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SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the following undersigned parties: 

The Plaintiff Federal Deposit Insurance Corporatiou as Receiver for Am Trust Bank 

("FDIC-R"); and Foundation Mortgage Corporation (the "Settling Defendant") (individually, the 

FDIC-R and the Settling Defendant may be referred to herein as "Party" and collectively as the 

"Parties"). 

RECITALS 

WHEREAS: 

Prior to December 4, 2009, Am Trust Bank, formerly known as Ohio Savings Bank 

("Am Trust" or "Bank"), was a depository institution organized and existing under the laws of t11c 

United States. 

On or about July 14, 2004, the Bank and Settling Defendant entered into a Master 

Correspondent Loan Purchase Agreement setting forth the terms and conditions pursuant to 

which the Bank would purchase cei1aio residential mortgage loans originated and/or submitted 

by Settling Defendant ("MCLPA"). 

Pursuant to the terms oftbe MCLPA, the Settling Defendant originated and/or submitt1/ 

~e Bank various residential mortgage loans, including specifically, the following: ~ 

... 

'' \ 

(b)(4);(b)( 

6) 

(b )(6) 
(b)(4);(b)( 

6) 

(b)(4);(b)( 

6) 

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"Subject Loans"). 

On December 4, 2009, the Office of Thrift Supervision closed the Bank and pursuant to 

12 U.S.C. § I 821(c), the Federal Deposit Insurance Corporation was appointed Receiver. In 

accordnnce with 12 U.S.C. § 1821 (d), tbe FDIC-Rsucceeded to all rights, titles, powers and 

privileges of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were the ilank's claims, demands, and 

causes of action that are the subject of this Agreement. 

The FDIC-R filed a Complaint on December 2, 2015, for money damages against the 

Settling Defendant, which was severed into four separate lawsuits on July 18, 20 l 7. In 

accordance with the severance order, the FDIC-R filed three additional complaints on July 24, 

2017. These Complaints for damages (the "Complaints") are now pending in the United States 

District Court for the Southern District of Florida in the following lawsuits: Federal Deposit 

Insurance Corporation as Receiver for AmTrusl Bank v. Foundation Mortgage C01poration1 

Case Nos. I 5-cv-24444; I 7-cv-22752, 17-cv-22755, and l 7-cv-22756 (collectively, the I ••· 

"Actions"). The Settling Defendant has denied liability in the Actions. 

The unclersigned Parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty and expense of further litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

undersigned Parties agree, each with the other, as follows: 

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SECTION I: Payment to FDIC-R 

A. As an essential covenant and condition to this Agreement, the Settling Defendant 

agrees to pay the FDIC-R the sum of $230,000 ("the Settlement Payment"), as follows: 

I. On or before 30 calend~r days following the date the FDIC-R executes this 

Agreement, the Settling Defendant agrees to pay the PDIC-R the sum of 

$50,000. 

2. $90,000 payable in 36 equal monthly installments of $2,500 per month, 

due on the first day of each month, commencing on J anua1y l, 2018. 

3. One balloon payment of $90,000 to be paid on or before December ! , 

2020. 

The amount of the Settlement Payment attributable to each of the loans identified in the 

Complaints in the Actions is set forth in Exhibit A. 

B. The Settling Defendant shall deliver the Settlement Payment to the fDIC-R by 

wire transfer into an account designated by FDIC-R by notice to the attorneys for the Settling 

Defendant or by ccl'tified oi: cashier's check drawn upon a depository institution acceptable to 

FDIC-R. 

In the event that the Settlement Payment is not delivered to the FDIC-R (or its counsel) 

by the due dates set fo1th in Section LA, above, interest sh~ll accrue on all unpaid amounts at the 

rate of 5% per annum from the date that payment was required by Section I.A until the date of 

payment. 

C. lfthe FDIC-R does not receive the Settlement Payment in full on or before the 

dates determined by Section I.A above, then the FDJC-R, in its sole discretion, shall have the 

right at any time prior to receipt of the Settlement Payment in full (including all accrued 

interest) to: 

1. Extend tbe period of time for the Settlement Payment, including interest 

accrning from the dates determined by Section I.A above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 6621(a)(2); or 

[505241/1) 3 
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2. Enforce this Agreement, in which event the Settling Defendant agrees to 

jurisdiction in lJnitcd States District Comt for the Southern District of Florida and to pay all of 

the FDIC-R's reasonable attorney's fees and costs expended in enforcing the terms of this 

Agreement; or 

3. Terminate the Agreement and move to vacate any dismissal orders, lo 

which the Settling Defendant agrees to consent ond re-institute the Actions on the FDIC-R's 

claims. The Settling Defendant further agrees to waive any defense based on any statute of 

limitations that would bar any of the FDIC-R's claims and waives all objections, defenses, 

claims or counterclaims, and covenants and agrees not to asselt any objections, defenses, claims 

or counterclaims that did not exist or were otherwise unavailable as of the date this Agreement 

was fully executed; or 

4. Enforce the Stipulation for Entry of Judgment, attached hereto as 

Exhibit B; or 

5, Seek any other relief available to it in law or equity. 

Any extension of time under Section I.C. l fo1· delivery of tbe Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the FDJC-R' s rights to take 

any of the actions set forth in Section I.C, l through I.C,5 at any time prior to receipt of 

Settlement Payment (including all accrued interest) in full. 

SECTION II: Stipulations and Dismissal 

Within ten business days after the full execution of both this Agreement and the 

Stipulation for Entry of Judgment by all of the Pa1ties, the FDIC-R shall file a stipulation of 

dismissal with prejudice in the Actions, whereby the Court shall retain jurisdiction to hear and 

determine all matters related to the Actions and to enforce tbis Agreement, cxccult:d by the 

attorneys for all Patties hereto, 

Within ten business days of the execution of this Agreement, the Pa1ties agree to execute 

a Stiplllation for Entry of Judgment for $230,000. The FDIC-R shall send a notice to Defendant 

of any missed installment payment and provide Defendant ten calendar days to cure the default. 

{505241/1] 
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Notice of default is required solely to enforce the Stipulation for Entry of Judgment and shall nol 

otherwise impact any of the FDIC-R's rights and/or 1·emedies under this Agreement in any way. 

If Defendant defaults on any installment payment and fails to cure the default within ten calendar 

days from notice of the non-payment, the FDIC-R may seek to enforce the Stipulation for Entry 

of Judgment in United States District Cami for the Southern District of Florida on an ex parte 

basis, subject to the Federal Rules of Civil Procedure and tbe Local Rules of the United States 

District Court for the Southern District of Florida. If any pmtions of the Settlement Payment are 

paid prior to default, FDIC-R shall file a Notice of Partial Satisfaction of Judgment concurrently 

with the Stipulation for Entry of Judgment, to set fmtb the amount of the Settlement Payment 

already paid. FDIC-R shall be entitled to recover reasonable attorneys' fees and costs incurred in 

connection with enforcing the Judgment. 

SECTION III: Releases 

A. The FDIC-R's Releases. 

Upon receipt of the Settlement Payment in full and except as provided in Section JII.C, 

the FDIC-R, for itself and its successors and assigns, hereby releases and discharges the Settling 

Defendant and its heirs, executors, trustees, administrators, representatives, successors, and 

assigns, from any and all claims, demands, obligations, damages, actions, and causes of action, 

direct or indirect, in law or in equity, belonging to the FDIC-R, that arise from the causes of 

action alleged in the Actions and/or with respect to the Subject Loans. 

B. The Settling Defendant's Releases. 

Effective simultaneously with the release granted in Section III.A above, the Settling 

Defendant, on bebalf of itself and its heirs, executors, trustees, administrators, representatives, 

attorneys, successors, and assigns, hereby releases and discharges the FDIC-R, and its 

employees, officers, directors, representatives, attorneys, successors and assigns, from any and 

all claims, demands, obi igations, damages, actions, and causes of action, direct or indirect, in law 

or in eqL1ity, that arise from the causes of action alleged in the Actions and/or with respect to the 

Subject Loans. 

[505241/1] 5 
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C. Exceptions from Releases by FDJC-R. 

l. Notwithstanding any other provision of this Agreement, the FD IC-R docs 

not release, and expressly preserves fully and to the same extent as if this Agreement had nol 

been executed, any claims or causes of action: 

a. Against the Settling Defendant or any other person or entity for 

liability, if any, incurred as the maker, endorser or guarantor of any promissory note or 

indebtedness payable or owed by them to FDlC-R, the Bank, other financial institutions, or any 

other person or entity, including without limitation any such claims acquired by FDIC-Ras 

successor in interest to the Bank or any person or entity other than Bank; and 

b. Against any person or entity not expressly released by the PDlC-R 

in this Agreement. 

2. Notwithstanding any other provision of this Agreement, nothing in this 

Agreement shall be construed or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority of the Federal Deposit Insurance Corporation in the exercise of its 

supervisory or regulatory authority or to diminish its ahility to institute administrative 

enforcement or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seek pursuant to its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, any claims that could be brought by the United 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district, or any other department or agency of the United States as defined by 18 U.S.C. 

§ 6. In addition, the FDIC-R specifically reserves the right to seek court-ordered restitution 

pursuant to the relevant provisions oftbe Mandatory Victims Restitution Act, I 8 U.S.C. §§ 3322 

and 3663, et. seq., if appropriate. 

SECTION IV: Representations and Aclmowledgcmcnts 

A. Authorized Signatories. All of the undersigned persons represent and warrnnt that 

they .ire Parties hereto or are authorized to sign this Agreement on behalf of the respective Party, 

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and that they have the full power and authority to bind such Party to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of the 

undersigned Parties and their respective heirs, executors, trustees, administrators, representatives, 

successors and assigns. 

B. Advice of Counsel. Each Patty hereby acknowledges that he, she, or it has 

consulted with and obtained the advice of counsel prior to executing this Agreement, and that 

this Agreement has been explained to that Pa1ty by his or her counsel. 

C. Status ofFDIC-R Investigation. FDIC-R represents that it is no longer 

investigating Settling Defendant or any of its officers, directors, and employees in regards to any 

additional claims arising from the MCLPA, nor is it presently aware of any additional claims 

arising from the MCLPA. Settling Defendant acknowledges that this provision does not limit, 

waive, release, or compromise: (I) the exceptions to FDIC"R's release sel forth in Section III.C 

above, and (2) FDIC"R's right to assert any additional claims discovered after the execution of 

this Agreement arising from the MCLPA against Settling Defendant or any of its officers, 

directors, and employees. FDIC-R acknowledges that this provision does not limit, waive, 

release, or compromise any defenses that Settling Defendant or any of its ofiiccrs, directors and 

employees may have to any additional claims FDIC-R may assert after execution of this 

Agreement. 

SECTION V: Reasonable Cooperation 

The Parties agree to cooperate in good faith to effectuate all the terms and conditions of 

this Agreement, including doing, or causing their agents and attorneys to do, whatever is 

reasonably necessary to effectuate the signing, delivery, execution, filing, recording, and entry, 

of any documents necessary to conclude the Actions and to otherwise perform the terms of this 

Agreement. 

SECTION VI: Other Matters 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree ~ 

that the matters set forth in this Agreement constitute the settlement and compromise of disputed 1 

[505241/1] 7 [j 
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claims and defenses, that this Agreement is not an admission or evidence of liability or infirmity 

by any of them regarding any claim or defense, and that the Agreement shall not be offered or 

received in evidence by or against any Party except lo enforce its terms. 

B. Execution in Counterpa11s. This Agreement may be cx:ecuted in counterparts by 

one or more of the Parties and all such counterparts when so executed shall together constitute 

the final Agreement, as if one document had been signed by all Parties; and each such 

counterpart, upon execution and delivery, shall be deemed a complete original, binding the 

Parties subscribed thereto upon the execution by all Parties to this Agreement. 

C. Choice of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal law, or in its absence, tbe laws of the State of Ohio. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 

If to the FDIC-R: Paul Levin, Esq.; Mo1tgage Recovery Law Group; 700 N. Brand 

Suite 830, Glendale, CA 91203; Tel.: (818) 630-7900; Email:._! __________ ..., 

Ifto the Settling Defendant: Scott Jones; Foundation Mortgage Corporation; J 680 

higan Ave., Ste. 700, Miami Beach, FL 33139; Tel: (305) 532-3995; Email: 

E. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned Parties concerning the matters 

set foith herein and supersedes any prior agreements or understandings. This Agreement may 

not be amended or modified, nor may any of its provisions be waived, except in writing signed 

by the Pa1ties bound thereby, or by their respective authorized atlorney(s), or other 

rcpresentative(s ). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

arc for convenience only and shall not affect the interpretation of this Agreement. 

f505241/1] 

(b )(6) 
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G. No Confidentiality. The undersigned Patties acknowledge that this Agreement 

shall not be confidential and will be disclosed pursuant to the Federal Deposit Insurance 

Corporation's applicable policies, procedures, and other legal requirements. 

IN WITNESS WHEREOF, the Pmties hereto have caused this Agreement to be executed by 

each of tbem or their duly authorized representatives on the dates hereinafter subscribed. 

Date: 11,/s I i.011 BY: 

TITLE: Counsel, Legal Division 

PRINT NAME: Samuel 13. Lutz 

TITLE: President 

PRINT NAME: Scott Jones 

(505241/1] 9 

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(b )(6)