Exhibit 10.2

LOGO [g11890g85j70.jpg]

July 31, 2009

 

Pulte Mortgage LLC

7475 S. Joliet Street

Englewood, CO 80112

Attn: Dave Bruining, CFO

Email: dave.bruining@pulte.com

Re: Transactions Terms Letter for Master Repurchase Agreement

Ladies and Gentlemen:

This Transactions Terms Letter is made and entered into, as of the date set
forth above, by and between Bank of America, N.A. (“Buyer”) and Pulte Mortgage
LLC (“Seller”). This Transactions Terms Letter supplements the Master Repurchase
Agreement (the “Agreement”) by and between Buyer and Seller. In the event there
exists any inconsistency between the Agreement and this Transactions Terms
Letter, the latter shall be controlling notwithstanding anything contained in
the Agreement to the contrary. All capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Agreement.

 

 

Effective Date:

  

July 31, 2009

Expiration Date:

  

Expiring on July 30, 2010.

Aggregate Transaction Limit:

  

$35,000,000, increasing to $70,000,000 upon the closing of the Centex
transaction, and provided no Event of Default is existing or shall occur as a
result thereof.

Financial Covenants:

  

Seller shall maintain the following financial covenants:

  

(a)    Minimum Tangible Net Worth (calculated per HUD guidelines): $52,800,000,
excluding investment held in trust of the Seller in Joliet Mortgage Reinsurance
Company.

  

(b)    Minimum Liquidity: Seller to maintain the sum of (i) unrestricted cash or
unrestricted Cash Equivalents plus (ii) the market value of its unencumbered
marketable securities plus (iii) the amount by which the aggregate Asset Value
of all Purchased Mortgage Loans at such time exceeds the aggregate Purchase
Price for all Transactions at such time, in a minimum amount equal to
$15,000,000. For purposes of determining unrestricted Cash Equivalents, the
Over/Under Account Balance and any available draws or excess collateral under
Seller’s other warehouse or repurchase facilities shall be included. By way of
example but not limitation, cash in escrow and/or impound accounts shall not be
included in this calculation.

  

(c)    Maximum ratio of Total Liabilities and Warehouse Credit (Warehouse Credit
is inclusive of outstandings on warehouse lines, repurchase facilities or other
off balance sheet financing) to Tangible Net Worth: 10:1. (excluding the Early
Purchase Program with Buyer)

 

 

 

Acknowledged:               

Pulte Mortgage LLC:             

Bank of America, N.A.:             

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

Pulte Mortgage LLC

July 31, 2009

Page 2

 

  

(d)    Net Income:  The sum of Seller’s reported net income/loss (as determined
under GAAP) for any quarter ending before June 30, 2010, the period beginning
July 1, 2009 and ending on the last day of such quarter, and for any date of
determination ending on or after June 30, 2010, the four preceding quarters
ending on such date shall maintain net income of not less than $1.00. Seller
shall be allowed once during the life of the Agreement, to cure a violation, by
receipt of a capital contribution of not less than the amount of the violation
plus $1.00.

  

(e)    Seller shall not add additional mortgage financing facilities (including
warehouse, repurchase, purchase or off-balance sheet facilities) without prior
written notification to Buyer.

  

(f)     Payment of Dividends: Seller may, without the prior written consent of
Buyer, pay dividends to its shareholders, members, partners or owners provided
that a Potential Default or an Event of Default is not existing and will not
occur as a result thereof.

Other Covenants:

  

Seller shall maintain the following other covenants:

  

(a)    To help ensure that Seller has adequate approved investors for mortgage
loans originated by Seller, Seller shall become and remain an approved client of
Bank of America Home Loans Correspondent Lending (“Correspondent Lending”) and
enter into an assignment of trade, direct trade, commitment or similar agreement
with Correspondent Lending to sell at least 40% of the Corresponding Lending
eligible mortgage loans originated by Seller (including at least 10% of the
Conventional Conforming originations) per quarter to Correspondent Lending for
the term of the Agreement. Such agreement shall also provide for a pair off fee
of 25 basis points on the difference between the required volume and actual
volume of mortgage loans sold to Correspondent Lending.

  

(b)    Delinquency Covenant. If, in any two consecutive fiscal quarters of
Seller, the delinquency rate for first-lien residential mortgage loans
originated by Seller and sold to Correspondent Lending is greater than one
hundred and fifty percent (150%) of the average delinquency rate for first-lien
residential mortgages sold by all clients of Correspondent Lending, Buyer may,
with thirty (30) days prior written notice to Seller, terminate the Agreement.

  

(c)    Loss Mitigation Covenant. Seller agrees that, if (a) the sum total of all
outstanding amounts owed by Seller to Correspondent Lending at the end of a
calendar quarter is equal to or greater than 80% of Seller’s Tangible Net Worth
or (b) with respect to fifty percent (50%) or more of the outstanding amounts,
the average number of days the outstanding amounts have been outstanding exceeds
120 days, then, in either the case of (a) or (b), Buyer may, with thirty (30)
days prior written notice to Seller, suspend Transactions under the Agreement
and Correspondent Lending may immediately cease purchasing mortgage loans from
Seller.

  

(d)    Seller shall not have any undisputed receivables aged over sixty (60)
days.

 

 

Acknowledged:               

Pulte Mortgage LLC:             

Bank of America, N.A.:             

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

Pulte Mortgage LLC

July 31, 2009

Page 3

 

Facility Fee:

  

Due annually, 35 basis points, payable in quarterly installments, with the first
installment due prior to the Effective Date. Upon early termination of the
Agreement by Seller, the entire Facility Fee will be due and owing. The fee is
payable based on Aggregate Transactions Limit only and will be prorated in the
event of increases.

Unused Facility Fees:

  

Waived

Transaction Request Deadline:

  

1:00 p.m. (Pacific time).

Deadline for Daily Receipt

Of Purchase Advices by Buyer:

  

1:00 p.m. (Pacific time).

Minimum Over/Under

Account Balance:

  

75 basis points of the combined Aggregate Transaction Limit and the Outstanding
Loan Limit set forth within Seller’s EPP Addendum.

  

Seller shall be entitled to interest on a monthly basis thereon as follows:

  

(i)     if Seller’s average outstanding Transactions are at least five (5) times
the average monthly Over/Under Account Balance, Seller shall be entitled to
interest on a monthly basis thereon at an annual rate equal to the greater of
LIBOR or 2%, plus the Conventional Conforming EPP SRP Enhancement Percent; or

  

(ii)    if Seller’s average outstanding Transactions are less than five (5)
times the average monthly Over/Under Account Balance, Seller shall be entitled
to interest on a monthly basis thereon at an annual rate equal to LIBOR. For the
purpose of this calculation, average outstanding Transactions shall include EPP
Loans under Seller’s EPP Addendum with Buyer.

Eligible Loans:

  

Each loan shall comply with Buyer’s and Correspondent Lending’s eligibility
guidelines on their respective websites, and no loan shall be more than 30 days
past its original funding date or contractually delinquent 30 days or more.
These guidelines are subject to change at Buyer’s sole discretion.

Custodian:

  

Bank of America, N.A. (fka LaSalle Bank, N.A.)

Loans to Executive Officers, Directors,

  

Owners and Guarantors:

  

Transactions for a loan to be made to an executive officer, director or owner of
Seller or any guarantor (if applicable) shall be subject to the prior approval
of Buyer and such Transaction requirements as determined in Buyer’s sole
discretion.

 

 

Acknowledged:               

Pulte Mortgage LLC:             

Bank of America, N.A.:             

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

Pulte Mortgage LLC

July 31, 2009

Page 4

 

Reporting requirements:

  

Financial Reports & Officer’s Certificate: Seller shall deliver to Buyer, within
fifteen (15) days after the end of each month, financial statements of Seller,
including statements of income and changes in shareholders’ equity (or its
equivalent) for such month and the related balance sheet as at the end of such
month, all in reasonable detail acceptable to Buyer and certified by the chief
financial officer or other authorized officer of Seller, subject, however, to
year-end audit adjustments and the absence of footnotes and schedules. Together
with such financial statements, Seller shall deliver an officer’s certificate
substantially in a form to be provided by Buyer, which shall include funding and
production volume reports for the previous month, and a report summarizing
demands by an Approved Investor or Insurer for the repurchase of a mortgage
loan(s) or indemnification.

  

Annual Reports: Seller shall deliver to Buyer, within ninety (90) days after the
end of each fiscal year of Seller, audited financial statements of Seller,
including statements of income and changes in shareholders’ equity for such
fiscal year and the related balance sheet as at the end of such fiscal year, all
in reasonable detail acceptable to Buyer and certified by the chief financial
officer of Seller stating, at a minimum, that the financial statements fairly
present the financial condition and results of operations of Seller as of the
end of, and for, such year.

  

Government Insuring Reports: Seller shall provide Buyer within thirty (30) days
after the end of each quarter, or as requested by Buyer, the following
government insuring reports (including 15 month history):

  

(a)  Loans Originated - Current Defaults and Claims Reported – United States
(from FHA Connection):

  

¡     Output option: all loans

  

¡     Performance period: current period

  

¡     All insured single family loans with a beginning amortization within  the
last two years

  

(b)  HUD Pipeline/Uninsured Query:

  

¡     Date range: use default

  

¡     Sort by: originating ID in ascending order

  

(c)   Indemnification Query:

  

¡     Date range: last five years

  

¡     Sort by: case # in descending order

  

(d)  Late Endorsement Query:

  

¡     Loan status: Active, claimed

  

¡     Date range: last two year period

  

¡     Sort by: # days closing to Endr pkg Rcvd in descending order

  

Hedging Report: Seller shall deliver to Buyer each Monday, or as requested by
Buyer, a loan and rate lock position report and hedge report (data elements to
be agreed upon).

  

If requested by Buyer, Seller shall provide to Buyer within five (5) days of
such request, in a form reasonably acceptable to Buyer, a detailed aging report
of all outstanding loans on warehouse/ purchase/ repurchase facilities, and
detail of all uninsured government loans.

 

  

Acknowledged:              

Pulte Mortgage LLC:            

Bank of America, N.A.:            

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

Pulte Mortgage LLC

July 31, 2009

Page 5

 

Reimbursement of Expenses:

  

Seller shall reimburse Buyer for certain costs and expenses as follows:

  

(a)  Early Termination: If Seller terminates the Agreement prior to the initial
Transaction, Seller shall pay Buyer for all reasonable out-of-pocket costs and
expenses incurred by Buyer in connection with negotiation and execution of the
Agreement and Transactions Terms Letter including, without limitation, legal
fees, travel expenses and all other out-of-pocket costs and expenses related to
the negotiation, approval and documentation of the Agreement. A reasonable
estimate of such costs and expenses shall be $15,000. Seller will reimburse
Buyer such costs and expenses within fifteen (15) days after receipt of an
invoice from Buyer.

  

(b)  Legal and Due Diligence: Seller shall pay Buyer for all reasonable travel
and third party expenses, estimated not to exceed $20,000, within fifteen (15)
days after the Effective Date as reimbursement for Buyer’s legal and due
diligence expenses in connection with the Agreement. Further, Seller shall
reimburse Buyer on a quarterly basis for all out-of-pocket expenses incurred by
Buyer in connection with any ongoing due diligence or monitoring of Seller.

  

(c)   Amendments: Buyer reserves the right to charge Seller a fee for any future
amendments to the Agreement, Transactions Terms Letter, EPP Addendum, guaranty,
covenant violation notices, or any other required legal document. The amendment
fee shall be waived for any future amendments or modifications requested by
Seller regarding increases to the Aggregate Transaction Limit.

 

Fees:

 

Wire Transfer Fee:

    

$15.00 per Transaction

 

Non compliant Fee:

    

$25.00

 

Wet Deficiency Fee:

    

$10.00 per day

 

Other Fees:

    

As set forth within Schedule 1 hereto

 

Buyer’s Guidelines,

  

Policies and Procedures:

  

The terms and conditions of this Transactions Terms Letter and the Agreement
shall be subject to Buyer’s guidelines, policies and procedures, as may be
changed from time to time, as permitted under the Agreement. Buyer may
communicate changes to its guidelines, policies and procedures to Seller via
Buyer’s website, email or in writing.

Guarantors:

  

None.

  

(Signature page follows)

 

  

Acknowledged:              

Pulte Mortgage LLC:            

Bank of America, N.A.:            

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

Pulte Mortgage LLC

July 31, 2009

Page 6

 

Please acknowledge your agreement to the terms and conditions of this
Transactions Terms Letter by signing in the appropriate space below and
returning a copy of the same to the undersigned. Facsimile signatures shall be
deemed valid and binding to the same extent as the original. Buyer shall have no
obligation to honor the terms and conditions of this Transactions Terms Letter
if Seller fails to fully execute and return this document to Buyer within thirty
(30) days after the date of issuance.

 

Sincerely,

   

Agreed to and Accepted by:

  Bank of America, N.A.     Pulte Mortgage LLC  

By:

 

/s/ Jeffrey Martin

     

By:

 

/s/ David M. Bruining

 

Name:

 

Jeffrey Martin

     

Name:

 

David M. Bruining

 

Title:

 

AVP

     

Title:

 

SVP

 

 

  

Acknowledged:              

Pulte Mortgage LLC:            

Bank of America, N.A.:            

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

 

SCHEDULE 1

(Eligible Mortgage Loans)

     

 

Type

Sublimit

 

  

 

Margin over 30

day LIBOR (B)

 

  

 

Type Purchase Price
Percentage (A)

 

  

 

Maximum

Dwell Time

 

  

 

Transaction

Requirements

 

           

Type A:

Conventional Conforming Mortgage

Loans (Agency eligible 1st mortgages

with Full/Alt doc types only)

 

  

100%

 

  

2.25

 

  

97

 

  

45 days

 

  

None

 

       

Type B:

Government Mortgage Loans (1st

mortgages only)

 

  

100%

 

  

2.25

 

  

97

 

  

45 days

 

  

None

 

           

Type B-1:

Bond Loans (1st mortgages only)

 

  

20%

 

  

2.25

 

  

97

 

  

45 days

 

  

None

 

       

Type C:

Jumbo Mortgage Loans

(1st mortgages only, maximum loan

amounts to $1,000,000)

 

  

10%

 

  

2.25

 

  

95

 

  

45 days

 

  

None

 

           

Noncompliant Mortgage Loans

 

  

7%

 

  

2.00 over the

initial margin

 

  

See schedule 2

 

  

Additional 30

days

 

             Wet Mortgage Loans   

75%

 

  

Non-compliant or

default spreads,

as applicable,

over the initial

margin

 

  

1% less than the

corresponding Type

Purchase Price

Percentage

 

  

7 business

days

 

    

(A) The Purchase Price shall be calculated and equal to multiplying the unpaid
principal balance times the lesser of (i) the Type Purchase Price Percentage
times the lesser of par, takeout price or current market price or; (ii) 98% of
the takeout price or current market price or fair market value.

(B) For the purpose of calculating the Margin over 30 day LIBOR, “LIBOR” shall
mean the greater of (i) the daily rate per annum for one-month U.S. dollar
denominated deposits as offered to prime banks in the London interbank market or
(ii) 2%, as applicable.

 

—  

All Transactions are to the closing table.

—  

Delegated underwriting status does not satisfy the Transaction Requirements
contained herein.

—  

Transaction Requirement Definitions and Doc Type Definitions are set forth on
Buyer’s website.

—  

All loan amounts, FICO scores, LTV/CLTV, and document types shall meet
Correspondent Lending guidelines.

SCHEDULE 2

Noncompliant Mortgage Loans (Applicable to dry Transactions only)

 

  Days over Maximum Dwell    

Time

  

    Reduction in Value of    

Purchased Asset

1 to 15 Days

   20

16 to 30 Days

   30

Investor Rejects

   25

 

  

Acknowledged:              

Pulte Mortgage LLC:            

Bank of America, N.A.: