FINANCIAL AGENCY AGREEMENT

for a

HOMEOWNERSHIP PRESERVATION PROGRAM

under the

EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

This Financial Agency Agreement (FAA) is entered into as of February 18,2009 (Effective

Date), by and between the u.s. Department ofthe Treasury (Treasury), and Fannie Mae

(Financial Agent).

Recitals

To implement the Emergency Economic Stabilization Act of2008 (Act), the Treasury may

designate Financial Institutions as financial agents ofthe United States to provide all such

reasonable duties related to the Act as may be required.

Pursuant to the Act, the Treasury is establishing a Homeownership Preservation Program

(Program) encompassing loan modifications, foreclosure prevention, loss mitigation, and other

services, and has determined that it is in the interests ofthe United States to designate a financial

agent to provide for such services.

The Financial Agent desires to serve as a financial agent ofthe United States under the terms and

conditions contained herein.

Accordingly, in consideration ofthe representations, warranties, and mutual agreements set forth

herein and for other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the Treasury and the Financial Agent agree as follows.

1. Designation and authorization

Pursuant to the authority ofthe Secretary ofthe Treasury under the Act, the Treasury hereby

designates and authorizes the Financial Agent to act as a financial agent ofthe United States

under the terms and conditions ofthis FAA to perform certain services as more fully described in

Exhibits A and C.

2. Tenn

A. The initial term ofthis FAA is for 5 years from the Effective Date and shall expire on

February 17, 2014, unless terminated earlier by the Treasury pursuant to the provisions hereof.

B. The Treasury shall have the right and option to extend the term ofthis FAA beyond the

initial expiration date for a total of 5 consecutive I-year extensions. The Treasury may exercise

any such extension option by giving written notice to the Financial Agent at least 60 calendar

days prior to the end ofthe then current term. In the event any such extension option is

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exercised by the Treasury, this FAA shall continue in full force and effect for the tenn ofthe

extension.

c. The Financial Agent acknowledges that the services provided under this FAA are vital to the

United States and must continue without interruption during any transition period ifthe Treasury

decides to use a different entity to perfonn such services in the future, ifthe Treasury decides to

perform such services itself, or iftennination ofthe FAA requires an orderly shutdown of

services. To provide for such a transition, the Treasury shall have the right to extend the tenn of

this FAA beyond any expiration date for a period not to exceed I year. The Treasury may

exercise such option by giving written notice ofsuch extension to the Financial Agent prior to

the end ofthe then current tenn. The Treasury will use reasonable efforts to provide such

written notice at least 30 calendar days prior to the end ofthe then current tenn. The Treasury

may reduce the number or extent ofservices to be provided by the Financial Agent during any

such transition period. The Treasury agrees that it will work diligently to transfer or shutdown

the services performed hereunder as soon as reasonably possible.

D. The Financial Agent agrees to cooperate with the Treasury and/or any successor service

providers or financial agents and to provide such services as are necessary to ensure an effective

and orderly transfer or shutdown ofservices, functions, records, and data during the transition

period.

E. Ifthis FAA is tenninated before the end ofthe tenn, the Financial Agent will only be

compensated for services perfonned through the effective date oftennination.

3. Services to be provided by Financial Agent

A. The Financial Agent shall perfonn the services required under this FAA, as more fully

described in Exhibits A and C, in accordance with the practices, high professional standards of

care, and degree of attention used in a well-managed operation, and no less than that which the

Financial Agent exercises for itself under similar circumstances. The Financial Agent shall use

qualified individuals with suitable training, education, experience and skills to perfonn the

services.

B. Unless specifically authorized otherwise by the Treasury in writing, the Financial Agent shall

ensure that all employees ofthe Financial Agent and its contractors providing services under this

FAA are United States citizens or lawful pennanent residents perfonning their work in the

United States, and that the operation and maintenance of all systems and databases used in

providing services under this FAA are in the United States.

C. The Treasury may, in its sole discretion, modify, add to, or reduce the specific services

required under the general scope ofthis FAA by providing written notice to the Financial Agent.

If any such modification, addition or reduction causes an increase or decrease in the cost of, or

the time required for, perfonnance of any service required by this FAA, the Treasury and the

Financial Agent will negotiate an equitable adjustment in the compensation for the service or

other tenns of perfonnance.

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D. The Treasury may periodically issue instructions through bulletins, letters, or other

communications, consistent with this FAA, which will further describe or clarify the scope ofthe

duties and services ofthe Financial Agent under this FAA. To the extent that any such

instructions are inconsistent with the terms ofthis FAA or would constitute a material change in

the terms or scope ofservices under this FAA, the terms ofthis FAA shall govern.

E. The Financial Agent shall keep the Treasury informed of changes in technology and business

methods that might allow the Financial Agent to perform its services under this FAA in a more

efficient or cost effective manner.

F. Consistent with Section 3B, the Treasury may authorize the Financial Agent to engage noncitizens working outside the United States to perform certain functions, provided such functions

represent routine practices used to support other Financial Agent activities similar to those under

this FAA.

4. Compensation

A. The Treasury shall compensate the Financial Agent for services in accordance with Exhibit

B, as amended from time to time.

B. The Treasury does not guarantee any set quantity oftransactions, minimum volume of assets

or business, or related level of compensation to the Financial Agent and shall not adjust

compensation on the basis that volumes or quantities did not meet the Financial Agent's

expectations.

C. The Financial Agent shall maintain complete and accurate records of and supporting

documentation for the amounts billable to the Treasury, and payments made by the Treasury.

The Financial Agent shall follow generally accepted accounting principles when recording or

reporting any such administrative accounting ofthe services provided under this FAA. The

Financial Agent agrees to provide the Treasury with documentation and other information with

respect to any amounts billed to the Treasury as may be reasonably requested by the Treasury.

D. The Treasury may deduct from any amount to be paid to the Financial Agent any amount

that the Financial Agent is obligated to reimburse or pay to the Treasury.

E. Notwithstanding any other provision in this FAA, all compensation and funding shall be

subject to the availability offunds. Notwithstanding any other provision ofthis FAA, the

Financial Agent shall not enter into any agreements, commitments, or otherwise obligate the

Treasury to provide Program funds to a servicer, borrower, or investor until the Financial Agent

has received written direction from the Treasury to do so.

5. Financial Agent's fiduciary duty

The Financial Agent acknowledges and agrees that it owes a fiduciary duty ofloyalty and fair

dealing to the United States when acting as a financial agent ofthe United States. The Financial

Agent agrees to act at all times in the best interests ofthe United States when carrying out its

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responsibilities under this FAA and in all matters connected with this agency relationship. The

Financial Agent acknowledges and agrees that its fiduciary duties under this FAA include, but

are not limited to, the following:

- to perform its obligations with care, competence, and diligence;

- to construe the terms ofthis FAA and any related instructions from the Treasury in a

reasonable manner to serve the purposes and interests ofthe United States;

- to use any nonpublic information or assets ofthe United States received or developed in

connection with this FAA solely for the purposes offulfilling its duties to the Treasury

and not for its own commercial purposes or for those of a third party;

- to comply with 31 CFR Part 31, as may be amended from time to time, and with all

conflict of interest, non-disclosure, and information barrier obligations and restrictions,

and all conflict of interest mitigation measures, fully and in good faith, as set forth in the

FAA; and

- to act only within the scope ofits actual authority and to comply with all lawful

instructions or directions received from the Treasury.

6. Nonpnblic infonnation

A. The Financial Agent shall take appropriate measures to ensure the confidentiality of

nonpublic information and to prevent its inappropriate use, and shall document these measures in

sufficient detail to demonstrate compliance. Nonpublic information shall include any

information that the Treasury provides to the Financial Agent pursuant to this FAA, or that the

Financial Agent obtains or develops pursuant to this FAA, until the Treasury determines the

information is otherwise in writing, or until the information becomes part ofthe body of public

information from a source other than the Financial Agent. Nonpublic information includes, but

is not limited to, information about the Treasury's business, economic, and policy plans,

financial and asset information, trade secrets, information subject to the Privacy Act, personally

identifiable information (PH) , and sensitive but unclassified (SBU) information.

B. SBU information is defined as any information that the loss, misuse, or unauthorized access

to or modification of could adversely affect the national interest or the conduct of Federal

programs, or the privacy ofindividuals that they are entitled to under the Privacy Act. In

addition, this includes trade secret or other information protected by the Trade Secrets Act. This

definition may include other information designated by the Treasury or as defined by other

Federal Government sources not mentioned above.

C. PH means any information about an individual, including, but not limited to, education,

financial transactions, medical history, and criminal or employment history and information

which can be used to distinguish or trace an individual's identity, such as their name, social

security number, date and place of birth, mother's maiden name, biometric records, etc.,

including any other personal information which is linked or linkable to an individual.

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D. The Financial Agent shall use such nonpublic infonnation solely for the purposes offulfilling

its duties under this FAA and not for its own commercial purposes or for those of a third party.

The Financial Agent may disclose such nonpublic infonnation only to those employees ofthe

Treasury or the Financial Agent or its contractors, who have a legitimate need to know the

infonnation to assist in the proper perfonnance ofservices required by this FAA, consistent with

31 CFR Part 31 and with the conflict of interest mitigation and infonnation barrier measures

identified in Exhibit F. The Financial Agent shall require any contractor that provides services

under this FAA to agree in writing to confidentiality obligations substantially the same as those

in this FAA.

E. The measures required by this Section to protect nonpublic infonnation shall include, but are

not limited to, (i) security measures to prevent unauthorized access to facilities and storage

containers where nonpublic infonnation is stored, (ii) security measures to detect and prevent

unauthorized access to computer equipment and data storage devices that store or transmit

nonpublic infonnation, in accordance with Section 9, (iii) periodic training to ensure that persons

receiving nonpublic infonnation know their obligations to maintain its confidentiality and to use

it solely for purposes contemplated by this FAA, and (iv) programs to ensure compliance with

Federal securities laws, including laws relating to insider trading.

F. The Treasury may periodically issue other policy statements or guidance to clarify the

Financial Agent's obligations regarding nonpublic infonnation. Ifthe Financial Agent has any

questions on the designation or proper handling of nonpublic information, it shall immediately

seek clarification from the Treasury whose decision shall be binding upon the Financial Agent.

G. The Financial Agent's agreement with respect to nonpublic infonnation is a continuing one

that shall survive the tennination or expiration ofthis FAA. However, the Financial Agent shall

not be required to protect nonpublic information that becomes part ofthe body of public

infonnation from a source other than the Financial Agent.

H. The Financial Agent shall strictly enforce the terms of any non-disclosure agreements it has

with its employees and contractors regarding services provided under this FAA. In addition, the

Financial Agent shall ensure that each employee ofthe Financial Agent and all contractor

personnel to whom nonpublic infonnation is or may be disclosed, shall review and sign a NonDisclosure Agreement containing substantially the provisions and obligations in Exhibit E.

1. Notwithstanding the requirements ofthis Section, the Financial Agent may disclose nonpublic

infonnation ifrequired pursuant to a lawful court order or valid subpoena after giving prior

notice to the Treasury, or may disclose nonpublic infonnation to and ifrequired by its Federal

regulator.

7. Breaches ofnonpnblic information

A. The Financial Agent shall immediately notify the Treasury of any actual or suspected

breaches of nonpublic infonnation that may occur while handling Treasury data, whether paper

or electronic, including unauthorized access, use, disclosure, or loss of nonpublic infonnation.

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Such immediate notification should occur whether before or after regular business hours or on a

weekend or holiday, and should not be delayed as the Financial Agent researches or confirms the

particular details on an incident or suspected incident.

B. In response to a reported breach of nonpublic information, the Treasury may request the

Financial Agent to conduct an investigation and report detailed findings as to the cause and

impact ofthe breach as well as the remediation taken. As determined by the Treasury after

reviewing any investigation conducted by the Financial Agent, the Financial Agent may be liable

and may be required to reimburse the Federal Government or any affected individual for any

costs, expenses, or damages which result from the fraud, theft, willful misuse or negligence of

the Financial Agent, its contractors, Financial Agent employees, or contractor personnel with

respect to the handling and maintenance of nonpublic information.

c. The Financial Agent must ensure that all of its employees and contractor personnel impacted

by this Section receive the proper education and guidance.

8. Privacy Act

The Treasury may determine that, in connection with the services provided under this FAA, the

Financial Agent has obtained or developed a system ofrecords as defined under the Privacy Act

of 1974, 5 U.S.C. § 552a. For purposes ofthe Privacy Act, when a Government agency

delegates the development, operation or maintenance of a system ofrecords on individuals to

accomplish an agency function, the person that operates the system is bound by the Privacy Act

as ifsuch person were an employee ofthe agency. Violations ofthe Privacy Act may involve

the imposition of criminal penalties. Ifthe Treasury makes such a determination, it shall so

notify the Financial Agent. After receiving such notice, the Financial Agent shall promptly

provide training to all of its employees and contractor personnel with access to such system of

records on the duties and responsibilities imposed on them by the Privacy Act and by applicable

regulations and guidance, including the potential penalties for wrongful disclosure.

9. Infonnation technology security

A. The Financial Agent shall develop, maintain, enforce, and at least annually review for

effectiveness, information technology security measures designed to ensure the (i) availability,

(ii) access controls, and (iii) integrity of any systems, databases, or data stores containing or

processing nonpublic information.

B. The availability measures shall be designed to ensure such systems, databases, or data stores

are available for operation and use to support the services required under this FAA. The access

control measures shall be designed to ensure such systems, databases, or data stores are

protected against unauthorized access and use. The integrity measures shall be designed to

ensure that systems processes and storage and retrieval of nonpublic information in databases or

data stores, are complete, accurate, and protected against unauthorized modification.

C. Within 90 days ofthe Effective Date ofthis FAA, and on June I of each year thereafter that

this FAA is in effect, the Financial Agent shall submit to the Treasury for review and approval

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the specific infonnation technology security measures described above. In addition, the internal

control program, required by Section 16, must include review ofthe infonnation technology

control objectives and control techniques, and testing of operational effectiveness ofinfonnation

technology security measures.

D. For any database created by the Financial Agent under this FAA that may contain loan level

data on credit characteristics, modifications, and perfonnance, the Financial Agent shall ensure

that access is limited to the need to know pursuant to the FAA, that any access granted shall be at

the minimum levels required in each instance, and that appropriate controls are in place designed

to ensure that no one will access or use the data in such database, or any derivatives thereof, for

any purpose other than perfonning services under the FAA, with such impennissible purposes

including without limitation for conducting market research, credit risk analysis, securities

performance analysis, or underwriting for the Financial Agent's activities outside this FAA.

10. Personnel security

A. The Treasury will rely on the Financial Agent's personnel security screening standards. The

Financial Agent shall ensure that all of its employees and contractor personnel who have access

to nonpublic infonnation have appropriate personnel security background checks.

B. The Financial Agent shall provide the Treasury with a listing of all such background

investigative requirements (e.g., FBI fingerprint check, police check, credit check, verification of

lawful pennanent resident status, etc.). The Treasury may request additional personnel security

checks.

C. Consistent with Section 3B, all Financial Agent employees and contractor personnel who

have access to nonpublic infonnation must be U.S. citizens or lawful pennanent residents

perfonning their work in the continental United States.

11. Conflicts ofinterest mitigation and information barriers

A. Consistent with Exhibit F, the Financial Agent and its contractors shall adequately segregate

personnel or employ suitably robust internal controls designed to ensure that the Financial

Agent's personnel and those of its contractors assigned to provide services under this FAA do

not divulge infonnation regarding the Program to other personnel involved with the Financial

Agent's or its contractor's other activities that may conflict with duties owed to the Treasury.

No nonpublic infonnation related to the management ofthe Program shall be revealed to such

other personnel, except as required by law, or as required for internal senior management or

legal purposes consistent with the Financial Agent's duties owed to the Treasury.

B. As part ofits obligation to comply with the conflict ofinterest requirements ofthis FAA, the

Financial Agent shall implement the conflict of interest mitigation and infonnation barrier

measures set forth in Exhibit F throughout the tenn ofthis FAA.

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12. Employee codes of conduct and ethics

The Financial Agent must establish policies and procedures reasonably designed to assist all

individuals perfonning services under this FAA to comply with applicable laws and regulations,

and to comply with requirements for the disclosure and the avoidance, mitigation, or

neutralization of any actual or potential personal conflicts ofinterest, consistent with the

provisions of Exhibit F. The Financial Agent must have in place policies and procedures

establishing a Code of Conduct and a Code of Ethics.

13. Representations and warranties

The Financial Agent represents and warrants to the Treasury the following, the truth and

accuracy ofwhich are a continuing condition ofthe Financial Agent's responsibilities to the

Treasury:

A. The Financial Agent is an institution established and regulated under the laws ofthe

United States or any State, territory, or possession ofthe United States and having

significant operations in the United States.

B. The Financial Agent has full corporate power and authority to enter into, execute, and

deliver this FAA and to perfonn its obligations hereunder.

C. The Financial Agent has obtained or made all governmental approvals or registrations

required under law to authorize the perfonnance ofits obligations under this FAA, it

being understood that the Treasury hereby consents to the Financial Agent entering into

this FAA in accordance with the requirements ofthe Senior Preferred Stock Purchase

Agreement dated September 26, 2008, between the Treasury and the Financial Agent.

The Financial Agent is not aware of any legal or financial impediments to perfonning its

obligations under this FAA that it has not disclosed in writing to the Treasury.

D. The Financial Agent is not delinquent on any Federal tax obligation or any other debt

owed to the United States or collected by the United States for the benefit of others.

E. The Financial Agent is not on any Federal excluded parties, debannents, or suspension

lists.

F. The Financial Agent has or shall promptly obtain all required licenses, bonding, facilities,

equipment and trained personnel to perform its obligations under this FAA.

G. The Financial Agent owns or is licensed to use, or shall promptly obtain such ownership

or license to use, software programs and data processing hardware that are necessary for

it to perfonn its obligations under this FAA, and to the best ofits knowledge such

software programs and data processing hardware do not infringe upon or constitute an

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infringement on or misappropriation of any valid United States patent, copyright,

trademark, trade secret or other proprietary rights of any third party.

H. The Financial Agent agrees to comply with regnlations on conflicts of interest and other

matters at 31 CFR Part 31, as may be amended from time to time, as well as more

stringent provisions that may be imposed by this FAA. In addition, the Financial Agent

covenants to disclose all actual or potential organizational conflicts of interest, including

prompt disclosure of any conflicts with the interests of any contractors as soon as they

come to the Financial Agent's attention, and to avoid, mitigate, or neutralize to the extent

feasible and to the Treasury's satisfaction any personal or organizational conflicts of

interest that may be identified by the Treasury or the Financial Agent, consistent with the

conflict mitigation measures set forth in Exhibit F.

1. If doing other business with the Treasury or another Federal agency, the Financial Agent

is not in any kind of probationary status, and is addressing and resolving any identified

deficiencies in performance.

1. The Financial Agent covenants to disclose to the Special Inspector General created under

the Act, or the Treasury Office ofthe Inspector General, any credible evidence, in

connection with the designation, services, or closeout ofthis FAA, that a management

official, employee, or contractor ofthe Financial Agent has committed (a) a violation of

Federal criminal law involving fraud, conflict ofinterest, bribery, or gratuity violations

found in Title 18 ofthe United States Code, or (b) a violation ofthe civil False Claims

Act (31 U.S.C. §§ 3729-3733).

K. The Financial Agent covenants to disclose any other facts or information that the

Treasury should reasonably expect to know about the Financial Agent and its contractors

to help protect the reputational interests ofthe Treasury and the Financial Agent in

managing the Program.

The Financial Agent shall sign an annual certification, and deliver it to the Treasury on June I of

each year this FAA is in effect, in the form set forth in Exhibit D.

14. Use of contractors

A. Except as provided in Section 15, the Financial Agent shall use only its own employees to

perform services under this FAA, unless the Financial Agent obtains the prior written consent of

the Treasury to use contractors to perform such services. The Treasury may approve or reject

any contractor in its sole discretion. The Treasury shall have the right to impose requirements

for any such contractor including, without limitation, requirements relating to the location ofthe

contractor's offices, the citizenship ofthe contractor's employees, and the contractor's physical

and data security systems.

B. The Financial Agent must execute any agreement with a contractor in its own name and not

on behalf ofthe United States or the Treasury, and any such contractor does not become a

subcontractor, agent, or subagent ofthe Treasury. The Treasury shall not be deemed a party to

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any arrangement or agreement the Financial Agent may enter into with another entity to perform

any services under this FAA. The Treasury will not be liable for any payment to any entity other

than the Financial Agent.

c. The Financial Agent is responsible for the supervision and management of any contractor

that assists in the performance ofservices under this FAA. The Financial Agent shall remove

and replace any contractor that fails to perform. The Financial Agent shall ensure that all of its

contractors comply with the terms and provisions ofthis FAA. The Financial Agent shall be

responsible for the acts or omissions ofits contractors as ifthe acts or omissions were by the

Financial Agent.

15. Small Business Contractors, Including Minority- or Women-Owned Contractors

The Financial Agent agrees to engage one or more small businesses as contractors, including

minority- or women-owned businesses, to provide a portion ofthe services described in

Exhibits A and C. Such contractors shall serve as the direct providers ofrequired services, and

not as ancillary or secondary support providers to another entity directly responsible for the

services. The Treasury reserves the right to approve or reject the contractors in its sole

discretion.

16. Internal control program

The Financial Agent shall develop, enforce, and at least annually review for effectiveness, an

internal control program designed to ensure effective delivery ofservices under this FAA and

compliance with Program Guidelines. The internal control program must include documentation

ofthe control objectives for major Program activities, the associated control techniques, and

mechanisms for testing and validating the controls.

17. Reviews and audits

The Treasury, the Treasury Inspector General, the Special Inspector General created under the

Act, the Government Accountability Office, and other entities as authorized by the Treasury

shall have the right during normal business hours to conduct announced and unannounced onsite

and offsite physical, personnel and information technology testing, security reviews, and audits

ofthe Financial Agent, and to examine all books and records, related to the services provided

and compensation received under this FAA. The Financial Agent shall be responsible for

implementing corrective actions associated with such testing, reviews, or audits as directed by

the Treasury.

The Financial Agent shall provide the Treasury with access to all internal control reviews that

relate to services under this FAA performed by the Federal Housing Finance Agency (FHFA)

and the Financial Agent's independent auditing firm.

18. Intellectual property rights

A. For purposes ofthis Section, the following definitions apply:

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"Business Methods" means any ideas, concepts, designs, practices, and business methods

created by the Financial Agent or its contractors, jointly or independently, expressly for the

purpose of providing the services under this FAA.

"Data" means any recorded information, regardless ofform or the media on which it may

be recorded, regarding any ofthe services described in this FAA.

"Federal Government" means any Federal Government department, agency, bureau,

corporation or instrumentality, or any Federal Reserve Bank.

"Unlimited Rights" means non-exclusive perpetual rights to, without limitation, use,

copy, maintain, modify, enhance, disclose, reproduce, prepare derivative works, and distribute,

in any manner and for any purpose and to permit others to do so.

B. The Treasury shall have Unlimited Rights to Business Methods and may use them for any

purpose within the Treasury's authority.

c. Except as otherwise provided herein or prohibited by law, the Treasury shall have Unlimited

Rights to all data produced or developed, or obtained without restriction, by the Financial Agent

or a contractor ofthe Financial Agent for the purpose of providing services under this FAA. If

requested, such data shall be made available to the Treasury in industry standard useable format.

D. In accordance with 28 U.S.C. § 1498, the Treasury hereby authorizes and consents to all use,

manufacture, and production of any invention, product or work described in and covered by a

United States patent or copyright by the Financial Agent or a contractor ofthe Financial Agent in

the performance ofthis FAA.

19. Liability of Financial Agent

A. If any act or omission by the Financial Agent or a contractor ofthe Financial Agent results in

a delay in processing or transferring funds to the Treasury, or in delivering transaction

information that prevents the Treasury from making use offunds, the Financial Agent is liable

and shall reimburse the Treasury for the time value amount ofsuch loss. The Treasury may

reconsider any liability claim against the Financial Agent ifthe Treasury, in its sole discretion,

determines that any delay arose out of causes beyond the control and without the fault or

negligence ofthe Financial Agent.

B. Except as otherwise provided in this Section, the Financial Agent will not be liable to the

Treasury for (i) any loss incurred by reason of any Program decision or action taken or omitted

in what the Financial Agent believes in good faith to be the proper performance of its duties; (ii)

any exercise of, or failure to exercise, any discretionary authority duly granted to the Financial

Agent under this FAA; (iii) errors by the Treasury or its duly designated financial agents in data

or instructions provided to the Financial Agent; (iv) fraud by, acts or omissions of, or good faith

reliance on information from, independent third-parties not under contract with the Financial

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Agent to provide required services under this FAA, such as lenders, servicers, or borrowers; (v)

occasional clerical, administrative, or document keying errors which may occur as a result of

intensive manual processes, provided that, in the Treasury's sole determination, such errors are

not due to lack of an appropriate internal control system; (vi) any action taken or omitted by its

reliance on the receipt of electronic transmissions with the proper security codes or passwords

that the Financial Agent reasonably believes to be from the Treasury or its duly designated

financial agents; and (vii) events beyond the control ofthe Financial Agent and which can not be

avoided or mitigated by the exercise of expected diligence, care, and contingency planning.

c. The Financial Agent is liable and shall reimburse the Treasury for any monetary loss or costs

which result from the fraud, theft, embezzlement, willful misconduct, bad faith, or negligence of,

or breach offiduciary duty by, the Financial Agent or a contractor ofthe Financial Agent. The

Treasury will reconsider any liability claim against the Financial Agent resulting from

negligence ifthe Treasury, in its reasonable judgment, determines the failure to exercise

reasonable care was not caused by lack of an appropriate internal control system.

D. The Financial Agent may be liable for costs, expenses, or damages associated with a breach

of nonpublic information, as set forth in Section 7.

E. Ifthe Treasury reasonably believes that the Financial Agent is in breach ofthis FAA, an

investigation ofthe Financial Agent's actions by the Treasury or another entity may be required.

If ultimately found to be in breach, the Financial Agent shall be liable for the reasonable costs

and expenses of any such investigation to the extent that such costs and expenses are reasonably

documented.

20. Notice to the Treasury

The Financial Agent shall promptly notify the Treasury if (i) the Financial Agent becomes aware

of any loss, damage, investigation, action, proceeding or claim related to its performance under

this FAA that may have a material adverse effect on the Treasury or the United States or that

may damage the public's trust in the operations ofthe Treasury, (ii) the Financial Agent breaches

any material obligation or condition ofthis FAA, or (iii) any representation or warranty made by

the Financial Agent herein ceases to be true.

21. Defaults

The following, as solely determined by the Treasury, constitute events of default by the Financial

Agent under this FAA:

A. The Financial Agent fails to perform or comply with any ofits material obligations under

this FAA.

B. The Financial Agent, its contractors, or any employee ofthe Financial Agent or any

contractor personnel commits a negligent, willful, or reckless act in connection with

services or activities under this FAA.

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c. The Financial Agent breaches a fiduciary duty to the United States with respect to its

responsibilities under this FAA.

D. Any representation or warranty made herein by the Financial Agent is or becomes

materially false, incorrect, or incomplete.

E. The Financial Agent is or becomes delinquent on any Federal tax obligation or any other

debt owed to the United States Govermnent or collected by the United States for the

benefit of others.

F. A receiver, liquidator, trustee, or other custodian is appointed for the Financial Agent,

provided that the existence or continuation of FHFA's conservatorship ofthe Financial

Agent shall not constitute an event of default.

G. The Financial Agent is in default under any other agreement between the Financial Agent

and the Treasury or any bureau ofthe Treasury.

22. Remedies for default

The Treasury may take any, all, or none ofthe following actions in the event of a default by the

Financial Agent under this FAA:

A. The Treasury may terminate this FAA and cease its performance hereunder. Ifthis FAA

is terminated, the designation and authorization ofthe Financial Agent for purposes of

providing the services under this FAA are revoked.

B. The Treasury may reduce the scope ofservices under this FAA and cease a portion of its

performance hereunder. Ifthe scope ofthis FAA is reduced, the authorization ofthe

Financial Agent for purposes of providing the discontinued services under this FAA is

revoked.

C. The Treasury may revoke the Financial Agent's designation as a financial agent for the

United States, encompassing this FAA and any other financial agency agreement with the

Treasury, which shall be deemed terminated as ofthe effective date ofsuch revocation.

D. The Treasury may declare any other agreement between the Financial Agent and the

Treasury to be in default.

E. The Treasury in its sole discretion may put a Financial Agent on probation for failing to

perform satisfactorily a service (or services) delineated in this FAA. Probation means

that the Treasury will withhold some or all ofthe Financial Agent's compensation until in

the Treasury's determination the Financial Agent has cured the non-performance issues.

The Treasury reserves the right to consider other measures in addition to withholding the

compensation ifthe Financial Agent is put on probation, including but not limited to,

preclusion from additional work under the existing agreement and ineligibility to be

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designated for other work under a new agreement. The payment of compensation may

also be adjusted consistent with Section 19 (Liability of Financial Agent.)

F. The Treasury may consider information or history regarding any default hereunder when

making any decisions regarding future use ofthe Financial Agent for performance of

financial agent services.

G. The Treasury may take any other action available at law or in equity.

23. Tennination in the interest ofthe United States

Notwithstanding any other provision ofthis FAA, when the Treasury in its sole discretion

determines that such actions are necessary to protect the interests ofthe United States

Government, the Treasury may reduce the authorized scope ofwork under this FAA, terminate

this FAA, or revoke the Financial Agent's status as a financial agent ofthe United States even in

the absence of an event of default by the Financial Agent under this FAA.

24. Disputes

The Treasury and the Financial Agent agree that it is in their mutual interest to resolve disputes

by agreement. If a dispute arises under this FAA, the parties will make all reasonable efforts to

resolve the dispute by mutual agreement. If a dispute cannot be resolved informally by mutual

agreement at the lowest possible level, the dispute shall be referred up the respective chain of

command of each party in an attempt to resolve the matter. This will be done in an expeditious

manner. The Financial Agent shall continue diligent performance ofthe services required by

this FAA pending resolution of any dispute. The Treasury and the Financial Agent reserve the

right to pursue other legal or equitable rights they may have concerning any dispute. However,

the parties agree to take all reasonable steps to resolve disputes internally before commencing

legal proceedings.

25. Data and records retention

In addition to its fiduciary duties and any other obligation to retain financial and accounting

records that may be imposed by Federal or state law, the Financial Agent shall retain all data,

books, reports, documents, audit logs and records, including electronic records, related to the

performance ofservices required by this FAA. In addition, the Financial Agent shall maintain a

copy of all computer systems and application software necessary to review and analyze these

electronic records. Unless otherwise directed by the Treasury, the Financial Agent shall retain

these records for at least 7 years from the date the data or record was created. The Treasury may

also notify the Financial Agent from time to time of any additional records retention

requirements resulting from litigation in which the Treasury may have an interest, and the

Financial Agent agrees to comply with these litigation requirements.

14
26. Transfer or assignment

A. The Financial Agent may not transfer or assign its rights under this FAA without the prior

written consent ofthe Treasury, which may be granted or withheld in the sole discretion ofthe

Treasury. Any purported transfer or assignment without the prior written consent ofthe

Treasury shall be void.

B. The Financial Agent shall notify the Treasury as soon as legally possible of any proposed

merger, acquisition, or other action involving the Financial Agent or a contractor ofthe Financial

Agent that will affect the Financial Agent's ability to carry out its responsibilities under this

FAA.

C. In the event that the Financial Agent is involved in a merger or acquisition, the Treasury

may, in its sole discretion, elect to continue this FAA and to treat the Financial Agent's

successor in interest to be a successor financial agent. Ifthe Treasury elects not to continue this

FAA, the Treasury shall notify the Financial Agent ofthe termination date ofthe FAA.

27. Notices

All notices required to be given herein shall be in writing and shall be given to the following

contacts unless expressly stated otherwise herein:

To the Treasury:

Gary Grippo

Deputy Assistant Secretary

Fiscal Operations and Policy

U.S. Department ofthe Treasury

1500 Pennsylvania Ave, NW, Room 2112

Washington, DC 20220

To the Financial Agent:

Michael 1. Williams

Executive Vice President and Chief Operating Officer

Fannie Mae

3900 Wisconsin Ave, NW

Washington, DC 20016

The party giving the notice should send an e-mail to the party receiving the notice advising that

them that the notice by mail has been given.

15
28. Publicity and Disclosure

A. The Financial Agent shall not make use of any Treasury name, symbol, emblem, program

name, or product name, in any advertising, signage, promotional material, press release, Web

page, publication, or media interview, without the prior written consent ofthe Treasury.

B. The Financial Agent, its contractors, any employee ofthe Financial Agent, or any contractor

personnel shall not make statements to the media or issue press releases regarding their services

under this FAA without the prior written consent ofthe Treasury.

C. The Financial Agent acknowledges that this FAA is confidential and, consistent with

applicable law, shall not disclose this FAA to third parties.

29. Modifications

Modifications to this FAA shall be in writing and signed by the parties. Notwithstanding the

foregoing, the Treasury reserves the right to unilaterally modify the terms and provisions ofthis

FAA, through written notice to the Financial Agent, to comply with changes in legislation or

regulations, court orders, or audit findings.

30. Miscellaneous

A. This FAA shall be governed by, and interpreted in accordance with, Federal law not the law

of any state or locality. To the extent that a court looks to the laws of any state to determine or

define the Federal law, it is the intention ofthe parties to this FAA that such court shall look

only to the laws ofthe State of New York without regard to the rules of conflicts oflaws.

B. This FAA is not a Federal procurement contract and is therefore not subj ect to the provisions

ofthe Federal Property and Administrative Services Act (41 U.S.C. §§ 251-260), the Federal

Acquisition Regulations (48 CFR Chapter 1), or any other Federal procurement law.

C. Any provision ofthis FAA that is determined to be prohibited or unenforceable in any

jurisdiction shall, as to such jurisdiction, be ineffective to the extent ofsuch prohibition or

unenforceability without invalidating the remaining provisions ofthis FAA, and no such

prohibition or unenforceability in any jurisdiction shall invalidate such provision in any other

jurisdiction.

D. Failure on the part ofthe Treasury to insist upon strict compliance with any ofthe terms

hereof shall not be deemed a waiver, nor will any waiver hereunder at any time be deemed a

waiver at any other time. No waiver will be valid unless in writing and signed by an authorized

officer ofthe Treasury. No failure by the Treasury to exercise any right, remedy, or power

hereunder will operate as a waiver thereof. The rights, remedies, and powers provided herein are

cumulative and not exhaustive of any rights, remedies, and powers provided by law.

16
E. This FAA shall inure to the benefit of and be binding upon the parties to this FAA. No other

person or entity will have any right or obligation hereunder, except for successor financial agents

accepted by the Treasury.

F. This FAA may be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all ofwhich together shall constitute one

and the same instrument.

G. This FAA and the attached Exhibits constitute the entire agreement between the parties.

31. Incorporation by reference

Exhibits A-F attached to this FAA are incorporated herein by reference and given the same force

and effect as though fully set forth herein.

In witness whereof, the Treasury and the Financial Agent by their duly authorized officials

hereby execute and deliver this Financial Agent Agreement as ofthe Effective Date.

Department ofthe Treasury

Kenneth E. Carfine

Fiscal Assistant Secretary

Financial Agent

Michael 1. Williams

Executive Vice President and

Chief Operating Officer

17

Date

Date
E. This FAA shall inure to the benefit of and be binding upon the parties to this FAA. No other

person or entity will have any right or obligation hereunder, except for successor financial agents

accepted by the Treasury.

F. This FAA may be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all of which together shall constitute one

and the same instrument.

G. This FAA and the attaehed Exhibits constitute the entire agreement between the parties.

31. Incorporation by reference

Exhibits A-F attached to this FAA are incorporated herein by reference and given the same force

and effect as though fully set forth herein.

In witness whereof, the Treasury and the Financial Agent by their duly authorized officials

hereby execute and deliver this Financial Agent Agreement as ofthe Effective Date.

Department of the Treasury

eth E. Carfine

Fiscal Assistant Secreta"

Financial Agent

Michael J. Williams

Executive Vice President and

ChiefOperating Officer

17

Date
E. This FAA shall inure to the benefit of and be binding upon the parties to this FAA. No other

person or entity will have any right or obligation hereunder, except for successor financial agents

accepted by the Treasury.

F. This FAA may be executed in two or more counterparts (and by different parties on separate

counterparts), each of which shall be an original, but all of which together shall constitute one

and the same instrument.

G. This FAA and the attached Exhibits constitute the entire agreement between the parties.

31. Incorporation by reference

Exhibits A-F attached to this FAA are incorporated herein by reference and given the same force

and effect as though fully set forth herein.

In witness whereof, the Treasury and the Financial Agent by their duly authorized officials

hereby execute and deliver this Financial Agent Agreement as of the Effective Date.

Department of the Treasury

Kenneth Carfine

Fiscal Assistant Secretary

Financial Agent

18

Date

Date
Exhibit A

Exhibit B

Exhibit C

Exhibit D

Exhibit E

Exhibit F

EXHIBITS

Services and Other Terms

Budget, Funding, and Compensation

Program Guidelines

Annual Certification Format

Non-Disclosure Agreement

Conflicts of Interests Mitigation

18
EXHIBIT A

SERVICES AND OTHER TERMS

The Financial Agent will provide services to implement the Treasury's Homeownership

Preservation Program under the Emergency Economic Stabilization Act of 2008, including but

not limited to the development, implementation, and administration ofservices related to

foreclosure prevention, private label mortgage-backed securities (PLS), Housing Finance

Agency (HFA) activities, customer service call centers and other miscellaneous services.

The Financial Agent shall provide all services in accordance with the Program Guidelines,

contained in Exhibit C, as issued and updated from time to time by the Treasury.

1. Foreclosure prevention

A. To assist the Treasury with foreclosure prevention, the Financial Agent shall help design and

execute a program that implements standardized, streamlined mortgage modifications for all

types ofservicers, regardless ofthe risk holder (e.g., bank, PLS, GSE MBS, etc.), and that

lowers monthly payments for qualified borrowers.

B. The Financial Agent shall fulfill the roles of program administration and pipeline reporting,

as well as program record-keeper and paying agent. Another financial agent designated by the

Treasury will fulfill the role of program compliance agent. The Financial Agent agrees to work

in good faith and fully cooperate with the financial agent designated for compliance.

C. Acting as the program administrator and pipeline reporter, consistent with the Program

Guidelines, the Financial Agent shall prepare the requisite forms, tools, and training to facilitate

efficient execution of loan modifications by servicers, and shall provide the following services:

1. Develop and implement an overall marketing plan for the program that will target borrowers

at risk offoreclosure in 2009.

2. Develop and implement a customer service call center to respond to borrower and other

inquiries regarding the program.

3. Develop standard agreements and processes to initiate servicer participation in the program.

4. Develop and distribute standardized documentation that allows for both a one- and two-step

process for consummating the modification; create and maintain modification documents,

borrower hardship letters, and the like; and standardize document retention practices, for

rollout to servicers, to facilitate quality control and compliance efforts.

5. Develop and implement an exception management process for modifications that fall outside

of established program parameters.

1
6. Develop and implement procedures for reporting the initiation and terms ofthe modification.

7. Prepare and roll out on the program; prepare and distribute program announcement materials;

and communicate the terms ofthe program to servicers and secure agreements with servicers

for program participation.

8. Upon request, review servicer tapes of pools of loans to determine whether, and the extent to

which, a given pool is appropriate for the program.

9. Provide policy management support, including authorship of program documentation,

including FAQs that provide sufficient detail to allow servicers to execute modifications;

respond to servicer inquiries on program execution or documentation and provide routing

updates to program documentation, as appropriate; and conduct servicer outreach throughout

the life ofthe program.

10. Perform exception management; receive and review modification requests that are outside of

established parameters and, if permitted, evaluate acceptability ofmodifications for

exception processing; and approve or deny such exceptions and servicerlborrower appeals, as

appropriate and delegated by the Treasury.

11. Create a process for servicers to report data needed to monitor and report on modification

activity.

12. Prepare and distribute program reporting, including (1) collection of pipeline information

from the servicers, compilation ofsuch data, and communication to constituents to facilitate

cash flow and operational preparedness, and (2) reporting on modification performance,

cumulative cash outlays, and program costs.

13. Develop and implement practices to monitor and detect loan modification fraud.

D. Acting as the program record-keeper and paying agent, consistent with the Program

Guidelines, the Financial Agent shall maintain records of all modified loans, perform

preliminary tests of compliance, calculate subsidies and servicerlborrower compensation, pay

subsidies to the master servicer or designated party for modified loans, and pay compensation to

servicers/borrowers upon modification origination and upon reaching stated goals for reperformance. The Financial Agent shall provide the following services:

1. Collect executed contracts from servicers and review for completeness; scan and maintain

the respective agreements to evidence program participation and setup banking instructions,

as required, to facilitate payment ofsubsidies and servicerlborrower compensation; and

notify both the servicer and impacted master servicers of program participation.

2. Accept, collect, and record details of executed modifications including, original terms ofthe

modified loan, modified terms ofthe loan, data supporting the decision criteria for the

modification, the PLS name and CUSIP, the master servicer, and the servicer; review such

details to ensure the servicer is a program participant and to check compliance with

2
guidelines; and refer modifications that potentially violate such guidelines to the compliance

agent for validation and resolution.

3. Collect monthly data from servicers to maintain modified loan records, including updates to

payoff information and the LPI (last payment) date to facilitate tracking of loan performance;

and compare payment information reported by the servicers to the expected payment and

resolve differences.

4. On a monthly basis, calculate subsidies on eligible loans and deliver such payments to

respective master servicers, or designated party.

5. Calculate and remit compensation to servicers/borrowers in accordance with guidelines.

6. Provide detailed loan level reporting, as required, to the Treasury and the compliance agent.

2. Housing Finance Agencies

Services To Be Determined

3. Whole loan purchases out ofPLS trusts

Services To Be Determined

4. Miscellaneous services

A. The Financial Agent shall provide various miscellaneous services upon the Treasury's

request, including but not limited to the following services:

l. Provide consultative advice on other activities in the Treasury's Homeownership

Preservation Program.

2. Provide advice to the Treasury on managing the property disposition for real estate acquired

through foreclosure.

3. Assist in the selection ofspecial technical advisors for any ofthe activities referred to herein.

4. Provide analysis and modeling for any ofthe activities referred to herein.

3
EXHIBITB

BUDGET, FUNDING, AND COMPENSATION

1. Pass-through funding

A. The Financial Agent shall receive monthly payments to fund loan modifications and pay fees

to servicers or investors, as set forth in the Program Guidelines, in accordance with the following

categories:

• Interest rate reduction payments

• Principal reduction payments

• Principal reduction for borrowers remaining current on modified loans

• Compensation to servicers, for modifications made prior to 60-day delinquency on loans

• Up-front modification fees to servicers

• Success fees to servicers, for borrowers remaining current on modified loans

B. Such funding will be paid monthly for loan modification payments and servicer or investor

fees due that month. The Financial Agent must submit a certified funding schedule, detailing the

number ofloans and calculations for each funding line item, prior to receiving such funds.

2. Budget and compensation

A. The Treasury, in consultation with the Financial Agent, shall establish and from time to time

update a budget for the services to be provided under the Financial Agency Agreement (FAA),

based on factors including level ofresources required to perform services, standards of care to be

met, compliance policies required to administer the program, and other FAA requirements,

consistent with the Program Guidelines. The following major cost categories will be used for the

budget:

• Personnel compensation and related costs

• Travel

• Information technology

• Equipment and materials

• Contractors and other third party providers

• Other specific, direct costs

• Indirect costs

B. The Financial Agent shall be reimbursed for the costs of administering the program,

consistent with the budget. Such reimbursement will be paid monthly based on services

rendered the prior month. The Financial Agent must submit an invoice, with breakdowns under

each major cost category, prior to receiving such reimbursement.

1
3. Incentive payments

A. The Financial Agent may receive performance incentive payments, up to a maximum level of

20 percent of compensation to the Financial Agent, based on number of participating servicers,

the number of completed modifications, the re-default rate on modifications, and similar

program success and performance metrics determined by the Treasury, consistent with the

Program Guidelines.

B. Such performance payments will be paid quarterly based on results from the prior quarter.

The Financial Agent must submit, and the Treasury must review and approve, a service level

report prior to receiving such incentive payment.

2
EXHIBITC

PROGRAM GUIDELINES

To Be Issued by the Treasury

1
EXHIBITD

ANNUAL CERTIFICATION FORMAT

This certificate is delivered as provided in Section 13 ofthe Financial Agency Agreement (FAA)

effective February 18, 2009, between the U.S. Department ofthe Treasury (the Treasury) and

[Financial Institution name].

I, [Name of Authorized Official], a duly authorized official of [Financial Institution name],

certify that:

1. [Financial Institution name] is an institution established and regulated under the laws ofthe

United States or any State, territory, or possession ofthe United States and having significant

operations in the United States;

2. [Financial Institution name] is taking all reasonable steps to ensure that nonpublic

information obtained from or on behalf ofthe Treasury are properly safeguarded, in

accordance with the FAA and 31 CFR Part 31, as may be amended from time to time;

3. all charges and expenses charged to the Treasury are accurate and attributable to services

provided to the Treasury;

4. [Financial Institution name] is not on any Federal excluded parties, debarments, or

suspension lists;

5. [Financial Institution name] is not delinquent on any federal tax obligation or on any other

debt owed to the United States and that [Financial Institution name] agrees to execute IRS

Form 8821, and any other necessary Federal forms, to allow the Treasury to verify such

information;

6. [Financial Institution name] has all governmental approvals or registrations required under

law to authorize the performance ofits obligations under the FAA, and is not aware of any

legal or financial impediments to performing its obligations to the Treasury;

7. all employees of [Financial Institution name] and contractor personnel who have access to

nonpublic information are U.S. citizens or lawful permanent residents performing their work

in the continental United States, unless specifically authorized by the Treasury in writing;

8. [Financial Institution name] covenants to disclose all actual or potential organizational

conflicts ofinterest, including conflicts with the interests of any contractors performing

services under the FAA, and to avoid, mitigate, or neutralize to the extent feasible and to the

Treasury's satisfaction any personal or organizational conflicts of interest that may be

identified by the Treasury or [Financial Institution name], in accordance with the FAA and

31 CFR Part 31, as may be amended from time to time;

9. in accordance with the FAA and 31 CFR Part 31, as may be amended from time to time,

[Financial Institution name] covenants to disclose to the Treasury Inspector General or the

Special Inspector General created under the Act any credible evidence, in connection with

the designation, services, or closeout ofthis FAA, that a management official, employee, or

contractor ofthe [Financial Institution name] has committed (a) a violation of Federal

criminal law involving fraud, conflict of interest, bribery, or gratuity violations found in Title

18 ofthe United States Code, or (b) a violation ofthe civil False Claims Act (31 U.S.C. §§

3729-3733).

I
10. [Financial Institution name] covenants to disclose any other facts or information that the

Treasury should reasonably expect to know about the [Financial Institution name] and its

contractors to help protect the reputational interests ofthe Treasury and [Financial Institution

name] in managing the Program.

11. any other representations and warranties embodied by or contained in the FAA, and any

amendments thereto, either remain true and correct or have been otherwise disclosed.

In the event that any ofthe representations made herein cease to be true and correct, [Financial

Institution name] agrees to notify the Treasury immediately.

[Name of Authorized Official]

[Title of Authorized Official]

2

Date
EXHIBITE

NON-DISCLOSURE AGREEMENT

Conditional Access to Nonpublic Infonnation

I, , employee of (Organization)

hereby consent to the tenns in this Agreement in consideration of my being granted conditional

access to certain United States Government nonpublic infonnation.

I understand and agree to the following tenns and conditions:

1. By being granted conditional access to nonpublic information, the (Organization)

and the U.S. Department ofthe Treasury (Treasury) have placed special confidence and trust

in me, and I am obligated to protect this infonnation from unauthorized disclosure, according

to the tenns ofthis Agreement.

2. Nonpublic infonnation refers to any infonnation, provided to me by the Treasury or

-=-----=----=_c-(Organization) in connection with my authorized services to the Treasury, or

that I obtain or develop in providing authorized services to the Treasury, other than

infonnation designated as publicly available by the Treasury in writing or that becomes

publicly available from a source other than the Financial Agent. Nonpublic infonnation

includes but is not limited to infonnation about the Treasury's business, economic, and

policy plans, financial infonnation, trade secrets, infonnation subject to the Privacy Act,

personally identifiable infonnation (PH) , and sensitive but unclassified (SBU) infonnation.

3. PH includes, but is not limited to, infonnation pertaining to an individual's education, bank

accounts, financial transactions, medical history and other infonnation which can be used to

distinguish or trace an individual's identity, including but not limited to social security

numbers.

4. SBU infonnation is any infonnation where the loss, misuse, or unauthorized access to, or

modification of which could adversely affect the national interest or the conduct of Federal

programs, or the privacy ofindividuals that they are entitled to under the Privacy Act and

other Federal statutes.

5. I am being granted conditional access to nonpublic infonnation, contingent upon my

execution ofthis Agreement, to provide authorized services to the Treasury.

6. Except as set forth in paragraph 14 below, I shall never divulge any nonpublic infonnation

provided to me pursuant to this Agreement to any third party, unless I have been advised in

writing by the (Organization) and/or the Treasury that such party is authorized to

receive it.

1
7. I will submit to the Treasury for security review, prior to any submission for publication, any

book, article, column or other written work for general publication that is based upon any

knowledge I obtain during the course ofmy work in connection with the Treasury. I hereby

assign to the Federal Government all rights, royalties, remunerations and emoluments that

have resulted or will result or may result from any disclosure, publication, or revelation of

nonpublic information not consistent with the terms ofthis Agreement.

8. If I violate the terms and conditions ofthis Agreement, I understand that the unauthorized

disclosure of nonpublic information could compromise the security ofindividuals, the

_____ (Organization) and the Treasury.

9. If I violate the terms and conditions ofthis Agreement, such violation may result in the

cancellation of my conditional access to nonpublic information. Further, violation ofthe

terms and conditions ofthis Agreement may result in the (Organization) and/or

the United States taking administrative, civil or any other appropriate relief.

10. I understand that the willful disclosure ofinformation to which I have agreed herein not to

divulge may also constitute a criminal offense.

II. Unless I am provided a written release by the Treasury from this Agreement, or any portions

ofit, all conditions and obligations contained in this Agreement apply both during my period

of conditional access, and at which time my affiliation and/or employment with the

______ (Organization) ends.

12. Each provision ofthis Agreement is severable. If a court should find any provision ofthis

Agreement to be unenforceable, all other provisions shall remain in full force and effect.

13. I understand that the Treasury may seek any remedy available to it to enforce this

Agreement, including, but not limited to, application for a court order prohibiting disclosure

ofinformation in breach ofthis Agreement.

14. I understand that ifI am under U. S. Congressional or judicial subpoena, I may be required by

law to release information.

I make this Agreement in good faith, without mental reservation or purpose of evasion.

Signature

2

Date
EXHIBIT F

CONFLICTS OF INTEREST MITIGATION

The following explains and memorializes certain ofthe minimum conflicts ofinterest

mitigation controls the Financial Agent shall implement and monitor throughout the term

ofthe Financial Agency Agreement between the United States Department ofthe

Treasury (the "Treasury") and the Financial Agent (the "FAA"). The conflicts of interest

mitigation controls are based on the Financial Agent's role under the FAA. As more fully

described in Exhibit A and C, the Financial Agent shall act provide certain services in

connection with Treasury's Homeownership Preservation Program (the "Program")

pursuant to the Emergency Economic Stabilization Act of 2008 (the "Act"). In that role,

the Financial Agent will be responsible for, among other things, working with servicers

of pools of mortgage loans to prevent foreclosures on those loans.

Conflicts ofInterest

The following have been identified as actual or potential conflicts ofinterest associated

with the Financial Agent providing services under the FAA:

I. The Financial Agent owns a proprietary portfolio ofsecurities and loans, and

guarantees that principal and interest payments will be passed through to other

investors that own mortgage backed securities. A potential conflict exists

between the Financial Agent's interest in maximizing the performance and

minimizing the costs ofits retained and guaranteed portfolios and the Financial

Agent's responsibility to the Treasury to administer the Program uniformly for all

borrowers and investors across the country.

Examples ofthis potential conflict include the following: (a) mortgage asset

traders working on the Financial Agent's mortgage trading desk could make use

of Program information on investors, servicers, and borrowers, (b) personnel with

knowledge ofthe Financial Agent's portfolio may be more lenient in subsidizing

the portfolio's servicers and borrowers, and (c) personnel providing the Treasury

with technical input on the design and modeling for the Program could provide

self-serving advice to advantage the Financial Agent's portfolio.

2. The Financial Agent maintains business relationships with servicers from which it

purchases mortgages and upon which it is reliant to fulfill its core business and

statutory mission. Therefore, a potential conflict exists between the Financial

Agent's need to maintain beneficial relationships with servicers supplying product

and the Financial Agent's duty to the Treasury to administer the Program

uniformly and to enforce servicer compliance with Program Guidelines.

3. As the owner ofwhole loan mortgages purchased out of mortgage backed

securities it guarantees and as an investor in mortgage backed securities, the

Financial Agent may be an ultimate beneficiary ofthe interest rate or principal

reduction payments and loan modifications carried out under the Program. A

F-I
potential conflict exists between the Financial Agent's interest in benefiting from

the interest rate or principal reduction payments and mitigating foreclosures of

mortgages in its own portfolio and its duty to the Treasury to administer the

Program uniformly for all investors and to enforce compliance by all borrowers

under the Program.

4. Individuals employed by or associated with the Financial Agent may have a

financial interest in banks or investment funds that could receive or benefit from

the interest rate or principal reduction payments under the Program. Because

these individuals may have material, non-public information and may make

decisions about the execution ofthe Program, their duties could have a direct

effect on their financial interests. A potential conflict exists between their desire

to represent their own financial interests versus the interests ofthe Treasury.

Mitigation Plans

As a fiduciary to the Treasury, the Financial Agent owes a duty to look solely to the best

interests ofthe Treasury without considering the interests of other clients or its own

proprietary interests. Given actual or potential conflicts ofinterest with respect to

providing services under the FAA, the Financial Agent agrees to implement the following

mitigation plans and conflict ofinterest mitigation controls.

Conflict ofInterest #1: Financial Agent Portfolio and Mortgages Guaranteed

The possibility that the Financial Agent may provide self-serving advice on the Program

to the advantage ofthe Financial Agent's portfolio is mitigated by the following facts.

1. Treasury is receiving advice from at least one other Government Sponsored

Enterprise ("GSE") as well as from other third-party advisers.

2. Treasury is solely responsible for developing the Program Guidelines and both

GSEs must follow the Program Guidelines.

In addition to the above and the other measures set forth in the FAA and herein, the

Financial Agent shall mitigate this conflict by implementing two strategies.

1. Management ofthe Financial Agent's Portfolio. The Financial Agent's

Information Barrier Policy should prevent misuse of material non-public

information to benefit the Financial Agent's portfolio. The Policy is designed to

prevent the risk of "insider trading", i.e., securities trading on the basis of

material, non-public information. The Policy prohibits the sharing ofinside

information (including loan level information) with the Financial Agent's

mortgage asset traders (a.k.a. Fannie Mae employees authorized to trade

mortgage-related securities on behalf of Fannie Mae).

The Financial Agent will add the following specific provisions to the Policy to

further ensure its effectiveness.

F-2
a. Specifically prohibit employees who perform work on the Program

("Program Employees") from sharing inside information (including loan

information) obtained in connection with the Program with the Financial

Agent's mortgage assets traders.

b. Prohibit mortgage assets traders from working on the Program or having

any access to "non-public information", as that term is defined in 31 CFR

§31.217.

c. Physically separate mortgage assets traders from Program Employees.

d. In situations where the Policy permits a mortgage asset trader to go "over

the Information Barrier" to obtain information regarding the Program,

such mortgage asset trader will only do so with the Chief Executive

Officer's and the General Counsel's prior approval.

e. Require Program Employees to sign confidentiality agreements.

f. Require that data and technology used in connection with the Program will

be kept confidential and inaccessible to employees and contractors

(including contractor employees) who are not working on the Program.

g. Require Program Employees to have delegated authority directly from the

CEO (separate from any business line).

h. Require Program Employees to have training regarding the Policy.

2. Modifications of Mortgages Backing Mortgage Backed Securities in the Financial

Agent's Portfolio. The Financial Agent will:

a. Create a firewall between, on the one hand, Program Employees and, on

the other hand, Financial Agent employees who have and systems and

databases which have information regarding mortgage backed securities in

the Financial Agent's portfolio. The firewalls should keep Program

Employees from knowing whether the Financing Agent has an interest in a

mortgage backed security affected by a modification and, therefore,

should prevent such an interest from influencing a Program Employees

work.

b. Prohibit Program Employees from inquiring (internally or externally)

about or having access to the Financial Agent's portfolio holdings of

mortgage backed securities.

Conflict ofInterest #2: Business Relationships with Servicers

This potential conflict is mitigated by the incentives contemplated by Exhibit B and the

way the Program is structured. More specifically, Exhibit B provides that the Financial

Agent will receive incentive payments but only ifthe Financial Agent achieves specific

F-3
performance metrics agreed upon by the Financial Agent and Treasury. This structure

gives the Financial Agent an incentive to administer the Program uniformly and to

enforce servicer compliance with Program Guidelines. In addition, a different GSE will

be responsible for auditing servicer performance under the Program. Finally, Treasury

has the right under this FAA to oversee and audit the Financial Agent's performance of

its obligations under the FAA.

Conflict ofInterest #3: Interest Rate or Principal Reduction Payments

To mitigate this concern, the Financial Agent will take two steps.

1. Create the firewall and implement the prohibition described in part 2 ofthe

response to Conflict of Interest #1. As noted above, the firewall and prohibition

should keep Program Employees from knowing whether the Financing Agent has

an interest in a mortgage backed security affected by a modification and,

therefore, should prevent such an interest from influencing a Program Employee's

work.

2. Other than in the Financial Agent's capacity as an investor in a mortgage backed

security, the Financial Agent shall not receive under the Program any ofthe

payments to fund loan modifications and fees to servicers and investors set forth

in the first paragraph of Exhibit B.

Conflict ofInterest #4: Personal Conflicts ofInterest

To address this concern, the Financial Agent agrees that all management officials and key

individuals, as defined in 31 C.F.R. §31.20l, shall be subject to a code of ethics and

associated insider trading policy. In particular, these individuals shall disclose on a

quarterly basis information equivalent to that required by the United States Office of

Government Ethics Form 278 ("Form 278") to the Financial Agent's Compliance

Department for review. In addition, unless an investment is exempt from prior

notification, investments by such individuals must be pre-cleared by the Financial

Agent's Compliance Department and be subject to appropriate trading restrictions,

including being prohibited if a security is on the Financial Agent's restricted list. For

purposes ofthis exhibit, all references to management officials and key individuals shall

have the same meaning as such terms have in 31 C.F.R. § 31.201.

Conflicts ofInterest Mitigation Controls

As a requirement ofthis FAA, the Financial Agent shall maintain and enforce the

following corporate-wide policies and procedures addressing potential conflicts of

interests arising in connection with providing services under the FAA. For purposes of

this exhibit, the specific policies and procedures developed and implemented to address

potential conflicts ofinterest regarding its work under this FAA are collectively referred

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to as the "Conflicts ofInterest Mitigation Controls." The Conflicts ofInterest Mitigation

Controls shall apply to the Financial Agent and its employees, contractors, and its

contractors' employees (together, collectively, or individually as the "Financial Agent

Group") that provide the services under the FAA.

1. Restrictions Regarding Material Non-Public Information. While providing the

services under the FAA, some individuals within the Financial Agent Group may

have access to material non-public information related to the Program.

Information is "material" ifthere is a substantial likelihood that a reasonable

person would consider the information important in making an investment

decision (e.g., ifthe disclosure ofthe information would positively or negatively

affect the market price of a security or obligation). Individuals in possession of

non-public information obtained or developed pursuant to the FAA shall not act,

or cause others to act, on such information, except in performance ofthis FAA.

For purposes ofthis exhibit the phrase "non-public information" shall have the

same meaning as such term has in 31 CFR §31.217.

2. Information Barrier Policies. Program-related non-public information shall be

shared only on a need-to-know basis. The Financial Agent Group shall maintain

information barrier policies that are designed to restrict the dissemination,

availability and sharing of non-public information, including but not limited to

material non-public information.

3. Controls over IT and Paper Files Related to Non-Public Information. The

Financial Agent Group's management, performance, and accounting systems will

restrict non-public information access only to those individuals who have a need

to know such information. Paper files that include non-public information will

also be appropriately segregated so as to avoid inappropriate access by

unauthorized individuals. Any information technology systems or other record

systems (e.g., microfiche or data sticks) utilized by the Financial Agent Group in

the performance of services under this FAA that may contain non-public

information shall have appropriate administrative, technological and/or physical

security controls to help ensure that access to such information is limited to those

individuals who have a need to know such information.

4. Codes of Conduct. The Financial Agent Group providing the services under the

FAA shall maintain a code of conduct and related policies (collectively, the

"Code of Conduct") that sets out basic principles designed to guide employees in

the course oftheir business activities. The Code ofConduct should require all

employees and contractors to hold as strictly confidential client information, to

include all non-public information obtained or developed pursuant to the FAA,

and to know and comply with all company policies, procedures, laws and

regulations that are applicable to their job duties. The Code of Conduct should

require disclosure on a quarterly basis by management officials and key

individuals of information equivalent to a Form 278 and also place restrictions on

contractors', employees' and Related Person's trading on behalf of personal

accounts where conflicts may arise in connection with the performance ofthe

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services under the FAA. In particular, unless an investment is exempt from prior

notification, investments by management officials and key individuals must be

pre-cleared and be subject to certain blackout and short-term trading restrictions.

All employees and contractors performing the services under the FAA shall be

required to annually acknowledge that they are familiar with and abide by the

Code of Conduct. The Code ofConduct of Financial Agent Group members

providing the services under the FAA under the FAA shall be substantially similar

to the Financial Agent's Code ofConduct. For purposes ofthis exhibit, "Related

Person" shall mean spouses or domestic partners of Financial Agent's employees,

their minor children, anyone else living in employee's household, partnerships in

which employee is a general partner or corporations in which employee is a

controlling shareholder, trusts of which the employee is a trustee, and estates of

which employee is an executor.

5. Training. All management officials and key individuals associated with the

Financial Agent Group performing the services under the FAA shall be required

to participate in compliance training prior to, and annually thereafter, providing

the services under the FAA. The training program shall inform and advise each

individual oftheir obligations and requirements under this FAA (including its

exhibits).

6. Monitoring / Compliance. The Financial Agent Group shall maintain a staff of

compliance professionals to test and monitor the group's compliance policies and

procedures and their effectiveness. In addition, the Financial Agent Group shall

appoint a Program Compliance Officer to oversee compliance with this Exhibit F

by all entities and people performing work under this FAA, and to periodically

monitor for, identify, and mitigate, conflicts ofinterest that may arise during the

term ofthe FAA. The Financial Agent's Group Program Compliance Officer shall

be independent from the investment and operations personnel and report directly

to the Chief Operating Officer. The Program Compliance Officer shall inquire as

to, and keep records of, each member ofthe Board of Directors' current business

relationship with any servicer modifying loans under the Program (a "Program

Servicer"), or any business relationship within the preceding 12 month period,

which is other than: possessing a bank account at a Program Servicer where the

amount offunds deposited in anyone Program Servicer is less than the Federal

Deposit Insurance Corporation coverage limit; having a mortgage from a Program

Servicer on terms available to the general public, or holding investments in a

mutual fund or sector-specific fund containing Program Servicer securities, and

shall deliver such records to Treasury periodically as Treasury directs. The

Program Compliance Officer may have other responsibilities within the Financial

Agent Group, provided such responsibilities do not include portfolio management

responsibilities related to the Financial Agency's proprietary portfolio of

securities and loans or the mortgage backed securities in the Financial Agent's

portfolio. Furthermore, the Financial Agent Group shall document such internal

oversight and provide the Treasury with quarterly reports sufficient to evaluate

the effectiveness ofthe Financial Agent Group's mitigation controls in ensuring

compliance with all requirements ofthis FAA.

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7. Incident Reporting. Anyone perfonning services under the FAA under the FAA

shall be required to promptly report any breaches or violations ofthe Conflicts of

Interest Mitigation Controls or other requirements ofthe FAA to the Financial

Agent Group Program Compliance Officer. A description ofthe incident shall be

documented in an incident report and promptly provided to the Office of Financial

Stability Chief Compliance Officer ("OFS CCO").

8. Limitations on Communications with Employees ofthe Treasury. During the

course ofthe FAA with the Financial Agent Group, the Financial Agent Group

shall not directly or indirectly make any offer or promise offuture employment or

business opportunity to, or engage directly or indirectly in any discussion of

future employment or business opportunity with, any Treasury employee with

personal or direct responsibility for that selection. The Financial Agent Group

shall not offer, give, or promise to offer or give, directly or indirectly, any money,

gratuity, or other thing of value to any employee ofthe Treasury, except as

pennitted by Government-Wide Ethics Rules, 5 C.F.R. part 2635. The Financial

Agent Group shall not solicit or obtain from any Treasury employee, directly or

indirectly, any infonnation that is not public and was prepared for use by the

Treasury for the purpose of evaluating a bid, proposal, or offer to enter into an

agreement, except to the extent it does so to perfonn its obligations under this

FAA.

9. Certifications

a. Organizational Conflicts ofInterest Certification. In accordance with 31

CFR §31.2ll, the Financial Agent on behalf ofthe Financial Agent Group

shall quarterly certify in writing to the Treasury that it has no

organizational conflicts ofinterest, or explain in detail the extent to which

it cannot so certify, and (except to the extent already described in this

Exhibit F) describe the actions it has taken and plans to take to mitigate

these conflicts.

b. Personal Conflicts of Interest Certification. In accordance with 31 CFR

§31.2l2, the Financial Agent on behalf ofthe Financial Agent Group shall

certify no later than ten business days after the effective date ofthe FAA,

and then quarterly thereafter, to the Treasury that all management officials

and key individuals perfonning services under the FAA have no personal

conflicts ofinterest, or are subject to a mitigation or waiver plan approved

by the Treasury.

c. Communications with Treasury Employees Certification. Before the

Financial Agent enters into the FAA, or accepts a modification to the

FAA, it must certify to the following:

1. The Financial Agent is aware ofthe prohibitions of paragraph (a)

of3l CFR §31.2l6 and, to the best ofits knowledge after making a

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reasonable inquiry, it has no information concerning a violation or

possible violation of paragraph (a) of31 CFR §31.216; and

2. Each officer, employee, and representative ofthe retained entity

who participated personally and substantially in preparing or submitting a

bid offer, proposal, or request for a modification ofthe FAA has certified

that he/she

a. Is familiar with and will comply with the requirements of

paragraph (a) of31 CFR §31.216; and

b. Has no information of any violations or possible violations of

paragraph (a) of31 CFR 31.216 and will report immediately to the

Financial Agent any subsequently gained information concerning a

violation or possible violation of paragraph (a) of 31 CFR 31.216.

c. Confidentiality Certification. All management officials and key

individuals providing the services under the FAA shall certify quarterly to

the Financial Agent Group's Program Compliance Officer that he or she

will comply with the requirements ofthis FAA and 31 C.F.R. § 31.217 to

not share non-public information (as that term is defined in Section 6 of

the FAA) with any unauthorized person or entity.

8. Subsequent Notification. The Financial Agent Group has a continuing obligation

to search for and to report any potential organizational or personal conflicts of

interest, as those terms are defined in 31 CFR §31.201. The Financial Agent on

behalf ofthe Financial Agent Group shall notify the Treasury in writing as soon

as practicable, and in no instance later than two (2) business days of learning of

any new or expanded conflicts of interest that arise during the term ofthe FAA.

The disclosure shall describe the steps the Financial Agent has taken or proposes

to take to mitigate the potential conflict or request a waiver from Treasury.

9. Reviews. The Treasury, on its own behalf or through an entity contracted by the

Treasury, may conduct an annual or ad hoc review ofthe compliance ofthe

Financial Agent Group performing the services under the FAA with all conflicts

ofinterest and confidentiality obligations and responsibilities set forth in the

FAA. The Treasury plans to exercise this review authority over the Financial

Agent Group within the first six (6) months ofthe signing ofthis FAA. Additional

reviews may be conducted by oversight bodies with explicit authority over the

Program including the Office ofthe Special Inspector General for the Troubled

Asset Relief Program ("SIGTARP") and the U.S. Government Accountability

Office ("GAO"). The Financial Agent Group performing the services under the

FAA shall cooperate fully with the Treasury or its designated representative and

provide it with any and all such information (in whatever form) requested by it in

order to perform such a review.

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10. Point of Contact. The OFS CCO shall be the contact official at the Treasury

responsible for monitoring compliance with this Exhibit.

11. Changes to Conflicts ofInterest Mitigation Controls. The Financial Agent on

behalf ofthe Financial Agent Group and the Treasury agree that the Program's

objectives, operations and policies, as well as the Financial Agent's business, are

likely to evolve over the term ofthe Program. The Financial Agent on behalf of

the Financial Agent Group shall inform the Treasury and negotiate in good faith

all proposed material changes to the Conflicts ofInterest Mitigation Controls

prior to their adoption and Treasury retains the option of disapproving any

proposed material change, in which case the Financial Agent agrees not to change

such control. The Financial Agent and the Treasury agree to negotiate and resolve

any such proposed changes in good faith and as quickly as reasonably possible. In

addition, the Financial Agent shall promptly notify the Treasury of any changes to

the Code of Conduct ofthe Financial Agent Group providing the services under

the FAA under the FAA.

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