier denial of a loan modification application, that he or she may
submit a loan modification application in lieu of his or her appeal within 30
days after the Post Referral to Foreclosure Solicitation Letter.

 

  E. Development of Loan Portals.

 

  1. Servicer shall develop or contract with a third-party vendor to develop an
online portal linked to Servicer’s primary servicing system where borrowers can
check, at no cost, the status of their first lien loan modifications.

 

  2. Servicer shall design portals that may, among other things:

 

  a. Enable borrowers to submit documents electronically;

 

  b. Provide an electronic receipt for any documents submitted;

 

  c. Provide information and eligibility factors for proprietary loan
modification and other loss mitigation programs; and

 

  d. Permit Servicer to communicate with borrowers to satisfy any written
communications required to be provided by Servicer, if borrowers submit
documents electronically.

 

  3. Servicer shall participate in the development and implementation of a
neutral, nationwide loan portal system linked to Servicer’s primary servicing
system, such as Hope LoanPort to enhance communications with housing counselors,
including using the technology used for the Borrower Portal, and containing
similar features to the Borrower Portal.

 

  4. Servicer shall update the status of each pending loan modification on these
portals at least every 10 business days and ensure that each portal is updated
on such a schedule as to maintain consistency.

 

  F. Loan Modification Timelines.

 

  1.

Servicer shall provide written acknowledgement of the receipt of documentation
submitted by the borrower in connection with a first lien loan modification
application within 3 business days. In

 

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  its initial acknowledgment, Servicer shall briefly describe the loan
modification process and identify deadlines and expiration dates for submitted
documents.

 

  2. Servicer shall notify borrower of any known deficiency in borrower’s
initial submission of information, no later than 5 business days after receipt,
including any missing information or documentation required for the loan
modification to be considered complete.

 

  3. Subject to section IV.B, Servicer shall afford borrower 30 days from the
date of Servicer’s notification of any missing information or documentation to
supplement borrower’s submission of information prior to making a determination
on whether or not to grant an initial loan modification.

 

  4. Servicer shall review the complete first lien loan modification application
submitted by borrower and shall determine the disposition of borrower’s trial or
preliminary loan modification request no later than 30 days after receipt of the
complete loan modification application, absent compelling circumstances beyond
Servicer’s control.

 

  5. Servicer shall implement processes to ensure that second lien loan
modification requests are evaluated on a timely basis. When a borrower qualifies
for a second lien loan modification after a first lien loan modification in
accordance with Section 2.c.i of the General Framework for Consumer Relief
Provisions, the Servicer of the second lien loan shall (absent compelling
circumstances beyond Servicer’s control) send loan modification documents to
borrower no later than 45 days after the Servicer receives official notification
of the successful completion of the related first lien loan modification and the
essential terms.

 

  6. For all proprietary first lien loan modification programs, Servicer shall
allow properly submitted borrower financials to be used for 90 days from the
date the documents are received, unless Servicer learns that there has been a
material change in circumstances or unless investor requirements mandate a
shorter time frame.

 

  7. Servicer shall notify borrowers of the final denial of any first lien loan
modification request within 10 business days of the denial decision. The
notification shall be in the form of the non-approval notice required in
paragraph IV.G.1 below.

 

  G. Independent Evaluation of First Lien Loan Modification Denials.

 

  1.

Except when evaluated as provided in paragraphs IV.B.8 or IV.B.9, Servicer’s
initial denial of an eligible borrower’s request for first lien loan
modification following the submission of a

 

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  complete loan modification application shall be subject to an independent
evaluation. Such evaluation shall be performed by an independent entity or a
different employee who has not been involved with the particular loan
modification.

 

  2. Denial Notice.

 

  a. When a first lien loan modification is denied after independent review,
Servicer shall send a written non- approval notice to the borrower identifying
the reasons for denial and the factual information considered. The notice shall
inform the borrower that he or she has 30 days from the date of the denial
letter declination to provide evidence that the eligibility determination was in
error.

 

  b. If the first lien modification is denied because disallowed by investor,
Servicer shall disclose in the written non- approval notice the name of the
investor and summarize the reasons for investor denial.

 

  c. For those cases where a first lien loan modification denial is the result
of an NPV calculation, Servicer shall provide in the written non-approval notice
the monthly gross income and property value used in the calculation.

 

  3. Appeal Process.

 

  a. After the automatic review in paragraph IV.G.1 has been completed and
Servicer has issued the written non-approval notice, in the circumstances
described in the first sentences of paragraphs IV.B.3, IV.B.5 or IV.B.7,except
when otherwise required by federal or state law or investor directives,
borrowers shall have 30 days to request an appeal and obtain an independent
review of the first lien loan modification denial in accordance with the terms
of this Agreement. Servicer shall ensure that the borrower has 30 days from the
date of the written non-approval notice to provide information as to why
Servicer’s determination of eligibility for a loan modification was in error,
unless the reason for non-approval is (1) ineligible mortgage, (2) ineligible
property, (3) offer not accepted by borrower or request withdrawn, or (4) the
loan was previously modified.

 

  b.

For those cases in which the first lien loan modification denial is the result
of an NPV calculation, if a borrower disagrees with the property value used by
Servicer in the NPV test, the borrower can request that a full appraisal be
conducted of the property by an independent licensed appraiser (at borrower
expense) consistent with HAMP

 

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  directive 10-15. Servicer shall comply with the process set forth in HAMP
directive 10-15, including using such value in the NPV calculation.

 

  c. Servicer shall review the information submitted by borrower and use its
best efforts to communicate the disposition of borrower’s appeal to borrower no
later than 30 days after receipt of the information.

 

  d. If Servicer denies borrower’s appeal, Servicer’s appeal denial letter shall
include a description of other available loss mitigation, including short sales
and deeds in lieu of foreclosure.

 

  H. General Loss Mitigation Requirements.

 

  1. Servicer shall maintain adequate staffing and systems for tracking borrower
documents and information that are relevant to foreclosure, loss mitigation, and
other Servicer operations. Servicer shall make periodic assessments to ensure
that its staffing and systems are adequate.

 

  2. Servicer shall maintain adequate staffing and caseload limits for SPOCs and
employees responsible for handling foreclosure, loss mitigation and related
communications with borrowers and housing counselors. Servicer shall make
periodic assessments to ensure that its staffing and systems are adequate.

 

  3. Servicer shall establish reasonable minimum experience, educational and
training requirements for loss mitigation staff.

 

  4. Servicer shall document electronically key actions taken on a foreclosure,
loan modification, bankruptcy, or other servicing file, including communications
with the borrower.

 

  5. Servicer shall not adopt compensation arrangements for its employees that
encourage foreclosure over loss mitigation alternatives.

 

  6. Servicer shall not make inaccurate payment delinquency reports to credit
reporting agencies when the borrower is making timely reduced payments pursuant
to a trial or other loan modification agreement. Servicer shall provide the
borrower, prior to entering into a trial loan modification, with clear and
conspicuous written information that adverse credit reporting consequences may
result from the borrower making reduced payments during the trial period.

 

  7.

Where Servicer grants a loan modification, Servicer shall provide borrower with
a copy of the fully executed loan modification agreement within 45 days of
receipt of the executed copy from the

 

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  borrower. If the modification is not in writing, Servicer shall provide the
borrower with a written summary of its terms, as promptly as possible, within 45
days of the approval of the modification.

 

  8. Servicer shall not instruct, advise or recommend that borrowers go into
default in order to qualify for loss mitigation relief.

 

  9. Servicer shall not discourage borrowers from working or communicating with
legitimate non-profit housing counseling services.

 

  10. Servicer shall not, in the ordinary course, require a borrower to waive or
release claims and defenses as a condition of approval for a loan modification
program or other loss mitigation relief. However, nothing herein shall preclude
Servicer from requiring a waiver or release of claims and defenses with respect
to a loan modification offered in connection with the resolution of a contested
claim, when the borrower would not otherwise be qualified for the loan
modification under existing Servicer programs.

 

  11. Servicer shall not charge borrower an application fee in connection with a
request for a loan modification. Servicer shall provide borrower with a pre-paid
overnight envelope or pre-paid address label for return of a loan modification
application.

 

  12. Notwithstanding any other provision of this Agreement, and to minimize the
risk of borrowers submitting multiple loss mitigation requests for the purpose
of delay, Servicer shall not be obligated to evaluate requests for loss
mitigation options from (a) borrowers who have already been evaluated or
afforded a fair opportunity to be evaluated consistent with the requirements of
HAMP or proprietary modification programs, or (b) borrowers who were evaluated
after the date of implementation of this Agreement, consistent with this
Agreement, unless there has been a material change in the borrower’s financial
circumstances that is documented by borrower and submitted to Servicer.

 

  I. Proprietary First Lien Loan Modifications.

 

  1. Servicer shall make publicly available information on its qualification
processes, all required documentation and information necessary for a complete
first lien loan modification application, and key eligibility factors for all
proprietary loan modifications.

 

  2.

Servicer shall design proprietary first lien loan modification programs that are
intended to produce sustainable modifications according to investor guidelines
and previous results. Servicer

 

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  shall design these programs with the intent of providing affordable payments
for borrowers needing longer term or permanent assistance.

 

  3. Servicer shall track outcomes and maintain records regarding
characteristics and performance of proprietary first lien loan modifications.
Servicer shall provide a description of modification waterfalls, eligibility
criteria, and modification terms, on a publicly-available website.

 

  4. Servicer shall not charge any application or processing fees for
proprietary first lien loan modifications.

 

  J. Proprietary Second Lien Loan Modifications.

 

  1. Servicer shall make publicly available information on its qualification
processes, all required documentation and information necessary for a complete
second lien modification application.

 

  2. Servicer shall design second lien modification programs with the intent of
providing affordable payments for borrowers needing longer term or permanent
assistance.

 

  3. Servicer shall not charge any application or processing fees for second
lien modifications.

 

  4. When an eligible borrower with a second lien submits all required
information for a second lien loan modification and the modification request is
denied, Servicer shall promptly send a written non-approval notice to the
borrower.

 

  K. Short Sales.

 

  1. Servicer shall make publicly available information on general requirements
for the short sale process.

 

  2. Servicer shall consider appropriate monetary incentives to underwater
borrowers to facilitate short sale options.

 

  3. Servicer shall develop a cooperative short sale process which allows the
borrower the opportunity to engage with Servicer to pursue a short sale
evaluation prior to putting home on the market.

 

  4. Servicer shall send written confirmation of the borrower’s first request
for a short sale to the borrower or his or her agent within 10 business days of
receipt of the request and proper written authorization from the borrower
allowing Servicer to communicate with the borrower’s agent. The confirmation
shall include basic information about the short sale process and Servicer’s
requirements, and will state clearly and conspicuously that the Servicer may
demand a deficiency payment if such deficiency claim is permitted by applicable
law.

 

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  5. Servicer shall send borrower at borrower’s address of record or to
borrower’s agent timely written notice of any missing required documents for
consideration of short sale within 30 days of receiving borrower’s request for a
short sale.

 

  6. Servicer shall review the short sale request submitted by borrower and
communicate the disposition of borrower’s request no later than 30 days after
receipt of all required information and third-party consents.

 

  7. If the short sale request is accepted, Servicer shall contemporaneously
notify the borrower whether Servicer or investor will demand a deficiency
payment or related cash contribution and the approximate amount of that
deficiency, if such deficiency obligation is permitted by applicable law. If the
short sale request is denied, Servicer shall provide reasons for the denial in
the written notice. If Servicer waives a deficiency claim, it shall not sell or
transfer such claim to a third-party debt collector or debt buyer for
collection.

 

  L. Loss Mitigation During Bankruptcy.

 

  1. Servicer may not deny any loss mitigation option to eligible borrowers on
the basis that the borrower is a debtor in bankruptcy so long as borrower and
any trustee cooperates in obtaining any appropriate approvals or consents.

 

  2. Servicer shall, to the extent reasonable, extend trial period loan
modification plans as necessary to accommodate delays in obtaining bankruptcy
court approvals or receiving full remittance of debtor’s trial period payments
that have been made to a chapter 13 trustee. In the event of a trial period
extension, the debtor must make a trial period payment for each month of the
trial period, including any extension month.

 

  3. When the debtor is in compliance with a trial period or permanent loan
modification plan, Servicer will not object to confirmation of the debtor’s
chapter 13 plan, move to dismiss the pending bankruptcy case, or file a MRS
solely on the basis that the debtor paid only the amounts due under the trial
period or permanent loan modification plan, as opposed to the non-modified
mortgage payments.

 

  M. Transfer of Servicing of Loans Pending for Permanent Loan Modification.

 

  1. Ordinary Transfer of Servicing from Servicer to Successor Servicer or
Subservicer.

 

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  a. At time of transfer or sale, Servicer shall inform successor servicer
(including a subservicer) whether a loan modification is pending.

 

  b. Any contract for the transfer or sale of servicing rights shall obligate
the successor servicer to accept and continue processing pending loan
modification requests.

 

  c. Any contract for the transfer or sale of servicing rights shall obligate
the successor servicer to honor trial and permanent loan modification agreements
entered into by prior servicer.

 

  d. Any contract for transfer or sale of servicing rights shall designate that
borrowers are third party beneficiaries under paragraphs IV.M.l.b and IV.M.l.c,
above.

 

  2. Transfer of Servicing to Servicer. When Servicer acquires servicing rights
from another servicer, Servicer shall ensure that it will accept and continue to
process pending loan modification requests from the prior servicer, and that it
will honor trial and permanent loan modification agreements entered into by the
prior servicer.

 

V. PROTECTIONS FOR MILITARY PERSONNEL.

 

  A. Servicer shall comply with all applicable provisions of the Servicemembers
Civil Relief Act (SCRA), 50 U.S.C. Appx. § 501 et seq., and any applicable state
law offering protections to servicemembers, and shall engage an independent
consultant whose duties shall include a review of (a) all foreclosures in which
an SCRA-eligible servicemember is known to have been an obligor or mortgagor,
and (b) a sample of foreclosure actions (which sample will be appropriately
enlarged to the extent Servicer identifies material exceptions), from January 1,
2009 to December 31, 2010 to determine whether the foreclosures were in
compliance with the SCRA. Servicer shall remediate all monetary damages in
compliance with the banking regulator Consent Orders.

 

  B. When a borrower states that he or she is or was within the preceding 9
months (or the then applicable statutory period under the SCRA) in active
military service or has received and is subject to military orders requiring him
or her to commence active military service, Lender shall determine whether the
borrower may be eligible for the protections of the SCRA or for the protections
of the provisions of paragraph V.F. If Servicer determines the borrower is so
eligible, Servicer shall, until Servicer determines that such customer is no
longer protected by the SCRA,

 

  1. if such borrower is not entitled to a SPOC, route such customers to
employees who have been specially trained about the protections of the SCRA to
respond to such borrower’s questions, or

 

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  2. if such borrower is entitled to a SPOC, designate as a SPOC for such
borrower a person who has been specially trained about the protections of the
SCRA (Servicemember SPOC).

 

  C. Servicer shall, in addition to any other reviews it may perform to assess
eligibility under the SCRA, (i) before referring a loan for foreclosure,
(ii) within seven days before a foreclosure sale, and (iii) the later of
(A) promptly after a foreclosure sale and (B) within three days before the
regularly scheduled end of any redemption period, determine whether the secured
property is owned by a servicemember covered under SCRA by searching the Defense
Manpower Data Center (DMDC) for evidence of SCRA eligibility by either (a) last
name and social security number, or (b) last name and date of birth.

 

  D. When a servicemember provides written notice requesting protection under
the SCRA relating to interest rate relief, but does not provide the
documentation required by Section 207(b)(1) of the SCRA (50 USC Appx. §
527(b)(1)), Servicer shall accept, in lieu of the documentation required by
Section 207(b)(1) of the SCRA, a letter on official letterhead from the
servicemember’s commanding officer including a contact telephone number for
confirmation:

 

  1. Addressed in such a way as to signify that the commanding officer
recognizes that the letter will be relied on by creditors of the servicemember
(a statement that the letter is intended to be relied upon by the
Servicemember’s creditors would satisfy this requirement);

 

  2. Setting forth the full name (including middle initial, if any), Social
Security number and date of birth of the servicemember;

 

  3. Setting forth the home address of the servicemember; and

 

  4. Setting forth the date of the military orders marking the beginning of the
period of military service of the servicemember and, as may be applicable, that
the military service of the servicemember is continuing or the date on which the
military service of the servicemember ended.

 

  E.

Servicer shall notify customers who are 45 days delinquent that, if they are a
servicemember, (a) they may be entitled to certain protections under the SCRA
regarding the servicemember’s interest rate and the risk of foreclosure, and
(b) counseling for covered servicemembers is available at agencies such as
Military OneSource, Armed Forces Legal Assistance, and a HUD-certified housing
counselor. Such notice shall include a toll- free number that servicemembers may
call to be connected to a person who has been specially trained about the
protections of the SCRA to respond to such borrower’s questions. Such telephone
number shall either connect directly to such a person or afford a caller the
ability to identify

 

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  him- or herself as an eligible servicemember and be routed to such persons.
Servicers hereby confirm that they intend to take reasonable steps to ensure the
dissemination of such toll-free number to customers who may be eligible
servicemembers.

 

  F. Irrespective of whether a mortgage obligation was originated before or
during the period of a servicemember’s military service, if, based on the
determination described in the last sentence and subject to Applicable
Requirements, a servicemember’s military orders (or any letter complying with
paragraph V.D), together with any other documentation satisfactory to the
Servicer, reflects that the servicemember is (a) eligible for Hostile
Fire/Imminent Danger Pay and (b) serving at a location (i) more than 750 miles
from the location of the secured property or (ii) outside of the United States,
then to the extent consistent with Applicable Requirements, the Servicer shall
not sell, foreclose, or seize a property for a breach of an obligation on real
property owned by a servicemember that is secured by mortgage, deed of trust, or
other security in the nature of a mortgage, during, or within 9 months after,
the period in which the servicemember is eligible for Hostile Fire/Imminent
Danger Pay, unless either (i) Servicer has obtained a court order granted before
such sale, foreclosure, or seizure with a return made and approved by the court,
or (ii) if made pursuant to an agreement as provided in section 107 of the SCRA
(50 U.S.C. Appx. § 517). Unless a servicemember’s eligibility for the protection
under this paragraph can be fully determined by a proper search of the DMDC
website, Servicer shall only be obligated under this provision if it is able to
determine, based on a servicemember’s military orders (or any letter complying
with paragraph V.D), together with any other documentation provided by or on
behalf of the servicemember that is satisfactory to the Servicer, that the
servicemember is (a) eligible for Hostile Fire/Imminent Danger Pay and
(b) serving at a location (i) more than 750 miles from the location of the
secured property or (ii) outside of the United States.

 

  G.

Servicer shall not require a servicemember to be delinquent to qualify for a
short sale, loan modification, or other loss mitigation relief if the
servicemember is suffering financial hardship and is otherwise eligible for such
loss mitigation. Subject to Applicable Requirements, for purposes of assessing
financial hardship in relation to (i) a short sale or deed in lieu transaction,
Servicer will take into account whether the servicemember is, as a result of a
permanent change of station order, required to relocate even if such
servicemember’s income has not been decreased, so long as the servicemember does
not have sufficient liquid assets to make his or her monthly mortgage payments,
or (ii) a loan modification, Servicer will take into account whether the
servicemember is, as a result of his or her under military orders required to
relocate to a new duty station at least seventy five mile from his or her
residence/secured property or to reside at a location other than the
residence/secured property, and accordingly is

 

A-34

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  unable personally to occupy the residence and (a) the residence will continue
to be occupied by his or her dependents, or (b) the residence is the only
residential property owned by the servicemember.

 

  H. Servicer shall not make inaccurate reports to credit reporting agencies
when a servicemember, who has not defaulted before relocating under military
orders to a new duty station, obtains a short sale, loan modification, or other
loss mitigation relief.

 

VI. RESTRICTIONS ON SERVICING FEES.

 

  A. General Requirements.

 

  1. All default, foreclosure and bankruptcy-related service fees, including
third-party fees, collected from the borrower by Servicer shall be bona fide,
reasonable in amount, and disclosed in detail to the borrower as provided in
paragraphs I.B.10 and VI.B.1.

 

  B. Specific Fee Provisions.

 

  1. Schedule of Fees. Servicer shall maintain and keep current a schedule of
common non-state specific fees or ranges of fees that may be charged to
borrowers by or on behalf of Servicer. Servicer shall make this schedule
available on its website and to the borrower or borrower’s authorized
representative upon request. The schedule shall identify each fee, provide a
plain language explanation of the fee, and state the maximum amount of the fee
or how the fee is calculated or determined.

 

  2. Servicer may collect a default-related fee only if the fee is for
reasonable and appropriate services actually rendered and one of the following
conditions is met:

 

  a. the fee is expressly or generally authorized by the loan instruments and
not prohibited by law or this Agreement;

 

  b. the fee is permitted by law and not prohibited by the loan instruments or
this Agreement; or

 

  c. the fee is not prohibited by law, this Agreement or the loan instruments
and is a reasonable fee for a specific service requested by the borrower that is
collected only after clear and conspicuous disclosure of the fee is made
available to the borrower.

 

  3. Attorneys’ Fees. In addition to the limitations in paragraph VI.B.2 above,
attorneys’ fees charged in connection with a foreclosure action or bankruptcy
proceeding shall only be for work actually performed and shall not exceed
reasonable and customary fees for such work. In the event a foreclosure action
is terminated prior to the final judgment and/or sale for a loss mitigation
option, a reinstatement, or payment in full, the borrower shall be liable only
for reasonable and customary fees for work actually performed.

 

A-35

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

  4. Late Fees.

 

  a. Servicer shall not collect any late fee or delinquency charge when the only
delinquency is attributable to late fees or delinquency charges assessed on an
earlier payment, and the payment is otherwise a full payment for the applicable
period and is paid on or before its due date or within any applicable grace
period.

 

  b. Servicer shall not collect late fees (i) based on an amount greater than
the past due amount; (ii) collected from the escrow account or from escrow
surplus without the approval of the borrower; or (iii) deducted from any regular
payment.

 

  c. Servicer shall not collect any late fees for periods during which (i) a
complete loan modification application is under consideration; (ii) the borrower
is making timely trial modification payments; or (iii) a short sale offer is
being evaluated by Servicer.

 

  C. Third-Party Fees.

 

  1. Servicer shall not impose unnecessary or duplicative property inspection,
property preservation or valuation fees on the borrower, including, but not
limited to, the following:

 

  a. No property preservation fees shall be imposed on eligible borrowers who
have a pending application with Servicer for loss mitigation relief or are
performing under a loss mitigation program, unless Servicer has a reasonable
basis to believe that property preservation is necessary for the maintenance of
the property, such as when the property is vacant or listed on a violation
notice from a local jurisdiction;

 

  b. No property inspection fee shall be imposed on a borrower any more
frequently than the timeframes allowed under GSE or HUD guidelines unless
Servicer has identified specific circumstances supporting the need for further
property inspections; and

 

  c. Servicer shall be limited to imposing property valuation fees (e.g., BPO)
to once every 12 months, unless other valuations are requested by the borrower
to facilitate a short sale or to support a loan modification as outlined in
paragraph IV.G.3.a, or required as part of the default or foreclosure valuation
process.

 

A-36

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  2. Default, foreclosure and bankruptcy-related services performed by third
parties shall be at reasonable market value.

 

  3. Servicer shall not collect any fee for default, foreclosure or
bankruptcy-related services by an affiliate unless the amount of the fee does
not exceed the lesser of (a) any fee limitation or allowable amount for the
service under applicable state law, and (b) the market rate for the service. To
determine the market rate, Servicer shall obtain annual market reviews of its
affiliates’ pricing for such default and foreclosure-related services; such
market reviews shall be performed by a qualified, objective, independent
third-party professional using procedures and standards generally accepted in
the industry to yield accurate and reliable results. The independent third-party
professional shall determine in its market survey the price actually charged by
third-party affiliates and by independent third party vendors.

 

  4. Servicer shall be prohibited from collecting any unearned fee, or giving or
accepting referral fees in relation to third-party default or
foreclosure-related services.

 

  5. Servicer shall not impose its own mark-ups on Servicer initiated
third-party default or foreclosure-related services.

 

  D. Certain Bankruptcy Related Fees.

 

  1. Servicer must not collect any attorney’s fees or other charges with respect
to the preparation or submission of a POC or MRS document that is withdrawn or
denied, or any amendment thereto that is required, as a result of a substantial
misstatement by Servicer of the amount due.

 

  2. Servicer shall not collect late fees due to delays in receiving full
remittance of debtor’s payments, including trial period or permanent
modification payments as well as post-petition conduit payments in accordance
with 11 U.S.C. § 1322(b)(5), that debtor has timely (as defined by the
underlying Chapter 13 plan) made to a chapter 13 trustee.

 

VII. FORCE-PLACED INSURANCE.

 

  A. General Requirements for Force-Placed Insurance.

 

  1.

Servicer shall not obtain force-placed insurance unless there is a reasonable
basis to believe the borrower has failed to comply with the loan contract’s
requirements to maintain property insurance. For escrowed accounts, Servicer
shall continue to advance payments for the homeowner’s existing policy, unless
the borrower or insurance company cancels the existing policy.

 

A-37

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For purposes of this section VII, the term “force-placed insurance” means hazard
insurance coverage obtained by Servicer when the borrower has failed to maintain
or renew hazard or wind insurance on such property as required of the borrower
under the terms of the mortgage.

 

  2. Servicer shall not be construed as having a reasonable basis for obtaining
force-placed insurance unless the requirements of this section VII have been
met.

 

  3. Servicer shall not impose any charge on any borrower for force-placed
insurance with respect to any property securing a federally related mortgage
unless:

 

  a. Servicer has sent, by first-class mail, a written notice to the borrower
containing:

 

  i. A reminder of the borrower’s obligation to maintain hazard insurance on the
property securing the federally related mortgage;

 

  ii. A statement that Servicer does not have evidence of insurance coverage of
such property;

 

  iii. A clear and conspicuous statement of the procedures by which the borrower
may demonstrate that the borrower already has insurance coverage;

 

  iv. A statement that Servicer may obtain such coverage at the borrower’s
expense if the borrower does not provide such demonstration of the borrower’s
existing coverage in a timely manner;

 

  v. A statement that the cost of such coverage may be significantly higher than
the cost of the homeowner’s current coverage;

 

  vi. For first lien loans on Servicer’s primary servicing system, a statement
that, if the borrower desires to maintain his or her voluntary policy, Servicer
will offer an escrow account and advance the premium due on the voluntary policy
if the borrower: (a) accepts the offer of the escrow account; (b) provides a
copy of the invoice from the voluntary carrier; (c) agrees in writing to
reimburse the escrow advances through regular escrow payments; (d) agrees to
escrow to both repay the advanced premium and to pay for the future premiums
necessary to maintain any required insurance policy; and (e) agrees Servicer
shall manage the escrow account in accordance with the loan documents and with
state and federal law; and

 

A-38

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

  vii. A statement, in the case of single interest coverage, that the coverage
may only protect the mortgage holder’s interest and not the homeowner’s
interest.

 

  b. Servicer has sent, by first-class mail, a second written notice, at least
30 days after the mailing of the notice under paragraph VII.A.3.a that contains
all the information described in each clause of such paragraph.

 

  c. Servicer has not received from the borrower written confirmation of hazard
insurance coverage for the property securing the mortgage by the end of the
15-day period beginning on the date the notice under paragraph VII.A.3.b was
sent by Servicer.

 

  4. Servicer shall accept any reasonable form of written confirmation from a
borrower or the borrower’s insurance agent of existing insurance coverage, which
shall include the existing insurance policy number along with the identity of,
and contact information for, the insurance company or agent.

 

  5. Servicer shall not place hazard or wind insurance on a mortgaged property,
or require a borrower to obtain or maintain such insurance, in excess of the
greater of replacement value, last-known amount of coverage or the outstanding
loan balance, unless required by Applicable Requirements, or requested by
borrower in writing.

 

  6. Within 15 days of the receipt by Servicer of evidence of a borrower’s
existing insurance coverage, Servicer shall:

 

  a. Terminate the force-placed insurance; and

 

  b. Refund to the consumer all force-placed insurance premiums paid by the
borrower during any period during which the borrower’s insurance coverage and
the force placed insurance coverage were each in effect, and any related fees
charged to the consumer’s account with respect to the force-placed insurance
during such period.

 

  7. Servicer shall make reasonable efforts to work with the borrower to
continue or reestablish the existing homeowner’s policy if there is a lapse in
payment and the borrower’s payments are escrowed.

 

  8. Any force-placed insurance policy must be purchased for a commercially
reasonable price.

 

A-39

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

  9. No provision of this section VII shall be construed as prohibiting Servicer
from providing simultaneous or concurrent notice of a lack of flood insurance
pursuant to section 102(e) of the Flood Disaster Protection Act of 1973.

 

VIII. GENERAL SERVICER DUTIES AND PROHIBITIONS.

 

  A. Measures to Deter Community Blight.

 

  1. Servicer shall develop and implement policies and procedures to ensure that
REO properties do not become blighted.

 

  2. Servicer shall develop and implement policies and procedures to enhance
participation and coordination with state and local land bank programs,
neighborhood stabilization programs, nonprofit redevelopment programs, and other
anti-blight programs, including those that facilitate discount sale or donation
of low-value REO properties so that they can be demolished or salvaged for
productive use.

 

  3. As indicated in I.A.18, Servicer shall (a) inform borrower that if the
borrower continues to occupy the property, he or she has responsibility to
maintain the property, and an obligation to continue to pay taxes owed, until a
sale or other title transfer action occurs; and (b) request that if the borrower
wishes to abandon the property, he or she contact Servicer to discuss
alternatives to foreclosure under which borrower can surrender the property to
Servicer in exchange for compensation.

 

  4. When the Servicer makes a determination not to pursue foreclosure action on
a property with respect to a first lien mortgage loan, Servicer shall:

 

  a. Notify the borrower of Servicer’s decision to release the lien and not
pursue foreclosure, and inform borrower about his or her right to occupy the
property until a sale or other title transfer action occurs; and

 

  b. Notify local authorities, such as tax authorities, courts, or code
enforcement departments, when Servicer decides to release the lien and not
pursue foreclosure.

 

  B. Tenants’ Rights.

 

  1. Servicer shall comply with all applicable state and federal laws governing
the rights of tenants living in foreclosed residential properties.

 

  2. Servicer shall develop and implement written policies and procedures to
ensure compliance with such laws.

 

A-40

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IX. GENERAL PROVISIONS, DEFINITIONS, AND IMPLEMENTATION.

 

  A. Applicable Requirements.

 

  1. The servicing standards and any modifications or other actions taken in
accordance with the servicing standards are expressly subject to, and shall be
interpreted in accordance with, (a) applicable federal, state and local laws,
rules and regulations, including, but not limited to, any requirements of the
federal banking regulators, (b) the terms of the applicable mortgage loan
documents, (c) Section 201 of the Helping Families Save Their Homes Act of 2009,
and (d) the terms and provisions of the Servicer Participation Agreement with
the Department of Treasury, any servicing agreement, subservicing agreement
under which Servicer services for others, special servicing agreement, mortgage
or bond insurance policy or related agreement or requirements to which Servicer
is a party and by which it or its servicing is bound pertaining to the servicing
or ownership of the mortgage loans, including without limitation the
requirements, binding directions, or investor guidelines of the applicable
investor (such as Fannie Mae or Freddie Mac), mortgage or bond insurer, or
credit enhancer (collectively, the “Applicable Requirements”).

 

  2. In the event of a conflict between the requirements of the Agreement and
the Applicable Requirements with respect to any provision of this Agreement such
that the Servicer cannot comply without violating Applicable Requirements or
being subject to adverse action, including fines and penalties, Servicer shall
document such conflicts and notify the Monitor and the Monitoring Committee that
it intends to comply with the Applicable Requirements to the extent necessary to
eliminate the conflict. Any associated Metric provided for in the Enforcement
Terms will be adjusted accordingly.

 

  B. Definitions.

 

  1. In each instance in this Agreement in which Servicer is required to ensure
adherence to, or undertake to perform certain obligations, it is intended to
mean that Servicer shall: (a) authorize and adopt such actions on behalf of
Servicer as may be necessary for Servicer to perform such obligations and
undertakings; (b) follow up on any material non-compliance with such actions in
a timely and appropriate manner; and (c) require corrective action be taken in a
timely manner of any material non-compliance with such obligations.

 

  2.

References to Servicer shall mean Ally Financial, Inc., and its subsidiaries and
affiliates Residential Capital, LLC, and GMAC Mortgage, LLC and shall include
Servicer’s successors and

 

A-41

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

  assignees in the event of a sale of all or substantially all of the assets of
Servicer or of Servicer’s division(s) or major business unit(s) that are engaged
as a primary business in customer-facing servicing of residential mortgages on
owner-occupied properties. The provisions of this Agreement shall not apply to
those divisions or major business units of Servicer that are not engaged as a
primary business in customer-facing servicing of residential mortgages on
owner-occupied one-to-four family properties on its own behalf or on behalf of
investors.

 

A-42

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EXHIBIT B

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

DISTRIBUTION OF FUNDS

1. Any amount of the Direct Payment Settlement Amount that is not distributed
pursuant to Paragraph 2 shall be distributed as follows.

 

  a. Federal Payment Settlement Amount. The Escrow Agent shall distribute
$911,777,917.00 (the “Federal Payment Settlement Amount”) to the United States
in accordance with instructions to be provided by the United States.

 

  i. Of the Federal Payment Settlement Amount, $684,090,417.00 shall, following
payment of any amounts owed as a result of resolutions pursuant to 31 U.S.C. §
3730(d), and subject to 28 U.S.C. § 527 (Note), be deposited for losses incurred
into FHA’s Capital Reserve Account, the Veterans Housing Benefit Program Fund
(pursuant to 38 U.S.C. § 3722(c)(3), as being incident to housing loan
operations) or as otherwise directed by the Department of Veterans Affairs, and
as directed by Rural Housing Service, Department of Agriculture, in accordance
with instructions from the United States. The United States intends that such
deposits conform with the Miscellaneous Receipts Act and other law.

 

  ii.

The Federal Payment Settlement Amount includes resolution of the following qui
tam actions: (i) $75,000,000 from the claims in United States ex rel. Lagow v.
Countrywide Financial Corp., et al., Civil Action No. CV-09-2040 (E.D.N.Y.);
(ii) $45,000,000 from those claims in United States ex rel. Bibby et al. v.
JPMorgan Chase et al., No. 2:11-cv-00535-RHL-RJJ (N.D. Ga.) that are expressly
released by the United States in this litigation; (iii) $95,000,000 from those
claims in United States ex rel. Szymoniak v.

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

  [SEALED], Civ No. 0:10-cv-01465 (D.S.C.) and in United States ex rel.
Szymoniak v. [SEALED], Civ No. 3:10-cv-575 (W.D.N.C.) that are expressly
released by the United States in this litigation; (iv) $6,500,000 from the
claims in United States ex rel. Mackler v. Bank of America, N.A., et al.,
11-CV-3270 (SLT) (E.D.N.Y.); and (v) $6,187,500 from the claims in United States
ex rel. Harris v. J.P. Morgan Chase & Co., et al., Civil Action No. 10-10068-GAO
(D. Mass). Following payment of any amounts owed as a result of resolutions
pursuant to 31 U.S.C. § 3730(d), and subject to 28 U.S.C. § 527 (Note), these
amounts shall be deposited into FHA’s Capital Reserve Account and the Veterans
Housing Benefit Program Fund (pursuant to 38 U.S.C. § 3722(c)(3), as being
incident to housing loan operations) or as otherwise directed by the Department
of Veterans Affairs, in accordance with instructions from the United States. The
United States intends that such deposits conform with the Miscellaneous Receipts
Act and other law.

 

  b. State Payment Settlement Amounts. In accordance with written instructions
from each State Attorney General, the Escrow Agent shall distribute cash
payments in the total amounts set forth in the attached Exhibit B-1.

 

  i.

Each State Attorney General shall designate the uses of the funds set forth in
the attached Exhibit B-1. To the extent practicable, such funds shall be used
for purposes intended to avoid preventable foreclosures, to ameliorate the
effects of the

 

B-2

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

  foreclosure crisis, to enhance law enforcement efforts to prevent and
prosecute financial fraud, or unfair or deceptive acts or practices and to
compensate the States for costs resulting from the alleged unlawful conduct of
the Defendants. Such permissible purposes for allocation of the funds include,
but are not limited to, supplementing the amounts paid to state homeowners under
the Borrower Payment Fund, funding for housing counselors, state and local
foreclosure assistance hotlines, state and local foreclosure mediation programs,
legal assistance, housing remediation and anti-blight projects, funding for
training and staffing of financial fraud or consumer protection enforcement
efforts, and civil penalties. Accordingly, each Attorney General has set forth
general instructions for the funds in the attached Exhibit B-2.

 

  ii. No more than ten percent of the aggregate amount paid to the State Parties
under this paragraph 1(b) may be designated as a civil penalty, fine, or similar
payment. The remainder of the payments is intended to remediate the harms to the
States and their communities resulting from the alleged unlawful conduct of the
Defendant and to facilitate the implementation of the Borrower Payment Fund and
consumer relief.

 

B-3

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

2. Of the Direct Payment Settlement Amount, $1,579,813,925.00 shall be
distributed as follows:

 

  a. In accordance with written instructions from the State members of the
Monitoring Committee, the Escrow Agent shall make available $1,489,813,925.00 to
the Administrator to provide cash payments to borrowers whose homes were finally
sold or taken in foreclosure between and including January 1, 2008 and
December 31, 2011; who submit claims arising from the Covered Conduct; and who
otherwise meet criteria set forth by the State members of the Monitoring
Committee. Any amounts made available hereunder remain a part of the Qualified
Settlement Fund until distributed to borrowers and shall be administered in
accordance with the terms set forth in Exhibit C.

 

  b.

In accordance with written instructions from the State members of the Monitoring
Committee, the Escrow Agent shall distribute $15,000,000.00 to the National
Association of Attorneys General (NAAG) to create and administer the “Financial
Services and Consumer Protection Enforcement, Education and Training Fund.” Such
Fund shall be used to pay for expenses and training relating to the
investigation and prosecution of cases involving fraud, unfair and deceptive
acts and practices, and other illegal conduct related to financial services or
state consumer protection laws. Illustrative examples include, but are not
limited to, travel costs associated with investigation, litigation, or
settlement of financial services or consumer protection cases; expert witness
and consulting fees, training programs, NAAG Consumer Protection Conferences,
information

 

B-4

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

  exchanges, public education campaigns, and other uses. The State members of
the Monitoring Committee shall develop rules and regulations governing the
Financial Services and Consumer Protection Enforcement, Education and Training
Fund in a separate memorandum of understanding after this Consent Judgment has
been entered.

 

  c. In accordance with written instructions from the State members of the
Monitoring Committee, the Escrow Agent shall distribute a total of
$10,000,000.00 to the members of the Executive Committee and the Ameriquest
Financial Services Fund (“AMFSF”) for reimbursement of costs and attorneys fees
incurred during the investigation of this case and the settlement negotiations
and for subsequent expenditures as authorized by each Attorney General. Such
payments shall be made as designated by the Iowa Attorney General as the
Chairman of the Executive Committee, and shall be made to the State Attorneys
General of Arizona, California, Colorado, Connecticut, Delaware, Florida,
Illinois, Iowa, Massachusetts, North Carolina, Ohio, Tennessee, Texas, and
Washington and the Maryland Department of Labor, Licensing and Regulation and
the Ameriquest Financial Services Fund. The authorized representatives of each
state attorney general, the Maryland Department of Labor, Licensing and
Regulation and the AMFSF will provide a letter to the Escrow Agent directing how
each separate payment should be made.

 

B-5

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

  d. In accordance with written instructions from the State members of the
Monitoring Committee, the Escrow Agent shall distribute $65,000,000.00 to the
Conference of State Bank Supervisors (CSBS). CSBS shall use $15,000,000 to
establish the “State Financial Regulation Fund,” a fund to be managed and used
by CSBS to support and improve state financial regulation and supervision. From
the balance, CSBS shall transfer $1,000,000 per state to the state financial
regulators who have signed this Consent Judgment. Where multiple agencies within
a single state claim regulatory jurisdiction, CSBS shall transfer that state’s
funds as provided in an agreement between or among those regulatory agencies. In
addition, state financial regulators may, at their discretion, enter into an
agreement with CSBS for the management and disbursement of all or a portion of
the funds paid to them. If, for any reason, a state financial regulator elects
to forego receipt of their transfer payment or in the case of a participating
state where the state financial regulator declines to sign this Consent
Judgment, such funds shall revert to the State Financial Regulation Fund.

 

3. Any interest earned on funds held by the Escrow Agent may be used, at the
discretion of the State members of the Monitoring Committee, to pay the costs
and expenses of the escrow or the costs and expenses of administration,
including taxes, or for any other housing related purpose.

 

B-6

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

4. Notwithstanding any implication to the contrary in any of the provisions of
Exhibit B-2, all instructions therein shall be subject to the provisions of
paragraph 1.b(i) and 1.b(ii) of this Exhibit B. If and to the extent any amounts
are paid into a fund or escrow account established by a State Party that is not
an integral part of the government of such State, it is intended that such fund
or account be deemed a Qualified Settlement Fund within the meaning of Treasury
Regulation Section 1.468B-1 of the U.S. Internal Revenue Code of 1986, as
amended. To the extent that any state designates any payments hereunder as a
civil penalty, such state shall provide the Defendant(s), upon request, such
information as is reasonably necessary for tax reporting purposes with respect
to such civil penalty.

 

B-7

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

EXHIBIT B1

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

EXHIBIT B1

 

STATE    DOLLAR
ALLOCATION  

AK

   $ 3,286,839   

AL

   $ 25,305,692   

AR

   $ 12,830,241   

AZ

   $ 97,784,204   

CA

   $ 410,576,996   

CO

   $ 50,170,188   

CT

   $ 26,102,142   

DC

   $ 4,433,081   

DE

   $ 7,913,923   

FL

   $ 334,073,974   

GA

   $ 99,365,105   

HI

   $ 7,911,883   

IA

   $ 14,651,922   

ID

   $ 13,305,209   

IL

   $ 105,806,405   

IN

   $ 43,803,419   

KS

   $ 13,778,401   

KY

   $ 19,198,220   

LA

   $ 21,741,560   

MA

   $ 44,450,668   

MD

   $ 59,697,470   

ME

   $ 6,907,023   

MI

   $ 97,209,465   

MN

   $ 41,536,169   

MO

   $ 39,583,212   

MS

   $ 13,580,374   

MT

   $ 4,858,276   

NC

   $ 60,852,159   

ND

   $ 1,947,666   

NE

   $ 8,422,528   

NH

   $ 9,575,447   

NJ

   $ 72,110,727   

NM

   $ 11,174,579   

NV

   $ 57,368,430   

NY

   $ 107,642,490   

OH

   $ 92,783,033   

OR

   $ 29,253,190   

PA

   $ 66,527,978   

RI

   $ 8,500,755   

SC

   $ 31,344,349   

SD

   $ 2,886,824   

TN

   $ 41,207,810   

TX

   $ 134,628,489   

UT

   $ 21,951,641   

VA

   $ 66,525,233   

VT

   $ 2,552,240   

WA

   $ 54,242,749   

WI

   $ 30,191,806   

WV

   $ 5,748,915   

WY

   $ 2,614,515   

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

EXHIBIT B2

 

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

EXHIBIT B2

ALABAMA

The Court awards the State of Alabama a judgment in the amount of $25,305,692,
which shall be paid by electronic transfer to the Office of the Attorney
General. Of this amount, the Court awards $2,530,569 dollars in civil penalties
(or 10% of the total) as defined by and in accordance with Code of Alabama,
1975, §8-19-11 for misconduct relating to the banks’ robo-signing in violation
of Alabama’s Deceptive Trade Practices Act. The remaining amount shall be used
by the Attorney General, at his sole discretion, for costs of investigation and
litigation, for law enforcement efforts to prevent and prosecute financial
fraud, and/or for public protection purposes, such as to defray the operating
cost of any function of the Attorney General’s Office that protects citizens,
whether through investigation, representation, regulation, mediation,
prosecution, victims’ assistance, or consumer education concerning
consumer-related financial or other crimes, or, at the sole discretion of the
Attorney General, to be used for housing programs, housing counseling, legal
assistance, foreclosure prevention hotlines, foreclosure mediation and
investigation of financial fraud or other wrongdoing overseen by any division of
the Attorney General’s Office.

In addition, the Attorney General may distribute any amount from the funds, at
his sole discretion, to other governmental entities or charitable organizations
whose eleemosynary purposes benefit those affected by the aforementioned
misconduct

ALASKA

Alaska’s payment of $3,286,839.00 shall be to the State of Alaska and delivered
to the Office of the Attorney General, 1031 West 4th Avenue, Suite 200,
Anchorage, Alaska 99501.

ARIZONA

1. State Payment Settlement Amounts, Consent Judgment Ex. B, Paragraph 1(b)(i)
Arizona’s share of the State Payment Settlement Amounts (“Funds”) provided under
this Consent Judgment, and any interest thereon, shall be made payable to the
Office of the Arizona Attorney General. The Attorney General shall direct the
use of the Funds in Arizona. The Funds shall be used for purposes intended to
avoid preventable foreclosures, to ameliorate the effects of the foreclosure
crisis, to enhance law enforcement efforts to prevent and prosecute financial
fraud, or unfair or deceptive acts or practices and to compensate the State for
costs resulting from the alleged unlawful conduct of the Defendants. Such
permissible purposes for allocation of the funds include, but are not limited
to, supplementing the amounts paid to state homeowners under the Borrower
Payment Fund, funding for housing counselors, state and local foreclosure
assistance hotlines, state and local foreclosure mediation programs, legal
assistance, housing remediation and anti-blight projects, funding for training
and staffing of financial fraud or consumer protection enforcement efforts, and
civil penalties.

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The Attorney General shall deposit the Funds with the State Treasurer and the
Funds shall be held in a separate Court Ordered Trust Fund account and all
interest thereon deposited into that account and used only for the purposes set
forth herein.

2. Executive Committee Payment, Consent Judgment Ex. B, Paragraph 2(c) Any funds
paid to the Office of the Arizona Attorney General as reimbursement for
attorneys fees and costs for serving on the Executive Committee, and any
interest thereon, shall be deposited into the consumer fraud revolving fund
pursuant to A.R.S. § 44-1531.01 and used for the purposes set forth therein.

ARKANSAS

For the payment to the State of Arkansas as provided in Paragraph III (3) of the
Consent Judgment, and it accordance with the provisions of Paragraph 1. (b) of
Exhibit B to the Consent Judgment, Attorney General Dustin McDaniel directs that
the total anticipated sum of Twelve Million, Eight Hundred Thirty Thousand, two
hundred and forty-one dollars ($12,830,241) be paid to the State of Arkansas
Office of the Attorney General (and delivered to Carol Thompson, Chief Financial
Officer) to then be distributed by the Attorney General to the following
entities for the following purposes:

 

  1. To the Arkansas Development Finance Authority to fund programs that provide
to Arkansas residents down payment assistance, financial literacy and mortgage
and foreclosure counseling ,tax credit assistance, rental assistance,
low-interest financing, land acquisition, new construction, rehabilitation
construction, and reconstruction, the sum of Nine Million dollars
($9,000,000.00);

 

  2. To the Arkansas Access to Justice Commission to provide equal access to
justice to Arkansas residents affected by the mortgage and foreclosure crisis,
the sum of Two Million dollars ($2,000,000.00);

 

  3. To the University of Arkansas School of Law to support its legal aid
clinic, which provides legal representation to low-income Arkansans, the sum of
Five Hundred Thousand dollars ($500,000.00);

 

  4. To the University of Arkansas at Little Rock School of Law to support its
legal aid clinic, which provides legal representation to low-income Arkansans,
the sum of Five Hundred Thousand dollars ($500,000.00);

And, to the Arkansas Treasury the remaining funds for fees, costs, and the costs
of investigation and pursuit of this matter, the sum of Eight Hundred Thirty
Thousand, two hundred and forty-one dollars ($830,241.00).

 

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CALIFORNIA

The payment to the California Attorney General’s Office shall be used as
follows:

 

  a) Ten percent of the payment shall be paid as a civil penalty and deposited
in the Unfair Competition Law Fund;

 

  b) The remainder shall be paid and deposited into a Special Deposit Fund
created for the following purposes: for the administration of the terms of this
Consent Judgment; monitoring compliance with the terms of this Consent Judgment
and enforcing the terms of this Consent Judgment; assisting in the
implementation of the relief programs and servicing standards as described in
this Consent Judgment; supporting the Attorney General’s continuing
investigation into misconduct in the origination, servicing, and securitization
of residential mortgage loans; to fund consumer fraud education, investigation,
enforcement operations, litigation, public protection and/or local consumer aid;
to provide borrower relief; to fund grant programs to assist housing counselors
or other legal aid agencies that represent homeowners, former homeowners, or
renters in housing-related matters; to fund other matters, including grant
programs, for the benefit of California homeowners affected by the
mortgage/foreclosure crisis; or to engage and pay for third parties to develop
or administer any of the programs or efforts described above.

COLORADO

1. State Payment Settlement Amounts, Consent Judgment Ex. B, Paragraph 1(b)(i)
The first $1.0 Million paid to the State of Colorado pursuant to Ex. B, 1(b)(i),
and any interest thereon, shall be held in trust by the Colorado Attorney
General and used for future consumer protection and antitrust enforcement and
education efforts. The remainder of the funds paid under this provision, and any
interest thereon, shall be held in trust by the Colorado Attorney General and
used for programs relating to foreclosure prevention, loan modification and
housing and for future consumer protection and antitrust enforcement and
education efforts.

2. Executive Committee Payment, Consent Judgment Ex. B, Paragraph 2(c) The funds
paid to the State of Colorado under Ex. B, 2(c), and any interest thereon, shall
be held in trust by the Colorado Attorney General for the following purposes.
First, these funds, and any interest thereon, shall be used for reimbursement of
the state’s actual costs and attorney fees incurred in this matter. The
remaining funds, and any interest thereon, shall be held in trust by the
Colorado Attorney General and may be used for programs related to foreclosure
prevention, loan modification and housing and for future consumer protection and
antitrust enforcement and education efforts.

CONNECTICUT

The Escrow Agent shall pay up to $2.2 million of the Direct Payment Settlement
Amount payable to the State of Connecticut pursuant to paragraph 1(b) of Exhibit
B of this

 

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Consent Judgment to provide immediate assistance to Connecticut residents
seeking to avoid foreclosure by funding housing counselor positions through the
Connecticut Housing Finance Authority and/or the Department of Economic and
Community Development and by funding positions and other support to facilitate
and expand the Judicial Branch’s foreclosure related programs. All of the
remaining Direct Payment Settlement Amount payable to the State of Connecticut
pursuant to paragraph 1(b) of Exhibit B of this Consent Judgment shall be
disbursed at the written instruction of the Office of the Attorney General after
consultation by the Office of the Attorney General with the Office of Policy and
Management and appropriate officials of the State of Connecticut as may be
required by Connecticut law.

The Escrow Agent shall pay any Direct Payment Settlement Amount payable to the
Office of the Attorney General pursuant to paragraph 2(c) of Exhibit B of this
Consent Judgment to the Attorney General’s Consumer Protection Fund, which funds
shall be expended to fund protection and education of consumers, including,
without limitation, legal assistance to Connecticut citizens seeking to avoid
foreclosure, grants to non-profit legal aid organizations assisting Connecticut
citizens seeking to avoid foreclosure, funding to support implementation of this
Consent Judgment by the Office of the Attorney General, and for any other
purposes intended to avoid preventable foreclosures and to ameliorate the
effects of the foreclosure crisis.

DELAWARE

The amount of $7,913,923.00 will be paid to the Delaware Department of Justice
by wire transfer or certified check payable to the “State of Delaware—Consumer
Protection Fund”, which shall be used in the sole discretion of the Delaware
Department of Justice exclusively for the following purposes related to consumer
protection efforts to address the mortgage and foreclosure crisis, financial
fraud and deception, and housing-related conduct: (1) investigations,
enforcement operations, litigation, and other initiatives conducted or overseen
by the Delaware Department of Justice Fraud Division, including training and
staffing, (2) the Delaware Automatic Residential Mortgage Foreclosure Mediation
Program or any successor program, and (3) grants or other aid to agencies and
organizations approved by the Delaware Department of Justice for consumer
assistance, consumer education, credit and housing counseling, mediation
programs, legal assistance, training, or staffing. If the payment is made by
certified check, it shall be delivered to:

 

Delaware Department of Justice Fraud Division, Consumer Protection Unit 820 N.
French Street Wilmington, Delaware 19801 ATTN: Ian R. McConnel, Division Chief

DISTRICT of COLUMBIA

The payment for the District of Columbia shall be paid to the “D.C. Treasurer”
in accordance with instructions provided by the Office of the Attorney General
for the

 

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District of Columbia. The payment shall be used by the District of Columbia
Government, subject to appropriation, for one or more of the following purposes:
(1) mortgage-related or foreclosure-related counseling, (2) mortgage-related or
foreclosure-related legal assistance or advocacy, (3) mortgage-related or
foreclosure-related mediation, (4) outreach and/or assistance to help current
and former homeowners secure the benefits for which they are eligible under
mortgage-related or foreclosure-related settlements or judgments,
(5) enforcement work in the area of financial fraud or consumer protection.

FLORIDA

Of the payment identified in Exhibit B-1 that Defendants are making to settle
this matter with the Attorney General, State of Florida, Department of Legal
Affairs, 10% is to be paid to the State of Florida as a penalty; the remainder
shall be held in escrow by the escrow agent for subsequent disbursement as
directed in writing by the Florida Attorney General for purposes consistent with
Exhibit B, paragraph 1b(i) of this consent judgment

GEORGIA

The State Settlement Payment Amount to Georgia shall be paid to the state
treasury to the credit of the general fund and shall be available for
appropriation by the General Assembly for any purpose permitted by state law,
including, to the extent practicable but not limited to, those purposes intended
to avoid preventable foreclosures, to ameliorate the effects of the foreclosure
crisis, to enhance law enforcement efforts to prevent and prosecute financial
fraud or unfair or deceptive acts or practices, or to compensate Georgia for
costs resulting from the alleged unlawful conduct of the Defendants.

HAWAII

The monies are to be held in trust for the benefit of homeowners and others in
the State of Hawaii who are, have been, or may be affected by mortgage loan
proceedings. This includes, but is not limited to, those who have been subject
to foreclosure, are in foreclosure, are at risk of foreclosure, have delinquent
mortgage loan payments, have negative equity in their homes, have lost their
homes due to foreclosure, have been unable to refinance their mortgage loans, or
are leasing a dwelling affected by foreclosure. The monies shall be used for
housing and financial counseling, public education, mediation, dispute
resolution, and enforcement of laws and agreements protecting the rights of
homeowners and lessees. The monies shall be used only for these purposes. The
monies shall be deposited into an administrative trust account to be
administered by the Attorney General of the State of Hawaii, who as custodian
shall have sole discretion to make determinations as to the amounts and the
purposes for which the monies are to be expended.

 

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IDAHO

Pursuant to Idaho Code § 48-606(5), the money paid to the State of Idaho, as
identified in Exhibit B-1 of the Consent Judgment, shall be remitted to the
consumer protection fund.

ILLINOIS

The funds allocated to the Attorney General of Illinois shall be expended, in
the sole discretion of the Attorney General, primarily for programs to avoid
foreclosure and ameliorate the effects on homeowners of the foreclosure crisis,
including without limitation, the funding of: legal assistance, housing
counseling, administrative oversight for the funded programs by the Attorney
General or others; to support law enforcement efforts to prevent and prosecute
financial fraud or unfair and deceptive acts or practices; and for such other
purposes as directed by the Attorney General.

INDIANA

Pursuant to the terms of the Consent Judgment entered into between the
(a) United States of America and the State Parties; and (b) the Defendants, the
State of Indiana will accept and use its cash payments identified in Exhibit B-1
as follows:

1. The cash payment shall be made to the Office of the Indiana Attorney General.

2. A portion of the cash payment will be used for existing and new programs of
the Attorney General, including but not limited to:

 

  a. Consumer protection services and unfair and deceptive acts and practices
investigations, enforcement, litigation, training, outreach, education, and
related purposes.

 

  b. Homeowner protection services, investigations, enforcement, litigation,
training, outreach, education, and related purposes regarding mortgage lending
and foreclosures.

 

  c. Financial fraud protection services, investigations, enforcement,
litigation, training, outreach, education, and related purposes.

 

  d. Education and training of counselors, facilitators, attorneys,
investigators, and other stakeholders regarding the terms of the settlement.

3. To carry out the purposes of paragraph two (2), funds may be deposited in the
following fund accounts and other related fund accounts as necessary:

 

  a. Homeowner Protection Unit Fund

 

  b. Consumer Fees and Settlements Fund

 

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  c. Identity Theft Unit Fund

 

  d. Real Estate Appraiser Licensing Fund

 

  e. Telephone Solicitation Fund

 

  f. Consumer Assistance Program Fund

4. A portion of the cash payment will be used for a combination of existing and
new programs created or administered by the Indiana General Assembly and state
executive branch agencies, including but not limited to:

 

  a. Housing counseling, foreclosure prevention, legal assistance, foreclosure
mediation, victim assistance, and related purposes.

 

  b. Settlement conferences, court facilitator services, and related purposes.

 

  c. Land banks and related purposes.

 

  d. Homeowner and renter energy assistance programs such as the Lower Income
Hoosier Energy Assistance Program, with priority given to homeowners.

 

  e. Workforce and job training programs to assist unemployed and underemployed
state residents in increasing income to avoid foreclosure and obtain affordable
housing.

 

  f. Neighborhood stabilization programs and community blight remediation
programs.

 

  g. Law enforcement efforts and programs to prevent and address financial,
consumer, mortgage lending, and mortgage foreclosure fraud.

 

  h. Foreclosure prevention and assistance programs for military service members
and veterans.

5. The Attorney General may allocate and designate up to ten percent of the cash
payment as a civil penalty or fine.

6. The Attorney General shall allocate the cash payment among the identified
purposes at his discretion based on the terms of the settlement.

IOWA

The Escrow Agent shall distribute the funds according to written direction
received from the Attorney General of Iowa. The payment shall be used, at the
sole discretion of the

 

B2-7

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Attorney General of Iowa, for any use permitted by law or this Consent Judgment,
including but not limited to:

 

  1) Purposes intended to avoid preventable foreclosures, to ameliorate the
effects of the foreclosure crisis, to enhance law enforcement efforts to prevent
and prosecute financial fraud and unfair or deceptive acts or practices, and to
compensate the State of Iowa for costs resulting from the alleged unlawful
conduct of the Defendant. Such permissible purposes for allocation of the funds
further include, but are not limited to, supplementing the amounts paid to
homeowners under the Borrower Payment Fund, funding for housing counselors,
state and local foreclosure assistance hotlines, state and local foreclosure
mediation programs, legal assistance, housing remediation and anti-blight
projects, funding for training and staffing of financial fraud or consumer
protection enforcement efforts, and civil penalties.

 

  2) Investigative and administrative costs in connection with the matters
addressed herein, including costs incurred before and after the signing of this
Consent Judgment.

 

  3) Public education relating to consumer fraud, mortgage, housing and
financial issues and for enforcement of Iowa Code section 714.16, as referenced
in Iowa Code section 714.16A.

 

  4) Any other lawful purpose.

KANSAS

The Kansas Attorney General shall dedicate not less than 25 percent of any cash
payment to the State of Kansas for the following purposes: 1) supporting the
Attorney General’s ongoing investigation and prosecution of suppliers in the
housing and financial sectors who violate the law; 2) resolving consumer
complaints filed with the Attorney General to prevent foreclosures and remedy
mortgage servicing abuses suffered by Kansas consumers; and 3) defraying the
investigative, administrative and consumer education costs associated with this
settlement, including but not limited to the dedication of additional staff to
monitor compliance with its terms. The remainder of any cash payment to the
State of Kansas that is not dedicated to the above purposes shall be designated
as a civil penalty and shall be deposited to the State General Fund for
appropriation by the Legislature

KENTUCKY

The Office of the Attorney General for the Commonwealth of Kentucky
(hereinafter, the “Attorney General” and “the Commonwealth,” respectively) shall
direct the payment of $19,198,220 to the Commonwealth in a manner consistent
with the terms of the Consent Judgment to which this Exhibit B-2 refers, such
that any funds distributed by the Attorney General shall be used for purposes
intended to avoid preventable foreclosures,

 

B2-8

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to ameliorate the effects of the foreclosure crisis, to enhance law enforcement
efforts to prevent and prosecute financial fraud or unfair or deceptive acts or
practices, to address the collateral consequences of such conduct, and to
compensate the Commonwealth for costs resulting from the alleged unlawful
conduct of the Defendants. Such payments shall include:

 

  i) $5,048,220 in agency restricted funds to directly compensate the Office of
the Attorney General for the reasonable costs of investigation and litigation of
the alleged unlawful conduct of the Defendants, and to finance, within the
Office of the Attorney General, ongoing consumer protection actions including,
but not limited to, actions addressing any conduct similar to the alleged
unlawful conduct of the Defendants by any entity not released by the State
Release contemporaneously executed with this Consent Judgment; any civil and
criminal investigations emanating from any allegedly improper conduct not
released pursuant to the State Release perpetrated by any Defendant or any other
person or entity; investigations and potential litigation pertaining to MERS or
any related entity involving mortgage assignments in the Commonwealth; and
claims of fraud or improper conduct relating to the pooling of, marketing of, or
sale of any securities product involving or containing mortgage related payment
streams; and

 

  ii) $14,150,000 to be distributed at the express direction of the Attorney
General to agencies, organizations or entities to avoid preventable
foreclosures, to ameliorate the effects of the foreclosure crisis, to enhance
law enforcement efforts to prevent and prosecute financial fraud or unfair or
deceptive acts or practices, to address the collateral consequences of such
conduct, and to compensate the Commonwealth for costs resulting from the alleged
unlawful conduct of the Defendants, including, but not limited to, the
following:

 

  a. The Kentucky Housing Corporation, for purposes including, but not limited
to, mortgage assistance to Kentucky homeowners, down payments and/or closing
costs assistance for qualifying homebuyers, state and local foreclosure
prevention and mediation programs, housing rehabilitation and anti-blight
projects;

 

  b. The Kentucky Homeownership Protection Center, to provide homeownership and
mortgage-related credit counseling to Kentucky consumers;

 

  c. The four federally-funded civil legal aid service organizations within the
Commonwealth, to provide housing-related legal assistance to low income
consumers;

 

  d. The Commonwealth’s Unified Prosecutorial System (“UPS”), to support and
sustain new and ongoing investigations and prosecutions relating to the
foreclosure crisis and consequential criminal conduct plaguing local communities
throughout the Commonwealth;

 

B2-9

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  e. The Commonwealth’s Department of Financial Institutions (“DFI”), to assist
in regulatory and educational efforts targeting financial services institutions
subject to DFI’s jurisdictional oversight, and consumers purchasing products and
services from such institutions;

 

  f. The Commonwealth’s Department of Public Health, to support and maintain
consumer safety and injury prevention programs, including but not limited to,
lead abatement programs affecting low income individuals or communities; and

 

  g. Within the discretion of the Attorney General, any other organization or
entity substantially able to implement, manage, develop or support any program
consistent with the aims of this settlement.

Funds directed to any agency, organization or entity by the Attorney General
pursuant to the terms of this paragraph shall be appropriated, administered and
expended consistent with the terms of KRS Chapter 48, as applicable.

LOUISIANA

Said payment shall be payable to the Louisiana Department of Justice Consumer
Enforcement Fund and shall be used for investigation of mortgage and foreclosure
matters, consumer protection law enforcement and education, litigation funds,
public protection, reimbursement of costs and fees associated with the
investigation of this matter, ensuring compliance under the terms of this
agreement, federal, and state regulations, or for any other purpose, at the
direction of the Attorney General, as permitted by state law.

MARYLAND

The settlement amount of $59,697,470.00 shall be paid for the benefit of the
citizens of the State of Maryland, of which the maximum of 10%, or
$5,969,747.00, shall be paid to the Office of the Attorney General of Maryland
as a civil penalty to be deposited in the General Fund of the State of Maryland.
The balance of $53,727,723.00 shall be held in trust pursuant to paragraph 1.b.
of Exhibit B to the Consent Order, to be disbursed only as directed by the
Office of the Attorney General of Maryland and to be used only for housing and
foreclosure-relief purposes and for related investigations and enforcement
activities. These purposes and activities may include, but are not limited to,
the provision of housing counseling, legal assistance, criminal or civil
investigations of fraud related to housing and the securitization of mortgage
loans, enforcement activities, foreclosure prevention, foreclosure remediation,
restitution, and programs to address community blight or to fund other programs
reasonably targeted to benefit persons harmed by mortgage fraud.

 

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MASSACHUSETTS

Payment to Massachusetts (“the Payment”) shall be payable to the Commonwealth of
Massachusetts and directed to the Office of the Attorney General, and shall be
used, consistent with this paragraph, to provide consumer and community relief
to remedy the alleged unfair and deceptive acts and practices that gave rise to
this Consent Decree, allocated as follows:

 

  a) $4.4 million shall be paid as a civil penalty pursuant to G.L. c. 93A, § 4;

 

  b) $1.0 million shall be paid as costs and attorneys fees pursuant to G.L. c.
93A, § 4;

 

  c) $1.5 million shall be used for the administration of the terms of this
Consent Judgment, monitoring compliance with the terms of this Consent Judgment
and enforcing the terms of this Consent Judgment, assisting in the
implementation of the relief programs and servicing standards as described in
this Consent Judgment, and supporting the Attorney General’s continuing
investigation into misconduct in the origination, servicing, and securitization
of residential mortgage loans; and

 

  d) the remainder of the Payment shall be used to establish the Consumer and
Community Foreclosure Relief Fund (“the Fund”) which shall be used, in the sole
discretion of the Attorney General, to fund or assist in funding programs
intended to avoid preventable foreclosures, mitigate the effects of foreclosures
on borrowers and communities, provide compensation to borrowers, other persons
and communities arising out of alleged unfair or deceptive acts or practices
that gave rise to the Consent Decree, and/or enhance law enforcement efforts to
prevent and prosecute financial fraud or unfair or deceptive acts or practices.
The Fund may further be used to provide consumer education, outreach, local
consumer aid funds, consumer protection enforcement funds, and public protection
funds or for other uses permitted by state law.

MAINE

Funds paid to the Maine Bureau of Consumer Credit Protection shall be deposited
in the nonlapsing, dedicated account authorized to accept funds from any public
or private source as described in 14 MRS § 6112(4) to fund the Bureau’s
foreclosure prevention program. Amounts paid to the Maine Attorney General shall
be used to fund foreclosure diversion programs including the Bureau of Consumer
Credit Protection’s foreclosure prevention program and to legal aid
organizations for direct legal services to consumers in support of foreclosure
prevention efforts, to defray the costs of the inquiry leading hereto or for
other uses permitted by state law at the sole discretion of the Attorney General

 

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MICHIGAN

Payment shall be forwarded at the direction of the Michigan Attorney General.
Said payment shall be used for attorneys’ fees and other costs of the inquiry
leading hereto, and other uses as are consistent with state law and this consent
judgment.

MINNESOTA

The State of Minnesota shall use the funds paid pursuant to Exhibit B-1
(“Minnesota Direct Payment Funds”) to provide restitution to Minnesota residents
who were harmed by Defendant’s origination, servicing, or foreclosure practices.
The Minnesota Direct Payment Funds shall be deposited into an interest-bearing
escrow account. The reasonable expenses of the escrow account and for
developing, administering, and implementing the restitution plan, including the
expenses of settlement administration and independent claims review, may be paid
with Minnesota Direct Payment Funds. After full and fair restitution has been
paid to individuals harmed by Defendant’s practices as set forth above, any
amount remaining shall be deposited into the State of Minnesota General Fund.
Defendant shall provide to the settlement administrator retained by the
Minnesota Attorney General to administer the Minnesota Direct Payment Funds (the
“Settlement Administrator”) all information already in its possession and
readily available that is reasonably necessary for the administration of the
Minnesota Direct Payment Funds, within a reasonable time after receipt of the
request for the information. Information pertaining to individual borrowers who
may be eligible for payments under the Minnesota Direct Payment Funds, including
names and other identifying information and information necessary to verify or
corroborate claims for restitution of Minnesota borrowers, shall be provided to
Minnesota so long as such information is used solely for the purpose of
contacting eligible borrowers, responding to inquiries from borrowers regarding
their eligibility for Minnesota Direct Payment Funds, and/or complying with tax
reporting and withholding obligations, if any. Appropriate information security
protocols, including prior borrower authorization where applicable, shall be
utilized to ensure the privacy of borrower information and compliance with all
applicable privacy laws.

MISSISSIPPI

The settlement payment for the State of Mississippi in the amount of
$13,580.374.00 shall be distributed to the Mississippi Attorney General for
disbursements in accordance with the terms of the Consent Judgment to which this
Exhibit refers.

MISSOURI

The Escrow Agent shall pay $39,583,212 to the State of Missouri:

 

  a. $38,583,212 to the State of Missouri Office of the Attorney General and

 

  b.

$1,000,000 to the state of Missouri Office of the Attorney General to the credit
of the Merchandising Practices Revolving Fund for advocacy of consumers

 

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  impacted by the practices addressed in this Consent Judgment, for the
investigation and prosecution of persons involved in unfair, deceptive and
fraudulent practices related to financial services, and for such other purposes
as authorized by law.

MONTANA

Pursuant to 1(b) of Exhibit B to the foregoing Consent Judgment, the sum of
$4,858,276 shall be distributed to the state consumer protection account for the
Montana Department of Justice, according to wire transfer instructions to be
provided by the Montana Attorney General’s Office to the Trustee.

The sum of $450,000 shall be for civil fines, costs and fees pursuant to Mont.
Code Ann. § 30-14-143.

The remaining funds shall be used, at the sole discretion of the Attorney
General of Montana, for purposes intended to avoid preventable foreclosures, to
ameliorate the effects of the foreclosure crisis, and to enhance law enforcement
efforts to prevent and prosecute financial fraud, or unfair or deceptive acts or
practices. These purposes include but are not limited to, funding for housing
counselors, state and local foreclosure assistance services, state and local
foreclosure mediation programs, legal assistance, and funding for training and
staffing of financial fraud or consumer protection enforcement efforts.

NEBRASKA

The Nebraska Attorney General, on behalf of the State of Nebraska, directs that
Nebraska’s portion of the Direct Payment Settlement Amount, pursuant to Exhibit
B, Paragraph (1)(b) of the attached Consent Judgment, be distributed to the
following, to be used for any purpose(s) allowed pursuant to said Consent
Judgment: State of Nebraska-Cash Reserve Fund (11000).

NEVADA

Funds shall be directed to the Nevada Attorney General to be deposited into an
account and used for the following purposes: avoiding preventable foreclosure,
ameliorating the effects of the mortgage and foreclosure crisis in Nevada,
enhance consumer protection and legal aid efforts, enhance consumer financial
and housing counseling assistance including economic education and/or
instruction on financial literacy for the benefit of Nevada residents, enhance
law enforcement efforts to investigate, prosecute and prevent financial fraud or
unfair or deceptive acts or practices at the sole discretion of the Attorney
General. The aforementioned account shall be interest bearing and all accrued
interest shall stay with the account for the above enumerated purposes.

 

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NEW HAMPSHIRE

The funds received by the New Hampshire Attorney General pursuant to this
agreement shall be deposited in the consumer escrow account at the Department of
Justice and used at the sole discretion of the New Hampshire Attorney General
for the protection of consumers in the State of New Hampshire. The permissible
purposes for allocation of the funds include, but are not limited to, funding
for housing counselors, state and local foreclosure assistance programs, state
and local foreclosure mediation programs, legal assistance, funding for training
and staffing of financial fraud and/or consumer protection enforcement efforts,
supplementing the amounts paid to state homeowners under the Borrower Payment
Fund, and civil penalties.

NEW JERSEY

New Jersey plans to apply its share of the settlement proceeds for its
attorneys’ fees, investigation costs and other expenses related to the
investigation and resolution of this matter as well as on one or more of the
following programs: Affordable Housing, Local Planning Services, Developmental
Disabilities Residential Services, State Rental Assistance Program, Homelessness
Prevention, Shelter Assistance, Community Based Senior Programs, Mental Health
Residential Programs, Social Services for the Homeless, and/or Temporary
Assistance for Needy Families

NEW YORK

The State Payment Settlement Amount for New York, set forth in Exhibit B-1 to
this Consent Judgment (“New York Settlement”), will be paid to the Office of the
Attorney General of the State of New York (“NYOAG”) by certified check payable
to the State of New York, Department of Law and deposited by the NYOAG in an
account that may be used, as determined by the NYOAG, to address matters
relating to housing, lending, mortgage defaults, foreclosures, or the mortgage
crisis, including without limitation consumer assistance, investigation,
enforcement operations, litigation, public protection, consumer education, or
local consumer aid, and for penalties, costs, fees, or any other use permitted
under law. The New York Settlement shall be disbursed by the NYOAG in its sole
discretion and at its direction consistent with the terms of this Consent
Judgment. The certified check shall be delivered to:

New York State Office of the Attorney General

120 Broadway, 25th Floor

New York, New York 10271-0332

Attn.: Scott Wilson, Senior Advisor and Special Counsel

NEW MEXICO

Funds allocated to the Attorney General of the State of New Mexico shall be
expended, in the sole discretion of the Attorney General, primarily for programs
to avoid preventable foreclosures and ameliorate the effects on homeowners of
the foreclosure crisis, including without limitation, funding for housing
counselors, establishment of a state foreclosure assistance hotline, state and
local foreclosure mediation programs, legal

 

B2-14

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assistance for homeowners facing foreclosure, funding for administrative
oversight for and coordination of funded programs by the Attorney General, and
to enhance law enforcement efforts to prevent and prosecute financial fraud or
unfair or deceptive acts or practices.

NORTH CAROLINA

For the payment of settlement funds pursuant to Paragraph III (3) of the Consent
Judgment and in accordance with the provisions of Paragraph 1 (b) of Exhibit B
to the Consent Judgment, North Carolina Attorney General Roy Cooper sets forth
the following funding allocations for the State of North Carolina’s settlement
payment and directs the Escrow Agent to pay said funds as follows:

 

  •  

$5.74 million to be allocated as civil penalties payable to the Civil Penalty
and Forfeiture Fund pursuant to N.C. Gen. Stat. § 115C-457.2 and Article 9,
Section 7 of the North Carolina Constitution;

 

  •  

$30.60 million to the North Carolina Housing Finance Agency for distribution as
follows: (a) $19.12 million to be allocated to housing counseling providers to
ensure that North Carolina homeowners receive the benefits due under this
Consent Judgment, and to ensure the availability of homeownership and
foreclosure prevention counseling services in North Carolina; (b) $11.47 million
to be allocated to legal services providers in North Carolina for legal
representation and assistance to North Carolinians in foreclosure or other
housing or lending-related matters;

 

  •  

$6.69 million to the Conference of District Attorneys of the North Carolina
Administrative Office of the Courts to administer a program of grants among the
prosecutorial districts in North Carolina for the purpose of expanding
prosecution of lending and financial crimes, and expanding prosecution and
investigative abilities in those areas, and obtaining training relating to
lending and financial crimes;

 

  •  

$2.87 million to the North Carolina State Bureau of Investigation to expand its
accounting and financial investigative ability and its expertise to investigate
financial and lending crimes;

 

  •  

$4.78 million to the North Carolina Department of Justice to enable its Consumer
Protection Division to hire attorneys, investigators, financial accountants and
other specialists and staff as needed in order to increase its efforts to
investigate and pursue cases related to financial fraud and unfair or deceptive
trade practices in mortgage lending and financial services, and to assure public
awareness of consumers’ eligibility for relief under the Consent Judgment and
address consumer need for information;

 

B2-15

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  •  

$8.6 million to the general fund of the State of North Carolina as compensation
for costs and economic losses sustained by the State due to mortgage fraud and
foreclosure misconduct. (It is anticipated that an additional $1 million will be
paid to the general fund of the State of North Carolina in the form of attorneys
fees.)

To the extent there are funds remaining or unallocated under the allocations set
forth above, the Escrow Agent is directed to distribute such funds to the North
Carolina Housing Finance Agency for it to distribute consistent with the
purposes outlined above. If North Carolina’s settlement payment amount is
reduced for unanticipated reasons, the individual allocations set forth above
will each be reduced by the corresponding percentage amount.

NORTH DAKOTA

The settlement payment to the State of North Dakota shall be paid to the North
Dakota Attorney General, and shall be used, in the Attorney General’s
discretion, to fund housing remediation projects designed to create more
affordable and available housing or lodging in areas where more housing or
lodging is needed, including creating available housing or lodging for personnel
in law enforcement, emergency response, et cetera, and to compensate the state
for attorney’s fees and costs resulting from the alleged unlawful conduct of the
Defendants.

OHIO

Ohio’s share of the Direct Payment Settlement Amount shall be distributed and
delivered to the office of the Ohio Attorney General, and shall be placed in the
following two funds:

 

  1. $90,783,033.00 in the Attorney General Court Order Fund pursuant to section
109.111 of the Ohio Revised Code. The funds shall be transferred, distributed,
disbursed, or allocated for the purposes described in Paragraph 1(b)(i) of
Exhibit B of the Consent Judgment, including the costs of the Ohio Attorney
General in administering this settlement and fund. Interest or other income
earned on this account shall also be transferred, distributed, disbursed, or
allocated for the purposes described in Paragraph 1(b)(i) of Exhibit B of the
Consent Judgment and for the costs of the Ohio Attorney General in administering
this settlement and fund.

 

  2. $2,000,000.00 shall be placed in the Consumer Protection Enforcement Fund
created pursuant to section 1345.51 of the Ohio Revised Code. The funds shall be
used for the purposes described in section 1345.51.

 

B2-16

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OREGON

1.1 Payment. Servicers shall make available a total sum of Twenty-Nine Million
Two Hundred Fifty-Three Thousand One Hundred Ninety Dollars ($29,253,190) for
payment to the State of Oregon, allocated as follows:

 

  (a) Four Million Dollars ($4,000,000) shall be deposited into the Oregon
Department of Justice Operating Account established pursuant to ORS 180.180.

 

  (b) Twenty-Five Million Two Hundred Fifty-Three Thousand One Hundred Ninety
Dollars ($25,253,190) shall be deposited into the General Fund with a
recommendation to the Oregon Legislative Assembly that such funds be used for
housing and foreclosure relief and mitigation as set forth in this Consent
Judgment.

PENNSYLVANIA

The Attorney General of the Commonwealth of Pennsylvania (“Attorney General”)
directs that the State Payment Settlement Amount, as that term is used in
Exhibit B of this Consent Judgment (“Settlement Amount”), be distributed to the
Office of Attorney General, to be allocated by the Attorney General, at her sole
discretion, to the Office of Attorney General and the Pennsylvania Department of
Banking to further their respective educational and law enforcement purposes;
and the balance to be allocated by the Attorney General, at her sole discretion,
to appropriate programs that help Pennsylvania homeowners avoid foreclosure. The
amount, timing, and manner of the allocation of the Settlement Amount shall be
at the sole discretion of the Attorney General.

RHODE ISLAND

The Rhode Island Attorney General shall receive all state government designated
funds paid under this agreement. Said funds shall be held in separate accounts
and must be used solely for mortgage foreclosure related issues and/or consumer
education, outreach, training or related consumer issues as determined by the
Rhode Island Attorney General

SOUTH CAROLINA

With respect to the State of South Carolina’s payment, said payment shall be
used by the South Carolina Attorney General for a consumer protection
enforcement fund, consumer education fund, consumer litigation fund, local
consumer aid fund, or revolving fund; for consumer restitution, including the
administrative costs thereof; for attorneys’ fees and other costs of
investigation and litigation; for reimbursement of state agencies; for cy pres
purposes; or for any other uses not prohibited by law. The South Carolina
Attorney General shall have sole discretion over the distribution of the funds.

SOUTH DAKOTA

Said payment shall be used by the Attorneys General for attorney fees and other
costs of investigation and litigation, or to be placed in, or applied to, the
consumer protection

 

B2-17

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enforcement fund, consumer education or litigation, to defray the costs of the
inquiry leading hereto, or may be used to fund or assist in funding housing
counselor programs, foreclosure assistance personnel, foreclosure mediation
programs, legal assistance and funding for training and staffing of financial
fraud or consumer protection enforcement efforts, civil penalties or for other
uses permitted by state law, at the sole discretion of the Attorney General

TENNESSEE

The settlement amount of $41,207,810.00 shall be paid for the benefit of the
citizens of the State of Tennessee, of which the maximum of 10%, or
$4,120,781.00, shall be paid to the general fund of the State of Tennessee as a
civil penalty. The remaining $37,087,029.00 shall be paid to the Office of the
Attorney General of Tennessee and shall be used for purposes consistent with
applicable provisions of the consent judgment as directed by the Office of the
Attorney General, including funding foreclosure prevention counseling, other
housing and legal assistance programs, related compliance, investigative,
enforcement, and education purposes, or to fund other programs reasonably
targeted to housing or tenant issues.

TEXAS

Said payment to the State of Texas in the amount of One Hundred Thirty-Four
Million, Six Hundred Twenty-Eight Thousand, Four Hundred Eighty-Nine Dollars
($134,628,489.00) shall be allocated as follows:

 

  A. Ten Million Dollars ($10,000,000.00) for civil penalties pursuant to Tex.
Bus. & Com. Code §17.47(c) paid to the State of Texas for deposit to the
judicial fund pursuant to Texas Government Code §402.007;

 

  B. One Hundred Twenty-Four Million, Six Hundred Twenty-Eight Thousand, Four
Hundred Eighty-Nine Dollars ($124,628,489.00) paid to the State of Texas for
deposit into the General Revenue Fund pursuant to Texas Government Code
§404.094(b) and §404.097(c).

UTAH

The Attorney General of the State of Utah directs that the Utah portion of the
State Payment Settlement Amounts, as that term is used in Exhibit B of this
Consent Judgment, be distributed to the State of Utah to be further allocated as
determined by the Utah State Legislature.

VERMONT

The state funds may be used for housing-related or other purposes.

 

B2-18

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VIRGINIA

The State Payment Settlement Amount for Virginia totaling $66,525,233 shall be
provided to the Virginia Attorney General for deposit to the Attorney General’s
Regulatory, Consumer Advocacy, Litigation and Enforcement Revolving Trust Fund
(the “Revolving Fund”). Amounts deposited to the Revolving Fund may be used for
costs of the Attorney General associated with his consumer protection advocacy
and enforcement efforts and other delineated purposes permitted by State law.

WASHINGTON

The State of Washington will use its share of the State Payment Settlement
Amount, as follows:

 

  1. Ten percent will be designated as a civil penalty.

 

  2. No more than $5 million will be used to compensate the State for its costs
and fees to date, for costs of monitoring and enforcing the terms of the
settlement, and for enforcing RCW 19.86, the Consumer Protection Act.

 

  3. The remaining amount will be used for purposes intended to avoid
preventable foreclosures or ameliorate the effects of the foreclosure crisis. As
permitted by the Consent Judgment, such uses may include

 

  a. supplementing the amounts paid to state homeowners under the Borrower
Payment Fund;

 

  b. funding for housing counselors;

 

  c. funding for state and local foreclosure assistance hotlines;

 

  d. funding for state and local foreclosure mediation programs;

 

  e. funding for civil legal assistance; or

 

  f. funding for housing remediation and anti-blight projects.

The State of Washington will convene a committee of public and private
stakeholders who are experienced in foreclosure assistance, mortgage lending,
civil legal services or housing related issues to determine how best to use the
funds. As required by the Consent Judgment, the Attorney General will exercise
his discretion over the final disposition of the funds in accordance with the
purposes as set forth in the Consent Judgment and will provide instructions to
the Escrow Agent accordingly.

 

B2-19

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WEST VIRGINIA

Settlement payments to the State of West Virginia in the amount of $5,748,915.00
shall be placed in trust and used at the discretion of the Attorney General
solely for consumer protection purposes, including but not limited to, direct
payments, restitution, consumer education, legal services, credit or bankruptcy
counseling and education, housing counseling, conflict resolution programs, and
costs associated with implementing court orders.

WISCONSIN

Money owed to the State of Wisconsin shall be made payable to ‘Attorney General,
State of Wisconsin,’ and may be used for any purpose permitted under the Consent
Judgment, as solely determined and directed by the Attorney General.

WYOMING

The Escrow Agent shall distribute the amount constituting the State Payment
Settlement Amount for the State of Wyoming to the Attorney General of the State
of Wyoming, as trustee, to hold and distribute such amount, pursuant to Wyoming
Statute § 9-1-639(a)(i), exclusively for the purpose of addressing mortgage and
foreclosure matters in the State of Wyoming, by providing grants or other aid to
agencies and organizations approved by the Attorney General of the State of
Wyoming for mortgage and housing related consumer assistance, consumer
education, credit counseling, mediation programs, legal assistance, training, or
staffing.

 

B2-20

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EXHIBIT C

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BORROWER PAYMENT AMOUNT

1. The Borrower Payment Amount shall be administered under the direction and
control of the State members of the Monitoring Committee in the following
manner.

2. Within ninety (90) days of the Effective Date of this Consent Judgment, the
State members of the Monitoring Committee shall choose and retain a Settlement
Administrator (“the Administrator”) to administer the distribution of cash
payments to individual borrowers under this and all similar Consent Judgments
with other servicers concerning the Covered Conduct (the “Related Consent
Judgments”). All costs and expenses of the Administrator, including taxes, shall
be paid from the Borrower Payment Amount.

3. Defendant shall provide to the Administrator all information already in its
possession and readily available that is reasonably necessary for the
administration of this and the Related Consent Judgments, within a reasonable
time after receipt of the request for information. Defendant is ordered herein
to provide such information under 15 U.S.C. § 6802(e)(1)(A), (5) and (8) of the
Gramm-Leach-Bliley Act. Such information pertaining to individual eligible
Borrowers, including names and other identifying information, may be provided to
individual states, but only if the information is used solely for the purpose of
contacting eligible Borrowers, responding to inquiries from Borrowers regarding
their eligibility or concerning the award of borrower payments under this
Consent Judgment, and/or complying with tax reporting and withholding
obligations, if any. The Administrator shall utilize appropriate information
security protocols to ensure the privacy of Borrower information and otherwise
comply with all applicable privacy laws. After the completion of the Borrower
Payment process, the Administrator shall provide a report to each Defendant
identifying which borrowers have received payment. In addition, Defendant may
request from the Administrator

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such interim reports as may be deemed reasonable by the State Members of the
Monitoring Committee. Interim reports necessary to insure that Borrowers will
not receive duplicate payments by virtue of litigation, the foreclosure review
required by federal banking agencies or otherwise hereby are deemed reasonable.
Defendant shall warrant to the State Members of the Monitoring Committee at the
time of supplying information to the Administrator that the information is
complete and accurate to the best of its knowledge and capability.

4. The Administrator shall permit reasonable onsite inspection by the State
members of the Monitoring Committee on the premises of the Administrator to
monitor administration of this and all Related Consent Judgments.

5. As a condition to receipt of any payments pursuant to this process, borrowers
must agree that such payment shall offset and operate to reduce any other
obligation Defendant has to the borrowers to provide compensation or other
payments. However, borrowers shall not be required to release or waive any other
right or legal claim as a condition of receiving such payments.

6. Any cash payment to individual borrowers awarded under the terms of this
Consent Judgment is not and shall not be considered as forgiven debt.

7. The purposes of the payments described in this Exhibit C are remedial and
relate to the reduction in the proceeds deemed realized by borrowers for tax
purposes from the foreclosure sale of residential properties owned by the
borrowers allegedly resulting from the allegedly unlawful conduct of the
Defendants.

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EXHIBIT D

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Consumer Relief Requirements

Any Servicer as defined in the Servicing Standards set forth in Exhibit A to
this Consent Judgment (hereinafter “Servicer” or “Participating Servicer”)
agrees that it will not implement any of the Consumer Relief Requirements
described herein through policies that are intended to (i) disfavor a specific
geography within or among states that are a party to the Consent Judgment or
(ii) discriminate against any protected class of borrowers. This provision shall
not preclude the implementation of pilot programs in particular geographic
areas.

Any discussion of property in these Consumer Relief Requirements, including any
discussion in Table 1 or other documents attached hereto, refers to a 1-4 unit
single-family property (hereinafter, “Property” or collectively, “Properties”).

Any consumer relief guidelines or requirements that are found in Table 1 or
other documents attached hereto, are hereby incorporated into these Consumer
Relief Requirements and shall be afforded the same deference as if they were
written in the text below.

For the avoidance of doubt, subject to the Consumer Relief Requirements
described below, Servicer shall receive credit for consumer relief activities
with respect to loans insured or guaranteed by the U.S. Department of Housing
and Urban Development, U.S. Department of Veterans Affairs, or the U.S.
Department of Agriculture in accordance with the terms and conditions herein,
provided that nothing herein shall be deemed to in any way relieve Servicer of
the obligation to comply with the requirements of the U.S. Department of Housing
and Urban Development, U.S. Department of Veterans Affairs, and the U.S.
Department of Agriculture with respect to the servicing of such loans.

Servicer shall not, in the ordinary course, require a borrower to waive or
release legal claims and defenses as a condition of approval for loss mitigation
activities under these Consumer Relief Requirements. However, nothing herein
shall preclude Servicer from requiring a waiver or release of legal claims and
defenses with respect to a Consumer Relief activity offered in connection with
the resolution of a contested claim, when the borrower would not otherwise have
received as favorable terms or when the borrower receives additional
consideration.

Programmatic exceptions to the crediting available for the Consumer Relief
Requirements listed below may be granted by the Monitoring Committee on a
case-by-case basis.

To the extent a Servicer is responsible for the servicing of a mortgage loan to
which these Consumer Relief Requirements may apply, the Servicer shall receive
credit for all consumer relief and refinancing activities undertaken in
connection with such mortgage loan by any of its subservicers to the same extent
as if Servicer had undertaken such activities itself.*

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1. First Lien Mortgage Modifications

 

  a. Servicer will receive credit under Table 1, Section 1, for first-lien
mortgage loan modifications made in accordance with the guidelines set forth in
this Section 1.

 

  b.

First liens on occupied1 Properties with an unpaid principal balance (“UPB”)
prior to capitalization at or below the highest GSE conforming loan limit cap as
of January 1, 2010 shall constitute at least 85% of the eligible credits for
first liens (the “Applicable Limits”).

 

  c. Eligible borrowers must be at least 30 days delinquent or otherwise qualify
as being at imminent risk of default due to borrower’s financial situation.

 

  d. Eligible borrowers’ pre-modification loan-to-value ratio (“LTV”) is greater
than 100%.

 

  e.

Post-modification payment should target a debt-to-income ratio (“DTI”)2 of 31%
(or an affordability measurement consistent with HAMP guidelines) and a modified
LTV3 of no greater than 120%, provided that eligible borrowers receive a
modification that meets the following terms:

 

  i. Payment of principal and interest must be reduced by at least 10%.

 

  ii. Where LTV exceeds 120% at a DTI of 31%, principal shall be reduced to a
LTV of 120%, subject to a minimum DTI of 25% (which minimum may be waived by
Servicer at Servicer’s sole

 

* If a Servicer holds a mortgage loan but does not service or control the
servicing rights for such loan (either through its own servicing operations or a
subservicer), then no credit shall be granted to that Servicer for consumer
relief and refinancing activities related to that loan.

 

1 

Servicer may rely on a borrower’s statement, at the time of the modification
evaluation, that a Property is occupied or that the borrower intends to rent or
re-occupy the property.

 

2 

Consistent with HAMP, DTI is based on first-lien mortgage debt only. For
non-owner-occupied properties, Servicer shall consider other appropriate
measures of affordability.

 

3 

For the purposes of these guidelines, LTV may be determined in accordance with
HAMP PRA.

 

D-2

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  discretion), provided that for investor-owned loans, the LTV and DTI need not
be reduced to a level that would convert the modification to net present value
(“NPV”) negative.

 

  f. DTI requirements may be waived for first lien mortgages that are 180 days
or more delinquent as long as payment of principal and interest is reduced by at
least 20% and LTV is reduced to at least 120%.

 

  g. Servicer shall also be entitled to credit for any amounts of principal
reduction which lower LTV below 120%.

 

  h. When Servicer reduces principal on a first lien mortgage via its
proprietary modification process, and a Participating Servicer owns the second
lien mortgage, the second lien shall be modified by the second lien owning
Participating Servicer in accordance with Section 2.c.i below, provided that any
Participating Servicer other than the five largest servicers shall be given a
reasonable amount of time, as determined by the Monitor, after that
Participating Servicer’s Start Date to make system changes necessary to
participate in and implement this requirement. Credit for such second lien
mortgage write-downs shall be credited in accordance with the second lien
percentages and cap described in Table 1, Section 2.

 

  i. In the event that, in the first 6 months after Servicer’s Start Date (as
defined below), Servicer temporarily provides forbearance or conditional
forgiveness to an eligible borrower as the Servicer ramps up use of principal
reduction, Servicer shall receive credit for principal reduction on such
modifications provided that (i) Servicer may not receive credit for both the
forbearance and the subsequent principal reduction and (ii) Servicer will only
receive the credit for the principal reduction once the principal is actually
forgiven in accordance with these Consumer Relief Requirements and Table 1.

 

  j. Eligible modifications include any modification that is made on or after
Servicer’s Start Date, including:

 

  i. Write-offs made to allow for refinancing under the FHA Short Refinance
Program;

 

  ii. Modifications under the Making Home Affordable Program (including the Home
Affordable Modification Program (“HAMP”) Tier 1 or Tier 2) or the Housing
Finance Agency Hardest Hit Fund (“HFA Hardest Hit Fund”) (or any other federal
program) where principal is forgiven, except to the extent that state or federal
funds paid to Servicer in its capacity as an investor are the source of a
Servicer’s credit claim.

 

D-3

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  iii.

Modifications under other proprietary or other government modification programs,
provided that such modifications meet the guidelines set forth herein.4

2. Second Lien Portfolio Modifications

 

  a. Servicer is required to adhere to these guidelines in order to receive
credit under Table 1, Section 2.

 

  b. A write-down of a second lien mortgage will be creditable where such
write-down facilitates either (a) a first lien modification that involves an
occupied Property for which the borrower is 30 days delinquent or otherwise at
imminent risk of default due to the borrower’s financial situation; or (b) a
second lien modification that involves an occupied Property with a second lien
which is at least 30 days delinquent or otherwise at imminent risk of default
due to the borrower’s financial situation.

 

4 

Two examples are hereby provided. Example 1: on a mortgage loan at 175% LTV,
when a Servicer (in its capacity as an investor) extinguishes $75 of principal
through the HAMP Principal Reduction Alternative (“PRA”) modification in order
to bring the LTV down to 100%, if the Servicer receives $28.10 in PRA principal
reduction incentive payments from the U.S. Department of the Treasury for that
extinguishment, then the Servicer may claim $46.90 of principal reduction for
credit under these Consumer Relief Requirements:

 

LTV Reduction Band:

  

HAMP-PRA Incentive Amount

Received:

  

Allowable Settlement Credit:

175% LTV to 140% LTV

   $10.50 (35% LTV * $0.30)    $24.50 ((35% LTV-$10.50) * $1.00)

140% LTV to 115% LTV

   $11.30 (25% LTV * $0.45)    $13.70 ((25% LTV-$11.30) * $1.00)

115% LTV to 105% LTV

   $6.30 (10% LTV * $0.63)    $3.70 ((10% LTV-$6.30) * $1.00)

105% LTV to 100% LTV

   None (no credit below 105% LTV)    $5.00 (5% LTV * $1.00)

Total:

   $28.10    $46.90

Example 2: on a mortgage loan at 200% LTV, when a Servicer (in its capacity as
an investor) extinguishes $100 of principal through a HAMP-PRA modification in
order to bring the LTV down to 100%, if the Servicer receives $35.60 in PRA
principal reduction incentive payments from Treasury for that extinguishment,
then although the Servicer would have funded $64.40 in principal reduction on
that loan, the Servicer may claim $55.70 of principal reduction for credit under
these Consumer Relief Requirements:

 

LTV Reduction Band:

  

HAMP-PRA Incentive Amount

Received:

  

Allowable Settlement Credit:

200% LTV to 175% LTV

   $7.50 (25% LTV * $0.30)    $8.80 ((25% LTV-$7.50) * $0.50)

175% LTV to 140% LTV

   $10.50 (35% LTV * $0.30)    $24.50 ((35% LTV-$10.50) * $1.00)

140% LTV to 115% LTV

   $11.30 (25% LTV * $0.45)    $13.70 ((25% LTV-$11.30) * $1.00)

115% LTV to 105% LTV

   $6.30 (10% LTV * $0.63)    $3.70 ((10% LTV-$6.30) * $1.00)

105% LTV to 100% LTV

   None (no credit below 105% LTV)    $5.00 (5% LTV * $1.00)

Total:

   $35.60    $55.70

 

D-4

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  c. Required Second Lien Modifications:

 

  i. Servicer agrees that it must write down second liens consistent with the
following program until its Consumer Relief Requirement credits are fulfilled:

 

  1. A write-down of a second lien mortgage will be creditable where a
successful first lien modification is completed by a Participating Servicer via
a servicer’s proprietary, non-HAMP modification process, in accordance with
Section 1, with the first lien modification meeting the following criteria:

 

  a. Minimum 10% payment reduction (principal and interest);

 

  b. Income verified;

 

  c. A UPB at or below the Applicable Limits; and

 

  d.

Post-modification DTI5 between 25% and 31%.

 

  2. If a Participating Servicer has completed a successful proprietary first
lien modification and the second lien loan amount is greater than $5,000 UPB and
the current monthly payment is greater than $100, then:

 

  a. Servicer shall extinguish and receive credit in accordance with Table 1,
Section 2.iii on any second lien that is greater than 180 days delinquent.

 

  b. Otherwise, Servicer shall solve for a second lien payment utilizing the
HAMP Second Lien Modification Program (“2MP”) logic used as of January 26, 2012.

 

  c. Servicer shall use the following payment waterfall:

 

  i. Forgiveness equal to the lesser of (a) achieving 115% combined
loan-to-value ratio (“CLTV”) or (b) 30% UPB (subject to minimum forgiveness
level); then

 

  ii. Reduce rate until the 2MP payment required by 2MP logic as of January 26,
2012; then

 

5 

Consistent with HAMP, DTI is based on first-lien mortgage debt only. For
non-owner-occupied properties, Servicer shall consider other appropriate
measures of affordability.

 

D-5

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  iii. Extend term to “2MP Term” (greater of modified first or remaining
second).

 

  d. Servicer shall maintain an I/O product option consistent with 2MP
protocols.

 

  d. Eligible second lien modifications include any modification that is made on
or after Servicer’s Start Date, including:

 

  i. Principal reduction or extinguishments through the Making Home Affordable
Program (including 2MP), the FHA Short Refinance Second Lien (“FHA2LP”) Program
or the HFA Hardest Hit Fund (or any other federal program), except (to the
extent) that state or federal funds are the source of a Servicer’s credit claim.

 

  ii. Second lien write-downs or extinguishments completed under proprietary
modification programs, are eligible, provided that such write-downs or
extinguishments meet the guidelines as set forth herein.

 

  e. Extinguishing balances of second liens to support the future ability of
individuals to become homeowners will be credited based on applicable credits in
Table 1.

3. Enhanced Borrower Transitional Funds

Servicer may receive credit, as described in Table 1, Section 3, for providing
additional transitional funds to homeowners in connection with a short sale or
deed-in-lieu of foreclosure to homeowners for the amount above $1,500.

4. Short Sales

 

  a. As described in the preceding paragraph, Servicer may receive credit for
providing incentive payments for borrowers on or after Servicer’s Start Date who
are eligible and amenable to accepting such payments in return for a dignified
exit from a Property via short sale or similar program. Credit shall be provided
in accordance with Table 1, Section 3.i.

 

  b. To facilitate such short sales, Servicer may receive credit for
extinguishing second liens on or after Servicer’s Start Date under Table 1,
Section 4.

 

  c. Short sales through the Home Affordable Foreclosure Alternatives (HAFA)
Program or any HFA Hardest Hit Fund program or proprietary programs closed on or
after Servicer’s Start Date are eligible.

 

  d.

Servicer shall be required to extinguish a second lien owned by Servicer behind
a successful short sale/deed-in-lieu conducted by a Participating Servicer
(provided that any Participating Servicer other than the five largest servicers
shall be given a reasonable amount of time, as determined

 

D-6

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  by the Monitor, after their Start Date to make system changes necessary to
participate in and implement this requirement) where the first lien is greater
than 100% LTV and has a UPB at or below the Applicable Limits, until Servicer’s
Consumer Relief Requirement credits are fulfilled. The first lien holder would
pay to the second lien holder 8% of UPB, subject to a $2,000 floor and an $8,500
ceiling. The second lien holder would then release the note or lien and waive
the balance.

5. Deficiency Waivers

 

  a. Servicer may receive credit for waiving deficiency balances if not eligible
for credit under some other provision, subject to the cap provided in the Table
1, Section 5.i.

 

  b. Credit for such waivers of any deficiency is only available where Servicer
has a valid deficiency claim, meaning where Servicer can evidence to the Monitor
that it had the ability to pursue a deficiency against the borrower but waived
its right to do so after completion of the foreclosure sale.

6. Forbearance for Unemployed Borrowers

 

  a. Servicer may receive credit for forgiveness of payment of arrearages on
behalf of an unemployed borrower in accordance with Table 1, Section 6.i.

 

  b. Servicer may receive credit under Table 1, Section 6.ii., for funds
expended to finance principal forbearance solutions for unemployed borrowers as
a means of keeping them in their homes until such time as the borrower can
resume payments. Credit will only be provided beginning in the 7th month of the
forbearance under Table 1, Section 6.ii.

7. Anti-Blight Provisions

 

  a. Servicer may receive credit for certain anti-blight activities in
accordance with and subject to caps contained in Table 1, Section 7.

 

  b. Any Property value used to calculate credits for this provision shall have
a property evaluation meeting the standards acceptable under the Making Home
Affordable programs received within 3 months of the transaction.

8. Benefits for Servicemembers

 

  a. Short Sales

 

  i.

Servicer shall, with respect to owned portfolio first liens, provide
servicemembers who qualify for SCRA benefits (“Eligible Servicemembers”) a short
sale agreement containing a predetermined minimum net proceeds amount (“Minimum
Net Proceeds”) that Servicer will accept for short sale transaction upon receipt
of the listing agreement and all required third-party approvals. The Minimum Net
Proceeds may be expressed as a

 

D-7

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  fixed dollar amount, as a percentage of the current market value of the
property, or as a percentage of the list price as approved by Servicer. After
providing the Minimum Net Proceeds, Servicer may not increase the minimum net
requirements above the Minimum Net Proceeds amount until the initial short sale
agreement termination date is reached (not less than 120 calendar days from the
date of the initial short sale agreement). Servicer must document subsequent
changes to the Minimum Net Proceeds when the short sale agreement is extended.

 

  ii. Eligible Servicemembers shall be eligible for this short sale program if:
(a) they are an active duty full-time status Eligible Servicemember; (b) the
property securing the mortgage is not vacant or condemned; (c) the property
securing the mortgage is the Eligible Servicemember’s primary residence (or, the
property was his or her principal residence immediately before he or she moved
pursuant to a Permanent Change of Station (“PCS”) order dated on or after
October 1, 2010; (d) the Eligible Servicemember purchased the subject primary
residence on or after July 1, 2006 and before December 31, 2008; and (e) the
Eligible Servicemember relocates or has relocated from the subject property not
more than 12 months prior to the date of the short sale agreement to a new duty
station or home port outside a 50-mile radius of the Eligible Servicemember’s
former duty station or home port under a PCS. Eligible Servicemembers who have
relocated may be eligible if the Eligible Servicemember provides documentation
that the property was their principal residence prior to relocation or during
the 12-month period prior to the date of the short sale agreement.

 

  b. Short Sale Waivers

 

  i. If an Eligible Servicemember qualifies for a short sale hereunder and sells
his or her principal residence in a short sale conducted in accordance with
Servicer’s then customary short sale process, Servicer shall, in the case of an
owned portfolio first lien, waive the additional amount owed by the Eligible
Servicemember so long as it is less than $250,000.

 

  ii. Servicer shall receive credit under Table 1, Section 4, for mandatory
waivers of amounts under this Section 8.b.

 

  c. With respect to the refinancing program described in Section 9 below,
Servicer shall use reasonable efforts to identify active servicemembers in its
owned portfolio who would qualify and to solicit those individuals for the
refinancing program.

 

D-8

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9. Refinancing Program

 

  a. Servicer shall create a refinancing program for current borrowers. Servicer
shall provide notification to eligible borrowers indicating that they may
refinance under the program described herein. The minimum occupied Property
eligibility criteria for such a program shall be:

 

  i. The program shall apply only to Servicer-owned first lien mortgage loans.

 

  ii. Loan must be current with no delinquencies in past 12 months.

 

  iii. Fixed rate loans, ARMS, or I/Os are eligible if they have an initial
period of 5 years or more.

 

  iv. Current LTV is greater than 100%.

 

  v. Loans must have been originated prior to January 1, 2009.

 

  vi. Loan must not have received any modification in the past 24 months.

 

  vii. Loan must have a current interest rate of at least 5.25 % or PMMS + 100
basis points, whichever is greater.

 

  viii. The minimum difference between the current interest rate and the offered
interest rate under this program must be at least 25 basis points or there must
be at least a $100 reduction in monthly payment.

 

  ix. Maximum UPB will be an amount at or below the Applicable Limits.

 

  x. The following types of loans are excluded from the program eligibility:

 

  1. FHA/VA

 

  2. Property outside the 50 States, DC, and Puerto Rico

 

  3. Loans on Manufactured Homes

 

  4. Loans for borrowers who have been in bankruptcy anytime within the prior 24
months

 

  5. Loans that have been in foreclosure within the prior 24 months

 

  b.

The refinancing program shall be made available to all borrowers fitting the
minimum eligibility criteria described above in 9.a. Servicer will be free to
extend the program to other customers beyond the minimum eligibility criteria
provided above and will receive credit under this Agreement for such
refinancings, provided that such customers have an

 

D-9

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  LTV of over 80%, and would not have qualified for a refinance under Servicer’s
generally-available refinance programs as of September 30, 2011. Notwithstanding
the foregoing, Servicer shall not be required to solicit or refinance borrowers
who do not satisfy the eligibility criteria under 9.a above. In addition,
Servicer shall not be required to refinance a loan under circumstances that, in
the reasonable judgment of the Servicer, would result in Troubled Debt
Restructuring (“TDR”) treatment. A letter to the United States Securities and
Exchange Commission regarding TDR treatment, dated November 22, 2011, shall be
provided to the Monitor for review.

 

  c. The structure of the refinanced loans shall be as follows:

 

  i. Servicer may offer refinanced loans with reduced rates either:

 

  1. For the life of the loan;

 

  2. For loans with current interest rates above 5.25% or PMMS + 100 basis
points, whichever is greater, the interest rate may be reduced for 5 years.
After the 5 year fixed interest rate period, the rate will return to the
preexisting rate subject to a maximum rate increase of 0.5% annually; or

 

  3. For loans with an interest rate below 5.25% or PMMS + 100 basis points,
whichever is greater, the interest rate may be reduced to obtain at least a 25
basis point interest rate reduction or $100 payment reduction in monthly
payment, for a period of 5 years, followed by 0.5% annual interest rate
increases with a maximum ending interest rate of 5.25% or PMMS + 100 basis
points.

 

  ii. The original term of the loan may be changed.

 

  iii. Rate reduction could be done through a modification of the existing loan
terms or refinance into a new loan.

 

  iv. New term of the loan has to be a fully amortizing product.

 

  v. The new interest rate will be capped at 100 basis points over the PMMS rate
or 5.25%, whichever is greater, during the initial rate reduction period.

 

  d. Banks fees and expenses shall not exceed the amount of fees charged by
Banks under the current Home Affordable Refinance Program (“HARP”) guidelines.

 

  e. The program shall be credited under these Consumer Relief Requirements as
follows:

 

D-10

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  i. Credit will be calculated as the difference between the preexisting
interest rate and the offered interest rate times UPB times a multiplier.

 

  ii. The multiplier shall be as follows:

 

  1. If the new rate applies for the life of the loan, the multiplier shall be 8
for loans with a remaining term greater than 15 years, 6 for loans with a
remaining term between 10 and 15 years and 5 for loans with a remaining term
less than 10 years.

 

  2. If the new rate applies for 5 years, the multiplier shall be 5.

 

  f. Additional dollars spent by each Servicer on the refinancing program beyond
that Servicer’s required commitment shall be credited 25% against that
Servicer’s first lien principal reduction obligation and 75% against that
Servicer’s second lien principal reduction obligation, up to the limits set
forth in Table 1.

10. Timing, Incentives, and Payments

 

  a. For the consumer relief and refinancing activities imposed by this
Agreement, Servicer shall be entitled to receive credit against Servicer’s
outstanding settlement commitments for activities taken on or after Servicer’s
start date, March 1, 2012 (such date, the “Start Date”).

 

  b. Servicer shall receive an additional 25% credit against Servicer’s
outstanding settlement commitments for any first or second lien principal
reduction and any amounts credited pursuant to the refinancing program within 12
months of Servicer’s Start Date (e.g., a $1.00 credit for Servicer activity
would count as $1.25).

 

  c. Servicer shall complete 75% of its Consumer Relief Requirement credits
within two years of the Servicer’s Start Date.

 

  d.

If Servicer fails to meet the commitment set forth in these Consumer Relief
Requirements within three years of Servicer’s Start Date, Servicer shall pay an
amount equal to 125% of the unmet commitment amount; except that if Servicer
fails to meet the two year commitment noted above, and then fails to meet the
three year commitment, the Servicer shall pay an amount equal to 140% of the
unmet three-year commitment amount; provided, however, that if Servicer must pay
any Participating State for failure to meet the obligations of a state-specific
commitment to provide Consumer Relief pursuant to the terms of that commitment,
then Servicer’s obligation to pay under this provision shall be reduced by the
amount that such a Participating State would have received under this provision
and the Federal portion of the payment attributable to that

 

D-11

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  Participating State. The purpose of the 125% and 140% amounts is to encourage
Servicer to meet its commitments set forth in these Consumer Relief
Requirements.

11. Applicable Requirements

The provision of consumer relief by the Servicer in accordance with this
Agreement in connection with any residential mortgage loan is expressly subject
to, and shall be interpreted in accordance with, as applicable, the terms and
provisions of the Servicer Participation Agreement with the U.S. Department of
Treasury, any servicing agreement, subservicing agreement under which Servicer
services for others, special servicing agreement, mortgage or bond insurance
policy or related agreement or requirements to which Servicer is a party and by
which it or its servicing affiliates are bound pertaining to the servicing or
ownership of the mortgage loans, including without limitation the requirements,
binding directions, or investor guidelines of the applicable investor (such as
Fannie Mae or Freddie Mac), mortgage or bond insurer, or credit enhancer,
provided, however, that the inability of a Servicer to offer a type, form or
feature of the consumer relief payments by virtue of an Applicable Requirement
shall not relieve the Servicer of its aggregate consumer relief obligations
imposed by this Agreement, i.e., the Servicer must satisfy such obligations
through the offer of other types, forms or features of consumer relief payments
that are not limited by such Applicable Requirement.

 

D-12

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EXHIBIT D-1

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Table 11

 

Menu Item    Credit Towards Settlement    Credit Cap

Consumer Relief Funds

     

1.      First Lien Mortgage Modification2

      Minimum 30% for First Lien Mods3 (which can be reduced by 2.5% of overall
consumer relief funds for excess refinancing program credits above the minimum
amount required)

PORTFOLIO LOANS

     

i.       First lien principal forgiveness modification

   LTV </= 175%: $1.00 Write-down=$1.00 Credit       LTV > 175%: $1.00
Write-down=$0.50 Credit (for only the portion of principal forgiven over 175%)
  

ii.      Forgiveness of forbearance amounts on existing modifications

   $1.00 Write-down=$0.40 Credit    Max 12.5%

 

1 

Where applicable, the number of days of delinquency will be determined by the
number of days a loan is delinquent at the start of the earlier of the first or
second lien modification process. For example, if a borrower applies for a first
lien principal reduction on February 1, 2012, then any delinquency determination
for a later second lien modification made pursuant to the terms of this
Agreement will be based on the number of days the second lien was delinquent as
of February 1, 2012.

2 

Credit for all modifications is determined from the date the modification is
approved or communicated to the borrower. However, no credits shall be credited
unless the payments on the modification are current as of 90 days following the
implementation of the modification, including any trial period, except if the
failure to make payments on the modification within the 90 day period is due to
unemployment or reduced hours, in which case Servicer shall receive credit
provided that Servicer has reduced the principal balance on the loan. Eligible
Modifications will include any modification that is completed on or after the
Start Date, as long as the loan is current 90 days after the modification is
implemented.

3

All minimum and maximum percentages refer to a percentage of total consumer
relief funds.

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

Menu Item    Credit Towards Settlement    Credit Cap

iii.    Earned forgiveness over a period of no greater than 3 years–provided
consistent with PRA

  

LTV </= 175%: $1.00 Write-down=$.85 Credit

 

LTV > 175%: $1.00 Write-down=$0.45 Credit (for only the portion of principal
forgiven over 175%)

  

SERVICE FOR OTHERS

 

iv.     First lien principal forgiveness modification on investor loans
(forgiveness by investor)

  

$1.00 Write-down=$0.45

Credit

  

v.      Earned forgiveness over a period of no greater than 3 years–provided
consistent with PRA

  

LTV </= 175%: $1.00 Write-down=$.40 Credit

 

LTV > 175%: $1.00 Write-down=$0.20 Credit (for only the portion of principal
forgiven over 175%)

  

2.      Second Lien Portfolio Modifications

      Minimum of 60% for 1st and 2nd Lien Mods (which can be reduced by 10% of
overall consumer relief funds for excess refinancing program credits above the
minimum amounts required)

i.       Performing Second Liens (0-90 days delinquent)

  

$1.00 Write-down=$0.90

Credit

  

 

D1-2

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Menu Item    Credit Towards Settlement    Credit Cap

ii.      Seriously Delinquent Second Liens (>90-179 days delinquent)

   $1.00 Write-down=$0.50 Credit   

iii.    Non-Performing Second Liens (180 or more days delinquent)

   $1.00 Write-down=$0.10 Credit   

3.      Enhanced Borrower Transitional Funds

      Max 5%

i.       Servicer Makes Payment

   $1.00 Payment=$1.00 Credit (for the amount over $1,500)   

ii.      Investor Makes Payment (non-GSE)

   $1.00 Payment=0.45 Credit (for the amount over the $1,500 average payment
established by Fannie Mae and Freddie Mac)   

4.      Short Sales/Deeds in Lieu

     

i.       Servicer makes payment to unrelated 2nd lien holder for release of 2nd
lien

   $1.00 Payment=$1.00 Credit   

ii.      Servicer forgives deficiency and releases lien on 1st lien Portfolio
Loans

   $1.00 Write-down=$0.45 Credit   

iii.    Investor forgives deficiency and releases lien on 1st Lien investor
loans

   $1.00 Write-down=$0.20 Credit   

iv.     Forgiveness of deficiency balance and release of lien on

     

 

D1-3

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Menu Item    Credit Towards Settlement    Credit Cap

Portfolio Second Liens Performing Second Liens (0-90 days delinquent)

   $1.00 Write-down=$0.90 Credit   

Seriously Delinquent Second Liens (>90-179 days delinquent)

   $1.00 Write-down=$0.50 Credit   

Non-Performing Second Liens (180 or more days delinquent)

   $1.00 Write-down=$0.10 Credit   

5.      Deficiency Waivers

      Max 10%

i.       Deficiency waived on 1st and 2nd liens loans

   $1.00 Write-down=$0.10 Credit   

6.      Forbearance for unemployed homeowners

     

i.       Servicer forgives payment arrearages on behalf of borrower

   $1.00 new forgiveness=$1.00 Credit   

ii.      Servicer facilitates traditional forbearance program

   $1.00 new forbearance = $0.05 Credit   

7.      Anti-Blight Provisions

      Max 12%

i.       Forgiveness of principal associated with a property where Servicer does
not pursue foreclosure

   $1.00 property value=$0.50 Credit   

 

D1-4

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Menu Item    Credit Towards Settlement    Credit Cap

ii.      Cash costs paid by Servicer for demolition of property

   $1.00 Payment=$1.00 Credit   

iii.    REO properties donated to accepting municipalities or nonprofits or to
disabled servicemembers or relatives of deceased servicemembers

   $1.00 property value=$1.00 Credit   

 

D1-5

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EXHIBIT E

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Enforcement Terms

 

A. Implementation Timeline. Servicer anticipates that it will phase in the
implementation of the Servicing Standards and Mandatory Relief Requirements
(i) through (iv), as described in Section C.12, using a grid approach that
prioritizes implementation based upon: (i) the importance of the Servicing
Standard to the borrower; and (ii) the difficulty of implementing the Servicing
Standard. In addition to the Servicing Standards and any Mandatory Relief
Requirements that have been implemented upon entry of this Consent Judgment, the
periods for implementation will be: (a) within 60 days of entry of this Consent
Judgment; (b) within 90 days of entry of this Consent Judgment; and (c) within
180 days of entry of this Consent Judgment. Servicer will agree with the Monitor
chosen pursuant to Section C, below, on the timetable in which the Servicing
Standards and Mandatory Relief Requirements (i) through (iv) will be
implemented. In the event that Servicer, using reasonable efforts, is unable to
implement certain of the standards on the specified timetable, Servicer may
apply to the Monitor for a reasonable extension of time to implement those
standards or requirements.

 

B. Monitoring Committee. A committee comprising representatives of the state
Attorneys General, State Financial Regulators, the U.S. Department of Justice,
and the U.S. Department of Housing and Urban Development shall monitor
Servicer’s compliance with this Consent Judgment (the “Monitoring Committee”).
The Monitoring Committee may substitute representation, as necessary. Subject to
Section F, the Monitoring Committee may share all Monitor Reports, as that term
is defined in Section D.2 below, with any releasing party.

 

C. Monitor

Retention and Qualifications and Standard of Conduct

 

  1. Pursuant to an agreement of the parties, Joseph A. Smith Jr. is appointed
to the position of Monitor under this Consent Judgment. If the Monitor is at any
time unable to complete his or her duties under this Consent Judgment, Servicer
and the Monitoring Committee shall mutually agree upon a replacement in
accordance with the process and standards set forth in Section C of this Consent
Judgment.

 

  2.

Such Monitor shall be highly competent and highly respected, with a reputation
that will garner public confidence in his or her ability to perform the tasks
required under this Consent Judgment. The Monitor shall have the right to employ
an accounting firm or firms or other firm(s) with similar capabilities to
support the Monitor in carrying out his or her duties under this Consent
Judgment. Monitor and Servicer shall agree on the selection of a “Primary
Professional Firm,” which must have adequate capacity and resources to perform
the work required under this agreement.

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

  The Monitor shall also have the right to engage one or more attorneys or other
professional persons to represent or assist the Monitor in carrying out the
Monitor’s duties under this Consent Judgment (each such individual, along with
each individual deployed to the engagement by the Primary Professional Firm,
shall be defined as a “Professional”). The Monitor and Professionals will
collectively possess expertise in the areas of mortgage servicing, loss
mitigation, business operations, compliance, internal controls, accounting, and
foreclosure and bankruptcy law and practice. The Monitor and Professionals shall
at all times act in good faith and with integrity and fairness towards all the
Parties.

 

  3. The Monitor and Professionals shall not have any prior relationships with
the Parties that would undermine public confidence in the objectivity of their
work and, subject to Section C.3(e), below, shall not have any conflicts of
interest with any Party.

 

  (a) The Monitor and Professionals will disclose, and will make a reasonable
inquiry to discover, any known current or prior relationships to, or conflicts
with, any Party, any Party’s holding company, any subsidiaries of the Party or
its holding company, directors, officers, and law firms.

 

  (b) The Monitor and Professionals shall make a reasonable inquiry to determine
whether there are any facts that a reasonable individual would consider likely
to create a conflict of interest for the Monitor or Professionals. The Monitor
and Professionals shall disclose any conflict of interest with respect to any
Party.

 

  (c) The duty to disclose a conflict of interest or relationship pursuant to
this Section C.3 shall remain ongoing throughout the course of the Monitor’s and
Professionals’ work in connection with this Consent Judgment.

 

  (d) All Professionals shall comply with all applicable standards of
professional conduct, including ethics rules and rules pertaining to conflicts
of interest.

 

  (e) To the extent permitted under prevailing professional standards, a
Professional’s conflict of interest may be waived by written agreement of the
Monitor and Servicer.

 

  (f) Servicer or the Monitoring Committee may move the Court for an order
disqualifying any Professionals on the grounds that such Professional has a
conflict of interest that has inhibited or could inhibit the Professional’s
ability to act in good faith and with integrity and fairness towards all
Parties.

 

E-2

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  4. The Monitor must agree not to be retained by any Party, or its successors
or assigns, for a period of 2 years after the conclusion of the terms of the
engagement. Any Professionals who work on the engagement must agree not to work
on behalf of Servicer, or its successor or assigns, for a period of 1 year after
the conclusion of the term of the engagement (the “Professional Exclusion
Period”). Any Firm that performs work with respect to Servicer on the engagement
must agree not to perform work on behalf of Servicer, or its successor or
assigns, that consists of advising Servicer on a response to the Monitor’s
review during the engagement and for a period of six months after the conclusion
of the term of the engagement (the “Firm Exclusion Period”). The Professional
Exclusion Period and Firm Exclusion Period, and terms of exclusion may be
altered on a case-by-case basis upon written agreement of Servicer and the
Monitor. The Monitor shall organize the work of any Firms so as to minimize the
potential for any appearance of, or actual, conflicts.

Monitor’s Responsibilities

 

  5. It shall be the responsibility of the Monitor to determine whether Servicer
is in compliance with the Servicing Standards and the Mandatory Relief
Requirements (as defined in Section C.12) and whether Servicer has satisfied the
Consumer Relief Requirements, in accordance with the authorities provided herein
and to report his or her findings as provided in Section D.3, below.

 

  6. The manner in which the Monitor will carry out his or her compliance
responsibilities under this Consent Judgment and, where applicable, the
methodologies to be utilized shall be set forth in a work plan agreed upon by
Servicer and the Monitor, and not objected to by the Monitoring Committee (the
“Work Plan”).

Internal Review Group

 

  7. Servicer will designate an internal quality control group that is
independent from the line of business whose performance is being measured (the
“Internal Review Group”) to perform compliance reviews each calendar quarter
(“Quarter”) in accordance with the terms and conditions of the Work Plan (the
“Compliance Reviews”) and satisfaction of the Consumer Relief Requirements after
the (A) end of each calendar year (and, in the discretion of the Servicer, any
Quarter) and (B) earlier of the Servicer assertion that it has satisfied its
obligations thereunder and the third anniversary of the Start Date (the
“Satisfaction Review”). For the purposes of this provision, a group that is
independent from the line of business shall be one that does not perform
operational work on mortgage servicing, and ultimately reports to a Chief Risk
Officer, Chief Audit Executive, Chief Compliance Officer, or another employee or
manager who has no direct operational responsibility for mortgage servicing.

 

E-3

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  8. The Internal Review Group shall have the appropriate authority, privileges,
and knowledge to effectively implement and conduct the reviews and metric
assessments contemplated herein and under the terms and conditions of the Work
Plan.

 

  9. The Internal Review Group shall have personnel skilled at evaluating and
validating processes, decisions, and documentation utilized through the
implementation of the Servicing Standards. The Internal Review Group may include
non-employee consultants or contractors working at Servicer’s direction.

 

  10. The qualifications and performance of the Internal Review Group will be
subject to ongoing review by the Monitor. Servicer will appropriately remediate
the reasonable concerns of the Monitor as to the qualifications or performance
of the Internal Review Group.

Work Plan

 

  11. Servicer’s compliance with the Servicing Standards shall be assessed via
metrics identified and defined in Schedule E-1 hereto (as supplemented from time
to time in accordance with Sections C.12 and C.23, below, the “Metrics”). The
threshold error rates for the Metrics are set forth in Schedule E-1 (as
supplemented from time to time in accordance with Sections C.12 and C.23, below,
the “Threshold Error Rates”). The Internal Review Group shall perform test work
to compute the Metrics each Quarter, and report the results of that analysis via
the Compliance Reviews. The Internal Review Group shall perform test work to
assess the satisfaction of the Consumer Relief Requirements within 45 days after
the (A) end of each calendar year (and, in the discretion of the Servicer, any
Quarter) and (B) earlier of (i) the end of the Quarter in which Servicer asserts
that it has satisfied its obligations under the Consumer Relief Provisions and
(ii) the Quarter during which the third anniversary of the Start Date occurs,
and report that analysis via the Satisfaction Review.

 

  12.

In addition to the process provided under Sections C.23 and 24, at any time
after the Monitor is selected, the Monitor may add up to three additional
Metrics and associated Threshold Error Rates, all of which (a) must be similar
to the Metrics and associated Threshold Error Rates contained in Schedule E-1,
(b) must relate to material terms of the Servicing Standards, or the following
obligations of Servicer: (i) after the Servicer asserts that it has satisfied
its obligation to provide a refinancing program under the framework of the
Consumer Relief Requirements (“Framework”), to provide notification to eligible
borrowers indicating

 

E-4

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  that such borrowers may refinance under the refinancing program described in
the Framework, (ii) to make the Refinancing Program available to all borrowers
fitting the minimum eligibility criteria described in 9.a of the Framework,
(iii) when the Servicer owns the second lien mortgage, to modify the second lien
mortgage when a Participating Servicer (as defined in the Framework) reduces
principal on the related first lien mortgage, as described in the Framework,
(iv) with regard to servicer-owned first liens, to waive the deficiency amounts
less than $250,000 if an Eligible Servicemember qualifies for a short sale under
the Framework and sells his or her principal residence in a short sale conducted
in accordance with Servicer’s then customary short sale process, or (v) without
prejudice to the implementation of pilot programs in particular geographic
areas, to implement the Framework requirements through policies that are not
intended to disfavor a specific geography within or among states that are a
party to the Consent Judgment or discriminate against any protected class of
borrowers (collectively, the obligations described in (i) through (v) are
hereinafter referred to as the “Mandatory Relief Requirements”), (c) must either
(i) be outcomes-based (but no outcome-based Metric shall be added with respect
to any Mandatory Relief Requirement) or (ii) require the existence of policies
and procedures implementing any of the Mandatory Relief Requirements or any
material term of the Servicing Standards, in a manner similar to Metrics 5.B-E,
and (d) must be distinct from, and not overlap with, any other Metric or
Metrics. In consultation with Servicer and the Monitoring Committee, Schedule
E-1 shall be amended by the Monitor to include the additional Metrics and
Threshold Error Rates as provided for herein, and an appropriate timeline for
implementation of the Metric shall be determined.

 

  13. Servicer and the Monitor shall reach agreement on the terms of the Work
Plan within 90 days of the Monitor’s appointment, which time can be extended for
good cause by agreement of Servicer and the Monitor. If such Work Plan is not
objected to by the Monitoring Committee within 20 days, the Monitor shall
proceed to implement the Work Plan. In the event that Servicer and the Monitor
cannot agree on the terms of the Work Plan within 90 days or the agreed upon
terms are not acceptable to the Monitoring Committee, Servicer and Monitoring
Committee or the Monitor shall jointly petition the Court to resolve any
disputes. If the Court does not resolve such disputes, then the Parties shall
submit all remaining disputes to binding arbitration before a panel of three
arbitrators. Each of Servicer and the Monitoring Committee shall appoint one
arbitrator, and those two arbitrators shall appoint a third.

 

E-5

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  14. The Work Plan may be modified from time to time by agreement of the
Monitor and Servicer. If such amendment to the Work Plan is not objected to by
the Monitoring Committee within 20 days, the Monitor shall proceed to implement
the amendment to the Work Plan. To the extent possible, the Monitor shall
endeavor to apply the Servicing Standards uniformly across all Servicers.

 

  15. The following general principles shall provide a framework for the
formulation of the Work Plan:

 

  (a) The Work Plan will set forth the testing methods and agreed procedures
that will be used by the Internal Review Group to perform the test work and
compute the Metrics for each Quarter.

 

  (b) The Work Plan will set forth the testing methods and agreed procedures
that will be used by Servicer to report on its compliance with the Consumer
Relief Requirements of this Consent Judgment, including, incidental to any other
testing, confirmation of state-identifying information used by Servicer to
compile state-level Consumer Relief information as required by Section D.2.

 

  (c) The Work Plan will set forth the testing methods and procedures that the
Monitor will use to assess Servicer’s reporting on its compliance with the
Consumer Relief Requirements of this Consent Judgment.

 

  (d) The Work Plan will set forth the methodology and procedures the Monitor
will utilize to review the testing work performed by the Internal Review Group.

 

  (e) The Compliance Reviews and the Satisfaction Review may include a variety
of audit techniques that are based on an appropriate sampling process and random
and risk-based selection criteria, as appropriate and as set forth in the Work
Plan.

 

  (f) In formulating, implementing, and amending the Work Plan, Servicer and the
Monitor may consider any relevant information relating to patterns in complaints
by borrowers, issues or deficiencies reported to the Monitor with respect to the
Servicing Standards, and the results of prior Compliance Reviews.

 

  (g) The Work Plan should ensure that Compliance Reviews are commensurate with
the size, complexity, and risk associated with the Servicing Standard being
evaluated by the Metric.

 

E-6

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  (h) Following implementation of the Work Plan, Servicer shall be required to
compile each Metric beginning in the first full Quarter after the period for
implementing the Servicing Standards associated with the Metric, or any
extension approved by the Monitor in accordance with Section A, has run.

Monitor’s Access to Information

 

  16. So that the Monitor may determine whether Servicer is in compliance with
the Servicing Standards and Mandatory Relief Requirements, Servicer shall
provide the Monitor with its regularly prepared business reports analyzing
Executive Office servicing complaints (or the equivalent); access to all
Executive Office servicing complaints (or the equivalent) (with appropriate
redactions of borrower information other than borrower name and contact
information to comply with privacy requirements); and, if Servicer tracks
additional servicing complaints, quarterly information identifying the three
most common servicing complaints received outside of the Executive Office
complaint process (or the equivalent). In the event that Servicer substantially
changes its escalation standards or process for receiving Executive Office
servicing complaints (or the equivalent), Servicer shall ensure that the Monitor
has access to comparable information.

 

  17. So that the Monitor may determine whether Servicer is in compliance with
the Servicing Standards and Mandatory Relief Requirements, Servicer shall notify
the Monitor promptly if Servicer becomes aware of reliable information
indicating Servicer is engaged in a significant pattern or practice of
noncompliance with a material aspect of the Servicing Standards or Mandatory
Relief Requirements.

 

  18. Servicer shall provide the Monitor with access to all work papers prepared
by the Internal Review Group in connection with determining compliance with the
Metrics or satisfaction of the Consumer Relief Requirements in accordance with
the Work Plan.

 

  19. If the Monitor becomes aware of facts or information that lead the Monitor
to reasonably conclude that Servicer may be engaged in a pattern of
noncompliance with a material term of the Servicing Standards that is reasonably
likely to cause harm to borrowers or with any of the Mandatory Relief
Requirements, the Monitor shall engage Servicer in a review to determine if the
facts are accurate or the information is correct.

 

  20. Where reasonably necessary in fulfilling the Monitor’s responsibilities
under the Work Plan to assess compliance with the Metrics or the satisfaction of
the Consumer Relief Requirements, the Monitor may request information from
Servicer in addition to that provided under Sections C.16-19. Servicer shall
provide the requested information in a format agreed upon between Servicer and
the Monitor.

 

E-7

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  21. Where reasonably necessary in fulfilling the Monitor’s responsibilities
under the Work Plan to assess compliance with the Metrics or the satisfaction of
the Consumer Relief Requirements, the Monitor may interview Servicer’s employees
and agents, provided that the interviews shall be limited to matters related to
Servicer’s compliance with the Metrics or the Consumer Relief Requirements, and
that Servicer shall be given reasonable notice of such interviews.

Monitor’s Powers

 

  22. Where the Monitor reasonably determines that the Internal Review Group’s
work cannot be relied upon or that the Internal Review Group did not correctly
implement the Work Plan in some material respect, the Monitor may direct that
the work on the Metrics (or parts thereof) be reviewed by Professionals or a
third party other than the Internal Review Group, and that supplemental work be
performed as necessary.

 

  23.

If the Monitor becomes aware of facts or information that lead the Monitor to
reasonably conclude that Servicer may be engaged in a pattern of noncompliance
with a material term of the Servicing Standards that is reasonably likely to
cause harm to borrowers or tenants residing in foreclosed properties or with any
of the Mandatory Relief Requirements, the Monitor shall engage Servicer in a
review to determine if the facts are accurate or the information is correct. If
after that review, the Monitor reasonably concludes that such a pattern exists
and is reasonably likely to cause material harm to borrowers or tenants residing
in foreclosed properties, the Monitor may propose an additional Metric and
associated Threshold Error Rate relating to Servicer’s compliance with the
associated term or requirement. Any additional Metrics and associated Threshold
Error Rates (a) must be similar to the Metrics and associated Threshold Error
Rates contained in Schedule E-1, (b) must relate to material terms of the
Servicing Standards or one of the Mandatory Relief Requirements, (c) must either
(i) be outcomes-based (but no outcome-based Metric shall be added with respect
to any Mandatory Relief Requirement) or (ii) require the existence of policies
and procedures required by the Servicing Standards or the Mandatory Relief
Requirements, in a manner similar to Metrics 5.B-E, and (d) must be distinct
from, and not overlap with, any other Metric or Metrics. Notwithstanding the
foregoing, the Monitor may add a Metric that satisfies (a)-(c) but does not
satisfy (d) of the preceding sentence if the Monitor first asks the Servicer to
propose, and then implement, a Corrective Action Plan, as defined below, for the
material

 

E-8

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  term of the Servicing Standards with which there is a pattern of noncompliance
and that is reasonably likely to cause material harm to borrowers or tenants
residing in foreclosed properties, and the Servicer fails to implement the
Corrective Action Plan according to the timeline agreed to with the Monitor.

 

  24. If Monitor proposes an additional Metric and associated Threshold Error
Rate pursuant to Section C.23, above, Monitor, the Monitoring Committee, and
Servicer shall agree on amendments to Schedule E-1 to include the additional
Metrics and Threshold Error Rates provided for in Section C.23, above, and an
appropriate timeline for implementation of the Metric. If Servicer does not
timely agree to such additions, any associated amendments to the Work Plan, or
the implementation schedule, the Monitor may petition the court for such
additions.

 

  25. Any additional Metric proposed by the Monitor pursuant to the processes in
Sections C.12, C.23, or C.24 and relating to provision VIII.B.1 of the Servicing
Standards shall be limited to Servicer’s performance of its obligations to
comply with (1) the federal Protecting Tenants at Foreclosure Act and state laws
that provide comparable protections to tenants of foreclosed properties;
(2) state laws that govern relocation assistance payments to tenants (“cash for
keys”); and (3) state laws that govern the return of security deposits to
tenants.

 

D. Reporting

Quarterly Reports

 

  1. Following the end of each Quarter, Servicer will report the results of its
Compliance Reviews for that Quarter (the “Quarterly Report”). The Quarterly
Report shall include: (i) the Metrics for that Quarter; (ii) Servicer’s progress
toward meeting its payment obligations under this Consent Judgment;
(iii) general statistical data on Servicer’s overall servicing performance
described in Schedule Y. Except where an extension is granted by the Monitor,
Quarterly Reports shall be due no later than 45 days following the end of the
Quarter and shall be provided to: (1) the Monitor, and (2) the Board of Servicer
or a committee of the Board designated by Servicer. The first Quarterly Report
shall cover the first full Quarter after this Consent Judgment is entered.

 

  2. Following the end of each Quarter, Servicer will transmit to each state a
report (the “State Report”) including general statistical data on Servicer’s
servicing performance, such as aggregate and state-specific information
regarding the number of borrowers assisted and credited activities conducted
pursuant to the Consumer Relief Requirements, as described in Schedule Y. The
State Report will be delivered simultaneous with the submission of the Quarterly
Report to the Monitor. Servicer shall provide copies of such State Reports to
the Monitor and Monitoring Committee.

 

E-9

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Monitor Reports

 

  3. The Monitor shall report on Servicer’s compliance with this Consent
Judgment in periodic reports setting forth his or her findings (the “Monitor
Reports”). The first three Monitor Reports will each cover two Quarterly
Reports. If the first three Monitor Reports do not find Potential Violations (as
defined in Section E.1, below), each successive Monitor Report will cover four
Quarterly Reports, unless and until a Quarterly Report reveals a Potential
Violation (as defined in Section E.1, below). In the case of a Potential
Violation, the Monitor may (but retains the discretion not to) submit a Monitor
Report after the filing of each of the next two Quarterly Reports, provided,
however, that such additional Monitor Report(s) shall be limited in scope to the
Metric or Metrics as to which a Potential Violation has occurred.

 

  4. Prior to issuing any Monitor Report, the Monitor shall confer with Servicer
and the Monitoring Committee regarding its preliminary findings and the reasons
for those findings. Servicer shall have the right to submit written comments to
the Monitor, which shall be appended to the final version of the Monitor Report.
Final versions of each Monitor Report shall be provided simultaneously to the
Monitoring Committee and Servicers within a reasonable time after conferring
regarding the Monitor’s findings. The Monitor Reports shall be filed with the
Court overseeing this Consent Judgment and shall also be provided to the Board
of Servicer or a committee of the Board designated by Servicer.

 

  5.

The Monitor Report shall: (i) describe the work performed by the Monitor and any
findings made by the Monitor’s during the relevant period, (ii) list the Metrics
and Threshold Error Rates, (iii) list the Metrics, if any, where the Threshold
Error Rates have been exceeded, (iv) state whether a Potential Violation has
occurred and explain the nature of the Potential Violation, and (v) state
whether any Potential Violation has been cured. In addition, following each
Satisfaction Review, the Monitor Report shall report on the Servicer’s
satisfaction of the Consumer Relief Requirements, including regarding the number
of borrowers assisted and credited activities conducted pursuant to the Consumer
Relief Requirements, and identify any material inaccuracies identified in prior
State Reports. Except as otherwise provided herein, the Monitor Report may be
used in any court hearing, trial, or other proceeding brought pursuant to this
Consent Judgment pursuant to Section J, below, and shall be admissible in
evidence in a proceeding brought under this Consent Judgment pursuant to Section
J, below. Such admissibility shall not prejudice Servicer’s right

 

E-10

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  and ability to challenge the findings and/or the statements in the Monitor
Report as flawed, lacking in probative value or otherwise. The Monitor Report
with respect to a particular Potential Violation shall not be admissible or used
for any purpose if Servicer cures the Potential Violation pursuant to Section E,
below.

Satisfaction of Payment Obligations

 

  6. Upon the satisfaction of any category of payment obligation under this
Consent Judgment, Servicer, at its discretion, may request that the Monitor
certify that Servicer has discharged such obligation. Provided that the Monitor
is satisfied that Servicer has met the obligation, the Monitor may not withhold
and must provide the requested certification. Any subsequent Monitor Report
shall not include a review of Servicer’s compliance with that category of
payment obligation.

Compensation

 

  7. Within 120 days of entry of this Consent Judgment, the Monitor shall, in
consultation with the Monitoring Committee and Servicer, prepare and present to
Monitoring Committee and Servicer an annual budget providing its reasonable best
estimate of all fees and expenses of the Monitor to be incurred during the first
year of the term of this Consent Judgment, including the fees and expenses of
Professionals and support staff (the “Monitoring Budget”). On a yearly basis
thereafter, the Monitor shall prepare an updated Monitoring Budget providing its
reasonable best estimate of all fees and expenses to be incurred during that
year. Absent an objection within 20 days, a Monitoring Budget or updated
Monitoring Budget shall be implemented. Consistent with the Monitoring Budget,
Servicer shall pay all fees and expenses of the Monitor, including the fees and
expenses of Professionals and support staff. The fees, expenses, and costs of
the Monitor, Professionals, and support staff shall be reasonable. Servicer may
apply to the Court to reduce or disallow fees, expenses, or costs that are
unreasonable.

 

E. Potential Violations and Right to Cure

 

  1. A “Potential Violation” of this Consent Judgment occurs if the Servicer has
exceeded the Threshold Error Rate set for a Metric in a given Quarter. In the
event of a Potential Violation, Servicer shall meet and confer with the
Monitoring Committee within 15 days of the Quarterly Report or Monitor Report
indicating such Potential Violation.

 

  2. Servicer shall have a right to cure any Potential Violation.

 

  3.

Subject to Section E.4, a Potential Violation is cured if (a) a corrective
action plan approved by the Monitor (the “Corrective Action Plan”) is determined
by the Monitor to have been satisfactorily completed in

 

E-11

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  accordance with the terms thereof; and (b) a Quarterly Report covering the
Cure Period reflects that the Threshold Error Rate has not been exceeded with
respect to the same Metric and the Monitor confirms the accuracy of said report
using his or her ordinary testing procedures. The Cure Period shall be the first
full quarter after completion of the Corrective Action Plan or, if the
completion of the Corrective Action Plan occurs within the first month of a
Quarter and if the Monitor determines that there is sufficient time remaining,
the period between completion of the Corrective Action Plan and the end of that
Quarter.

 

  4. If after Servicer cures a Potential Violation pursuant to the previous
section, another violation occurs with respect to the same Metric, then the
second Potential Violation shall immediately constitute an uncured violation for
purposes of Section J.3, provided, however, that such second Potential Violation
occurs in either the Cure Period or the quarter immediately following the Cure
Period.

 

  5. In addition to the Servicer’s obligation to cure a Potential Violation
through the Corrective Action Plan, Servicer must remediate any material harm to
particular borrowers identified through work conducted under the Work Plan. In
the event that a Servicer has a Potential Violation that so far exceeds the
Threshold Error Rate for a metric that the Monitor concludes that the error is
widespread, Servicer shall, under the supervision of the Monitor, identify other
borrowers who may have been harmed by such noncompliance and remediate all such
harms to the extent that the harm has not been otherwise remediated.

 

  6. In the event a Potential Violation is cured as provided in Sections E.3,
above, then no Party shall have any remedy under this Consent Judgment (other
than the remedies in Section E.5) with respect to such Potential Violation.

 

F. Confidentiality

 

  1. These provisions shall govern the use and disclosure of any and all
information designated as “CONFIDENTIAL,” as set forth below, in documents
(including email), magnetic media, or other tangible things provided by the
Servicer to the Monitor in this case, including the subsequent disclosure by the
Monitor to the Monitoring Committee of such information. In addition, it shall
also govern the use and disclosure of such information when and if provided to
the participating state parties or the participating agency or department of the
United States whose claims are released through this settlement (“participating
state or federal agency whose claims are released through this settlement”).

 

E-12

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  2. The Monitor may, at his discretion, provide to the Monitoring Committee or
to a participating state or federal agency whose claims are released through
this settlement any documents or information received from the Servicer related
to a Potential Violation or related to the review described in Section C.19;
provided, however, that any such documents or information so provided shall be
subject to the terms and conditions of these provisions. Nothing herein shall be
construed to prevent the Monitor from providing documents received from the
Servicer and not designated as “CONFIDENTIAL” to a participating state or
federal agency whose claims are released through this settlement.

 

  3. The Servicer shall designate as “CONFIDENTIAL” that information, document
or portion of a document or other tangible thing provided by the Servicer to the
Monitor, the Monitoring Committee or to any other participating state or federal
agency whose claims are released through this settlement that Servicer believes
contains a trade secret or confidential research, development, or commercial
information subject to protection under applicable state or federal laws
(collectively, “Confidential Information”). These provisions shall apply to the
treatment of Confidential Information so designated.

 

  4. Except as provided by these provisions, all information designated as
“CONFIDENTIAL” shall not be shown, disclosed or distributed to any person or
entity other than those authorized by these provisions. Participating states and
federal agencies whose claims are released through this settlement agree to
protect Confidential Information to the extent permitted by law.

 

  5.

This agreement shall not prevent or in any way limit the ability of a
participating state or federal agency whose claims are released through this
settlement to comply with any subpoena, Congressional demand for documents or
information, court order, request under the Right of Financial Privacy Act, or a
state or federal public records or state or federal freedom of information act
request; provided, however, that in the event that a participating state or
federal agency whose claims are released through this settlement receives such a
subpoena, Congressional demand, court order or other request for the production
of any Confidential Information covered by this Order, the state or federal
agency shall, unless prohibited under applicable law or the unless the state or
federal agency would violate or be in contempt of the subpoena, Congressional
demand, or court order, (1) notify the Servicer of such request as soon as
practicable and in no event more than ten (10) calendar days of its receipt or
three calendar days before the return date of the request, whichever is sooner,
and (2) allow the Servicer ten (10) calendar days from the receipt of the notice
to obtain a protective order or stay of production for the

 

E-13

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  documents or information sought, or to otherwise resolve the issue, before the
state or federal agency discloses such documents or information. In all cases
covered by this Section, the state or federal agency shall inform the requesting
party that the documents or information sought were produced subject to the
terms of these provisions.

 

G. Dispute Resolution Procedures. Servicer, the Monitor, and the Monitoring
Committee will engage in good faith efforts to reach agreement on the proper
resolution of any dispute concerning any issue arising under this Consent
Judgment, including any dispute or disagreement related to the withholding of
consent, the exercise of discretion, or the denial of any application. Subject
to Section J, below, in the event that a dispute cannot be resolved, Servicer,
the Monitor, or the Monitoring Committee may petition the Court for resolution
of the dispute. Where a provision of this agreement requires agreement, consent
of, or approval of any application or action by a Party or the Monitor, such
agreement, consent or approval shall not be unreasonably withheld.

 

H. Consumer Complaints. Nothing in this Consent Judgment shall be deemed to
interfere with existing consumer complaint resolution processes, and the Parties
are free to bring consumer complaints to the attention of Servicer for
resolution outside the monitoring process. In addition, Servicer will continue
to respond in good faith to individual consumer complaints provided to it by
State Attorneys General or State Financial Regulators in accordance with the
routine and practice existing prior to the entry of this Consent Judgment,
whether or not such complaints relate to Covered Conduct released herein.

 

I. Relationship to Other Enforcement Actions. Nothing in this Consent Judgment
shall affect requirements imposed on the Servicer pursuant to Consent Orders
issued by the appropriate Federal Banking Agency (FBA), as defined in 12 U.S.C.
§ 1813(q), against the Servicer. In conducting their activities under this
Consent Judgment, the Monitor and Monitoring Committee shall not impede or
otherwise interfere with the Servicer’s compliance with the requirements imposed
pursuant to such Orders or with oversight and enforcement of such compliance by
the FBA.

 

J. Enforcement

 

  1. Consent Judgment. This Consent Judgment shall be filed in the U.S. District
Court for the District of Columbia (the “Court”) and shall be enforceable
therein. Servicer and the Releasing Parties shall waive their rights to seek
judicial review or otherwise challenge or contest in any court the validity or
effectiveness of this Consent Judgment. Servicer and the Releasing Parties agree
not to contest any jurisdictional facts, including the Court’s authority to
enter this Consent Judgment.

 

  2.

Enforcing Authorities. Servicer’s obligations under this Consent Judgment shall
be enforceable solely in the U.S. District Court for the

 

E-14

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  District of Columbia. An enforcement action under this Consent Judgment may be
brought by any Party to this Consent Judgment or the Monitoring Committee.
Monitor Report(s) and Quarterly Report(s) shall not be admissible into evidence
by a Party to this Consent Judgment except in an action in the Court to enforce
this Consent Judgment. In addition, unless immediate action is necessary in
order to prevent irreparable and immediate harm, prior to commencing any
enforcement action, a Party must provide notice to the Monitoring Committee of
its intent to bring an action to enforce this Consent Judgment. The members of
the Monitoring Committee shall have no more than 21 days to determine whether to
bring an enforcement action. If the members of the Monitoring Committee decline
to bring an enforcement action, the Party must wait 21 additional days after
such a determination by the members of the Monitoring Committee before
commencing an enforcement action.

 

  3. Enforcement Action. In the event of an action to enforce the obligations of
Servicer and to seek remedies for an uncured Potential Violation for which
Servicer’s time to cure has expired, the sole relief available in such an action
will be:

 

  (a) Equitable Relief. An order directing non-monetary equitable relief,
including injunctive relief, directing specific performance under the terms of
this Consent Judgment, or other non-monetary corrective action.

 

  (b) Civil Penalties. The Court may award as civil penalties an amount not more
than $1 million per uncured Potential Violation; or, in the event of a second
uncured Potential Violation of Metrics 1.a, 1.b, or 2.a (i.e., a Servicer fails
the specific Metric in a Quarter, then fails to cure that Potential Violation,
and then in subsequent Quarters, fails the same Metric again in a Quarter and
fails to cure that Potential Violation again in a subsequent Quarter), where the
final uncured Potential Violation involves widespread noncompliance with that
Metric, the Court may award as civil penalties an amount not more than $5
million for the second uncured Potential Violation.

Nothing in this Section shall limit the availability of remedial compensation to
harmed borrowers as provided in Section E.5.

 

  (c) Any penalty or payment owed by Servicer pursuant to the Consent Judgment
shall be paid to the clerk of the Court or as otherwise agreed by the Monitor
and the Servicer and distributed by the Monitor as follows:

 

E-15

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  1. In the event of a penalty based on a violation of a term of the Servicing
Standards that is not specifically related to conduct in bankruptcy, the penalty
shall be allocated, first, to cover the costs incurred by any state or states in
prosecuting the violation, and second, among the participating states according
to the same allocation as the State Payment Settlement Amount.

 

  2. In the event of a penalty based on a violation of a term of the Servicing
Standards that is specifically related to conduct in bankruptcy, the penalty
shall be allocated to the United States or as otherwise directed by the Director
of the United States Trustee Program.

 

  3. In the event of a payment due under Paragraph 10.d of the Consumer Relief
requirements, 50% of the payment shall be allocated to the United States, and
50% shall be allocated to the State Parties to the Consent Judgment, divided
among them in a manner consistent with the allocation in Exhibit B of the
Consent Judgment.

 

K. Sunset. This Consent Judgment and all Exhibits shall retain full force and
effect for three and one-half years from the date it is entered (the “Term”),
unless otherwise specified in the Exhibit. Servicer shall submit a final
Quarterly Report for the last quarter or portion thereof falling within the
Term, and shall cooperate with the Monitor’s review of said report, which shall
be concluded no later than six months following the end of the Term, after which
time Servicer shall have no further obligations under this Consent Judgment.

 

E-16

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EXHIBIT E-1

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Servicing Standards Quarterly Compliance Metrics

Executive Summary

Sampling: (a) A random selection of the greater of 100 loans and a statistically
significant sample. (b) Sample will be selected from the population as defined
in column E

Review and Reporting Period: Results will be reported Quarterly and 45 days
after the end of the quarter.

Errors Definition: An error is a measurement in response to a test question
related to the Servicing Standards that results in the failure of the specified
outcome. Errors in response to multiple questions with respect to a single
outcome would be treated as only a single error.

Metrics Tested

 

A

  

B

   C    D   

E

  

F

Metric

  

Measurements

   Loan Level
Tolerance  for
Error1    Threshold
Error Rate2   

Test Loan Population
and Error Definition

  

Test Questions

1. Outcome Creates Significant Negative Customer Impact

A. Foreclosure sale in error

   Customer is in default, legal standing to foreclose, and the loan is not
subject to active trial, or BK.    n/a    1%   

Population Definition: Foreclosure Sales that occurred in the review period.

 

A.  Sample :# of Foreclosure Sales in the review period that were tested.

 

B.  Error Definition: # of loans that went to foreclosure sale in error due to
failure of any one of the test questions for this metric.

 

Error Rate = B/A

  

1.   Did the foreclosing party have legal standing to foreclose?

 

2.   Was the borrower in an active trial period plan (unless the servicer took
appropriate steps to postpone sale)?

 

3.   Was the borrower offered a loan modification fewer than 14 days before the
foreclosure sale date (unless the borrower declined the offer or the servicer
took appropriate steps to postpone the sale)?

 

4.   Was the borrower not in default (unless the default is cured to the
satisfaction of the Servicer or investor within 10 days before the foreclosure
sale date and the Servicer took appropriate steps to postpone sale)?

 

5.   Was the borrower protected from foreclosure by Bankruptcy (unless Servicer
had notice of such protection fewer than 10 days before the foreclosure sale
date and Servicer took appropriate steps to postpone sale)?

 

E1-1

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A

  

B

   C    D   

E

   F  

Metric

  

Measurements

   Loan Level
Tolerance
for Error1    Threshold
Error Rate2   

Test Loan Population
and Error Definition

   TestQuestions

B. Incorrect Mod denial

   Program eligibility, all documentation received, DTI test, NPV test.   
5% On income
errors    5%   

Population Definition: Modification Denied In the Review Period.

 

Error Definition: # of loans that were denied a modification as a result of
failure of anyone of the test questions for this metric.

  

1.   Was the evaluation of eligibility Inaccurate ( as per HAMP, Fannie, Freddie
or proprietary modification criteria)?

 

2.   Was the income calculation Inaccurate?

 

3.   Were the inputs used in the decision tool (NPV and Waterfall test) entered
in error or inconsistent with company policy?

 

4.   Was the loan NPV positive?

 

5.   Was there an inaccurate determination that the documents received were
incomplete?

 

6.   Was the trial inappropriately failed?

2. Integrity of Critical Sworn Documents

A. Was AOI properly prepared

   Based upon personal knowledge, properly notarized, amounts agree to system of
record within tolerance if overstated.    Question 1,

Y/N; Question
2, Amounts
overstated (or,
for question
on Escrow
Amounts,
understated)
by the greater
of $99 or 1%
of

the Total

Indebtedness
Amount

   5%   

Population Definition: Affidavits of indebtedness filed in the review period.

 

Error Definition: For question 1, yes; for question 2, the # of Loans where the
sum of errors exceeds the allowable threshold.

  

1.   Taken as a whole and accounting for contrary evidence provided by the
Servicer, does the sample indicate systemic issues with either affiants lacking
personal knowledge or improper notarization?

 

2.   Verify all the amounts outlined below against the system of record

 

a.   Was the correct principal balance used Was the correct interest amount (and
per diem) used?

 

b.   Was the escrow balance correct?

 

c.   Were correct other fees used?

 

d.   Was the correct corporate advance balance used?

 

e.   Was the correct late charge balance used?

 

f.    Was the suspense balance correct?

 

g.   Was the total indebtedness amount on the Affidavit correct?

 

E1-2

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A

  

B

  

C

   D   

E

   F  

Metric

  

Measurements

  

Loan Level

Tolerance

for Error1

   Threshold
Error Rate2   

Test Loan Population
and Error Definition

   TestQuestions

B. POC

   Accurate statement of pre-petition arrearage to system of record.   

Amounts over

stated by the greater of $50

or 3% of the

correct Pre-

Petition Arrearage

   5%   

Population Definition: POCs filed in the review period.

 

Error Definition: # of Loans where sum of errors exceeds the allowable
threshold.

  

1)   Are the correct amounts set forth in the form, with respect to pre-petition
missed payments, fees, expenses charges, and escrow shortages or deficiencies?

C. MRS Affidavits

   Customer is in default and amount of arrearage is within tolerance.   
Amounts overstated (or for escrows amounts, understated) by the greater of $50
or 3% of the correct Post Petition Total Balance    5%   

Population Definition: Affidavits supporting MRS’s filed in the review period

 

Error Definition: # of Loans where the sum of errors exceeds the allowable
threshold.

  

1.   Verify against the system of record, within tolerance if overstated:

 

a.   the post-petition default amount;

 

b.   the amount of fees or charges applied to such pre-petition default amount
or post-petition amount since the later of the date of the petition or the
preceding statement; and

 

c.   escrow shortages or deficiencies.

 

 

E1-3

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

A

  

B

   C    D   

E

   F  

Metric

  

Measurements

   Loan Level
Tolerance for
Error1    Threshold
Error  Rate2   

Test Loan Population
and Error Definition

   TestQuestions

3. Pre-foreclosure Initiation

A. Pre Foreclosure Initiation

   Accuracy of Account information.    Amounts over
stated by the
greater of $99
or 1% of the
Total balance    5%   

Population Definition: Loans with a Foreclosure referral date in the review
period.

 

Error Definition: # of Loans that were referred to foreclosure with an error in
any one of the foreclosure initiation test questions.

  

**  Verify all the amounts outlined below against the system of record.

 

1.   Was the loan delinquent as of the date the first legal action was filed?

 

2.   Was information contained in the Account Statement completed accurately?

 

a)   The total amount needed to reinstate or bring the account current, and the
amount of the principal;

 

b)   The date through which the borrower’s obligation is paid;

 

c)   The date of the last full payment;

 

d)   The current interest rate in effect for the loan;

 

e)   The date on which the interest rate may next reset or adjust;

 

f)    The amount of any prepayment fee to be charged, if any;

 

g)   A description of any late payment fees; and

 

h)   a telephone number or electronic mail address that may be used by the
obligor to obtain information regarding the mortgage.

 

E1-4

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

A

  

B

   C    D   

E

  

F

Metric

  

Measurements

   Loan Level
Tolerance for
Error1    Threshold
Error Rate2   

Test Loan Population

and Error Definition

  

Test Questions

B. Pre Foreclosure Initiation Notifications

   Notification sent to the customer supporting right to foreclose along with:
Applicable information upon customers request, Account statement information,
Ownership statement, and Loss Mitigation statement. Notifications required
before 14 days prior to referral to foreclosure.    N/A    5%   

Population Definition: Loans with a Foreclosure referral date in the review
period.

 

Error Definition: # of Loans that were referred to foreclosure with an error in
any one of the foreclosure initiation test questions.

  

1.   Were all the required notifications statements mailed no later than 14 days
prior to first Legal Date (i) Account Statement; (ii) Ownership Statement; and
(iii) Loss Mitigation Statement?

 

2.   Did the Ownership Statement accurately reflect that the servicer or
investor has the right to foreclose?

 

3.   Was the Loss Mitigation Statement complete and did it accurately state that

 

a)   The borrower was ineligible (if applicable); or

 

b)   The borrower was solicited, was the subject of right party contact
routines, and that any timely application submitted by the borrower was
evaluated?

 

E1-5

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

A

  

B

   C    D   

E

  

F

Metric

  

Measurements

   Loan Level
Tolerance
for Error1    Threshold
Error Rate2   

Test Loan Population

and Error Definition

  

Test Questions

4. Accuracy and Timeliness of Payment Application and Appropriateness of Fees

A. Fees adhere to guidance (Preservation fees, Valuation fees and Attorney’s
fees)

   Services rendered, consistent with loan instrument, within applicable
requirements.    Amounts
over stated
by the
greater of
$50 or 3%
of the
Total
Default
Related
Fees
Collected    5%   

Population Definition: Defaulted loans (60 +) with borrower payable default
related fees* collected.

 

Error Definition: # of loans where the sum of default related fee errors exceeds
the threshold.

 

* Default related fees are defined as any fee collected for a default-related
service after the agreement date.

  

      For fees collected in the test period:

 

1.   Was the frequency of the fees collected (in excess of what is consistent
with state guidelines or fee provisions in servicing standards?

 

2.   Was amount of the fee collected higher than the amount allowable under the
Servicer’s Fee schedule and for which there was not a valid exception?

 

B. Adherence to customer payment processing

   Payments posted timely (within 2 business days of receipt) and accurately.   
Amounts
understated
by the
greater
$50.00 or
3%

of the

scheduled
payment

   5%   

Population Definition: All subject payments posted within review period.

 

Error Definition: # of loans with an error in any one of the payment application
test questions.

  

1.   Were payments posted to the right account number?

 

2.   Were payments posted in the right amount?

 

3.   Were properly identified conforming payments posted within 2 business days
of receipt and credited as of the date of receipt?

 

4.   Did servicer accept payments within $50.00 of the scheduled payment,
including principal and interest and where applicable taxes and insurance as
required by the servicing standards?

 

5.   Were partial payments credited to the borrower’s account as of the date
that the funds cover a full payment?

 

6.   Were payments posted to principal interest and escrow before fees and
expenses?

 

E1-6

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

A

  

B

  

C

  

D

   E   

F

Metric

  

Measurements

  

Loan Level

Tolerance for

Error1

  

Threshold

Error Rate2

   Test Loan Population
and Error Definition   

Test Questions

C. Reconciliation of certain waived fees. (I.b.11.C)

   Appropriately updating the Servicer’s systems of record in connection with
the reconciliation of payments as of the date of dismissal of a debtor’s Chapter
13 bankruptcy case, entry of an order granting Servicer relief from the stay
under Chapter 13, or entry of an order granting the debtor a discharge under
Chapter 13, to reflect the waiver of any fee, expense or charge pursuant to
paragraphs III.B.1.c.i or III.B.1.d of the Servicing Standards (within
applicable tolerances).   

Amounts over stated by the greater of $50

or 3 % of the

correct reconciliation amount

   5%   

Population Definition: All accounts where inline reconciliation routine is
completed within review period.

 

Error Definition: # of loans with an error in the reconciliation routine
resulting in overstated amounts remaining on the borrower account.

  

1.   Were all required waivers of Fees, expense or charges applied and/or
corrected accurately as part of the reconciliation?

D. Late fees adhere to guidance

   Late fees are collected only as permitted under the Servicing Standards
(within applicable tolerances).    Y/N    5%   

Population Definition: All late fees collected within the review period.

 

Error Definition: # of loans with an error on any one of the test questions.

  

1.   Was a late fee collected with respect to a delinquency attributable solely
to late fees or delinquency charges assessed on an earlier payment?

 

E1-7

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

A

  

B

   C    D   

E

  

F

Metric

  

Measurements

   Loan Level
Tolerance
for  Error1    Threshold
Error
Rate2   

Test Loan Population
and Error Definition

  

Test Questions

5. Policy/Process Implementation

A. Third Party Vendor Management

   Is periodic third party review process in place? Is there evidence of
remediation of identified issues?    Y/N    N   

Quarterly review of a vendors providing Foreclosure Bankruptcy, Loss mitigation
and other Mortgage services.

 

Error Definition: Failure on any one of the test questions for this metric.

  

1.   Is there evidence of documented oversight policies and procedures
demonstrating compliance with vendor oversight provisions: (i) adequate due
diligence procedures, (ii) adequate enforcement procedures (iii) adequate vendor
performance evaluation procedures (iv) adequate remediation procedures?3

 

2.   Is there evidence of periodic sampling and testing of foreclosure documents
(including notices of default and letters of reinstatement) and bankruptcy
documents prepared by vendors on behalf of the servicer?

 

3.   Is there evidence of periodic sampling of fees and costs assessed by
vendors to; (i) substantiate services were rendered (ii) fees are in compliance
with servicer fee schedule (iii) Fees are compliant with state law and
provisions of the servicing standards?

 

4.   Is there evidence of vendor scorecards used to evaluate vendor performance
that include quality metrics (error rate etc)?

 

5.   Evidence of remediation for vendors who fail metrics set forth in vendor
scorecards and/or QC sample tests consistent with the servicer policy and
procedures?

B. Customer Portal

   Implementation of a customer portal.    Y/N    N    A Quarterly testing
review of Customer Portal.   

1.   Does the portal provide loss mitigation status updates?

 

E1-8

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

A

  

B

  

C

  

D

  

E

  

F

Metric

  

Measurements

  

Loan Level
Tolerance

for Error1

  

Threshold
Error Rate2

  

Test Loan Population
and Error Definition

  

Test Questions

C. SPOC

   Implement single point of contact (“SPOC”).   

Y/N

5% for

Question 4

  

N

For

Question #4: 5%

  

Quarterly review of SPOC program per provisions in the servicing standard.

 

Population Definition (for Question 4): Potentially eligible borrowers who were
identified as requesting loss mitigation assistance.

 

Error Definition: Failure on any one of the

test questions for this metric.

  

1.   Is there evidence of documented policies and procedures demonstrating
compliance with SPOC program provisions?

 

2.   Is there evidence that a single point of contact is available for
applicable borrowers?

 

3.   Is there evidence that relevant records relating to borrower’s account are
available to the borrower’s SPOC?

 

4.   Is there evidence that the SPOC has been identified to the borrower and the
method the borrower may use to contact the SPOC has been communicated to the
borrower?

D. Workforce Management

   Training and staffing adequacy requirements.    Y/N    N   

Loss mitigation, SPOC and Foreclosure Staff.

 

Error Definition: Failure on any one of the

test questions for this metric.

  

1.   Is there evidence of documented oversight policies and procedures
demonstrating effective forecasting, capacity planning, training and monitoring
of staffing requirements for foreclosure operations?

 

2.   Is there evidence of periodic training and certification of employees who
prepare Affidavits sworn statements or declarations.

 

E. Affidavit of Indebtedness Integrity.

   Affidavits of Indebtedness are signed by affiants who have personal knowledge
of relevant facts and properly review the affidavit before signing it.   

Y/N

  

N

  

Annual Review of Policy.

  

1.   Is there evidence of documented policies and procedures sufficient to
provide reasonable assurance that affiants have personal knowledge of the
matters covered by affidavits of indebtedness and have reviewed affidavit before
signing it?

 

F. Account Status Activity.

   System of record electronically documents key activity of a foreclosure, loan
modification, or bankruptcy.   

Y/N

  

N

  

Annual Review of Policy.

  

1.   Is there evidence of documented policies and procedures designed to ensure
that the system of record contains documentation of key activities?

 

E1-9

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

A

  

B

  

C

  

D

  

E

  

F

Metric

  

Measurements

  

Loan Level

Tolerance

for Error1

  

Threshold Error Rate2

  

Test Loan Population
and Error Definition

  

Test Questions

6.     Customer Experiences

A. Complaint response timeliness

   Meet the requirements of Regulator complaint handling.    N/A    5%   

Population Definition: Government submitted complaints and inquiries from
individual borrowers who are in default and/or have applied for loan
modifications

received during the three months prior to 40 days prior to the review period.
(To allow for response period to expire).

 

Error Definition: # of loans that exceeded the required response timeline.

  

1.   Was written acknowledgment regarding complaint/inquires sent within 10
business days of complaint/inquiry receipt?**

 

2.   Was a written response (“Forward Progress”) sent within 30 calendar days of
complaint/inquiry receipt?**

 

      **receipt= from the Attorney General, state financial regulators, the
Executive Office for United States Trustees/regional offices of the United
States Trustees, and the federal regulators and documented within the System of
Record.

B.    Loss Mitigation

              

i. Loan Modification Document Collection timeline compliance

      N/A    5%   

Population Definition: Loan modifications and loan modification requests
(packages) that that were missing documentation at receipt and received more
than 40 days prior to the end of the review period.

 

Error Definition: The total # of loans processed outside the allowable timelines
as defined under each timeline requirement tested.

  

1.   Did the Servicer notify borrower of any known deficiency in borrower’s
initial submission of information, no later than 5 business days after receipt,
including any missing information or documentation?

 

2.   Was the Borrower afforded 30 days from the date of Servicer’s notification
of any missing information or documentation to supplement borrower’s submission
of information prior to making a determination on whether or not to grant an
initial loan modification?

 

E1-10

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

A

  

B

  

C

  

D

  

E

   F       

Metric

  

Measurements

  

Loan Level

Tolerance for

Error1

  

Threshold

Error Rate2

  

Test Loan Population
and Error Definition

  

Test Questions

ii. Loan Modification Decision/Notification timeline compliance

         10%   

Population Definition: Loan modification requests (packages) that are denied or
approved in the review period.

 

Error Definition: The total # of loans processed outside the allowable timelines
as defined under each timeline requirement tested.

  

1.   Did the servicer respond to request for a modification within 30 days of
receipt of all necessary documentation?

 

2.   Denial Communication: Did the servicer notify customers within 10 days of
denial decision?

iii. Loan Modification Appeal timeline compliance

         10%   

Population Definition: Loan modification requests (packages) that are borrower
appeals in the review period.

 

Error Definition: The total # of loans processed outside the allowable timeline
tested.

  

1.   Did Servicer respond to a borrowers request for an appeal within 30 days of
receipt?

 

iv. Short Sale Decision timeline compliance

         10%   

Population Definition: Short sale requests (packages) that are complete in the
three months prior to 30 days prior to the end of the review period. (to allow
for short sale review to occur).

 

Error Definition: The total # of loans processed outside the allowable timeline
tested.

  

1.   Was short sale reviewed and a decision communicated within 30 days of
borrower submitting completed package?

 

E1-11

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

A

  

B

  

C

  

D

  

E

  

F

Metric

  

Measurements

  

Loan Level

Tolerance

for Error1

  

Threshold Error Rate2

  

Test Loan Population
and Error Definition

  

Test Questions

v. Short Sale Document Collection timeline compliance

         5%   

Population Definition: Short sale requests (packages) missing documentation that
are received in the three months prior to 30 days prior to the end of the review
period (to allow for short sale review to occur).

 

Error Definition: The total # of loans processed outside the allowable timeline
tested.

  

1.   Did the Servicer provide notice of missing documents within 30 days of the
request for the short sale?

vi. Charge of application fees for Loss mitigation          1%   

Population Definition: loss mitigation requests (packages) that are Incomplete,
denied , approved and borrower appeals in the review period.

 

(Same as 6.B.i)

 

Error Definition: The # of loss mitigation applications where servicer collected
a processing fee.

  

1.   Did the servicer assess a fee for processing a loss mitigation request?

vii. Short Sales

              

a. Inclusion of notice of whether or not a deficiency will be required

   Provide information related to any required deficiency claim.    n/a    5%   

Population Definition: Short sales approved in the review period.

 

Error Definition: The # of short sales that failed any one of the deficiency
test questions

  

1.   If the short sale was accepted, did borrower receive notification that
deficiency or cash contribution will be needed?

 

2.   Did borrower receive in this notification approximate amounts related to
deficiency or cash contribution?

viii. Dual Track

              

 

E1-12

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

A

  

B

  

C

  

D

  

E

  

F

Metric

  

Measurements

  

Loan Level

Tolerance

for Error1

  

Threshold Error Rate2

  

Test Loan Population

and Error Definition

  

Test Questions

a. Referred to foreclosure in violation of Dual Track Provisions

   Loan was referred to foreclosure in error.    n/a    5%   

Population Definition: Loans with a first legal action date in the review
period.

 

Error Definition: The # of loans with a first legal filed in the review period
that failed any one of the dual tracking test questions.

  

1.  Was the first legal action taken while the servicer was in possession of an
active, complete loan modification package (as defined by the Servicing
Standards) that was not decisioned as required by the standards?

2.  Was the first legal commenced while the borrower was approved for a loan
modification but prior to the expiration of the borrower acceptance period,
borrower decline of offer or while in an active trial period plan?

b. Failure to postpone foreclosure proceedings in violation of Dual Track
Provisions

   Foreclosure proceedings allowed to proceed in error.    n/a    5%   

Population Definition: Active foreclosures during review period.

 

Error Definition: # of active foreclosures that went to judgment as a result of
failure of any one on of the active foreclosure dual track test question.

  

1.  Did the servicer proceed to judgment or order of sale upon receipt of a
complete loan modification package within 30 days of the Post-Referral to
Foreclosure Solicitation Letter?**

 

**Compliance of Dual tracking provisions for foreclosure sales are referenced in
1.A

C. Forced Placed Insurance

i. Timeliness of notices

   Notices sent timely with necessary information.    n/a    5%   

Population Definition: Loans with forced placed coverage initiated in review
period.

 

Error Definition: # of loans with active force place insurance resulting from an
error in any one of the force-place insurance test questions.

  

1.  Did Servicer send all required notification letters (ref. V 3a i-vii)
notifying the customer of lapse in insurance coverage?

2.  Did the notification offer the customer the option to have the account
escrowed to facilitate payment of all insurance premiums and any arrearage by
the servicer prior to obtaining force place insurance?

3.  Did the servicer assess forced place insurance when there was evidence of a
valid policy?

ii. Termination of Force place Insurance

   Timely termination of force placed insurance.       5%   

Population Definition: Loans with forced placed coverage terminated in review
period.

 

Error Definition: # of loans terminated force place insurance with an error in
any one of the force- place insurance test questions.

  

Did Servicer terminate FPI within 15 days of receipt of evidence of a borrower’s
existing insurance coverage and refund the pro-rated portion to the borrower’s
escrow account?

 

E1-13

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

1 

Loan Level Tolerance for Error: This represents a threshold beyond which the
variance between the actual outcome and the expected outcome on a single test
case is deemed reportable

 

2 

Threshold Error Rate: For each metric or outcome tested if the total number of
reportable errors as a percentage of the total number of cases tested exceeds
this limit then the Servicer will be determined to have failed that metric for
the reported period.

 

3 

For purposes of determining whether a proposed Metric and associated Threshold
Error Rate is similar to those contained in this Schedule, this Metric 5.A shall
be excluded from consideration and shall not be treated as representative.

 

E1-14

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

EXHIBIT F

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

FEDERAL RELEASE

This Federal Release (“Release”) is entered into among the United States of
America, its agencies, and departments (collectively, “the United States”),
acting through the United States Department of Justice, and Ally Financial, Inc.
(the “COMPANY”) (hereafter the United States and the COMPANY are collectively
referred to as “the Parties”), through their authorized representatives.

RECITALS

A. The COMPANY is a Delaware corporation headquartered in Detroit, Michigan.

B. The COMPANY is a financial holding and a bank holding company. The COMPANY,
either through its own operations or through the operations of its affiliates
and subsidiaries, serves, and during the relevant period served: (1) as a
participant in the Direct Endorsement Lender program of the Federal Housing
Administration (FHA) within the United States Department of Housing and Urban
Development (HUD); (2) as a mortgagee or servicer for mortgages insured or
guaranteed by federal mortgage programs administered by agencies that include
FHA, the United States Department of Veterans Affairs (VA), and the United
States Department of Agriculture Rural Development; (3) as a participating
servicer in the Making Home Affordable Program (MHA) (including MHA’s component
program, the Home Affordable Modification Program (HAMP)) of the United States
Department of the Treasury (Treasury) and HUD, and as a participant in various
state programs of the Housing Finance Agency Innovation Fund for the Hardest Hit
Housing Markets (HHF); and (4) as an entity that litigates single-family
residential mortgage issues in U.S. Bankruptcy Courts in capacities that include
commencing and pursuing or supporting litigation commenced against mortgagors
and other debtors.

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

C. The United States contends that it has certain civil claims based on conduct
of the COMPANY and its affiliated entities in servicing of mortgage loans (the
“Covered Servicing Conduct”). Such Covered Servicing Conduct encompasses all
activities of the COMPANY, of any affiliated entity during or prior to such time
as it was an affiliated entity, and all of the current or former officers,
directors, employees and agents of any of the foregoing, directed toward
servicing (including subservicing and master servicing), whether for their own
account or for the account of others, of mortgage loans for single-family
residential homeowners (which includes loans secured by one- to four-family
residential properties, whether used for investor or consumer purposes), whether
in the form of a mortgage, deed of trust or other security instrument creating a
lien upon such property or any other property described therein that secures the
related mortgage loan (“single-family residential mortgage loans”) from and
after the closing of a borrower’s mortgage loan and includes, but is not limited
to, the following conduct:

(1) Deficiencies in performing loan modification and other loss mitigation
activities, including extensions, forbearances, short sales and deeds in lieu of
foreclosure, setting the qualifying criteria for any of the foregoing and/or
setting the terms and conditions for any of the foregoing;

(2) Deficiencies in foreclosing on single-family residential mortgage loans or
acquiring title in lieu of foreclosure, including the designation and identity
of the foreclosing party, the timing of foreclosures, transfer of legal or
beneficial ownership to the mortgage loan and/or the related servicing rights or
obligations, the charging of any fees, the preparation, contents, execution,
notarization or presentation of any documents filed with or submitted to a

 

F-2

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

court or any government agency, or otherwise used as part of the foreclosure
process (including, but not limited to, affidavits, declarations,
certifications, substitutions of trustees, and assignments) and dual-tracking
foreclosure and loan modification activities, and communications with borrowers
in respect of foreclosure;

(3) Other deficiencies in servicing single-family residential mortgage loans
relating to:

(a) Collections activity, including all contact with borrowers (e.g., telephone
calls, letters, and in-person visits) in respect of such activities;

(b) Practices relating to paying or failing to pay taxes (including property
taxes), hazard insurance, forced-place insurance, and homeowner association dues
or other items provided for in a mortgage loan escrow arrangement (including
making or failing to make such payments), including obtaining or maintaining
insurance and advancing funds to pay therefor and the creation and maintenance
of such escrow accounts;

(c) Use or supervision of vendors, agents and contract employees, and their
activities in connection with creation and recording of assignments, servicing,
foreclosure, and loss mitigation activities, including subservicers, foreclosure
and bankruptcy attorneys, and other default service providers, and pursuit of
claims against vendors and other third parties for failure of such third parties
to comply with contractual or other obligations;

(d) Activities related to the executing, notarizing, transferring or recording
of mortgages; the obtaining, executing, notarizing, transferring or recording of
assignments; or activities related to the use of any mortgage registry system,
including MERS, and including the transferring of mortgages or assignments using
MERS;

 

F-3

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

(e) Account statements, disclosures, and/or other communications to borrowers;
unintentional reporting errors regarding activities that, but for this
Paragraph, would be Covered Servicing Conduct, and unintentional remittance
errors that are cured;

(f) Maintenance and placement of loan-level and pool-level mortgage insurance
and guarantees, hazard insurance, flood insurance, title insurance, and other
insurance related to mortgage loans and related properties, including claims
activity;

(g) Handling and resolution of inquiries, disputes and complaints by or on
behalf of borrowers and frequency and adequacy of communications with borrowers;

(h) Securing, inspecting, repairing, maintaining, or preserving properties both
before and after foreclosure or other acquisition of title;

(i) Adequacy of staffing, training, systems and processes, including maintenance
and security of access to records relating to servicing, foreclosure,
bankruptcy, property sale and management and activities related or ancillary
thereto;

(j) Determinations in respect of the appropriate actions of obtaining value for
mortgage loans, including whether to pursue foreclosure on properties, whether
to assert or abandon liens and other claims and actions taken in respect
thereof, and whether to pursue a loan modification or any particular loan
modification or other form of loss mitigation;

 

F-4

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

(k) Acceptance, rejection, application, or reporting of payments made on behalf
of borrowers, including the assessment of any fees and placement of the
payment(s) in a suspense account;

(l) Obtaining, securing, updating, transferring, or providing promissory notes
or endorsements of promissory notes through allonges or otherwise;

(m) Licensing or registration of employees, agents, or contractors, or
designation of employees as agents for another entity, through corporate
resolutions or Powers of Attorney or otherwise;

(n) Pursuing claims post foreclosure, including seeking deficiency judgments;

(o) Eviction notices, registrations of vacant properties, and any activity
relating to the sale or disposition of foreclosed or acquired properties
(including Real Estate Owned properties), including management of such
properties and proceedings related to such properties;

(p) Executing, notarizing, or recording any documents related to the sale of
acquired properties, including the warranty deeds and closing documents;

(q) Custodial and trustee functions related to the Covered Servicing Conduct;

 

F-5

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

(r) Quality control, quality assurance or compliance or audit testing or
oversight related to the Covered Servicing Conduct; for avoidance of doubt,
quality control or compliance reviews associated with the origination, sale, or
securitization of mortgage loans does not constitute Covered Servicing Conduct;

(s) Reporting, certification or registration requirements related to any of the
Covered Servicing Conduct; and

(t) Communications with borrowers with respect to the Covered Servicing Conduct.

(4) Deficiencies in the COMPANY’s or any of its affiliates’ participation in and
implementation of the Hardest Hit Fund Program and Making Home Affordable
Program, including all of its component programs (e.g., HAMP, 2MP, HAFA, UP, PRA
-HAMP, FHA-HAMP, FHA2LP, and RD-HAMP).

D. The United States further contends that it has certain civil claims based on
the conduct of the COMPANY and its affiliated entities in originating mortgage
loans (the “Covered Origination Conduct”). Such Covered Origination Conduct
consists of all activities of the COMPANY, of any affiliated entity during or
prior to such time as it was an affiliated entity, and all of the current or
former officers, directors, employees, and agents of any of the foregoing,
directed toward directly or indirectly originating, assisting in the origination
of, or purchasing single-family residential mortgage loans and excludes conduct
occurring following the closing of the borrower’s mortgage loan that is
otherwise covered as the Covered Servicing Conduct. Such Covered Origination
Conduct includes, but is not limited to, the following conduct:

 

F-6

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

(1) Submitting loans for insurance endorsement and claims for insurance benefits
for FHA loans that the COMPANY or any affiliated entity during or prior to such
time as it was an affiliated entity endorsed or underwrote as a participant in
the FHA’s Direct Endorsement Program that failed to meet any applicable
underwriting requirements, including those set forth in the applicable version
of the HUD Handbook 4155.1, as supplemented by relevant mortgagee letters, all
as of the time of origination;

(2) Submitting loans for insurance endorsement or claims for insurance benefits
for FHA loans that the COMPANY or any affiliated entity during or prior to such
time as it was an affiliated entity endorsed or underwrote as a participant in
the FHA’s Direct Endorsement Program while failing to implement applicable
quality control measures; and

(3) Other deficiencies in originating single-family residential mortgage loans
relating to:

(a) Processing, underwriting, closing, or funding of loans and the terms and
conditions of such loans;

(b) Approving or denying loan applications;

(c) Pricing of loans, including the charging and splitting of any fee or
discount points;

 

F-7

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

(d) Recommendations of particular types of loan products, loan features or terms
and conditions of any loan;

(e) Valuing the properties used as collateral for such loans, including use of
employee, independent and vendor management appraisers and alternative valuation
methods such as AVMs and BPOs;

(f) Use of vendors, including vendor management companies and other providers of
real estate settlement services, whether affiliated or unaffiliated;

(g) Payment of fees or other things of value in connection with the making or
receiving of referrals of settlement and other services;

(h) Conduct of any vendors used in connection with the origination of loans,
including, but not limited to, closing agents, appraisers, real estate agents,
title review, flood inspection, and mortgage brokers;

(i) Drafting of loan documents and loan disclosures and the provision of such
disclosures;

(j) Obtaining and recording of collateral documents relating to loans,
including, but not limited to, use of trustees or designees on mortgages or
deeds of trust;

(k) Advertising of loans and solicitation of borrowers;

(l) Licensing, registration, qualifications or approvals of employees in
connection with the Covered Origination Conduct; and

 

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(m) Quality control, quality assurance or compliance or audit testing or
oversight related to the Covered Origination Conduct.

E. The United States further contends that it has certain civil claims based on
the COMPANY’s servicing, including servicing by any affiliated entity during or
prior to such time as it was an affiliated entity, and by any of the COMPANY’s
or such affiliated entities’ current or former officers, directors, employees,
and agents, of loans of borrowers in bankruptcy (the “Covered Bankruptcy
Conduct”). Such Covered Bankruptcy Conduct includes, but is not limited to, the
following conduct:

(1) Deficiencies in servicing residential mortgage loans for borrowers in
bankruptcy relating to:

(a) The preparation, prosecution, documentation, substantiation, or filing of
proofs of claim, motions seeking relief from the automatic stay, objections to
plan confirmation, motions to dismiss bankruptcy cases, and affidavits,
declarations, and other mortgage-related documents in bankruptcy courts;

(b) Charging and timing of fees and expenses, including any fees or expenses
assessed to the borrower due to delay while the bankruptcy court reviews a
pending request for loan modification or delay by the Chapter 13 trustee to
timely remit the borrower’s payments;

(c) Use or disclosure of escrow accounts, including any advances on borrower’s
behalf;

 

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(d) Account statements, disclosures, and/or other communications to borrowers,
including: (i) assessing, imposing, posting, or collecting fees and charges;
(ii) disclosure of fees and charges assessed, imposed or posted during the
bankruptcy case; and (iii) collection of undisclosed post-petition fees and
charges after the borrower receives a discharge, the COMPANY obtains relief from
the automatic stay, or the bankruptcy case is dismissed;

(e) Adequacy of staffing, training, systems, and processes relating to
administering and servicing loans for borrowers in bankruptcy;

(f) Use or supervision of vendors and contract employees, including Lender
Processing Services, Inc., bankruptcy attorneys and other default service
providers;

(g) Pursuit of or failure to pursue claims against vendors and other third
parties for failure of such third parties to comply with contractual or other
obligations; and

(h) Handling and resolution of inquiries, disputes or complaints by or on behalf
of borrowers, and frequency and adequacy of communications with borrowers in
bankruptcy.

(2) Deficiencies in accounting for, processing, approving and administering loan
modifications for borrowers in bankruptcy relating to:

(a) Charging late fees or seeking arrearages while a trial period modification
plan or permanent loan modification plan is in place and borrower is timely
making payments under the terms of the loan modification plan;

 

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(b) Seeking relief from the automatic stay when the COMPANY has approved a trial
period or permanent loan modification plan and borrower is timely making
payments under the terms of the loan modification plan; and

(c) Delays in approving or finalizing the documentation necessary to the
approval of loan modifications for borrowers in bankruptcy.

F. This Release is neither an admission of liability of the allegations of the
Complaint or in cases settled pursuant to this Consent Judgment, nor a
concession by the United States that its claims are not well-founded.

To avoid the delay, uncertainty, inconvenience, and expense of protracted
litigation of the above claims, and in consideration of the mutual promises and
obligations of the Consent Judgment, the Parties agree and covenant as follows:

TERMS AND CONDITIONS

(1) The COMPANY and/or its affiliated entities shall pay or cause to be paid,
for the purposes specified in the Consent Judgment, the amount specified in
Paragraph 3 of the Consent Judgment (“Direct Payment Settlement Amount”) by
electronic funds transfer no later than seven days after the United States
District Court for the District of Columbia enters the final non-appealable
Consent Judgment (the “Effective Date of the Consent Judgment”) pursuant to
written instructions to be provided by the United States Department of Justice.
The COMPANY and/or its affiliated entities shall also undertake, for the
purposes specified in the Consent Judgment, certain consumer relief activities
as set forth in Exhibit D to such Consent Judgment

 

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and will be obligated to make certain payments (the “Consumer Relief Payments”)
in the event that it does not or they do not complete the Consumer Relief
Requirements set forth in Exhibit D to the Consent Judgment. The releases
contained in this Release shall become effective upon payment of the Direct
Payment Settlement Amount. The United States may declare this Release null and
void with respect to the United States if the COMPANY or its affiliated entities
do not make the Consumer Relief Payments required under this Consent Judgment
and fails to cure such non-payment within thirty days of written notice by the
United States.

(2)

(a) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the United States fully and finally releases the COMPANY and any current
or former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, and current or former employee of any of the foregoing,
individually and collectively, from any civil or administrative claims the
United States has or may have, and from any civil or administrative remedies or
penalties (expressly including punitive or exemplary damages) it may seek or
impose, based on the Covered Servicing Conduct that has taken place as of 11:59
p.m., Eastern Standard Time, on February 8, 2012 (and, for the avoidance of
doubt, with respect to FHA-insured loans, whether or not a claim for mortgage
insurance benefits has been or is in the future submitted), under the Financial
Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), the False Claims
Act, the Racketeer Influenced and Corrupt Organizations Act, the Real Estate
Settlement Procedures Act, the Fair Credit Reporting

 

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Act, the Fair Debt Collection Practices Act, the Truth in Lending Act, the
Interstate Land Sales Full Disclosure Act, 15 U.S.C. § 1691(d) (“Reason for
Adverse Action”) or § 1691(e) (“Appraisals”), sections 502 through 509 (15
U.S.C. § 6802-6809) of the Gramm-Leach Bliley Act except for section 505 (15
U.S.C. § 6805) as it applies to section 501(b) (15 U.S.C. § 6801(b)), or that
the Civil Division of the United States Department of Justice has actual and
present authority to assert and compromise pursuant to 28 C.F.R. § 0.45.

(b) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the United States fully and finally releases the COMPANY and any current
or former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, or current or former employee of any of the foregoing,
individually and collectively, from any civil or administrative claims the
United States has or may have, and from any civil or administrative remedies or
penalties (expressly including punitive or exemplary damages) it may seek or
impose, based on the Covered Origination Conduct that has taken place as of
11:59 p.m., Eastern Standard Time, on February 8, 2012, under the Real Estate
Settlement Procedures Act, the Fair Credit Reporting Act, the Truth in Lending
Act, 15 U.S.C. § 1691(d) (“Reason for Adverse Action”) or § 1691(e)
(“Appraisals”), or the Interstate Land Sales Full Disclosure Act.

(c) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the United States fully and finally releases the COMPANY and any current
or former affiliated entity (to the extent the COMPANY retains liability
associated with such former

 

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affiliated entity), and any of their respective successors or assigns, as well
as any current or former director, current or former officer, and current or
former employee of any of the foregoing, individually and collectively, from any
civil or administrative claims the United States has or may have, and from any
civil or administrative remedies or penalties (expressly including punitive or
exemplary damages) it may seek to impose under FIRREA based on the Covered
Origination Conduct only to the extent that:

(i) such claim is (A) based upon false, misleading or fraudulent representations
(or a scheme to defraud consisting solely of such a false, misleading or
fraudulent representation) made by the COMPANY or affiliated entity as of 11:59
p.m., Eastern Standard Time, on February 8, 2012, to a borrower in connection
with the COMPANY’s or affiliated entity’s making of a residential mortgage loan
to such borrower; or (B) an action pursuant to 12 U.S.C. § 1833a(c)(2) in which
the action is consisting solely of the allegation that the COMPANY or one of its
affiliated entities made a false statement or misrepresentation (or engaged in a
scheme to defraud based solely upon such a false statement or misrepresentation)
to the COMPANY or another affiliated entity, as of 11:59 p.m., Eastern Standard
Time, on February 8, 2012, in connection with the COMPANY’s or affiliated
entity’s making of a residential mortgage loan to a borrower; and

(ii) (A) the only federally insured financial institution that was affected by
the statement or misrepresentation (or scheme), or by actions based

 

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on, incorporating, or omitting the statement or misrepresentation (or scheme)
was the COMPANY or an affiliated entity; (B) the false statement or
misrepresentation (or scheme) was not made to, directed at, or part of a scheme
to defraud, any person or entity other than or in addition to the borrower
and/or the COMPANY or an affiliated entity, including, but not limited to, any
other financial institution (as defined in 18 U.S.C. § 20), investors, and
governmental entities; (C) the false statement or misrepresentation (or scheme),
or actions based on, incorporating, or omitting the statement or
misrepresentation (or scheme) did not harm any other financial institution (as
defined in 18 U.S.C. § 20), investors, governmental entities, or any other
entities other than the COMPANY or an affiliated entity; and (D) there was no
material monetary effect on an agency of the United States.

(3)

(a) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the United States Department of Housing and Urban Development fully and
finally releases the COMPANY and any current or former affiliated entity (to the
extent the COMPANY retains liabilities associated with such former affiliated
entity), and any of their respective successors or assigns, as well as any
current or former director, current or former officer, and current or former
employee of any of the foregoing, individually and collectively, from any civil
or administrative claims it has or may have, and from any civil or
administrative remedies or penalties (expressly including punitive or exemplary
damages) it may seek or impose,

 

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based on the Covered Servicing Conduct with respect to FHA loans that has taken
place as of 11:59 p.m., Eastern Standard Time, on February 8, 2012 (and, for the
avoidance of doubt, with respect to FHA-insured loans, whether or not a claim
for mortgage insurance benefits has been or is in the future submitted).
Notwithstanding the foregoing, in no instance shall this Release relieve the
COMPANY or any affiliated entity from the obligation to remedy, upon
identification, defects of title or such other problems caused by the acts or
omissions of the COMPANY or any affiliated entity that may preclude FHA from
accepting assignment or paying a claim for which FHA lacks statutory authority
pursuant to 12 U.S.C. § 1707(a) and § 1710(a)(1)(B), in which case FHA shall
reconvey the property back to the COMPANY or the affiliated entity to remedy the
defect in title or such other problem and the COMPANY or the affiliated entity
shall convey the property back to FHA once the defect or problem is cured.
Further, nothing in this Release shall relieve COMPANY or affiliated entity of
any obligation to provide FHA with any and all mortgage insurance premium
payments that have been or should have been collected, plus interest, if any.
Notwithstanding any other provision of this Release, FHA shall calculate the
payment of insurance benefits for any insured mortgage in accordance with its
regulations.

(b) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the United States fully and finally releases the COMPANY and any current
or former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, and current or former employee of any of the foregoing,
individually and collectively, from any civil or administrative claims it has or
may have and from any civil or administrative remedies or penalties (expressly
including punitive or

 

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exemplary damages) it may seek or impose under FIRREA, the False Claims Act, and
the Program Fraud Civil Remedies Act where the sole basis for such claim or
claims is that the COMPANY or any current or former affiliated entity (to the
extent the COMPANY retains liabilities associated with such former affiliated
entity) or any of their respective successors or assigns, submitted to HUD-FHA
prior to 11:59 p.m., Eastern Standard Time, on February 8, 2012 a false or
fraudulent annual certification that the mortgagee had “conform[ed] to all
HUD-FHA regulations necessary to maintain its HUD-FHA approval” (including, but
not limited to, the requirement that the mortgagee implement and maintain a
quality control program that conforms to HUD-FHA requirements), or “complied
with and agree[d] to continue to comply with HUD-FHA regulations, handbooks,
Mortgagee Letters, Title I Letters, policies, and terms of any agreements
entered into with the Department under HUD’s Direct Endorsement Program.” For
avoidance of doubt, this Paragraph means that the United States is barred from
asserting that a false annual certification renders the COMPANY or any current
or former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity) liable under the False Claims Act
and the other laws cited above for loans endorsed by the COMPANY or its
affiliated entity for FHA insurance during the period of time applicable to the
annual certification without regard to whether any such loans contain material
violations of HUD-FHA requirements, or that a false individual loan
certification that “this mortgage is eligible for HUD mortgage insurance under
the Direct Endorsement program” renders the COMPANY or any current or former
affiliated entity (to the extent the COMPANY retains liabilities associated with
such former affiliated entity) liable under the False Claims Act for any
individual loan that does not contain a material violation of HUD-FHA
requirements. However, this Paragraph does not (i)

 

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release, bar or otherwise preclude the right of the United States to pursue any
civil or administrative claims or remedies it has or may have, or release or
preclude under res judicata or collateral estoppel theories any civil or
administrative remedies or penalties it may seek or impose, against the COMPANY,
any current or former affiliated entity (to the extent the COMPANY retains
liabilities associated with such former affiliated entity), and any of their
respective successors or assigns, for conduct with respect to the insurance of
residential mortgage loans that violates any laws, regulations or other HUD-FHA
requirements applicable to the insurance of residential mortgage loans by HUD,
including, but not limited to, material violations of any applicable HUD-FHA
requirements with respect to an individual loan or loans, except if and to the
extent such claim, remedy or penalty is based solely on such entity’s failure to
provide HUD with an accurate annual certification as described above;
(ii) release or otherwise bar the United States from introducing evidence of any
alleged failure to comply with applicable HUD-FHA requirements, including, but
not limited to, sufficient quality control, underwriting or due diligence
programs, in any way (including, but not limited to, for the purpose of proving
intent) in connection with any claim that there was a material violation(s) of
applicable HUD-FHA requirements with respect to an individual loan or loans that
would subject the COMPANY or an affiliated entity to liability under the False
Claims Act or any other federal statutory or common law administrative or
judicial claim; or (iii) permit the COMPANY or its affiliates to offset or
otherwise reduce any potential liability for such claims or remedies by any
amount paid under the Consent Judgment. The parties agree that the issue of
whether and to what extent the United States may use statistical sampling of
individual loans or similar techniques for calculating damages or proving
material violations of HUD-FHA underwriting requirements with respect to a

 

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pool of loans is not addressed by the Consent Judgment and shall be governed by
the law of the relevant administrative or judicial forum of any future dispute.
Notwithstanding the foregoing, in no instance shall this Release relieve the
COMPANY or any affiliated entity from the obligation to remedy, upon
identification, defects of title or such other problems caused by the acts or
omissions of the COMPANY or an affiliated entity that may preclude FHA from
accepting assignment or paying a claim for which FHA lacks statutory authority
pursuant to 12 U.S.C. § 1707(a) and § 1710(a)(1)(B), in which case FHA shall
reconvey the property back to the COMPANY or affiliated entity to remedy the
defect in title or such other problem and the COMPANY or affiliated entity shall
convey the property back to FHA once the defect or problem is cured.

(4) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, for loans that closed before 11:59 p.m., Eastern Standard Time, on
February 8, 2012 and are guaranteed by the Department of Veterans Affairs (VA),
the United States fully and finally releases the COMPANY and any current or
former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, and current or former employee of any of the foregoing,
individually and collectively, from any civil or administrative claims it has or
may have based on Covered Origination Conduct that arises under FIRREA, the
False Claims Act, or the Program Fraud Civil Remedies Act to the extent that
they are based on any failure by the COMPANY or any current or former affiliated
entity and any of their respective successors or assigns, as well as any current
or former director, current or former officer, and current or former employee of
any of the foregoing,

 

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individually and collectively, to conform to all VA regulations necessary to
maintain the authority of the COMPANY or any current or former affiliated entity
to close VA-guaranteed loans on an automatic basis. Nothing in the foregoing
shall be interpreted to release the right of the United States to pursue any
civil or administrative claims it has or may have, or to release any civil or
administrative remedies or penalties it may seek or impose, against the COMPANY,
any current or former affiliated entity (to the extent the COMPANY retains
liabilities associated with such former affiliated entity), and any of their
respective successors or assigns, based on Covered Origination Conduct that
violates the laws or regulations applicable to the guaranty of residential
mortgage loans by VA with respect to any residential mortgage loan or loans,
except if and to the extent such claim, remedy or penalty is based on such
entity’s failure to provide VA with an accurate general program compliance
certification, to implement an effective quality control plan, or to conform to
all VA regulations necessary to maintain the authority of the COMPANY or any
current or former affiliated entity to close VA-guaranteed loans on an automatic
basis.

(5) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, for loans that closed before 11:59 p.m., Eastern Standard Time, on
February 8, 2012 and are guaranteed by the Department of Agriculture (USDA), the
United States fully and finally releases the COMPANY and any current or former
affiliated entity (to the extent the COMPANY retains liabilities associated with
such former affiliated entity), and any of their respective successors or
assigns, as well as any current or former director, current or former officer,
and current or former employee of any of the foregoing, individually and
collectively, from any civil or administrative claims it has or may have against
the COMPANY and any of

 

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their respective successors or assigns, as well as any current or former
director, current or former officer, and current or former employee of any of
the foregoing, individually and collectively, based on Covered Origination
Conduct that arises under FIRREA, the False Claims Act, or the Program Fraud
Civil Remedies Act to the extent that they are based on statements made in the
COMPANY’s or current or former affiliated entity’s application for approved
lender status in the Single Family Housing Guaranteed Loan Program. Nothing in
the foregoing shall be interpreted to release the right of the United States to
pursue any civil or administrative claims it has or may have, or to release any
civil or administrative remedies or penalties it may seek or impose, against the
COMPANY, any current or former affiliated entity (to the extent the COMPANY
retains liabilities associated with such former affiliated entity), and any of
their respective successors or assigns, based on Covered Origination Conduct
that violates the laws or regulations applicable to the guaranty of residential
mortgage loans by USDA with respect to any residential mortgage loan or loans,
except if and to the extent such claim, remedy or penalty is based on such
entity’s failure to provide USDA with an accurate general program compliance
certification, to implement an effective quality control plan, or on statements
made in the COMPANY’s or current or former affiliated entity’s application for
approved lender status in the Single Family Housing Guaranteed Loan Program.

(6) Subject to the exceptions described in this Paragraph 6 and in Paragraph 11
(concerning excluded claims) below, the United States Department of the Treasury
(“Treasury”) fully and finally releases the COMPANY and any current or former
affiliated entity (to the extent the COMPANY retains liabilities associated with
such former affiliated entity), and any of their respective successors or
assigns, as well as any current or former director, current or

 

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former officer, and current or former employee of any of the foregoing,
individually and collectively, and will refrain from instituting, directing, or
maintaining any civil or administrative claims the Treasury has or may have, and
from any civil remedies or penalties (expressly including punitive or exemplary
damages) it may seek or impose against the COMPANY and any current or former
affiliated entity (to the extent the COMPANY retains liabilities associated with
such former affiliated entity), and any of their respective successors or
assigns, as well as any current or former director, current or former officer,
and current or former employee of any of the foregoing, individually and
collectively, based on the Covered Servicing Conduct that has taken place as of
11:59 p.m., Eastern Standard Time, on February 8, 2012; furthermore, as of
February 8, 2012, Treasury is withholding Making Home Affordable servicer
incentive payments from the COMPANY or any current or former affiliated entity,
and, upon the immediately succeeding Making Home Affordable Program incentive
payment date, Treasury shall release and remit to the COMPANY and any current or
former affiliated entity all outstanding Making Home Affordable Program servicer
incentive payments previously withheld by Treasury. Notwithstanding the
foregoing, Treasury, in connection with the Making Home Affordable Program,
reserves the right to continue to perform compliance reviews on the COMPANY’s
Making Home Affordable Program activities occurring prior to February 8, 2012,
to require non-financial remedies with respect to such activities, and to
publicly release servicer assessments with respect thereto. If, as the result of
any such compliance review occurring after February 8, 2012, Treasury determines
that the COMPANY or any of its affiliated entities have not adequately corrected
identified instances of noncompliance that occurred prior to the date specified
in the first sentence of this Paragraph and were communicated to COMPANY or any
of

 

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its affiliated entities by Treasury in a letter dated March 9, 2012, Treasury
reserves the right to adjust any Making Home Affordable Program incentive
payments made or owed to the COMPANY or any of its affiliated entities with
respect to those identified instances of noncompliance. In addition, with
respect to instances of noncompliance that occur after February 8, 2012,
Treasury reserves the right to exercise all available remedies, both financial
and non-financial, under the Making Home Affordable Program Commitment to
Purchase Financial Instrument and Servicer Participation Agreement, as amended,
between Treasury and COMPANY or any of its affiliated entities (“the SPA”).

(7) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, the Bureau of Consumer Financial Protection (“CFPB”) fully and finally
releases the COMPANY and any current or former affiliated entity (to the extent
such COMPANY retains liabilities associated with such former affiliated entity),
and any of their respective successors or assigns as well as any current or
former director, current or former officer, and current or former employee of
any of the foregoing, individually and collectively, and will refrain from
instituting, directing, or maintaining any civil or administrative claims the
CFPB has or may have, and from any civil remedies or penalties (expressly
including punitive or exemplary damages) it may seek or impose against the
COMPANY and any current or former affiliated entity (to the extent the COMPANY
retains liabilities associated with such former affiliated entity), and any of
their respective successors or assigns, as well as any current or former
director, current or former officer, or current or former employee of any of the
foregoing, individually and collectively, based on Covered Servicing Conduct or
Covered Origination Conduct that has taken place prior to July 21, 2011.
Notwithstanding the foregoing, the CFPB reserves the right to obtain information
related to conduct that occurred prior to July 21, 2011 under its authority
granted by Title X of the Dodd-Frank Wall Street Reform and Consumer Protection
Act.

 

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(8) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below, and conditioned upon the full payment of the Direct Payment Settlement
Amount, the Federal Trade Commission fully and finally releases the COMPANY and
any current or former affiliated entity (to the extent the COMPANY retains
liabilities associated with such former affiliated entity), and any of their
respective successors or assigns, as well as any current or former director,
current or former officer, and current or former employee of any of the
foregoing, individually and collectively, from any civil or administrative claim
the Federal Trade Commission has or may have, or civil or administrative
remedies or penalties (expressly including punitive or exemplary damages) it may
seek or impose, based on the Covered Origination Conduct that has taken place as
of 11:59 p.m., Eastern Standard Time, on February 8, 2012, or based on the
Covered Servicing Conduct that has taken place as of 11:59 p.m., Eastern
Standard Time, on February 8, 2012, provided, however, that nothing in this
Paragraph or Release shall be interpreted to release any liability to the
Federal Trade Commission relating to the Covered Servicing Conduct or Covered
Origination Conduct of any affiliated entity that the COMPANY has acquired on or
after November 30, 2011, or, notwithstanding Section C.3.i of this Release, any
conduct or claims involving the privacy, security, or confidentiality of
consumer information.

(9) Subject to the exceptions in Paragraph 11 (concerning excluded claims)
below:

 

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(a) Upon the Effective Date of the Consent Judgment, the Executive Office for
United States Trustees (“EOUST”) and the United States Trustees and Acting
United States Trustees for Regions 1 through 21 (collectively, with the EOUST,
“the United States Trustees”) will consent to and agree to take such steps as
may be reasonably necessary to fully and finally withdraw or facilitate the
dismissal with prejudice of pending objections and other actions by the United
States Trustees, including all related discovery requests, whether formal or
informal, and requests for examination under Fed. R. Bankr. P. 2004
(collectively, “the Discovery Requests”) and subpoenas or subpoenas duces tecum
(collectively, “the Subpoenas”), directed to or filed against the COMPANY, its
affiliates, and employees and officers of the COMPANY and its affiliates,
pertaining to the COMPANY’s or its affiliates’ mortgage-related claims filed in
a bankruptcy case prior to 11:59 p.m., Eastern Standard Time, on February 8,
2012 and based on the Covered Bankruptcy Conduct. The United States Trustees
further agree not to take any action to obtain discovery from the COMPANY or any
affiliated entity pursuant to any court order granting such Discovery Requests
or with respect to enforcing related Subpoenas pending as of 11:59 p.m., Eastern
Standard Time, on February 8, 2012. Upon the Effective Date of the Consent
Judgment, the United States Trustees further agree to take such steps as may be
reasonably necessary to fully and finally withdraw or facilitate the dismissal
with prejudice of Discovery Requests and Subpoenas directed to or filed against
any other party where the discovery was sought for the purpose of obtaining
relief against the COMPANY, its affiliates, or employees and officers of the
COMPANY or its affiliates, and pertains to the COMPANY’s or its affiliates’
mortgage-related claims filed in a bankruptcy case prior to 11:59 p.m., Eastern
Standard Time, on February 8, 2012 and based on the Covered Bankruptcy Conduct,
except that nothing in this

 

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Paragraph requires the United States Trustee to withdraw or facilitate the
dismissal of Discovery Requests and Subpoenas to the extent that relief against
another party, other than the COMPANY, its affiliates, or employees and officers
of the COMPANY or its affiliates, is the purpose of such discovery.

(b) Upon the Effective Date of the Consent Judgment, the COMPANY and its
affiliated entities will consent to and agrees to take such steps as may be
reasonably necessary to fully and finally withdraw or facilitate the dismissal
with prejudice of pending adversary proceedings, contested matters, appeals, and
other actions filed by the COMPANY or its affiliated entities, including all
Discovery Requests and Subpoenas directed to or filed against any United States
Trustee, relating to objections and other actions by the United States Trustees,
including Discovery Requests and Subpoenas, directed to or filed against the
COMPANY, its affiliated entities, or employees and officers of the COMPANY or
its affiliated entities pertaining to the COMPANY’s or its affiliated entities’
mortgage-related claims filed in a bankruptcy case prior to 11:59 p.m., Eastern
Standard Time, on February 8, 2012 and based on the Covered Bankruptcy Conduct.
The COMPANY and its affiliated entities further agree not to take any action to
obtain discovery from the United States Trustees pursuant to any court order
granting such Discovery Requests or with respect to enforcing related Subpoenas
pending as of 11:59 p.m., Eastern Standard Time, on February 8, 2012.

(c) The United States Trustees fully and finally release any claims, and will
refrain from instituting, directing or maintaining any action or participating
in any action by a third party (except that the United States Trustees may
participate in an action to the extent

 

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ordered by a court provided that the United States Trustees may not seek such a
court order formally or informally), against the COMPANY and any current or
former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, and current or former employee of any of the foregoing,
individually and collectively, pertaining to the COMPANY’s or its affiliated
entities’ mortgage-related claims filed in a bankruptcy case prior to 11:59
p.m., Eastern Standard Time, on February 8, 2012 and based on the Covered
Bankruptcy Conduct. The United States Trustees shall refrain from sharing
information obtained via the Discovery Requests and Subpoenas outside the
federal government (unless required to do so under applicable law or pursuant to
a court order) in support of any action, against the COMPANY, or any current or
former affiliated entity (to the extent the COMPANY retains liabilities
associated with such former affiliated entity), and any of their respective
successors or assigns, as well as any current or former director, current or
former officer, and current or former employee of any of the foregoing,
individually and collectively, pertaining to the COMPANY’s or its affiliates’
mortgage-related claims filed in a bankruptcy case prior to 11:59 p.m., Eastern
Standard Time, on February 8, 2012 and based on the Covered Bankruptcy Conduct.
Except as otherwise provided in the Enforcement Terms in Exhibit E of the
Consent Judgment, the United States Trustees further agree to refrain from
seeking to invalidate the COMPANY’s or its affiliates’ lien on residential real
property, including in an adversary proceeding pursuant to Fed. R. Bank. P.
7001(2) and 11 U.S.C. § 506, or to impose monetary sanctions or other punitive
relief against the COMPANY, and any current or former affiliated entity (to the
extent the COMPANY retains liabilities associated with such former affiliated

 

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entity), and any of their respective successors or assigns, as well as any
current or former director, current or former officer, and current or former
employee of any of the foregoing, individually and collectively, pertaining to
the COMPANY’s or its affiliated entities’ mortgage-related claims filed in a
bankruptcy case after 11:59 p.m., Eastern Standard Time, on February 8, 2012 and
based on the Covered Bankruptcy Conduct where the Covered Bankruptcy Conduct
occurred before 11:59 p.m., Eastern Standard Time, on February 8, 2012.

(d) Notwithstanding the foregoing, nothing in this Paragraph shall be construed
to be (1) a waiver of any defenses or claims of the COMPANY, its affiliates, or
employees and officers of the COMPANY or its affiliates, against any other
party, or a dismissal of any pending adversary proceedings, contested matters,
appeals, and other actions filed by the COMPANY, its affiliates, or employees
and officers of the COMPANY or its affiliates, against any other party, wherein
the United States Trustee is a party or otherwise involved; (2) a waiver of any
defenses or claims of the United States Trustee against any other party, or a
dismissal of any pending adversary proceedings, contested matters, appeals, and
other actions filed by the United States Trustee against any other party wherein
the COMPANY, its affiliates, or employees and officers of the COMPANY or its
affiliates, is a party or otherwise involved; or (3) a waiver of, or restriction
or prohibition on, the United States Trustees’ ability, to the extent permitted
by law, informally or formally, in individual bankruptcy cases, to seek a cure
of material inaccuracies in the COMPANY’s or its affiliates’ mortgage-related
claims filed in a bankruptcy case and based on the Covered Bankruptcy Conduct,
but not to impose monetary sanctions or other punitive relief against the
COMPANY or its affiliates in addition to such cure; provided, however, that this
provision shall not constitute a waiver of, or restriction or prohibition on,
the COMPANY’s or its affiliates’ ability to dispute whether the United States
Trustees have authority or ability to seek such a cure.

 

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(10) For the purposes of this Release, the term “affiliated entity” shall mean
entities that are directly or indirectly controlled by, or control, or are under
common control with, the COMPANY as of or prior to 11:59 p.m., Eastern Standard
Time, on February 8, 2012. The term “control” with respect to an entity means
the beneficial ownership (as defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended) of 50 percent or more of the voting
interest in such entity.

(11) Notwithstanding any other term of this Release, the following claims of the
United States are specifically reserved and are not released:

(a) Any liability arising under Title 26, United States Code (Internal Revenue
Code);

(b) Any liability of individuals (including current or former directors,
officers, and employees of the COMPANY or any affiliated entity) who have
received or receive in the future notification that they are the target of a
criminal investigation (as defined in the United States Attorneys’ Manual); have
been or are indicted or charged; or have entered or in the future enter into a
plea agreement, based on the Covered Servicing Conduct, the Covered Origination
Conduct, and the Covered Bankruptcy Conduct (collectively, the “Covered
Conduct”);

(c) Any criminal liability;

 

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(d) Any liability to the United States for any conduct other than the Covered
Conduct, or any liability for any Covered Conduct that is not expressly released
herein;

(e) Any and all claims whether legal or equitable, in connection with investors
or purchasers in or of securities or based on the sale, transfer or assignment
of any interest in a loan, mortgage, or security to, into, or for the benefit of
a mortgage-backed security, trust, special purpose entity, financial
institution, investor, or other entity, including but not limited to in the
context of a mortgage securitization or whole loan sale to such entities
(“Securitization/Investment Claims”). Securitization/Investment Claims include,
but are not limited to, claims based on the following, all in connection with
investors or purchasers in or of securities or in connection with a sale,
transfer, or assignment of any interest in loan, mortgage or security to, into,
or for the benefit of a mortgage-backed security, trust, special purpose entity,
financial institution, investor, or other entity:

(i) The United States’ capacity as an owner, purchaser, or holder of whole
loans, securities, derivatives, or other similar investments, including without
limitation, mortgage backed securities, collateralized debt obligations, or
structured investment vehicles.

(ii) The creation, formation, solicitation, marketing, assignment, transfer,
valuation, appraisal, underwriting, offer, sale, substitution, of or issuance of
any interest in such whole loans, mortgages, securities, derivatives, or other
similar investments.

 

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(iii) Claims that the COMPANY or an affiliated entity made false or misleading
statements or omissions, or engaged in other misconduct in connection with the
sale, transfer or assignment of any interest in a loan, mortgage, or security or
in connection with investors or purchasers in or of such loans, mortgages, or
securities, including but not limited to conduct that affected a federally
insured financial institution or violated a legal duty to a mortgage-backed
security, trust, special purpose entity, financial institution, or investor
(including the United States), or governmental agency and/or that subjects the
COMPANY or an affiliated entity to a civil penalty or other remedy under 12
U.S.C. § 1833a.

(iv) Representations, warranties, certifications, statements, or claims made
regarding such whole loans, securities, derivatives or other similar
investments, including representations, warranties, certifications or claims
regarding the eligibility, characteristics, or quality of mortgages or
mortgagors;

(v) Activities related to the executing, notarizing, transferring or recording
of mortgages; the endorsement or transfer of a loan; and the obtaining,
executing, notarizing, transferring or recording of assignments;

(vi) Obtaining, securing, updating, transferring, or providing promissory notes
or endorsements of promissory notes through allonges or otherwise;

 

F-31

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(vii) Custodial and trustee functions;

(viii) Intentional or fraudulent failure to pay investors sums owed with respect
to any security, derivatives, or similar investment;

(ix) Contractual covenants, agreements, obligations and legal duties to a
mortgage-backed security, trust, special purpose entity, financial institution,
investor, or other entity (including the United States);

(x) Covered Origination Conduct (except to the extent such conduct is released
in Paragraphs 3.b, 4 or 5); and

(xi) Covered Servicing Conduct to the extent the COMPANY or any affiliated
entity engaged in the Covered Servicing Conduct in question not in its capacity
as servicer, subservicer or master servicer, but in its capacity as the
originator of a mortgage loan or as seller, depositor, guarantor, sponsor,
securitization trustee, securities underwriter, document custodian or any other
capacity.

The exclusion set forth above in this Paragraph shall not apply to
Securitization/Investment Claims based on the following conduct, and such claims
are included in what is being released:

Securitization/Investment Claims based on Covered Servicing Conduct by the
COMPANY or any current or former affiliated entity where: (1) such conduct was
performed by the COMPANY or any affiliated entity in its capacity as the loan

 

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servicer, master servicer or subservicer, whether conducted for its own account
or pursuant to a third party servicing agreement or similar agreement, and not
in its capacity as loan originator, seller, depositor, guarantor, sponsor,
securitization trustee, securities underwriter, or any other capacity; and
(2) such conduct was not in connection with (x) the creation, formation,
solicitation, marketing, sale, assignment, transfer, offer, sale, substitution,
underwriting, or issuance of any interest in securities, derivatives or other
similar investments or (y) the sale or transfer of mortgage loans. The claims
addressed in this sub-paragraph include, without limitation, Securitization and
Investment Claims that the party seeking to enforce a mortgage loan against a
borrower and homeowner in respect of that borrower’s default did not have a
documented enforceable interest in the promissory note and mortgage or deed of
trust under applicable state law or is otherwise not a proper party to the
foreclosure or bankruptcy action or claims based on such party’s attempts to
obtain such a documented enforceable interest or become such a proper party.

(f) Any liability arising under Section 8 of the Real Estate Settlement
Procedures Act, 12 U.S.C. § 2607, relating to private mortgage insurance, with
respect to claims brought by the CFPB;

(g) Except with respect to claims related to the delivery of initial or annual
privacy notices, requirements with respect to the communication of non-public
personal information to non-affiliated third parties, or other conduct required
by Sections 502 through 509

 

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of the Gramm-Leach-Bliley Act (15 U.S.C. §§ 6802-6809), any claims or conduct
involving the obligation of a financial institution under Section 501(b) of the
Gramm-Leach-Bliley Act (15 U.S.C. s. 6801(b)) and its implementing regulations
to maintain administrative, technical, and physical information security
safeguards;

(h) Any liability arising under the Fair Housing Act; any provision of the Equal
Credit Opportunity Act that is not expressly released in Paragraph 2 of this
Release, including any provision prohibiting discriminatory conduct; the Home
Mortgage Disclosure Act; or any other statute or law that prohibits
discrimination of persons based on race, color, national origin, gender,
disability, or any other protected status;

(i) Administrative claims, proceedings, or actions brought by HUD against any
current or former director, officer, or employee for suspension, debarment or
exclusion from any HUD program;

(j) Any liability arising under the federal environmental laws;

(k) Any liability to or claims brought by (i) the Federal Housing Finance
Agency; (ii) any Government Sponsored Enterprise, including the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation (except
where the Government Sponsored Enterprise seeks to impose such liability or
pursue such claims in its capacity as an administrator of the Making Home
Affordable Program of Treasury); (iii) the Federal Deposit Insurance Corporation
(whether in its capacity as a Corporation, Receiver, or Conservator); (iv) the
Government National Mortgage Association (“Ginnie Mae”) arising out of

 

F-34

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COMPANY’s contractual obligations related to serving as Master Subservicer on
defaulted Ginnie Mae portfolios, including claims for breach of such
obligations; (v) the CFPB with respect to claims within its authority as of the
designated transfer date of July 21, 2011 that are not expressly released in
Paragraph 7; (vi) the National Credit Union Administration, whether in its
capacity as a Federal agency, Liquidating Agent, or Conservator; (vii) the
Securities and Exchange Commission; (viii) the Federal Reserve Board and its
member institutions; (ix) Maiden Lane LLC, Maiden Lane II LLC, Maiden Lane III
LLC, entities that are consolidated for accounting purposes on the financial
statements of the Federal Reserve Bank of New York, and the Federal Reserve Bank
of New York; (x) the Office of the Comptroller of the Currency; (xi) the USDA
(except to the extent claims are released in Paragraph 5); (xii) the VA (except
to the extent claims are released in Paragraph 4); (xiii) the Commodity Futures
Trading Commission; and (xvi) the Inspectors General of such entities;

(l) Any liability to the United States for the following claims or conduct
alleged against Ally Financial, Inc., or any of its current or former
subsidiaries, affiliates, officers, directors, employees or agents, including
but not limited to Residential Capital, LLC, GMAC Mortgage Corporation, GMAC
Mortgage, LLC, and GMAC Inc., or any other entity or person:

(i) All claims or allegations based on any conduct alleged in United States ex
rel. [Under Seal] v. [Under Seal], 2:11-cv-00535-RLH-RJJ (D. Nev.);

 

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(ii) All claims or allegations based on any conduct alleged in United States ex
rel. Szymoniak v. [Under Seal], Civ. No. 0:10-cv-01465 (D.S.C.) or in United
States ex rel. Szymoniak v. [Under Seal], Civ. No. 3:10-cv-575 (W.D.N.C.),
except any such claims that are encompassed by the releases described in
paragraphs 2 to 9, above, and not otherwise reserved from these releases in this
agreement; and

(iii) All claims or allegations based on any conduct alleged in United States ex
rel. Bibby et al. v. Wells Fargo Bank, National Association, Inc. et al., C.A.
No. 1:06-CV-0547-AT (N.D. Ga.);

(m) Any action that may be taken by the appropriate Federal Banking Agency
(FBA), as defined in 12 U.S.C. § 1813(q), against COMPANY, any of its affiliated
entities, and/or any institution-affiliated party of COMPANY, as defined in 12
U.S.C. § 1813(u), pursuant to 12 U.S.C. § 1818, and any action by the FBA to
enforce the Consent Order issued against the COMPANY by the FBA on April 13,
2011;

(n) Any liability based upon obligations created by this Consent Judgment;

(o) The parties agree that notwithstanding any other provision of this Release,
the United States retains the right to investigate and sue the COMPANY and any
affiliated entity under FIRREA for any conduct, statements or omissions that
are:

 

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(i) Made or undertaken in connection with either (a) the creation, formation,
transfer, sale, conveyance, or securitization of mortgage-backed securities,
derivatives, collateralized debt obligations and credit default swaps, or other
similar securities or (b) the sale or transfer of mortgage loans;

(ii) Made or undertaken by the COMPANY or an affiliated entity in its capacity
as loan originator, seller, depositor, guarantor, sponsor, securitization
trustee, securities underwriter, or any capacity other than as loan servicer,
master servicer or subservicer, in connection with the origination (including
Covered Origination Conduct), underwriting, due diligence, quality control,
valuation, appraisal, pledging, substitution, recording, assignment, or
securitization of mortgages, whole loans, mortgage-backed securities,
derivatives, collateralized debt obligations and credit default swaps, or other
similar securities (except to the extent such conduct is released in Paragraphs
2.c, 3.b, 4 or 5 and not excluded from this Release in Subsections (a)-(n) of
this Paragraph 11);

(iii) Made to or directed at federal governmental entities (except to the extent
such conduct is released in Paragraphs 2.a, 3.a, 3.b, 4 or 5 and not excluded
from this Release in Subsections (a)-(n) of this Paragraph 11); or

(iv) Based on (A) the failure by the COMPANY or affiliated entity to pay
investors or trustees any sums received by the COMPANY or affiliated entity and
owed to the investors and trustees with respect to any security, derivatives, or
similar investment; (B) the failure by the COMPANY or

 

F-37

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affiliated entity to disclose that it failed to pay investors or trustees any
sums received by the COMPANY or affiliated entity and owed to investors or
trustees with respect to any security, derivatives, or similar investment;
(C) the collection by the COMPANY or affiliated entity of money or other
consideration from loan sellers with respect to loans that the COMPANY or an
affiliated entity had sold to others or packaged into a security for sale to
others; or (D) the failure by the COMPANY or affiliated entity to repurchase
loans to the extent that it had a contractual obligation to repurchase.

The COMPANY and its affiliated entities agree that they have not been released
from any liability under FIRREA for such conduct or statements. To the extent
that this reservation of FIRREA claims is inconsistent with any other provision
of this Release, the reservation of FIRREA claims shall control. This
reservation of FIRREA Claims shall not be construed to otherwise limit any other
claim that the United States has against the COMPANY or its affiliated entities,
to alter the requirements of FIRREA, or to waive any defense available to the
COMPANY or its affiliated entities under existing law.

(12) For avoidance of doubt, this Release shall not preclude a claim by any
private individual or entity for harm to that private individual or entity,
except for a claim asserted by a private individual or entity under 31 U.S.C. §
3730(b) that is subject to this Release and not excluded by Paragraph 11.

(13) The COMPANY and its affiliated entities waive and shall not assert any
defenses they may have to any criminal prosecution or administrative action
based on the

 

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Covered Conduct that may be based in whole or in part on a contention that,
under the Double Jeopardy Clause in the Fifth Amendment of the Constitution or
under the Excessive Fines Clause in the Eighth Amendment of the Constitution,
this Release bars a remedy sought in such criminal prosecution or administrative
action. Nothing in this Paragraph or any other provision of this Consent
Judgment constitutes an agreement by the United States concerning the
characterization of the Federal Settlement Amount for purposes of Title 26,
United States Code (Internal Revenue Code).

(14) The COMPANY and any current or former affiliated entity, as well as any
current or former director, current or former officer, or current or former
employee of any of the foregoing, but only to the extent that the COMPANY and
any current or former affiliated entity possesses the ability to release claims
on behalf of such individuals or entities, fully and finally releases the United
States and its employees from any claims based on the Covered Conduct to the
extent, and only to the extent, that such individual or entity is released from
claims based on that Covered Conduct under Paragraphs 2 through 9 of this
Release and such claim is not excluded under Paragraph 11 of this Release
(including, for the avoidance of doubt, claims by the entities listed in
Paragraph 11(k)), as well as claims under the Equal Access to Justice Act, 28
U.S.C. § 2412 based on the United States’ investigation and prosecution of the
foregoing released claims. Nothing herein is intended to release claims for
mortgage insurance or mortgage guaranty payments or claims for payment for goods
and services, such as incentive payments under HAMP.

 

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(15)

(a) Unallowable Costs Defined: All costs (as defined in the Federal Acquisition
Regulations, 48 C.F.R. § 31.205-47) incurred by or on behalf of the COMPANY and
any current or former affiliated entity (to the extent the COMPANY retains
liabilities associated with such former affiliated entity), any successor or
assign, as well as any current or former director, current or former officer,
and current or former employee of any of the foregoing, individually and
collectively, in connection with:

 

  (1) the matters covered by the Consent Judgment;

 

  (2) the United States’ audits and civil investigations of the matters covered
by the Consent Judgment;

 

  (3) the COMPANY’s and its affiliated entities’ investigation, defense, and
corrective actions undertaken in response to the United States’ audit(s) and
civil investigation(s) in connection with the matters covered by the Consent
Judgment (including attorney’s fees);

 

  (4) the negotiation and performance of the Consent Judgment; and

 

  (5) the payments made to the United States or others pursuant to the Consent
Judgment, are unallowable costs for government contracting purposes
(“Unallowable Costs”).

 

F-40

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(b) Future Treatment of Unallowable Costs: Unallowable Costs will be separately
determined and accounted for by the COMPANY and its affiliated entities, and the
COMPANY and its affiliated entities shall not charge such Unallowable Costs
directly or indirectly to any contract with the United States.

(c) Treatment of Unallowable Costs Previously Submitted for Payment: Within 90
days of the Effective Date of the Consent Judgment, the COMPANY and its
affiliated entities shall identify and repay by adjustment to future claims for
payment or otherwise any Unallowable Costs included in payments previously
sought by the COMPANY or any of its affiliated entities from the United States.
The COMPANY and its affiliated entities agree that the United States, at a
minimum, shall be entitled to recoup from any overpayment plus applicable
interest and penalties as a result of the inclusion of such Unallowable Costs on
previously-submitted requests for payment. The United States reserves its rights
to audit, examine, or reexamine the COMPANY’s or affiliated entities’ books and
records and to disagree with any calculations submitted by the COMPANY or any of
its affiliated entities regarding any Unallowable Costs included in payments
previously sought by the COMPANY or its affiliated entities, or the effect of
any such Unallowable Costs on the amount of such payments.

(16) The COMPANY and its affiliated entities agree to cooperate fully and
truthfully with the United States’ investigation of individuals and entities not
released in this Release. Upon reasonable notice, the COMPANY shall encourage,
and agrees not to impair, the

 

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reasonable cooperation of its directors, officers and employees, and shall use
its reasonable efforts to make available and encourage the cooperation of former
directors, officers, and employees for interviews and testimony, consistent with
the rights and privileges of such individuals.

(17) This Release is intended to be and shall be for the benefit only of the
Parties and entities and individuals identified in this Release, and no other
party or entity shall have any rights or benefits hereunder.

(18) Each party shall bear its own legal and other costs incurred in connection
with this matter, including the preparation and performance of this Consent
Judgment.

(19) Each party and signatory to this Consent Judgment represents that it freely
and voluntarily enters into the Consent Judgment without any degree of duress or
compulsion.

(20) This Release is governed by the laws of the United States. The exclusive
jurisdiction and venue for any dispute arising out of matters covered by this
Release is the United States District Court for the District of Columbia. For
purposes of construing this Release, this Release shall be deemed to have been
drafted by all the Parties and shall not, therefore, be construed against any
party for that reason in any subsequent dispute.

(21) The Consent Judgment constitutes the complete agreement between the Parties
as to the matters addressed herein. The Consent Judgment may not be amended
except by written consent of the Parties.

 

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(22) The undersigned represent and warrant that they are fully authorized to
execute the Consent Judgment on behalf of the Parties indicated below.

(23) The Consent Judgment may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same Consent
Judgment.

(24) This Release is binding on, and inures to the benefit of, the COMPANY’s and
affiliated entities’ successors, heirs, and assigns.

(25) The Parties may disclose this Release, and information about this Release,
to the public at their discretion.

(26) Facsimiles of signatures shall constitute acceptable, binding signatures
for purposes of this Release.

(27) Whenever the words “include,” “includes,” or “including” are used in this
Release, they shall be deemed to be followed by the words “without limitation.”

 

F-43

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EXHIBIT G

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State Release

I. Covered Conduct

For purposes of this Release, the term “Covered Conduct” means residential
mortgage loan servicing, residential foreclosure services, and residential
mortgage loan origination services. For purposes of this Release, the term
“Bank” means Ally Financial, Inc., as well as its current and former parent
corporations or other forms of legal entities, direct and indirect subsidiaries,
brother or sister corporations or other forms of legal entities, divisions or
affiliates, and the predecessors, successors, and assigns of any of them, as
well as the current and former directors, officers, and employees of any of the
foregoing. For purposes of this Section I only, the term “Bank” includes agents
(including, without limitation, third-party vendors) of the Bank and the Bank is
released from liability for the covered conduct acts of its agents (including,
without limitation, third-party vendors). This Release does not release the
agents (including, without limitation, third-party vendors) themselves for any
of their conduct. For purposes of this Release, the term “residential mortgage
loans” means loans secured by one- to four-family residential properties,
irrespective of usage, whether in the form of a mortgage, deed of trust, or
other security interest creating a lien upon such property or any other property
described therein that secures the related mortgage note.

For purposes of this Release, the term “residential mortgage loan servicing”
means all actions, errors or omissions of the Bank, arising out of or relating
to servicing (including subservicing and master servicing) of residential
mortgage loans from and after the closing of such loans, whether for the Bank’s
account or for the account of others, including, but not limited to, the
following: (1) Loan modification and other loss mitigation activities,
including, without limitation, extensions, forbearances, payment plans, short
sales and deeds in lieu of

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

foreclosure, and evaluation, approval, denial, and implementation of the terms
and conditions of any of the foregoing; (2) Communications with borrowers
relating to borrower accounts, including, without limitation, account statements
and disclosures provided to borrowers; (3) Handling and resolution of inquiries,
disputes or complaints by or on behalf of borrowers; (4) Collection activity
related to delinquent borrower accounts; (5) Acceptance, rejection, application
or posting of payments made by or on behalf of borrowers, including, without
limitation, assessment and collection of fees or charges, placement of payments
in suspense accounts and credit reporting; (6) Maintenance, placement or payment
(or failure to make payment) of any type of insurance or insurance premiums, or
claims activity with respect to any such insurance; (7) Payment of taxes,
homeowner association dues, or other borrower escrow obligations, and creation
and maintenance of escrow accounts; (8) Use, conduct or supervision of vendors,
agents and contract employees, whether affiliated or unaffiliated, including,
without limitation, subservicers and foreclosure and bankruptcy attorneys, in
connection with servicing, loss mitigation, and foreclosure activities;
(9) Adequacy of staffing, training, systems, data integrity or security of data
that is unrelated to privacy issues, quality control, quality assurance,
auditing and processes relating to the servicing of residential mortgage loans,
foreclosure, bankruptcy, and property sale and management services;
(10) Securing, inspecting, repairing, maintaining, or preserving properties
before and after foreclosure or acquisition or transfer of title; (11) Servicing
of residential mortgage loans involved in bankruptcy proceedings;
(12) Obtaining, executing, notarizing, endorsing, recording, providing,
maintaining, registering (including in a registry system), and transferring
promissory notes, mortgages, or mortgage assignments or other similar documents,
or transferring interests in such documents among and between servicers and
owners, and custodial functions or appointment of officers relating to such

 

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documents; (13) Decisions on disposition of residential mortgage loans,
including, without limitation, whether to pursue foreclosure on properties,
whether to assert or abandon liens and other claims and actions taken in respect
thereof, and whether to pursue any particular loan modification or other form of
loss mitigation; (14) Servicing of residential mortgage loans of borrowers who
are covered by federal or state protections due to military status;
(15) Licensing or registration of employees, agents, vendors or contractors, or
designation of employees as agents of another entity; (16) Quality control,
quality assurance, compliance, audit testing, oversight, reporting, or
certification or registration requirements related to the foregoing; and
(17) Trustee functions related to the servicing of residential mortgage loans.

For purposes of this Release, the term “residential foreclosure services” means
all actions, errors or omissions of the Bank arising out of or relating to
foreclosures on residential mortgage loans, whether for the Bank’s own account
or for the account of others, including, but not limited to, the following:
(1) Evaluation of accounts for modification or foreclosure referral;
(2) Maintenance, assignment, recovery and preparation of documents that have
been filed or otherwise used to initiate or pursue foreclosures, and custodial
actions related thereto; (3) Drafting, review, execution and notarization of
documents (including, but not limited to, affidavits, notices, certificates,
substitutions of trustees, and assignments) prepared or filed in connection with
foreclosures or sales of acquired properties, or in connection with remediation
of improperly filed documents; (4) Commencement, advancement and finality of
foreclosures, including, without limitation, any issues relating to standing,
fees, or notices; (5) Acquisition of title post-foreclosure or in lieu of
foreclosure; (6) Pursuit of pre- and post-foreclosure claims by the Bank,
including, without limitation, the seeking of deficiency judgments when
permitted by law, acts or omissions regarding lien releases, and evictions and
eviction proceedings; (7)

 

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Management, maintenance, and disposition of properties in default or properties
owned or controlled by the Bank, whether prior to or during the foreclosure
process or after foreclosure, and executing, notarizing, or recording any
documents related to the sale of acquired properties; and (8) Trustee functions
related to the foreclosure of residential mortgage loans.

For purposes of this Release, the term “residential mortgage loan origination
services” means all actions, errors or omissions of the Bank arising out of or
relating to the origination of, or the assistance in the origination of,
residential mortgage loans, or the purchasing of residential mortgage whole
loans, including, but not limited to, the following: (1) Advertising,
solicitation, disclosure, processing, review, underwriting, closing and funding
of borrower residential mortgage loans or lending services, including, without
limitation, the charges, terms, pricing, and conditions of such loans or lending
services; (2) Approving or denying loan applications; (3) Recommendation,
offering or provision of loan products, including, without limitation, whether
such products’ features or terms and conditions were appropriate for a
particular borrower; (4) Valuation of the properties used as collateral for such
loans, including, without limitation, use of employees, independent and vendor
management appraisers, and alternative valuation methods such as AVMs and BPOs;
(5) Use, referral, conduct or supervision of, or payment of fees or other forms
of consideration to, vendors, agents or contract employees, whether affiliated
or unaffiliated, and whether retained by the Bank, borrower or otherwise,
including, without limitation, closing agents, appraisers, real estate agents,
mortgage brokers, and providers of real estate settlement services; (6) Drafting
and execution of residential mortgage loan documents and disclosures and the
provision of such disclosures; (7) Obtaining or recording of collateral
documents relating to the origination of residential mortgage loans, including,
without limitation, use of trustees or designees on mortgages or deeds of trust;
(8) Licensing and registration of

 

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employees in connection with origination of residential mortgage loans;
(9) Quality control, quality assurance, or compliance audit testing, or
oversight related to the origination of residential mortgage loans; and
(10) Communications with borrowers related to the origination of residential
mortgage loans.

II. Release of Covered Conduct

By their execution of this Consent Judgment, the Attorneys General and state
mortgage regulators (“Regulators”) that are parties to this Consent Judgment
release and forever discharge the Bank from the following: any civil or
administrative claim, of any kind whatsoever, direct or indirect, that an
Attorney General or Regulator, respectively, has or may have or assert,
including, without limitation, claims for damages, fines, injunctive relief,
remedies, sanctions, or penalties of any kind whatsoever based on, arising out
of, or resulting from the Covered Conduct on or before the Effective Date, or
any examination (or penalties arising from such an examination) relating to the
Covered Conduct on or before the Effective Date, except for claims and the other
actions set forth in Section IV, below (collectively, the “Released Claims”).

This Release does not release any claims against any entity other than the Bank
as defined in Section I above.

III. Covenants by the Bank

1. The Bank waives and shall not assert any defenses the Bank may have to any
criminal prosecution based on the Covered Conduct that may be based in whole or
in part on a contention that, under the Double Jeopardy Clause in the Fifth
Amendment of the Constitution or under the Excessive Fines Clause in the Eighth
Amendment of the Constitution, this Release bars a remedy sought in such
criminal prosecution.

 

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2. The Bank agrees to cooperate with an Attorney General’s criminal
investigation of individuals and entities not released in this Release. For
purposes of this covenant, cooperation shall not include any requirement that
the Bank waive the attorney-client privilege or any other applicable privileges
or protection, included but not limited to the attorney work product doctrine.
Upon reasonable notice, the Bank agrees not to impair the reasonable cooperation
of its directors, officers and employees, and shall use its reasonable efforts
to make available and encourage the cooperation of former directors, officers,
and employees for interviews and testimony, consistent with the rights and
privileges of such individuals.

IV. Claims and Other Actions Exempted from Release

Notwithstanding the foregoing and any other term of this Consent Judgment, the
following claims are hereby not released and are specifically reserved:

1. Securities and securitization claims based on the offer, sale, or purchase of
securities, or other conduct in connection with investors or purchasers in or of
securities, regardless of the factual basis of the claim, including such claims
of the state or state entities as an owner, purchaser, or holder of whole loans,
securities, derivatives or similar investments, including, without limitation,
mortgage backed securities, collateralized debt obligations or structured
investment vehicles, and including, but not limited to, such claims based on the
following:

(a) the creation, formation, solicitation, marketing, assignment, transfer,
offer, sale or substitution of securities, derivatives, or other similar
investments, including, without limitation, mortgage backed securities,
collateralized debt obligations, collateralized loan obligations, or structured
investment vehicles;

 

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(b) representations, warranties, certifications, or claims made regarding such
securities or investments, such as representations, warranties, certifications
or claims regarding origination, funding, and underwriting activities, and
including the eligibility, characteristics, or quality of the mortgages or the
mortgagors;

(c) the transfer, sale, conveyance, or assignment of mortgage loans to, and the
purchase and acquisition of such mortgage loans by, the entity creating, forming
and issuing the securities, derivatives or other similar investments relating to
such mortgage loans;

(d) all servicing-, foreclosure-, and origination-related conduct, but solely to
the extent that such claims are based on the offer, sale, or purchase of
securities, or other conduct in connection with investors or purchasers in or of
securities; and

(e) all Covered Conduct, but solely to the extent that such claims are based on
the offer, sale, or purchase of securities, or other conduct in connection with
investors or purchasers in or of securities.

For avoidance of doubt, securities and securitization claims based on the offer,
sale, or purchase of securities, or other conduct in connection with investors
or purchasers in or of securities, that are based on any source of law,
including, but not limited to, false claims acts or equivalent laws, securities
laws, and common law breach of fiduciary duty, are not released.

2. Claims against a trustee or custodian or an agent thereof based on or arising
out of the conduct of the trustee, custodian or such agent related to the
pooling of residential mortgage loans in trusts, mortgage backed securities,
collateralized debt obligations, collateralized loan obligations, or structured
investment vehicles, including, but not limited to, the performance of trustee
or custodial functions in such conduct.

 

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3. Liability based on the Bank’s obligations created by this Consent Judgment.

4. Obligations relating to assurances of voluntary compliance entered into
between various states and Wells Fargo, N.A. in 2010, 2011, and 2012 relating to
pay option ARMs.

5. Claims raised by the Illinois Attorney General in Illinois v. Wells Fargo &
Co., et al., 2009-CH-26434.

6. Claims raised in State of Connecticut v. Acordia, Inc.,
X10-UNYCV-0704020455-S (currently pending before the Connecticut Supreme Court).

7. Claims raised in State ex rel. Darrell V. McGraw, Jr. v. Acordia of West
Virginia, Inc., et al. (civil action no. 05-C-115W—circuit court of Hancock
County).

8. Claims raised in State of New York v. JPMorgan Chase Bank, et al., Index
No. 2768/2012 (N.Y. Sup. Ct.), and any similar claims—relating to the same types
of acts, practices, or conduct set forth in that lawsuit—that may be asserted in
the future by the Office of the New York State Attorney General against
Citigroup, Inc., Citibank, N.A., CitiMortgage, Inc., Ally Financial, Inc., GMAC
Mortgage LLC, Residential Capital, LLC, or their parents, subsidiaries, or
affiliates.

9. Claims and remedies raised in State of Delaware v. MERSCORP, Inc. et al.
(CA-NO-6987-CS), currently pending in the Court of Chancery for the State of
Delaware, and any similar claims—relating to the same types of acts, practices,
or conduct set forth in that lawsuit in connection with mortgages registered in
the MERS system and loans secured by such mortgages—that may be asserted in the
future by the Delaware Department of Justice against Bank of America, N.A., BAC
Home Loans Servicing, LP, JPMorgan Chase Bank, N.A., Chase Home Finance LLC, EMC
Mortgage Corporation, Wells Fargo Bank, N.A., Citigroup, Inc., Citibank, N.A.,
CitiMortgage, Inc., Ally Financial, Inc., GMAC Mortgage LLC, Residential
Capital, LLC, or their parents, subsidiaries, or affiliates.

 

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10. Claims raised in Commonwealth of Massachusetts v. Bank of America, N.A., et
al. (Civ. A. No. 11-4363), currently pending in the Superior Court of
Massachusetts, Suffolk County.

11. Claims of any kind that the State of Utah has or may have against any person
or entity not released under this Consent Judgment, or any right that State of
Utah has or may have to take law enforcement action of any kind against any
person or entity not released under this Consent Judgment, including any person
or entity who is or may be a co-obligor with a person or entity that is released
under this Consent Judgment, all of which claims, rights and actions are
expressly reserved by the State of Utah.

12. Claims against Mortgage Electronic Registration Systems, Inc. or MERSCORP,
INC.

13. Claims arising out of alleged violations of fair lending laws that relate to
discriminatory conduct in lending.

14. Claims of state, county and local pension or other governmental funds as
investors (whether those claims would be brought directly by those pension or
other governmental funds or by the Office of the Attorney General as attorneys
representing the pension or other governmental funds).

15. Tax claims, including, but not limited to, claims relating to real estate
transfer taxes.

16. Claims of county and local governments and claims of state regulatory
agencies having specific regulatory jurisdiction that is separate and
independent from the regulatory and enforcement jurisdiction of the Attorney
General, but not including claims of Regulators that are released herein.

 

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17. Criminal enforcement of state criminal laws.

18. Claims of county recorders, city recorders, town recorders or other local
government officers or agencies (or, for Hawaii only, where a statewide
recording system is applicable and operated by the state, claims by Hawaii; and
for Maryland, where the recording system is the joint responsibility of the
counties or Baltimore City and the state, claims of the counties or Baltimore
City and the state) for fees relating to the recordation or registration process
of mortgages or deeds of trust, including assignments, transfers, and
conveyances, regardless of whether those claims would be brought directly by
such local government officers or agencies or through the Office of the Attorney
General as attorneys representing such local government officers or agencies.

19. Claims and defenses asserted by third parties, including individual mortgage
loan borrowers on an individual or class basis.

20. Claims seeking injunctive or declaratory relief to clear a cloud on title
where the Covered Conduct has resulted in a cloud on title to real property
under state law; provided, however, that neither the Attorneys General nor
Regulators shall otherwise take actions seeking to invalidate past mortgage
assignments or foreclosures in connection with loans serviced and/or owned by
the Bank. For the avoidance of doubt, nothing in this paragraph 20 releases,
waives or bars any legal or factual argument related to the validity of past
mortgage assignments or foreclosures that could be made in support of claims not
released herein, including, without limitation, all claims preserved under
paragraphs 1 through 23 of Section IV of this Release.

 

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21. Disciplinary proceedings brought by a Regulator against individual employees
with respect to mortgage loan origination conduct for misconduct or violations
under state law.

22. Authority to resolve consumer complaints brought to the attention of the
Bank for resolution outside of the monitoring process, as described in Section H
of the Enforcement Terms (Exhibit E).

23. Claims against Bank for reimbursement to mortgage borrowers:

(a) That represent: (i) a fee imposed upon and collected from a mortgage
borrower by Bank and retained by Bank which fee is later determined to have been
specifically prohibited by applicable state law (an “Unauthorized Fee”),
provided that such determination of impermissibility is not predicated, directly
or indirectly, on a finding of a violation of any federal law, rule, regulation,
agency directive or similar requirement; and (ii) an actual overpayment by a
borrower resulting from a clear and demonstrable error in calculation of amounts
due from said borrower; and

(b) That are subject to the following: (i) are identified in the course of a
mandatory state regulatory compliance examination commenced after the Effective
Date by the Iowa Division of Banking, Nevada Division of Mortgage Lending, New
Hampshire Banking Department, Ohio Division of Financial Institutions, or Rhode
Island Department of Business Regulation, which examination period is
specifically limited to Bank’s Covered Conduct beginning on January 1, 2011 and
ending on January 1, 2012; or (ii) are part of a state regulatory compliance
examination that was open or in process as of the Effective Date; and

 

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(c) That are not duplicative of any prior voluntary or involuntary payment to
the affected loan borrower by Bank, whether directly or indirectly, from any
State Payment or other source.

 

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EXHIBIT H

 

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USDOJ Servicemembers Civil Relief Act Settlement Provisions:

Ally Financial, Inc., Residential Capital, LLC, and GMAC Mortgage, LLC

In exchange for a full release of the United States’1 potential civil claims
under the Servicemembers Civil Relief Act (“SCRA”), 50 U.S.C. app. § 501, et
seq., arising prior to the date of this agreement against Servicer2 with respect
to the servicing of residential mortgages, under the provisions of the SCRA
related to (a) mortgage foreclosure, and (b) the prohibition against charging
more than 6% interest on SCRA-covered mortgaged debt after a valid request by a
servicemember to lower the interest rate and receipt of orders, Servicer agrees
to the provisions set forth below.

 

  I. Servicer shall comply with all the “Protections for Military Personnel”
provisions in the Settlement Agreement (“Article V”). In addition, Servicer
shall undertake additional remedial action and agree to the policy changes set
forth below.

 

  II. Compensation for Servicemembers and Co-Borrowers

 

  a. Violations of Sections 533 and 521 of the SCRA related to completed
foreclosures on active duty servicemembers: Servicer will engage an independent

 

1 

The following claims are specifically reserved and not released: Any action that
may be taken by the appropriate Federal Banking Agency (FBA), as defined in 12
U.S.C. § 1813(q), against Servicer, any of its affiliated entities, and/or any
institution-affiliated party of Servicer, as defined in 12 U.S.C. § 1813(u),
pursuant to 12 U.S.C. § 1818, and any action by the FBA to enforce the Consent
Order issued against Servicer by the FBA on April 13, 2011.

2 

For purposes of the agreement in this exhibit, “Servicer” shall mean Ally
Financial, Inc., and its subsidiaries and affiliates, Residential Capital, LLC,
and GMAC Mortgage, LLC (including any loans serviced by GMAC Mortgage, LLC and
its subsidiaries on behalf of affiliates), and their successors and assignees in
the event of a sale of all or substantially all of the mortgage servicing
related assets of (1) Ally Financial, Inc., Residential Capital, LLC, or GMAC
Mortgage, LLC, or (2) any of Ally Financial, Inc.’s, Residential Capital, LLC’s,
or GMAC Mortgage, LLC’s division(s) or major business unit(s) that are engaged
in servicing residential mortgages. Ally Financial, Inc., Residential Capital,
LLC, and GMAC Mortgage, LLC, jointly and severally, will be obligated to make
the payments specified in the agreement in this exhibit; provided, however, that
any successor to or purchaser of all or a substantial portion of the assets of
Residential Capital, LLC or GMAC Mortgage, LLC shall not be obligated to pay any
of the amounts owed by Residential Capital, LLC, GMAC Mortgage, LLC, or Ally
Financial, Inc. under the Consent Judgment.

 

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  consultant whose duties shall include a review of all completed foreclosures
from January 1, 2006 to the present to evaluate whether the completed
foreclosures were in compliance with Sections 533 and 521 of the SCRA. Servicer
shall propose an independent consultant and submit the independent consultant’s
proposed methodology to DOJ for approval within 30 days after the entry of this
agreement. The independent consultant shall begin its review within 30 days
after receiving the above-referenced approvals by DOJ. The independent
consultant shall submit the results of its review to DOJ within 150 days after
it receives the data necessary for its analysis from the Department of Defense’s
Defense Manpower Data Center (“DMDC”) providing relevant periods of military
service of borrowers for completed foreclosures from January 1, 2006 to present.
Based on the information gathered by the independent consultant, information
submitted by Servicer, and DOJ’s independent investigation, DOJ shall make the
determination reasonably based on the information it has received and its
investigative conclusions whether or not a completed foreclosure was in
compliance with the SCRA. In the event Servicer disagrees with the DOJ’s
determination, Servicer shall be afforded 30 days to produce evidence of
compliance, which DOJ shall consider in good faith. Where DOJ determines that a
foreclosure was not in compliance with the SCRA, Servicer shall compensate the
borrowers (i.e., any individual(s) who signed the note with respect to a
foreclosed property) by providing:

(1) an amount of $116,785.00 to the servicemember-borrower or an amount
consistent with what was provided under the Federal Reserve Board Consent Order
Independent Review Process for similar violations of Sections 533 or 521 of the
SCRA, whichever is higher;

 

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(2) any lost equity in the foreclosed property, as calculated by: subtracting:

 

  (a) any outstanding principal, interest, and other amounts owing by the
borrowers (excluding any fees associated with foreclosure), plus any junior
liens at the time of foreclosure and any disbursements made to the servicemember
or a third party other than a junior lien holder from the proceeds of the
foreclosure sale (exclusive of any fees associated with the foreclosure) from

 

  (b) Either:

 

  i. a contemporaneous appraisal reflecting the value of the home at the time of
foreclosure;

 

  ii.

a BPO or other desktop determination of property valuation that results in
property valuations reasonably consistent3 with those contained in
contemporaneous appraisals; or

 

  iii. a retroactive appraisal reflecting the value of the home at the time of
foreclosure; and

(3) interest accrued on this lost equity, calculated from the date of the
foreclosure sale until the date payment is issued, at the rate set forth in 28
U.S.C. § 1961.4

 

3 

Before Servicer may rely on a BPO or desktop determination for purposes of this
subsection, Servicer must first obtain DOJ approval that the methodology for the
BPO or desktop determination results in property valuations reasonably
consistent with a contemporaneous appraisal. DOJ shall not unreasonably withhold
such approval.

4 

The independent consultant shall calculate the lost equity and interest
described herein as part of its review.

 

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While the amount described in subsection (1) shall be paid entirely to the
servicemember-borrower on the note securing the mortgage, the amounts described
in subsections (2) and (3) shall be distributed among all owners (including
non-servicemember owners) on the deed.5 In cases where Servicer has already
taken remedial actions with respect to a foreclosure which DOJ determines did
not comply with Sections 533 or 521 of the SCRA, DOJ shall consider such
remedial actions and adjust the compensation to be awarded to the subject
borrower or mortgagor.6 DOJ will submit lists or electronic links to, the
Servicer identifying servicemembers or co-borrowers to be compensated, and
Servicer must notify each identified servicemember or co-borrower (using best
efforts to locate each person) by letter (using Exhibit 1 or a modified version
mutually agreeable to Servicer and DOJ) within 45 days of receiving this list.
Any letters returned with forwarding addresses must be promptly mailed to the
forwarding address. Servicer shall issue and mail compensation checks no later
than 21 days after receipt of a signed release from the servicemember or
co-borrower aggrieved person. Every 6 months for a period of two years following
entry of this agreement, Servicer shall provide the DOJ with an accounting of
all

 

5 

If information is available regarding percentages of ownership interest in the
subject property, the amounts described in subsections (2) and (3) will be
distributed in amounts proportionate to the ownership interests. Otherwise,
amounts described in subsections (2) and (3) will be distributed equally among
owners.

6 

In determining the amount of compensation due to any servicemember or
co-borrower pursuant to Subsection II.a, DOJ will credit any monetary
compensation or other remediation efforts, including returning the home to the
borrower, already provided to any servicemember or co-borrower for alleged
compliance issues pursuant to Sections 533 or 521 of the SCRA and arising from
the same mortgage. In the event that a servicemember located through the Federal
Reserve Board Consent Order Independent Consultant review process elects to
receive the return of his or her home in lieu of a flat fee damages payment
pursuant to the Federal Reserve Board Consent Order remediation plan (which
payment shall not be less than the amount provided in Section II.a.(1)) for
violations of Sections 533 or 521 of the SCRA and arising from the same
mortgage, the servicemember shall be compensated pursuant to the terms of the
Federal Reserve Board Consent Order remediation plan rather than Section II.a.
of this agreement.

 

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releases received, checks issued (including copies of issued checks), credit
entries repaired, and notifications without responses or that were returned as
undeliverable.

 

  b.

Violations of Section 527 of the SCRA related to failing to limit interest rates
to 6% on SCRA-covered mortgage debt: Servicer will engage an independent
consultant whose duties shall include a review of either all or a sample of
mortgage loans where a borrower on the note securing the mortgage submitted a
request either orally or in writing for protection under Section 527 of the SCRA
from January 1, 2008 – present to evaluate whether the Servicer complied with
Section 527 of the SCRA. The DOJ shall determine whether a sample or a
comprehensive review, or some combination thereof, would be more appropriate to
locate potential violations by the Servicer. The consultant’s methodology must
be submitted to DOJ for approval within 60 days after entry of this agreement.
DOJ’s approval of the methodology will be based on, among other things, DOJ’s
evaluation of the Servicer’s SCRA policies in and around the time period in
question, Servicer’s search capabilities for determining which individuals
requested, either orally or in writing, interest rate protections based on their
military status, the servicing platform, and the number of individuals who
requested such protection. The consultant shall submit the results of its review
within 180 days after DOJ’s approval of the methodology. Based on the
information gathered by the consultant, information submitted by the Servicer,
and DOJ’s independent investigation, DOJ shall make the determination,
reasonably based on the information it has received and its investigative

 

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  conclusions, whether or not potential violations of Section 527 occurred. In
the event Servicer disagrees with the DOJ’s determination, Servicer shall be
afforded 30 days to produce evidence of compliance, which DOJ shall consider in
good faith. Where DOJ determines that a mortgage loan was not serviced in
compliance with Section 527, Servicer shall: (1) refund (with interest, as
calculated pursuant to 28 U.S.C. § 1961) all interest and fees charged above 6%;
and (2) provide an additional payment of $500 or triple the amount of the refund
referenced in subsection (1), whichever amount is larger.7 The compensation
described in subsection (1) shall be distributed equally among all borrowers
(including non-servicemember borrowers) on the note secured by the mortgage. The
compensation described in subsection (2) shall be paid entirely to the
servicemember. In cases where Servicer has already taken remedial actions with
respect to a mortgage which DOJ determines did not comply with Section 527 of
the SCRA, DOJ shall consider such remedial actions and adjust the compensation
to be awarded to the subject servicemember, borrower, or mortgagor.8 DOJ will
submit lists or electronic links to the Servicer of identified servicemembers or
coborrowers to be compensated, and Servicer must notify each identified
servicemember or co-borrower (using best efforts to locate each person) by
letter (using Exhibit 2 or a modified version mutually agreeable to Servicer and
DOJ) within 60 days of receiving this list of servicemembers or co-borrowers to
be

 

7 

The independent consultant shall calculate the amounts described herein as part
of its review.

8 

In determining whether any compensation is due to any servicemember or
co-borrower pursuant to Subsection II.b, and, if so, the amount DOJ will
consider the timing of any remedial actions and will credit any monetary
compensation already provided to any servicemember or co-borrower for alleged
compliance issues pursuant to Section 527 of the SCRA and arising from the same
mortgage, and/or provided under the Federal Reserve Board Consent Order
Independent Consultant review process for violations of Section 527 of the SCRA
and arising from the same mortgage.

 

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  compensated. Any letters returned with forwarding addresses must be promptly
mailed to the forwarding address. Servicer shall issue and mail compensation
checks no later than 21 days of receipt of a signed release from the
servicemember or co-borrower aggrieved person. Every 6 months for a period of
two years following entry of this agreement, Servicer shall provide the DOJ with
an accounting of all releases received, checks issued (including copies of
issued checks), credit entries repaired and notifications without responses or
that were returned as undeliverable.

 

  c. Concurrent with providing financial compensation to the
servicememberborrower, Servicer must request that all three major credit bureaus
remove negative entries for the servicemember(s) and any co-borrower(s)
attributable specifically to the wrongful foreclosure or interest overcharges
and Servicer shall not pursue, and must indemnify the servicemember and his or
her co-borrower(s) against any third-party pursuing, any deficiency that was
remaining on the servicemember’s SCRA-protected mortgage or junior lien after a
foreclosure was completed in violation of the SCRA.

 

  d. Servicer shall have 10 days after DOJ’s final determination that a
foreclosure was not in compliance with the SCRA or a mortgage loan was not
serviced in compliance with Section 527, to seek judicial review on the ground
that DOJ made a clearly erroneous factual determination.

 

  III. SCRA Compliance Policies

 

  a.

Servicer shall submit SCRA mortgage foreclosure-related policies to DOJ for
review and approval. If the Servicer decides to make a material modification to

 

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  these policies, Servicer will provide the modified policies for review and
approval. DOJ will advise Servicer of the results of DOJ’s review within 60 days
of receipt of a complete submission of all SCRA mortgage foreclosure-related
policies and any subsequent material modifications. In addition to the areas
covered under the “Protection of Military Personnel” provisions in the attached
document, these policies must address:

 

  i.

Prior to referring a loan to foreclosure, the Servicer shall review any orders
it has received from borrowers9 and check borrowers’ names and social security
numbers against the DMDC website as provided in the “Protections of Military
Personnel” provisions in the Settlement Agreement.

 

  ii. If Servicer pursues a foreclosure action in court and the borrower fails
to answer the action, Servicer and/or its agent will file a military affidavit
with the court as required by Section 521(b)(1)(A). After the borrower fails to
answer and prior to seeking entry of default, Servicer and/or its agent will
query the DMDC and review information in its possession or control for orders to
determine if the borrower is on active duty. If Servicer and/or its agent learns
that the borrower is on active duty or was on active duty at the time of his or
her failure to answer Servicer and/or its agent will file an affidavit stating
that “the defendant is in military service” or “was in military service at the
time of his or her failure to answer” prior to seeking default judgment and
attaching the most recent certificate of service from the DMDC or a copy of the
military orders.

 

9 

For the purposes of locating orders to be reviewed pursuant to Sections III.a.i
and III.a.ii of this agreement, it shall be sufficient for the Servicer to flag
or code accounts upon receipt of orders and rely on that system.

 

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  iii. If Servicer initiates and pursues a waiver under a written agreement as
provided in Section 517 of the SCRA, Servicer must initiate the waiver process
with the servicemember at least 30 days in advance of any anticipated
foreclosure sale date by sending a notice and a copy of the proposed waiver to
the servicemember. To the extent Servicer exercises this right, Servicer shall
utilize a notice and proposed waiver in the form attached as Exhibit 3. This
provision may be modified based on changes in servicing requirements from
government-sponsored entities or the Department of Housing and Urban
Development.

 

  b. Servicer shall submit SCRA mortgage loan interest rate-related policies to
DOJ for review and approval. If the Servicer decides to make a material
modification to these policies, Servicer will provide the modified policies for
review and approval. DOJ will advise Servicer of the results of DOJ’s review
within 60 days of receipt of a complete submission of all SCRA mortgage loan
interest raterelated policies and any subsequent material modifications. In
addition to the areas covered under Article V of the Settlement Agreement, these
policies must address:

 

  i.

Servicer shall accept servicemembers’ requests for reduced mortgage interest
rates pursuant to the SCRA via electronic mail, facsimile, U.S. Mail, Federal
Express or other overnight/express delivery to facsimile numbers and addresses
designated by the Servicer. Within six months after

 

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entry of this agreement, Servicer shall also accept servicemembers’ requests for
reduced mortgage interest rates pursuant to the SCRA via inperson delivery at
the Servicer’s full-service branch locations, should the Servicer maintain
branch locations.

 

  ii. When a servicemember requests interest rate relief under the SCRA,
Servicer shall accept orders as defined in the Settlement Agreement or any other
document that the DOD shall deem sufficient as a substitute for official orders.

 

  iii. Servicer shall seek only orders identifying the beginning date of the
applicable period of military service from the requesting servicemember and may
not condition providing SCRA benefits on the servicemember submitting orders
that include an end date.

 

  iv. Before concluding that the SCRA permits raising the interest rate on the
servicemember’s loan higher than six percent, the Servicer shall access the DMDC
website to determine the dates, where available, of active duty military service
of those servicemembers who request reduced interest rates pursuant to the SCRA.
If DMDC indicates that the individual is still on active duty, the Servicer must
continue to limit the charges pursuant to Section 527 of the SCRA.

 

  v. For those servicemembers who request a reduced interest rate pursuant to
the SCRA, but are determined not to be eligible for the reduced rate, Servicer
shall notify the servicemembers in writing of the reasons for the denial and
that they may provide additional documentation or information to establish
eligibility for the reduced interest rate.

 

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  c. In the event that DOJ requires a change or modification pursuant to this
agreement that is in conflict with a policy required by the appropriate Federal
Banking Agency (FBA), as defined in 12 U.S.C. § 1813(q), under the Consent Order
issued against the Servicer by the FBA on April 13, 2011, and the FBA will not
consent to the change, DOJ shall meet and confer with the FBA to resolve the
conflict. Nothing in this agreement prevents DOJ from requiring Servicer to
adopt policies that provide additional protections beyond the policies required
by the FBA.

 

  IV. Training and Monitoring Program

 

  a. Within 45 days after entry of this agreement, Servicer shall provide its
proposed training on the SCRA and this settlement to DOJ for approval. After
receiving DOJ’s approval, Servicer shall provide and require training on the
SCRA and this settlement for employees (including management officials):
(1) providing customer service to servicemembers, (2) involved in mortgage
servicing, including adjusting interest rates for mortgage loans, or (3) with
significant involvement in the foreclosure process, within 60 days of DOJ’s
approval (if already employed in such a position), or within 30 days of his or
her hiring, promotion, or transfer. Servicer shall also obtain confirmation from
third-party vendors, law firms, and/or trustee companies involved in conducting
foreclosures that their employees who are involved in the foreclosure process
have been trained on their obligations to comply with this settlement and the
SCRA.

 

H - 12

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

  b.

Servicer shall implement a monitoring program approved by DOJ designed to ensure
compliance with this settlement and the SCRA. At a minimum, monitoring will
include a quarterly report to be submitted to DOJ10 within 60 days after the end
of each quarter containing an analysis of a sample of foreclosures and a sample
of mortgages where a borrower or mortgagor submitted orders seeking protection
under Section 527 of the SCRA to determine compliance with the SCRA and this
settlement. If Servicer learns that despite the policies required by Section III
a violation of Section 521, 527 or 533 has occurred, Servicer will take
corrective action as set forth in Section II of this agreement.

 

  V. Term of Agreement

This agreement shall retain full force and effect for three and one half years
from the date it is entered (the “Term”). Servicer’s obligation pursuant to
Section III to submit quarterly reports and DOJ’s review of the same shall
continue for the six months following the Term, after which time Servicer shall
have no further obligations under this agreement.

 

10 

All materials required by this Order to be sent to the Department of Justice
shall be sent by commercial overnight delivery service addressed as follows:
Chief, Housing and Civil Enforcement Section, Civil Rights Division, U.S.
Department of Justice, 1800 G Street NW, Washington, D.C. 20006, Attn: DJ
216-16-2.

 

H - 13

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EXHIBIT H—1

 

H - 14

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[SCRA NOTIFICATION LETTER FOR SECTION 533 SERVICEMEMBER]

Name of Servicemember

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Servicemember]:

We write to inform you that                          (“the Bank”), entered into
a settlement on                         , with the United States Department of
Justice regarding alleged violations of the Servicemembers Civil Relief Act
(“SCRA”). This settlement resolves the Department of Justice’s allegations that
the Bank foreclosed on properties without approval by a court when the SCRA
required that the foreclosures be approved by a court.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. Please read and carefully review the declaration
attached to this letter. If it is accurate, please sign and return to us the
release and declaration attached to this letter in the enclosed postage paid
envelope. After we receive these documents, we will send you a check in the
amount of [insert amount]. This amount includes any equity remaining in your
home at the time of the foreclosure and monetary damages. In addition, the Bank
will request that all major credit bureaus remove any negative entries on your
credit report resulting from the foreclosure. This release and declaration must
be returned by                        .

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the declaration, release or settlement or
if anyone seeks to collect a debt arising from your mortgage, please contact
[Insert Independent Consultant Name] at [Insert Contact Information including a
phone number].

We deeply appreciate your service to our country. We are committed to serving
the financial needs of our customers who serve in the military, and we regret
any error that may have occurred on your account.

 

H - 15

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

Sincerely,

[Name]

[Title]

Enclosures: Release and Declaration

 

H - 16

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                                          , and the
Defendant’s payment to me of $            , pursuant to the Consent Order, I
hereby release and forever discharge all claims, arising prior to the entrance
of this Order, related to the facts at issue in the litigation referenced above
and related to the alleged violations of Section 533 of the Servicemembers Civil
Relief Act, that I may have against the Defendant, all related entities,
parents, predecessors, successors, subsidiaries, and affiliates, and all of its
past and present directors, officers, agents, managers, supervisors,
shareholders and employees and their heirs, executors, administrators,
successors or assigns.

Executed this             day of                 , 20         .

 

  Signature   

Print Name

  

Address

 

H - 17

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

[SCRA NOTIFICATION LETTER FOR SECTION 533 CO-BORROWER]

Name of Co-borrower

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Co-borrower]:

We write to inform you that                      (“the Bank”), entered into a
settlement on                     , with the Department of Justice regarding
alleged violations of the Servicemembers Civil Relief Act (“SCRA”). This
settlement resolves the Department of Justice’s allegations that the Bank
foreclosed on properties without approval by a court when the SCRA required that
the foreclosures be approved by a court.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. If you sign and return to us the release attached to
this letter in the enclosed postage paid envelope and your co-borrower signs and
returns the declaration and release that will be sent separately to your
co-borrower, we will send you a check in the amount of [insert amount]. This
amount represents your portion of any equity remaining in your home at the time
of the foreclosure. In addition, the Bank will request that all major credit
bureaus remove any negative entries on your credit report attributable to the
foreclosure.

To receive this payment, you must return the attached release within six months
of the date of receipt of this letter. The release, if signed, releases any
claim to lost equity that you may have under Section 533 of the SCRA; however,
it does not release any other claim you may have under the SCRA, including
Section 533, or other laws.

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the release or settlement or if anyone
seeks to collect a debt arising from your mortgage, please contact [Insert
Independent Consultant Name] at [Insert Contact Information including a phone
number].

 

H - 18

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

We are committed to serving the financial needs of our customers who serve in
the military, and we regret any error that may have occurred on your account.

Sincerely,

[Name]

[Title]

Enclosure: Release

 

H - 19

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                         , and the Defendant’s payment
to me of $            , pursuant to the Consent Order, I hereby release and
forever discharge any claim under Section 533 of the Servicemembers Civil Relief
Act for lost equity in the property related to the litigation referenced above
and arising prior to the entrance of this Order, that I may have against the
Defendant, all related entities, parents, predecessors, successors,
subsidiaries, and affiliates, and all of its past and present directors,
officers, agents, managers, supervisors, shareholders and employees and their
heirs, executors, administrators, successors or assigns.

Executed this                 day of                 , 20         .

 

  Signature   

Print Name

  

Address

 

H - 20

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

[SCRA NOTIFICATION LETTER FOR SECTION 521 SERVICEMEMBER]

Name of Servicemember

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Servicemember]:

We write to inform you that                    (“the Bank”), entered into a
settlement on                         , with the United States Department of
Justice regarding alleged violations of the Servicemembers Civil Relief Act
(“SCRA”). This settlement resolves the Department of Justice’s allegations that
the Bank foreclosed on servicemembers through default court proceedings without
filing accurate affidavits notifying the court of the servicemembers’ military
statuses.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. Please read and carefully review the declaration
attached to this letter. If it is accurate, please sign and return to us the
release and declaration attached to this letter in the enclosed postage paid
envelope. After we receive these documents, we will send you a check in the
amount of [insert amount]. This amount includes your portion of any equity
remaining in your home at the time of the foreclosure and monetary damages. In
addition, the Bank will request that all major credit bureaus remove any
negative entries on your credit report resulting from the foreclosure. This
release and declaration must be returned by                    .

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the declaration, release or settlement or
if anyone seeks to collect a debt arising from your mortgage, please contact
[Insert Independent Consultant Name] at [Insert Contact Information including a
phone number].

 

H - 21

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

We deeply appreciate your service to our country. We are committed to serving
the financial needs of our customers who serve in the military, and we regret
any error that may have occurred on your account.

Sincerely,

[Name]

[Title]

Enclosures: Release and Declaration

 

H - 22

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                                  , and the
Defendant’s payment to me of $            , pursuant to the Consent Order, I
hereby release and forever discharge all claims, arising prior to the entrance
of this Order, related to the facts at issue in the litigation referenced above
and related to the alleged violations of Section 521 of the Servicemembers Civil
Relief Act, that I may have against the Defendant, all related entities,
parents, predecessors, successors, subsidiaries, and affiliates, and all of its
past and present directors, officers, agents, managers, supervisors,
shareholders and employees and their heirs, executors, administrators,
successors or assigns.

Executed this             day of                     , 20         .

 

  Signature   

Print Name

  

Address

 

H - 23

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

[SCRA NOTIFICATION LETTER FOR SECTION 521 CO-BORROWER]

Name of Co-borrower

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Co-borrower]:

We write to inform you that                          (“the Bank”), entered into
a settlement on                         , with the United States Department of
Justice regarding alleged violations of the Servicemembers Civil Relief Act
(“SCRA”). This settlement resolves the Department of Justice’s allegations that
the Bank foreclosed on servicemembers through default court proceedings without
filing accurate affidavits notifying the court of the servicemembers’ military
statuses.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. If you sign and return to us the release attached to
this letter in the enclosed postage paid envelope and your co-borrower signs and
returns the declaration and release that will be sent separately to your
co-borrower, we will send you a check in the amount of [insert amount]. This
amount represents your portion of any equity remaining in your home at the time
of the foreclosure. In addition, the Bank will request that all major credit
bureaus remove any negative entries on your credit report attributable to the
foreclosure.

To receive this payment, you must return the attached release within six months
of the date of receipt of this letter. The release, if signed, releases any
claim to lost equity that you may have under Section 521 of the SCRA; however,
it does not release any other claim you may have under the SCRA, including
Section 521, or other laws.

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the release or settlement or if anyone
seeks to collect a debt arising from your mortgage, please contact [Insert
Independent Consultant Name] at [Insert Contact Information including a phone
number].

 

H - 24

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

We are committed to serving the financial needs of our customers who serve in
the military, and we regret any error that may have occurred on your account.

Sincerely,

[Name]

[Title]

Enclosure: Release

 

H - 25

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                                          , and the
Defendant’s payment to me of $            , pursuant to the Consent Order, I
hereby release and forever discharge any claim under Section 521 of the
Servicemembers Civil Relief Act for lost equity in the property related to the
litigation referenced above and arising prior to the entrance of this Order,
that I may have against the Defendant, all related entities, parents,
predecessors, successors, subsidiaries, and affiliates, and all of its past and
present directors, officers, agents, managers, supervisors, shareholders and
employees and their heirs, executors, administrators, successors or assigns.

Executed this              day of                  , 20         .

 

  Signature   

Print Name

  

Address

 

H - 26

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

EXHIBIT H—2

 

H - 27

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

[SCRA NOTIFICATION LETTER FOR SECTION 527 SERVICEMEMBER]

Name of Servicemember

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Servicemember]:

We write to inform you that                     (“the Bank”), entered into a
settlement on                     , with the United States Department of Justice
regarding alleged violations of the Servicemembers Civil Relief Act (“SCRA”).
This settlement resolves the Department of Justice’s allegations that the Bank
charged servicemembers interest higher than six percent on mortgage loans that
the servicemembers originated prior to entering active duty, despite receiving
requests for interest rate relief and orders.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. Please read and carefully review the declaration
attached to this letter. If it is accurate, please sign and return to us the
release and declaration attached to this letter in the enclosed postage paid
envelope. After we receive these documents, we will send you a check in the
amount of [insert amount]. This amount includes any interest charges in excess
of six percent and monetary damages. In addition, the Bank will request that all
major credit bureaus remove any negative entries on your credit report resulting
from the higher interest rate. This release and declaration must be returned by
                     .

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the declaration, release or settlement,
please contact [Insert Independent Consultant Name] at [Insert Contact
Information including a phone number].

We deeply appreciate your service to our country. We are committed to serving
the financial needs of our customers who serve in the military, and we regret
any error that may have occurred on your account.

 

H - 28

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

 

Sincerely,

[Name]

[Title]

Enclosures: Release and Declaration

 

H - 29

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                                          , and the
Defendant’s payment to me of $            , pursuant to the Consent Order, I
hereby release and forever discharge all claims, arising prior to the entrance
of this Order, related to the facts at issue in the litigation referenced above
and related to the alleged violation of Section 527 of the Servicemembers Civil
Relief Act, that I may have against the Defendant, all related entities,
parents, predecessors, successors, subsidiaries, and affiliates, and all of its
past and present directors, officers, agents, managers, supervisors,
shareholders and employees and their heirs, executors, administrators,
successors or assigns.

Executed this              day of                  , 20         .

 

  Signature   

Print Name

  

Address

 

H - 30

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

[SCRA NOTIFICATION LETTER FOR SECTION 527 CO-BORROWER]

Name of Co-borrower

123 Main Street

City, State Zip code

Re: Loan Number [Insert]

Dear [Co-borrower]:

We write to inform you that                      (“the Bank”), entered into a
settlement on                     , with the Department of Justice regarding
alleged violations of the Servicemembers Civil Relief Act (“SCRA”). This
settlement resolves the Department of Justice’s allegations that the Bank
charged servicemembers interest higher than six percent on mortgage loans that
the servicemembers originated prior to entering active duty, despite receiving
requests for interest rate relief and orders.

In connection with this settlement, the Department of Justice identified you as
a person who may be eligible for financial compensation with respect to your
loan [add loan number(s)]. If you sign and return to us the release attached to
this letter in the enclosed postage paid envelope and your co-borrower signs and
returns the declaration and release that will be sent separately to your
co-borrower, we will send you a check in the amount of [insert amount]. This
amount represents your portion of any interest charges in excess of six percent.
In addition, the Bank will request that all major credit bureaus remove any
negative entries on your credit report attributable to the higher interest rate.

To receive this payment, you must return the attached release within six months
of the date of receipt of this letter. The release, if signed, releases any
claim to the return of excess interest that you may have under Section 527 of
the SCRA; however, it does not release any other claim you may have under the
SCRA, including Section 527, or other laws.

You should be aware that the money you are eligible to receive may have
consequences with respect to your federal, state, or local tax liability, as
well as eligibility for any public assistance benefits you may receive. Neither
the Bank nor the Department of Justice can advise you on tax liability or any
effect on public assistance benefits. You may wish to consult with a qualified
individual or organization about any possible tax or other consequences
resulting from your receipt of this payment.

If you have any questions concerning the release or settlement, please contact
[Insert Independent Consultant Name] at [Insert Contact Information including a
phone number].

 

H - 31

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

We are committed to serving the financial needs of our customers who serve in
the military, and we regret any error that may have occurred on your account.

Sincerely,

[Name]

[Title]

Enclosure: Release

 

H - 32

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

RELEASE

In consideration for the parties’ agreement to the terms of the Consent Order
entered in                                                              , and
the Defendant’s payment to me of $            , pursuant to the Consent Order, I
hereby release and forever discharge any claim under Section 527 of the
Servicemembers Civil Relief Act for the return of excess interest for my
loan,                    [insert loan number], related to the litigation
referenced above and arising prior to the entrance of this Order, that I may
have against the Defendant, all related entities, parents, predecessors,
successors, subsidiaries, and affiliates, and all of its past and present
directors, officers, agents, managers, supervisors, shareholders and employees
and their heirs, executors, administrators, successors or assigns.

Executed this             day of                 , 20         .

 

  Signature   

Print Name

  

Address

 

H - 33

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

EXHIBIT H—3

 

H-34

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

IMPORTANT NOTICE AFFECTING MILITARY SERVICEMEMBERS

WAIVER OF RIGHTS AND PROTECTIONS AFFORDED UNDER

THE SERVICEMEMBERS CIVIL RELIEF ACT

Attached to this notice you will find a waiver of rights and protections that
may be applicable to you and your dependents pursuant to the Servicemembers
Civil Relief Act, 50 App. U.S.C. § 501, et seq. (the “SCRA”). The SCRA provides
military personnel and their dependents with a wide range of legal and financial
protections. Among other benefits and protections, the SCRA:

 

  •  

Upon request by the servicemember, imposes a maximum rate of interest that may
be charged on debt obligations incurred by an eligible servicemember before the
servicemember began his or her current military service.

 

  •  

May restrict or prohibit the sale, foreclosure, or seizure of real estate
pursuant to a pre-service debt obligation, except where the lender has obtained
a valid court order approving the sale, foreclosure, or seizure of the real
estate.

 

  •  

May prohibit a landlord or lender from evicting a servicemember or the
servicemember’s dependents from his/her residence, except where the lender has
obtained a valid court order approving the eviction.

 

  •  

May, in a court action, give the servicemember the right to postpone the case
under certain conditions.

 

  •  

May, in a court action, give the servicemember the right to have the terms of
the mortgage obligation adjusted under certain conditions.

[Judicial State / Non-Judicial State Paragraph—Insert Applicable Paragraph]

[Judicial State] If you choose to sign the waiver, the bank will have the option
to proceed with a foreclosure, sale and eviction without the protections of the
SCRA. If you do not sign this waiver, the Bank will be required to provide you
the protections of the SCRA. You may be able to seek a postponement of any
foreclosure or eviction action, and, in the case of foreclosure, an adjustment
of the mortgage obligation. Additionally, the court should take steps to ensure
that a judgment is not entered against you if you are unable to appear.

[Non-Judicial State] If you choose to sign the waiver, the bank will have the
option to proceed with a foreclosure, sale and eviction without going to court.
If you do not sign this waiver, the bank will be required to obtain a court
order in order to foreclose (if you incurred your debt before you went into
military service) or to evict you from your home. You may be able to seek a
postponement of any foreclosure or eviction action, and, in the case of
foreclosure, an adjustment of the mortgage obligation. Additionally, the court
should take steps to ensure that a judgment is not entered against you if you
are unable to appear.

Before waiving these important statutory rights, you should consult an attorney
regarding how best to exercise your rights or whether it is in your interest to
waive these rights under the conditions offered by the bank.

As an alternative to foreclosure, the bank may offer its borrowers the options
of pursuing a short sale of their property or executing a deed in lieu of
foreclosure. Borrowers in default may find these options to be preferable to
foreclosure. Any negotiation for a short sale or deed in lieu of foreclosure is
not a threat of current or future litigation, and should not be considered as
such.

 

H-35

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

For More Information:

 

  •  

CONSULT AN ATTORNEY: To fully understand your rights under the law, and before
waiving your rights, you should consult an attorney.

 

  •  

JAG / LEGAL ASSISTANCE: Servicemembers and their dependents with questions about
the SCRA should contact their unit’s Judge Advocate, or their installation’s
Legal Assistance Officer. A military legal assistance office locator for all
branches of the Armed Forces is available at
http://legalassistance.law.af.mil/content/locator.php

 

  •  

MILITARY ONESOURCE: “Military OneSource” is the U.S. Department of Defense’s
information resource. Go to www.militaryonesource.com

 

H-36

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

WAIVER OF RIGHTS UNDER

SERVICEMEMBERS CIVIL RELIEF ACT

I ______(NAME)_____ am a [servicemember] [dependent of ______(NAME)_______, a
servicemember], and I am aware that I have protections available to me under the
Servicemembers Civil Relief Act (SCRA). This includes, but is not limited to,
legal rights relating to the property securing my mortgage loan, including
protection against a sale, foreclosure, seizure, eviction or unlawful detainer
action related to the property listed below.

[ADDRESS OF PROPERTY]

I acknowledge that:

 

  •  

By signing this waiver, I am waiving the SCRA protections related to the
property listed above, including any protections against a sale, foreclosure,
seizure, eviction or unlawful detainer action, as well as relating to the right
of redemption.

 

  •  

This waiver applies to any form of proceeding or transaction through which
someone else receives ownership and/or possession of the property securing my
loan, including a foreclosure short sale, deed-in-lieu of foreclosure,
cash-for-keys, etc. This waiver applies not only to any such proceedings or
transactions that are in process at the time I sign this waiver, but also to
proceedings or transactions that are started after I sign this waiver.

 

  •  

The above described property secures my mortgage loan, account number:
_______________________.

 

  •  

In exchange for waiving my SCRA rights with respect to this property, the Bank
has agreed to provide _____________ (insert one—a short sale, cash for keys
agreement, deed-in-lieu of foreclosure, or other valuable consideration). This
waiver does not become effective until _____________ (insert item listed above)
is executed and completed. If for any reason, the __________ (insert item listed
above) is not executed and completed, this waiver shall become null and void.

Subject to the above provisions, I hereby waive and give up the right to these
protections under the SCRA with respect to the above listed property and any
right I may have had to a stay of proceedings or adjustment of the mortgage
obligation in a foreclosure action.

 

      Date:      (Signature)               Printed Name      

 

H-37

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

EXHIBIT I

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

Addendum to Federal and State Settlement Agreements

The Federal Parties, the State Parties, Residential Capital LLC (“ResCap”), GMAC
Mortgage, LLC (“GMACM”), Residential Funding Company, LLC (“Residential Funding”
and, together with ResCap and GMACM, the “ResCap Parties”), and Ally Financial,
Inc. (“AFI”) have agreed to enter into the Consent Judgment. Capitalized terms
used herein but not defined herein have the meanings assigned to them in the
relevant portion or exhibit of the Consent Judgment.

In recognition of the financial situation of the ResCap Parties, the agreements
of AFI with respect to the payment of settlement funds in the event the ResCap
Parties do not perform certain obligations, and the agreement of the ResCap
Parties to establish the ResCap Settlement Loan Modification Programs set forth
below, in addition to the terms agreed elsewhere in the Consent Judgment, the
Parties agree to the following:

1. Pursuant to Paragraph 3 of the Consent Judgment, the ResCap Parties shall pay
a Direct Payment Settlement Amount of $109,628,425, by electronic funds transfer
no later than seven days after the Effective Date of the Consent Judgment, in
accordance with written instructions to be provided by the United States
Department of Justice and, in furtherance of such payment, AFI has undertaken
the obligations specified in Paragraph 8 of this Addendum, including, without
limitation, entering into the Earmark and Indemnification Agreement.

2. In addition, the ResCap Parties and AFI agree that the United States shall
not be responsible for attorney’s fees for the relator in United States ex rel.
Szymoniak v. [SEALED], Civ No. 0:10-cv-01465 (D.S.C.) or in United States ex
rel. Szymoniak v. [SEALED], Civ No. 3:10-cv-575 (W.D.N.C.) in connection with
the settlement of those matters.

3. The ResCap Parties (and to the extent the ResCap Parties do not perform such
obligations, AFI) shall be responsible for $200,000,000 in consumer relief as
set forth in the Consumer Relief Requirements, credited pursuant to the terms
therein and this Addendum.

 

  a. Notwithstanding anything to the contrary in the Consent Judgment or the
Exhibits thereto, the ResCap Parties and AFI, jointly and severally, will be
obligated to make the payments specified in Paragraph 10.d of Exhibit D to the
Consent Judgment (Consumer Relief Requirements), Exhibit H (SCRA), and Paragraph
7 of this Addendum in the event and to the extent that the ResCap Parties, AFI,
or their successors in interest do not complete the Consumer Relief Activities
set forth in Exhibit D to the Consent Judgment; provided, however, that any
successor or purchaser of all or a substantial portion of the assets of the
ResCap Parties shall not be obligated to pay any of the amounts owed by the
ResCap Parties or AFI under the Consent Judgment or the Exhibits thereto.

 

  b. Notwithstanding the terms of Exhibit D of the Consent Judgment (Consumer
Relief Requirements), the ResCap Parties shall receive credit toward their
Consumer Relief commitment, up to a total of $1.6 million, for the ResCap
Parties’ out of pocket costs of contributions to a national borrower portal and
partnering with third parties for document delivery as contemplated by the
servicing standards in Exhibit A of the Consent Judgment.

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

  c. The releases contained in Exhibits F and G of the Consent Judgment shall
become effective upon payment of the Direct Payment Settlement Amount by
Defendant. The United States and any State Party may withdraw from the Consent
Judgment and declare it null and void with respect to that party and all
released entities if the Consumer Relief Payments (as that term is defined in
Exhibit F (Federal Release)) required under this Consent Judgment are not
completed within the time specified and any payment required under Paragraph
10.d of Exhibit D to the Consent Judgment is not cured within thirty days of
written notice by the party.

4. The ResCap Parties shall establish the following ResCap Settlement Loan
Modification Programs: The ResCap Parties and AFI shall conduct nationwide
modification programs to be offered to underwater borrowers with economic
hardship on first-lien and second-lien loans (“ResCap Settlement Loan
Modification Programs”).

 

  a. The ResCap Parties shall solicit, in accordance with the ResCap Settlement
Loan Modification Program Solicitation Requirements, all borrowers in the owned
loan portfolios of the ResCap Parties, AFI and its affiliates with the exception
of Ally Bank-owned CMG loans as of March 1, 2012 or loans included in asset
sales in the normal course of business where the primary servicer is a ResCap
Party (the “Loan Portfolio”) who meet the Eligibility Criteria for any of the
Program (“Eligible Borrowers”), as set forth in more detail below.

 

  b. From the date of Entry of the Consent Judgment by the Court until
completion of the Solicitation Requirements or proper denial of the borrower for
relief under this agreement, whichever is earlier, the ResCap Parties will defer
any foreclosure sales on any Eligible Borrower.

 

  c. The ResCap Parties will extend offers of relief under the ResCap Settlement
Loan Modification Programs to all Eligible Borrowers in the Loan Portfolio who
meet the Eligibility Criteria for any of the Programs as set forth below.

 

5. The ResCap Settlement Loan Modification Programs shall include the following:

 

  a. Rate Reduction Refinancing Program (“RRRP”): the Rate Reduction Refinancing
Program will offer a restructured mortgage to current borrowers who would
benefit from a refinancing but are currently precluded from refinancing due to a
negative equity position on their property.

 

  i. The ResCap Parties will offer a Rate Reduction Refinancing to all borrowers
in the Loan Portfolio who meet the RRRP Eligibility Criteria.

 

  ii. Eligibility Criteria. The Eligibility Criteria for the RRRP are the
following:

 

  1) The loan was originated prior to January 1, 2009;

 

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  2) The borrower is current on his or her first lien and has only been
delinquent 30 days once during the past 12 months;

 

  3) The borrower’s current interest rate is greater than or equal to 5.25%
(including, but not limited to mortgage loans that are interest-only and
non-interest only); and

 

  4) The borrower’s LTV is greater than 100% or the borrower’s LTV is greater
than 80% and the borrowers FICO score is less than 660.

 

  iii. Offer of Relief. Borrowers meeting the Eligibility Criteria will be
offered a modification that includes:

 

  1)

modification to a new fixed rate mortgage at current conforming rates (Primary
Mortgage Market Survey Rate as of March 1st, 2012);

 

  2) minimum payment relief of at least $100/month; and

 

  3) no future interest rate increases, changes in term, or additional costs to
the borrower.

 

  iv. Credit. Credit for the RRRP against the ResCap Parties obligation to
provide Consumer Relief shall be consistent with the crediting set forth in the
Consumer Relief Requirements in Exhibit D to the Consent Judgment.

 

  b.

Principal Reduction Modification Program (“PRMP”): the PRMP program will offer
Eligible Borrowers a HAMP PRA or a Proprietary PRA modification programs, as
follows1:

 

  i. The ResCap Parties will offer a Principal Reduction Modification to all
borrowers in the Loan Portfolio who meet the PRMP Eligibility Criteria.

 

  1) For all PRMP Programs, payment relief through the reduction in principal
balance will be the first step in the waterfall.

 

  2) All borrowers shall have their 1st liens reduced to an LTV of 105% or
lower, as set forth below.

 

  ii. The PRMP Programs are fourfold:

 

  1) Underwater with Credit Degradation.

 

  a. Eligibility Criteria. The Eligibility Criteria for the Underwater with
Credit Degradation Program are the following:

 

  i. Must not be an interest Only Loan; and

 

  ii. The borrower is current and has been 30 days delinquent at least twice in
the past year or 60 days delinquent at least once in the past year; or the
borrower’s FICO score is less than 675; or the borrower’s FICO has reduced more
than 10% since origination of the loan; and

 

  iii. The loan was originated prior to January 1, 2009; and

 

  iv. The borrower’s LTV is greater than 100%.

 

  v. Borrowers for this program will not need to have underwriting based on
income.

 

1 

An existing HAMP modification shall not receive principal reduction if such
principal reduction would result in that modification losing good standing under
HAMP.

 

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  b. Offer of Relief. The ResCap Parties shall offer a loan modification to all
such Eligible Borrowers that includes:

 

  i. Payment relief through the reduction in principal balance being the first
step in the waterfall; and

 

  ii. Minimum payment reduction of at least 10%; and

 

  iii. Reduction of principal balance to no more than 100% LTV.

 

  c. Credit. Credit for this Program against the ResCap Parties obligation to
provide Consumer Relief shall be consistent with the crediting set forth in the
Consumer Relief Requirements in Exhibit D, except that the ResCap parties will
receive (1) credit for principal reduction that results in an LTV below 100% and
(2) credit will be effective 90 days after the implementation of the
modification provided that the borrower is still current at that time, or, in
the event that borrower liquidates the property prior to the expiration of the
90 days, credit shall be calculated as provided in Section 4.ii of Table 1 to
Exhibit D (Consumer Relief Requirements).

 

  2) Payment Shock Relief.

 

  a. Eligibility Criteria. The Eligibility Criteria for the Payment Shock Relief
Program are:

 

  i. The borrower is current; and

 

  ii. The loan was originated prior to January 1, 2009; and

 

  iii. The borrower’s LTV is greater than 100%; and

 

  iv. The loan is an interest only loan or other high-risk mortgage product that
will reset, resulting in a payment shock to the borrower (such borrowers shall
be deemed to be in imminent risk of default consistent with Paragraph 1.c of the
Consumer Relief Requirements).

 

  v. Borrowers for this program will not need to have underwriting based on
income.

 

  b. Offer of Relief. For all such Eligible Borrowers, the ResCap parties shall
offer a loan modification that includes:

 

  i. Reduction of principal balance to a maximum of 100% LTV;

 

  ii. Conversion to a fully amortizing fixed rate mortgage;

 

  iii. A monthly payment that is no higher than the borrower’s current payment,
achieved through reduction of principal balance.

 

  c. Credit. Credit for this Program against the ResCap Parties obligation to
provide Consumer Relief shall be consistent with the crediting set forth in the
Consumer Relief Requirements in Exhibit D, except that the ResCap Parties will
receive (1) credit for principal reduction that results in an LTV below 100% and
(2) credit will be effective 90 days after the implementation of the
modification, provided that the borrower is still current at that time, or, in
the event that borrower liquidates the property prior to the expiration of the
90 days, credit shall be calculated as provided in Section 4.ii of Table 1 to
Exhibit D (Consumer Relief Requirements).

 

  3) Principal Reduction for Delinquent Borrowers

 

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  a. Eligibility Criteria. The Eligibility Criteria for the Principal Reduction
for Delinquent Borrowers Program are:

 

  i. The borrower is at least 30 days delinquent or otherwise qualifies as being
at imminent risk of default due to the borrower’s financial situation; and

 

  ii. The borrower’s LTV is greater than 100%.

 

  b. Offer of Relief. For all such Eligible Borrowers, the ResCap Parties shall
provide a modification that includes:

 

  i. Reduction of principal to between 85% LTV and 105% LTV;

 

  ii. If the borrower is in an adjustable rate mortgage, conversion into a fully
amortizing fixed rate mortgage;

 

  iii. Reduction in monthly payment of no less than 30%; and

 

  iv. Reduction of monthly payment to no more than 31% DTI.

 

  v. Borrowers for this program will need to have underwriting based on HAMP
guidelines.

 

  c. Credit. Credit for this Program against the ResCap Parties obligation to
provide Consumer Relief shall be consistent with the crediting set forth in the
Consumer Relief Requirements in Exhibit D, except that the ResCap Parties will
receive (1) credit for principal reduction that results in an LTV below 100% and
(2) credit will be effective 90 days after the implementation of the
modification, provided that the borrower is still current at that time, or, in
the event that borrower liquidates the property prior to the expiration of the
90 days, credit shall be calculated as provided in Section 4.ii of Table 1 to
Exhibit D (Consumer Relief Requirements).

 

  4) Second Lien Reduction Program

 

  a. Eligibility Criteria. The Eligibility Criteria for the Second Lien
Reduction Program are the following:

 

  i. The borrower’s first lien is modified in accordance with Section 2 of the
Consumer Relief Requirements or

 

  ii. The borrower is 30 or more days delinquent on the second lien regardless
of whether the first lien is delinquent or has been modified; and

 

  iii. The borrower’s CLTV is greater than 115%.

 

  b. Offer of Relief. For all such Eligible Borrowers, the ResCap Parties shall
provide a second lien modification that includes:

 

  i. Reduction of the borrower’s CLTV to maximum of 115%;

 

  ii. Reduction of principal on the second lien at the top of the waterfall,
followed by rate reduction and term extension; and

 

  iii. Reduction of monthly payment consistent with the methodology used in the
2MP program.

 

  c. Credit. Credit for this Program against the ResCap Parties obligation to
provide Consumer Relief shall be consistent with the crediting set forth in
Section 2.c of the Consumer Relief Requirements in Exhibit D.

 

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  c. Borrowers eligible for both the RRRP and the PRMP will be proactively
solicited for the RRRP. In order to put Eligible Borrowers in a sustainable
mortgage, such Eligible Borrowers will be asked to provide financial information
per HAMP guidelines in order to be evaluated under the PRMP if the borrower
indicates the RRRP payment is not sustainable.

 

  d. Notwithstanding the success or failure of the RRRP and the PRMP in putting
borrowers in sustainable mortgages, the ResCap Parties shall be obligated to
satisfy the commitment set forth in Paragraph 3 above; failure to satisfy the
commitment set forth in Paragraph 3 shall result in an additional payment as set
forth in Paragraph 10 of the Consumer Relief Requirements contained in Exhibit
D.

 

  e. In the event that the implementation of the RRRP and PRMP programs results
in the RespCap Parties completing more Consumer Relief than the commitment set
forth in Paragraph 3, as credited pursuant to the Consumer Relief Requirements
and subject to the requirements set forth therein, the ResCap Parties shall
nonetheless be obligated to comply with Paragraph 6 (including continuing to
make offers to Eligible Borrowers during the solicitation period) and satisfy
any RRRP and the PRMP offers that are accepted, including continuing to provide
modifications or refinancing consistent with those programs to all borrowers
meeting the Eligibility and solicitation period Criteria as contemplated herein.

6. Borrower Solicitation Requirements. The ResCap Parties will solicit all
borrowers in the Loan Portfolio who meet the Eligibility Criteria for the RRRP
or the PRMP as of March 1, 2012 as follows:

 

  a. General Loan Modification Program Solicitation Requirements.

 

  i. Such solicitation shall commence as soon as reasonably practicable
following the entry of the Consent Judgment and solicitations shall be sent to
all Eligible Borrowers in accordance with the timeline set forth in the ResCap
work plan. Any borrower who accepts a modification offer made under the RRRP or
PRMP within 3 months from the date the solicitation commences (which shall be
the first calendar day of the month following the date written communication is
first sent pursuant to b.i or c.i below) shall receive the modification.
Further, any borrower who accepts a modification offer made under the RRRP or
PRMP within 180 days of the offer being made shall, unless the ResCap Parties
have, as of the date of the offer, exceeded their obligations under Paragraph 3
by $50,000,000, receive the modification. The minimum solicitation period for a
modification offer made under the RRRP or PRMP shall be 3 months from the date
the solicitation commences (which shall be the first calendar day of the month
following the date written communication is first sent pursuant to b.i or c.i
below). Upon commencement of this solicitation of any individual Eligible
Borrower, ResCap Parties shall complete all of the solicitation requirements
described below until the earlier of the following occurs: (a) exhaustion of
relevant solicitation steps (such as attempted Right Party Contact) described in
6.b or 6.c below, without success, or (b) proper acceptance or denial of an
Eligible Borrower for the RRRP and/or PRMP (the “Borrower Solicitation Period”).

 

I-6

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  ii. After the completion of the Borrower Solicitation Period the ResCap
Parties may, but shall not be required to, make further solicitations of an
Eligible Borrower in respect of the RRRP, the PRMP and other modification
programs and the obligation to defer foreclosure sales shall terminate, except
that the ResCap Parties will continue to include any loss mitigation or
modification information in notices to such borrowers as required by the
Servicing Standards.

 

  iii. The Borrower Solicitation Requirements shall not apply to solicitations
for modification programs other than RRRP or PRMP (which may be conducted
contemporaneously) or to solicitations to a particular Eligible Borrower for the
RRRP or PRMP that occur after that particular Eligible Borrower has been
previously solicited, in compliance with this agreement, through the termination
of the Borrower Solicitation Period.

 

  iv. For the avoidance of doubt, loans that are prohibited by law or government
agency insurance programs from receiving principal reduction payments are
excluded from all solicitation requirements.

 

  b. The ResCap Loan Modification Program Solicitation Requirements for
delinquent borrowers under the PRMP shall include:

 

  i. Written communication clearly describing or offering programs specific to
the Settlement Loan Modification Programs shall be mailed to each Eligible
Borrower (the “Solicitation Package”). The Solicitation Package may also
identify other options potentially available to help the borrower cure any
delinquency and retain homeownership.

 

  ii. Unless Right Party Contact is achieved in fewer calls, The ResCap Parties
shall make a minimum of 4 telephone calls over a period of at least thirty days,
at different times of the day following the mailing of the first Solicitation
Package.

 

  iii.

If no Right Party Contact, as defined in Chapter II of the MHA Handbook, is
established with the borrower 30 days after mailing of the first Solicitation
Package, the ResCap Parties shall send a second Solicitation Package and shall
make a minimum of 4 telephone calls (unless Right Party Contact is achieved in
fewer calls) over a period of at least thirty days, at different times of the
day following the mailing of the second Solicitation Package.2

 

  iv. If no Right Party Contact, is established with the borrower 30 days after
mailing of the second Solicitation Package, the ResCap Parties shall send a
third Solicitation Package and shall make a minimum of 4 telephone calls (unless
Right Party Contact is achieved in fewer calls) over a period of at least thirty
days, at different times of the day following the mailing of the third
Solicitation Package.

 

  v. Any contact with borrowers, whether by telephone, mail or otherwise, shall
(1) advise borrowers that they may be eligible for the Settlement Loan
Modification

 

2 

Solicitation Packages shall be sent to the last address of record and at least
one of the first two Solicitation Packages shall be sent via certified/express
mail or via overnight delivery service (such as UPS) with return
receipt/delivery confirmation.

 

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Programs; (2) clearly describe the Required Documentation required to be
submitted by the borrower and state what other information the servicer needs to
complete the modification analysis; and (3) provide a toll-free telephone number
through which the borrower can reach a Single Point of Contact for any follow up
questions. All contact attempts must be documented in the servicing file.

 

  vi. If Right Party Contact is established over the phone and the borrower
expresses interest in the Settlement Loan Modification Programs, the ResCap
Parties shall send one reactive package with a fifteen-day response period. If
the borrower does not respond by submitting the Required Documentation, the
ResCap Parties shall send another reactive package with a fifteen-day response
period.

 

  vii. If Right Party Contact is established and the borrower expresses an
interest in the Settlement Loan Modification Programs, the ResCap Parties must
send a written communication to the borrower via regular or electronic mail that
clearly describes the Initial Package required to be submitted by the borrower
to request a HAMP modification. The communication should: Describe the income
evidence required to be evaluated for the Settlement Loan Modification Program;
provide a financial information form substantially similar in content to the
HAMP RMA and, if necessary, a Hardship Affidavit; and include an Internal
Revenue Service (IRS) Form 4506T-EZ (or IRS Form 4506-T, if necessary).

 

  viii. The post-Right Party Contact communication should also state that during
the Settlement Loan Modification Program evaluation the home will not: (1) be
referred to foreclosure; or (2) be sold at a foreclosure sale if the foreclosure
process has already been initiated. In the communication, the servicer must
include a specific date by which the Initial Package must be returned, which
must be no less than 15 calendar days from the date of the communication.
Electronic mail for this purpose may only be sent to an email address provided
by the borrower when right party contact was made. Such email address must be
documented in the servicing file.

 

  ix. If Right Party Contact is established but the borrower does not submit an
Initial Package, the ResCap Parties must resend the Initial Package
communication. Again, the ResCap Parties must include a specific date by which
the Initial Package must be returned, which must be no less than 15 calendar
days from the date of the second communication. If the borrower does not respond
by providing an Initial Package within the required time period set forth in the
second communication, the ResCap Parties may determine the borrower to be
ineligible for the Settlement Loan Modification Program.

 

  x. If Right Party Contact is established but the borrower submits an
incomplete Initial Package within the required time period, the ResCap Parties
must comply with the notice requirements set forth in the Settlement’s Servicing
Standards. If the borrower does not respond to the notice of incomplete
information by providing a complete Initial Package within the required time
period, the ResCap Parties may determine the borrower to be ineligible for the
Settlement Loan Modification Program.

 

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  xi. ResCap Parties are not required to send an Initial Package if, as a result
of discussions with the borrower, ResCap Parties reasonably determine that the
borrower does not meet the basic eligibility criteria for the Settlement Loan
Modification Programs, or the ResCap Parties determine that the borrower’s
monthly mortgage obligation (including principal interest, taxes, insurance and
Supplemental) is substantially less than 25% of the borrower’s gross monthly
income. Such decision must be documented in the applicable servicing files.

 

  xii. In addition to meeting these solicitation requirements, ResCap Parties
shall seek input from state attorneys general and NGOs (e.g. housing counseling
agencies) regarding best practices for borrower solicitation, and shall partner
with those state attorneys general or NGO’s to establish adequate response rates
to meet ResCap Parties’ solicitation obligations.

 

  c. The ResCap Loan Modification Program Solicitation Requirements for
borrowers eligible for (1) RRRP, (2) Under Water with Credit Degradation under
PRMP or (3) Payment Shock Relief under PRMP (i.e., borrowers who are not
delinquent) shall include:

 

  i. The ResCap Parties shall issue a Solicitation Package that includes a
pre-approved modification agreements for payment reductions and/or principal
reductions which the borrower can execute without the ResCap Parties requiring
any further due diligence except in cases where the Rescap Parties are required
to assess borrowers’ financial distress due to potentially adverse credit issues
in order to determine proper accounting treatment related to Trouble Debt
Restructuring or where borrowers’ consent is required to mail pre-approved
modification agreements.

 

  ii. The Solicitation Package shall clearly describe the Settlement Loan
Modification Programs and the pre-approved modification agreement. The
solicitation may also identify other options potentially available to help the
borrower cure any delinquency and retain homeownership. Eligible Borrowers may
submit a modification package for review if they want to evaluate alternative
programs that may be available.

 

  iii.

If no Right Party Contact, as defined in Chapter II of the MHA Handbook, is
established with the borrower 30 days after mailing of the first Solicitation
Package, the ResCap Parties shall send a second Solicitation Package and shall
make a minimum of 4 telephone calls (unless Right Party Contact is achieved in
fewer calls) over a period of at least thirty days, at different times of the
day following the mailing of the second Solicitation Package.3

 

  iv. If no Right Party Contact, is established with the borrower 30 days after
mailing of the second Solicitation Package, the ResCap Parties shall send a
third Solicitation Package and shall make a minimum of 4 telephone calls (unless
Right Party Contact is achieved in fewer calls) over a period of at least thirty
days, at different times of the day following the mailing of the third
Solicitation Package.

 

3 

Solicitation Packages shall be sent to the last address of record and at least
one of the first two Solicitation Packages shall be sent via certified/express
mail or via overnight delivery service (such as UPS) with return
receipt/delivery confirmation

 

I-9

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  v. Any contact with borrowers, whether by telephone, mail or otherwise, shall
(1) advise borrowers that they may be eligible for the Settlement Loan
Modification Programs; and (2) clearly describe the Required Documentation
required to be submitted by the borrower and state what other information, if
any, the ResCap Parties need to complete the modification analysis.

 

7. Role of the Monitor

 

  a. Following entry of the Consent Judgment, the Monitor shall annually review
the ResCap Parties’ compliance with this Addendum, specifically paragraphs 3, 4,
5, and 6, to ensure compliance with the Borrower Solicitation requirements and
the commitments made in the ResCap Borrower Relief programs. It shall be the
responsibility of the Monitor to verify that the conditions set forth herein
have been satisfied, using methods consistent with Exhibit E of the Consent
Judgment (Enforcement Provisions). The Monitor and the ResCap Parties shall work
together in good faith to resolve any disagreements or discrepancies. In the
event that a dispute cannot be resolved, the ResCap Parties may petition the
Court for resolution in accordance with Section G of Exhibit E of the Consent
Judgment (Enforcement Provisions).

 

  b. If the Monitor determines that the ResCap Parties have failed to
substantially comply with the material terms set forth herein, he or she shall
issue a Notice of Non-Compliance to the ResCap Parties detailing those areas of
non-compliance. For example, if the ResCap Parties fail to conduct the Borrower
Solicitation activities set forth in the Borrower Solicitation requirements in
all material respects or fail to give offers of principal reduction or
refinancing to borrowers consistent with the terms of the programs set forth
herein such that the Monitor determines that the ResCap Parties have failed to
substantially comply with the material terms of paragraphs 3, 4, 5 and 6 of this
Addendum, the Monitor shall detail such failings in a Notice of Non- Compliance.

 

  c. Notices of Non-Compliance shall have the following consequences:

 

  i. If the Monitor issues a Notice of Non-Compliance at the end of the first
year of the Consent Judgment or the second year of the Consent Judgment
(provided no prior uncured Notice of Non-Compliance has been issued with regard
to paragraphs 3, 4, 5, and 6 of the Addendum), the ResCap Parties shall have an
opportunity to cure such non-compliance within 90 days of issuance of the
Notice.

 

  1) Following issuance of such Notice, the ResCap Parties shall submit a report
detailing the steps taken to cure the non-compliance within 120 days of the
issuance of such Notice.

 

  2)

It shall be the responsibility of the Monitor to verify that the ResCap Parties
have cured issues identified in the Notice, using methods consistent with
Exhibit E of the Consent Judgment (Enforcement Provisions). The Monitor and the
ResCap parties shall work together in good faith to resolve any disagreements or
discrepancies. In the event that

 

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  a dispute cannot be resolved, the ResCap parties may petition the Court for
resolution in accordance with Section G of Exhibit E of the Consent Judgment
(Enforcement Provisions).

 

  3) In the event that the ResCap Parties fail to cure such material
non-compliance, the Monitor may impose an assessment of up to $15 million, to be
paid in accordance with instructions from the United States Department of
Justice. In setting the size of such an assessment, the Monitor shall take
account of the effort made by the ResCap Parties to comply, the level of
non-compliance and the impact of the non-compliance on borrowers.

 

  ii. If the Monitor issues a Notice of Non-Compliance at the end of the second
year of the Consent Judgment and the ResCap Parties have not cured a prior
Notice of Non-Compliance with regard to paragraphs 3, 4, 5 and 6, the steps set
forth in subparagraph i.1-3 shall be followed except that the Monitor may impose
an assessment that in combination with the prior assessment(s), if any,
aggregates to up to $25 million. In setting the size of such an assessment, the
Monitor shall take account of the effort made by the ResCap Parties to comply,
the level of non-compliance and the impact of the non-compliance on borrowers.

 

  iii. If, at the end of the third year of the Consent Judgment, the Monitor
issues a Notice of Non-Compliance, there shall be no opportunity to cure and the
Monitor may impose an assessment of up to $25 million. In setting the size of
such an assessment, the Monitor shall take account of the effort made by the
ResCap Parties to comply, the level of non-compliance and the impact of the
non-compliance on borrowers.

 

8. Representations and Warranties

 

  a. The ResCap Parties agree that, in the event of a transformative transaction
involving the ResCap Parties, including, without limitation, a change of control
transaction, a sale of all or substantially all of their assets (or assets that
together are material to the performance of the obligations of the ResCap
Parties under the Consent Judgment) or a reorganization or similar transaction
(including in connection with any legal or regulatory proceeding) (a
“Transformative Transaction”), the ResCap Parties will ensure the continued
performance of their obligations under the Consent Judgment, including requiring
any successor or purchaser of substantially all the assets (or assets that
together are material to the performance of the obligations of the ResCap
Parties under the Consent Judgment) of a ResCap Party to honor and perform the
obligations (in the case of a purchase or other acquisition of assets, to honor
and perform the obligations with respect to those assets) under the Consent
Judgment.

 

  b. AFI has entered into, with the United States, an Earmark and
Indemnification Agreement. The executed Earmark and Indemnification Agreement
will be accompanied by an AFI board of directors’ resolution authorizing AFI to
enter into the Earmark and Indemnification Agreement.

 

  c.

The ResCap Parties and AFI represent and agree that the ResCap Parties have
agreed with AFI that they will not enter into a Transformative Transaction
without the consent of AFI; and AFI represents and agrees that AFI will not
consent to any such

 

I-11

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  Transformative Transaction (or provide financial support in connection with
any such transaction) unless the ResCap Parties (including any successor to or
purchaser of the assets from a ResCap Party) agree to ensure the continued
performance of the obligations under the Consent Judgment, including, without
limitation, the Consumer Relief Activities (in the case of a purchase or other
acquisition of assets, to honor and perform the obligations with respect to
those assets) and the obligations under this Addendum; provided, however, that
any successor or purchaser of all or a substantial portion of the assets of the
ResCap Parties shall not be obligated to pay any of the amounts owed by the
ResCap Parties or AFI under the Consent Judgment or the Exhibits thereto.

 

9. Other Matters.

Menu Items. With respect to Table 1 “Credit Towards Settlement,” the following
modification and amendments shall apply:

 

  i. For first lien mortgage modifications with principal reduction credit will
be effective 90 days after the implementation of the modification, provided that
the borrower is still current at that time, or, in the event that borrower
liquidates the property prior to the expiration of the 90 days, credit shall be
calculated as provided in Section 4.ii of Table 1 to Exhibit D (Consumer Relief
Requirements).

 

10. State Release.

 

  a. With respect to the State Release in the Settlement Agreement, the
following paragraph is deemed to be included and applies to the ResCap Parties
and AFI:

V. Cooperation

Residential Capital LLC (“ResCap”), GMAC Mortgage, LLC (“GMACM”), Residential
Funding Company, LLC (“Residential Funding” and, together with ResCap and GMAC
Mortgage, the “ResCap Parties”),agree that in the event of a transformative
transaction involving the ResCap Parties, including, without limitation, a
change of control transaction, a sale of all or substantially all of their
assets (or assets that together are material to the performance of the
obligations of the ResCap Parties under the Consent Judgment) or a
reorganization or similar transaction (including in connection with any legal or
regulatory proceeding) (a “Transformative Transaction”), the ResCap Parties will
ensure the continued performance of their obligations under the Consent
Judgment, including requiring any successor or purchaser of substantially all
the assets (or assets that together are material to the performance of the
obligations of the ResCap Parties under the Consent Judgment) of a ResCap Party
to honor and perform the obligations (in the case of a purchase or other
acquisition of assets, to honor and perform the obligations with respect to
those assets) under the Consent Judgment; provided, however, that any successor
or purchaser of all or a substantial portion of the assets of the ResCap Parties
shall not be obligated to pay any of the amounts owed by the ResCap Parties or
AFI under the Consent Judgment or the Exhibits thereto. In addition, the ResCap
Parties have agreed with AFI that they will not enter into a Transformative
Transaction without the consent of AFI; and AFI

 

I-12

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represents and agrees that AFI will not consent to any such Transformative
Transaction (or provide financial support in connection with any such
transaction) unless the ResCap Parties (including any successor to or purchaser
of substantially all the assets from a ResCap Party) agree to ensure the
continued performance of the obligations under the Consent Judgment, including,
without limitation, the Consumer Relief Activities (in the case of a purchase or
other acquisition of assets, to honor and perform the obligations with respect
to those assets); provided, however, that any successor or purchaser of all or a
substantial portion of the assets of the ResCap Parties shall not be obligated
to pay any of the amounts owed by the ResCap Parties or AFI under the Consent
Judgment or the Exhibits thereto.

Subject to compliance by the ResCap Parties, their Successors and AFI with the
foregoing, in the event of a Transformative Transaction, the State Mortgage
Regulators agree that it is in the public’s best interest to expedite new
licenses for the Successors in a Transformative Transaction. Accordingly, State
Mortgage Regulators agree that, subject to applicable state law, they will
expeditiously process applications for change of control and/or new licenses for
any such successors of the ResCap Parties and for individual mortgage loan
originators to be employed by any such successors in order to complete a
Transformative Transaction.

Furthermore, subject to applicable state law, the State Mortgage Regulators
shall make all efforts to enable ResCap Parties to continue to operate under the
licenses active at the time of the transaction pending the completion of the
Transformative Transaction.

The ResCap Parties and Successors shall use their best efforts to comply with
all applicable requirements of licensure in each state. The State Mortgage
Regulators agree that neither the Res Cap Parties’ entry into the Settlement
Agreements nor any alleged or admitted conduct by the ResCap Parties that is
described in or forms a basis of the Settlement Agreements shall be a basis for
denying, delaying or imposing non-standard conditions upon a change of control
or new license application necessary to complete a Transformative Transaction.
The covered conduct subject to this Agreement shall not unduly prejudice ResCap
Parties and successors or otherwise limit access to licensure by the State
Mortgage Regulators.

 

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